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GOP Passes House Bill to Cut Spending on Medicare

By Eric Pianin and John E. Yang
The Washington Post

The GOP-dominated House voted 231 to 201 Thursday to approve a historic overhaul of Medicare health care program for the elderly, increasing the premiums for most beneficiaries and encouraging them to choose from private health care providers in an attempt to save $270 billion over seven years.

Brushing aside Democratic charges that Republicans were bent on dismantling Great Society social welfare programs to pay for tax cuts and balance the budget, GOP leaders hailed their legislation as critical to preserving the 30-year-old Medicare program for the nation's 37 million retirees.

"We want a solution that preserves and protects Medicare for seniors and that sets the stage for the baby boomers," House Speaker Newt Gingrich (R-Ga.) said. "If we continue to go down the irresponsible, unorganized, inefficient, bureaucratic waste and fraud-filled system, our children will be crushed with taxes, they will be crushed with debt."

President Clinton charged that the plan would "eviscerate" the program and vowed to veto the bill unless it were substantially changed. "There is a right way to balance this budget, and a wrong way," Clinton said. "And I strongly believe the Republicans in Congress are taking the wrong way."

Rep. Thomas J. Bliley Jr. (R-Va.), chairman of the House Commerce Committee and a key GOP lawmaker, said a compromise might be possible before the final bill is sent to the White House. "I'd be willing to consider any reasonable proposal," he said.

The vote climaxed a frenetic 48 hours of behind-the-scenes wheeling and dealing, as Gingrich and other House leaders pressed to assemble the 218-vote majority required for passage. The outcome appeared in doubt late Wednesday until Gingrich substantially sweetened an offer to 20 rural GOP lawmakers who had complained hospitals and private health care providers in their regions would be shortchanged by the Medicare plan.

The day-long, sometimes raucous debate was marked with bitter partisan bickering and animosity. As he closed the debate, Gingrich noted acidly that "we are ending this debate with the same spirit of misinformation that has characterized the opposition."

Republicans hissed as House Minority Whip David E. Bonior, (D-Mich.) scored the measure as turning back "30 years of progress, 30 years of trust and 30 years of hope that our parents and our grandparents will always have the health care that they need." House Democrats hooted with derision as Gingrich named the members of his extended family to describe how the GOP bill would affect them.

The House plan, similar to one pending in the Senate, would encourage beneficiaries to shift from the traditional fee-for-service system to health maintenance organizations, medical savings accounts and other private sector programs as a means of reducing costs.

The plan would not increase out-of-pocket costs for beneficiaries such as a increased co-payments or deductibles. But it would make large cuts in payments to hospitals and doctors, increase the Part B premiums paid by all enrollees beyond projected increases and force wealthy seniors to pay considerably higher premiums than others. Even with these savings, overall spending for Medicare will continue to rise over the next seven years, from $4,800 per beneficiary in 1996 to $6,700 in 2002.

The Republicans approved their plan after brushing aside a Democratic alternative, 283 to 149, that would have cut only $90 billion from the growth of spending over the next seven years. Rep. Sam Gibbons (Fla.), the ranking Democratic on the Ways and Means Committee, argued that his proposal would provide more than enough savings to avert the projected bankruptcy of the system by 2002, while buying time to devise a more sensible system.

The Democrats and the American Association for Retired Persons (AARP) have charged that the plan was "too extreme" and that it was a thinly veiled attempt to find savings to finance a large $245 billion tax cut for middle- and upper-income Americans.

"This bill takes health benefits from grandma, from grandpa, and hands them over to the richest Americans in the form of a nice, big, juicy, fat tax break," Rep. Joe Moakley (D-Mass.) said Thursday.