Editorial: Putting special interests first

Thursday, Dec. 29, 2005 | 8:20 a.m.

Last week Republican congressional leaders and President Bush crowed about the five-year spending plan they crafted, noting it would save nearly $40 billion. What they neglected to mention is that this deficit-reduction plan will fall squarely on those Americans most in need of help.

The largest amount that would be cut over the five-year period -- nearly $13 billion -- would come from student loan programs. This creates a particular hardship for many students since public colleges throughout the nation are increasing tuition because of a lack of financial support from the states.

One way that Congress is creating savings is by locking in interest rates for student loans at 6.8 percent -- even if commercial rates are lower. As the Christian Science Monitor noted in a story about the budget cuts, student loan interest rates currently are at 5.3 percent.

Medicare and Medicaid are the programs with the next biggest reductions, with $6.4 billion and $4.8 billion in cuts respectively. The costs for poor people who use Medicaid for their health care are expected to rise significantly because states now would be able to charge premiums and increase co-payments considerably. The Congressional Budget Office, the Associated Press reports, believes that these increases would have the net effect of leading many poor people to forgo health care or to not even bother to enroll in Medicaid.

An analysis by the Center on Budget and Policy Priorities notes that these Draconian health care cuts weren't necessary and savings could have been found elsewhere.

For example, potential savings in the budget originally proposed by the Senate would have come from drug companies -- by increasing the minimum rebates that they are required to pay to Medicaid -- but this proposal didn't make it into the final plan.

The nonprofit group also notes that the final agreement between the House and the Senate got rid of a Senate requirement that would have eliminated a $10 billion fund to encourage managed-care groups to participate in Medicare.

The Republican-controlled Congress, Bush and special interests may love this budget, but in our eyes it's obscene.