White House raising estimated cost of Medicare overhaul by about one-third


Published: Thursday, January 29, 2004 at 2:23 p.m.
Last Modified: Thursday, January 29, 2004 at 2:23 p.m.

WASHINGTON (AP) - President Bush's new budget will project that the just-enacted prescription drug program and Medicare overhaul will cost one-third more than previously estimated and will predict a deficit exceeding $500 billion for this year, congressional aides said Thursday.

Instead of a $400 billion 10-year price tag, Bush's 2005 budget will estimate the Medicare bill's cost at about $540 billion, said aides who spoke on condition of anonymity. Bush will submit on Monday a federal budget for the fiscal year 2005, which starts next Oct. 1.

Bush just signed the Medicare measure into law last month. While it was moving through Congress, Bush, White House officials and congressional Republican leaders had assured doubting conservatives that the bill's costs would stay within the $400 billion estimate.

Some conservatives voted against the legislation anyway, and many of them are already angry that Bush has presided over excessive increases in spending and budget deficits.

"I'm not the least bit surprised," said conservative Rep. John Shadegg, R-Ariz., who voted against the Medicare bill in November and who said he had heard that the cost estimate would rise. "Historically, our estimates of what these programs will cost have been so far off as to be meaningless."

White House budget office spokesman Chad Kolton would not comment on the Medicare figures. But an administration official, speaking on condition of anonymity, acknowledged that the estimate would rise to nearly $540 billion.

"Both numbers provide what you can call a reasonable range of possible future costs for Medicare," the official said. "These are complex estimates, based on hundreds of individual programs, decisions and potential actions over an extended period of time."

CBO, Congress' nonpartisan fiscal analyst, estimated the bill's 10-year cost at $395 billion. But administration officials repeatedly stood by the $400 billion figure, which Bush had included in the budget he proposed last February.

Bush's new budget will also estimate this year's budget deficit at about $520 billion, the congressional sources said. That would easily surpass the $375 billion shortfall of last year, the highest deficit ever in dollar terms.

Just Monday, the Congressional Budget Office projected this year's red ink would total $477 billion.

The new estimate comes as Bush braces for a difficult election-season fight with Congress over spending _ after a budget year that he can hardly expect to top.

Although Bush sends his 2005 budget to Congress next week, lawmakers only last week completed their spending work for 2004. That process saw Bush win virtually all his major priorities including a tax cut, new Medicare prescription drug coverage, funds to fight a war with Iraq, and overall spending restraint.

"He wanted a carpet that looked like X, and generally speaking he got a carpet that looked like X," said Richard Kogan, who analyzes the budget for the liberal Center on Budget and Policy Priorities.

The Republican-run Congress avoided overt clashes with Bush but did not roll over completely.

Lawmakers trimmed his defense plans while boosting funds for highways, Amtrak and veterans. They ignored Bush's plan to make tax cuts permanent, scaled back his proposal to stop taxing corporate dividends, derailed his energy bill and added thousands of home-district projects to spending measures.

Even so, the results were a far cry from the "dead on arrival" label applied to the spending blueprints of some of Bush's recent predecessors. Democrats and moderate Republicans often gave that assessment to plans written by the first President Bush and President Reagan, who were forced to accept both tax and spending increases.

On the other hand, despite the GOP takeover of Congress two years into his tenure, President Clinton won frequent spending concessions from lawmakers wary of battling him. Bush has followed a similar pattern.

"It would be hard to say he's not getting what he wants," Stan Collender, a senior vice president who follows the budget for the accounting firm Fleischman-Hillard.

Bush has yet to cast a veto after three years in office. He often uses the threat of a veto to get his way, issuing 19 as Congress considered the 13 annual spending bills for this year. In the end, lawmakers dropped challenges on issues like administration plans to change overtime pay rules and divert more government work to private contractors.

Major priorities Bush proposed last year included:

_Tax reductions of $1.3 trillion over 10 years. The bill he signed had $330 billion in tax cuts. That number is expected to grow should lawmakers, as anticipated, make some of its temporary reductions permanent. Congress added $20 billion he did not seek for financially strapped states.

_$400 billion over a decade for revamping Medicare and adding prescription drug coverage. Bush last month signed a bill resembling his proposal.

_$87 billion this year for wars in Iraq and Afghanistan, $500 million less than he got. The final bill gave him $1.7 billion less than the $18.6 billion he wanted to rebuild Iraq and less flexibility than he wanted for controlling the money.

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