Bush to seek healthcare cuts

WASHINGTON —  In a bid to balance the federal budget in five years, President Bush will seek cuts in several key programs. But the spending blueprint he sends to Congress on Monday leaves room for some sweeteners, according to administration officials.

Under the Bush plan, grants for college students would rise after remaining stagnant for three years, and some parts of the No Child Left Behind Act would receive additional funding.

There would be new money to spur the manufacture of hybrid cars and production of ethanol. And a new farm bill would give farmers $1 billion more a year than the current law.

At the same time, Bush will ask for substantial cuts in Medicare and Medicaid, the government’s main healthcare programs.

The Pentagon budget, including a detailed request for war funding in 2008, will hit $623 billion, according to a senior Defense official. That total includes $481 billion for the military’s normal annual budget, a 10% increase over this year’s spending.

That increase is accounted for, in part, by Bush’s proposal to increase the size of the Army and Marine Corps by a combined 92,000 troops over the next five years.

The budget request also includes, for the first time, funding details for the wars in Iraq and Afghanistan; in past years, these war costs have been approved as special emergency funding bills. The 2008 budget will include a $142-billion estimate for war costs, a clear indication that the administration anticipates a high troop level in Iraq through the end of next year.

The White House will also be asking for an additional $93 billion in war funding for the current fiscal year, which ends Sept. 30.

Combined, the two war requests would take total spending on Iraq and Afghanistan to about $737 billion.

Many aspects of Bush’s budget almost assuredly will spark criticism from the Democratic-controlled Congress, which can be expected to offer alternative funding levels. His proposed Medicare cuts are likely to receive an especially cold reception.

Sen. Hillary Rodham Clinton (D-N.Y.), who is seeking the presidency in 2008, on Friday said she considered it “unconscionable that the president’s answer to our healthcare crisis is to cut the already strained healthcare safety net.”

Bush’s proposal is expected to cut more than $65 billion over five years from Medicare and about $7 billion from Medicaid, relative to the spending levels that the programs would reach under current law. Large as these cuts seem, they represent only about 2% of the total projected spending for the two programs, which will cost about $590 billion this year.

Most of the Medicare cuts target hospitals and other service providers, rather than direct benefits to patients. The proposal includes cutting about 8% in Medicare payments to doctors.

At the same time, patients would have to pay more for their healthcare coverage through higher co-payments and other changes.

The president also will propose restraining the growth of the State Children’s Health Insurance Program. In some states, children from families with incomes up to three times the poverty level qualify for assistance; Bush would reduce that threshold to twice the poverty line.

The president’s budget would be more generous to low-income college students. The maximum Pell grant would rise to $4,600 in the 2008-09 school year, from $4,050.

The No Child Left Behind Act, which became law early in Bush’s first term, would keep its goal of lifting every student to grade-level competency in reading and mathematics by 2014. Some components of the program would get more federal funding, but the Education Department did not say whether overall outlays would rise.

Bush, who in his State of the Union address last week highlighted a push to reduce U.S. dependence on foreign oil, is expected to ask for $2.7 billion for his “advanced energy initiative.” This includes the efforts to develop more hybrid cars and to increase use of ethanol, an alternative fuel which can be produced from grains and grasses.

In the address, Bush proposed cutting the nation’s consumption of gasoline 20% within 10 years.

On another front, Sen. David Vitter (R-La.) expressed displeasure with the funding proposal for levee fortifications and other projects to help Louisiana recover from Hurricane Katrina.

In a letter to Bush, he contended that the budget request would be a “step back” from the president’s previous commitment.

joel.havemann@latimes.com

Times staff writers Ricardo Alonso-Zaldivar, Julian E. Barnes, Richard Simon and Peter Spiegel contributed to this report.