House Passes Painful Budget Reconcilation Legislation
On February 1 st , the House of Representatives voted 216-214 to approve legislation (S. 1932) cutting $39.5 billion from federal spending over the next five years. The legislation makes substantial changes to entitlement programs that are likely to harm millions of Americans with mental illnesses. The bill was approved by the Senate last December. It will now go to the White House for President Bush's signature. The American Counseling Association and the American Mental Health Counselors Association (AMHCA) had joined a wide array of other organizations in working in oppose the bill, due to its exclusion of Senate-passed language establishing Medicare coverage of licensed professional counselors and its cuts to key safety net programs.
The measure, which covers a five-year period ending in 2010, will achieve savings of $6.4 billion in Medicare, the health care program for the elderly, through a variety of changes that include higher premiums for all beneficiaries, with higher increases for wealthier seniors. The bill saves $4.8 billion in Medicaid, the health care program for the poor and disabled, by opening the door for states to signficantly increase cost-sharing requirements on low-income beneficiaries, and by changing current law Early and Periodic Screening, Diagnostic and Treatment (EPSDT) requirements for children enrolled in Medicaid. Medicaid beneficiaries will also face higher costs for emergency room visits for non-emergency care.
The legislation also makes significant changes to Temporary Assistance for Needy Families (TANF) programs by restricting states' flexibility in implementing their welfare programs, and steeply ratcheting up work requirements. The bill includes $1 billion in additional funding for child care, but this falls $7.4 billion short of the amount of money states are projected to need in order to pay for the increased child care costs associated with meeting the new work requirements included elsewhere in the bill.
In the area of education, the legislation will slash about $12 billion from government-backed student loan programs. The cuts, which are the largest in the loan programs' history, account for one-third of the bill's total savings. The bill reduces government subsidies to private lenders, raises interest rates for students and parents, and requires most borrowers to pay a 1-percent fee to agencies that guarantee loans. While the bulk of these changes are intended to reduce the federal budget deficit, a portion -- $3.75 billion over the next five years -- would finance a new program providing additional aid to high-achieving Pell Grant recipients and to those who major in mathematics, the sciences, or certain foreign languages. Under this new program, freshmen and sophomores who are Pell Grant recipients will receive additional grant aid if they have completed "a rigorous secondary-school program of study" recognized by the U.S. Department of Education. Separately, the bill will raise borrowing limits for freshmen and sophomores, and reduce over five years the origination fees that students pay lenders to take out loans.
The vote on the legislation highlights how difficult it may be for the President to push for even steeper cuts this year. While S. 1932 had strong support from party conservatives, four more moderate Republicans voted against the measure than did so in the House's initial vote last year, due in large measure to weeks of intense lobbying from advocacy groups. ACA and AMHCA thank those of you who called your members of Congress on this issue.
If you have any questions about the health policy-related provisions of the legislation, please feel free to contact Brian Altman of ACA at 800-347-6647, ext. 242 (e-mail: baltman@counseling.org ), or Beth Powell with AMHCA at 800-326-2642, ext. 105 (e-mail: bpowell@amhca.org ). For questions regarding the education-related provisions of the legislation, contact Chris Campbell with ACA at ext. 241 (e-mail: ccampbell@counseling.org ). For questions regarding the TANF provisions in the bill, contact me at ext. 234 (e-mail: sbarstow@counseling.org ).
Scott Barstow
Director of Public Policy and Legislation
American Counseling Association
5999 Stevenson Avenue
Alexandria, VA 22304