GOP seeks cuts to ease cost of cleanup

WASHINGTON -- Under pressure from conservatives, House and Senate Republican leaders are preparing a package of spending cuts to Medicaid and other social programs to defray some of the costs from the cleanup of Hurricane Katrina.

House leaders say they want to shave as much as $40 billion from various spending programs when budget negotiations with the Senate resume in mid-October. Those cuts would be in addition to $35 billion that Congress had agreed to cut earlier this year to reduce the federal deficit.

In the Senate, majority leader Bill Frist of Tennessee has asked all committee chairmen to scrub spending in their areas of oversight to generate possible savings. In addition, Frist and his leadership team sent a letter to President Bush on Wednesday asking him to produce a list of potential cuts.

Spending cuts will be debated in coming weeks, with an eye toward finishing work before Thanksgiving. Beyond Medicaid, House leaders say they are considering an across-the-board cut to all domestic programs, with the exception of defense, homeland security, and ''entitlement" programs such as Social Security that the government is obligated to fund.

''This is an opportunity for the Republican Party to reconnect itself with the country on an issue that matters -- the issue of not borrowing money to solve every problem that happens on our watch," Senator Lindsey O. Graham, a South Carolina Republican who serves on the Senate Budget Committee, said in an interview. ''We should showcase our willingness to govern differently."

But budget cuts are always politically difficult, and this round is promising to be no exception. Democrats are gearing up for a battle when the budget-cutting proposals are offered, particularly if Medicaid -- the healthcare program for the poor -- is targeted for further cuts.

The governors of Louisiana, Alabama, and Mississippi have identified Medicaid as perhaps the most important program the federal government funds in their region. The dire poverty exposed by the Katrina disaster argues for more government help for the poor, not less, said Senator John F. Kerry, Democrat of Massachusetts. ''It's unconscionable," Kerry said. ''A cut to Medicaid pushes more people into poverty. It takes more kids off of healthcare. It's moving in the wrong direction for the wrong reasons."

The interest in budget cuts comes after conservative House and Senate members raised alarms about Katrina spending contributing to a budget deficit that is estimated at $330 billion in the fiscal year that ended yesterday. The federal government has authorized spending $62 billion on Katrina, and some members of Congress have said the final costs could approach $200 billion.

The budget agreement reached this spring called for a $10 billion cut in Medicaid, but House leaders say they can find more savings by narrowing eligibility by lowering the income threshold. In addition, congressional leaders say they are looking for ways to minimize pet projects in pending spending bills.

The cost-cutting efforts are aimed at ''how we can best get back to our Republican principles of smarter, leaner government," Representative Deborah Pryce, Republican of Ohio, chairwoman of the House Republican Conference, said at a news conference Wednesday. ''We haven't strayed, but we've been led astray by terrorism, a war, corporate scandal, and now these two huge hurricanes." Still, there is a limit to the cost-cutting appetite on Capitol Hill. Though some conservatives have called for repealing portions of the recently passed $286.4 billion highway bill and delaying the Medicare prescription drug benefit scheduled to take effect in January, House leaders have served notice that those ideas are off the table.

Conservatives who have been frustrated by spiraling federal spending are using the indictment of Representative Tom DeLay of Texas, who was forced to resign his post as majority leader on Wednesday, as leverage to force cuts. They say they are more likely to mount challenges to the leaders working alongside House Speaker J. Dennis Hastert of Illinois if they refuse to bring spending into line.

''As long as the leadership displays a renewed commitment to fiscal discipline, they will enjoy the confidence of the members," said Representative Jeff Flake, Republican of Arizona.

In recent weeks, groups of conservatives in the House and Senate outlined their wish lists of budget cuts, including everything from stopping federal support for PBS and National Public Radio to scuttling the National Aeronautics and Space Administration's plans for manned missions to the moon and Mars. In many cases -- as with the prescription drug benefit and the moon and Mars missions -- the proposed cuts put conservatives at odds with GOP congressional leaders and the White House.

But the new majority leader, Representative Roy Blunt, downplayed talk of a Republican split over spending, saying the party is united about the need to slow the outpouring of federal dollars. ''Maybe some of our members just got a little ahead of everybody else in the discussion," said Blunt, a Missouri Republican.

One major program that provides aid to the poor was slashed yesterday by Congress, in what could be an early indication of cuts to come. The Senate approved a bill that cuts by 50 percent the $637 million spent last year on Community Services Block Grants, a program long targeted by some House Republicans that funds food banks, literacy programs, and housing assistance for the poor. Though advocates say they are confident the money will be restored later this month -- many senators said they were endorsing the cut only because it was included in a bill that funded all government operations and they wanted to avert a government shutdown -- the move drew quick condemnation from Democrats.

''It's wrong for the administration and the House of Representatives to ask for cuts in America's safety net, when so many Americans are already falling through it," said Senator Edward M. Kennedy, Democrat of Massachusetts. ''We know how to mend it. All we lack is the will and the leadership to do it."

Republicans say they sense momentum for reining in spending. But they acknowledge that getting any menu of budget cuts through Congress will be politically difficult. ''Getting the list is not the problem," Graham said. ''Getting the list enacted is the problem."

Rick Klein can be reached at rklein@globe.com.