Highlights of budget bill

Vice President Dick Cheney broke a tie in the Republican-controlled Senate to pass a plan to cut $39.7 billion from the federal deficit. Some highlights:

Student loans

Would cut $12.7 billion.

Would reduce lender subsidies and attach a 6.8 percent fixed rate on most loans. Would increase loan limits to $3,500 for first-year students and from $3,500 to $4,500 for second-year students.

Medicare

Would cut $6.4 billion

Would increase payments to insurers that cover sicker patients and lower payments to those covering healthier patients. Would increase Medicare beneficiaries' premiums for coverage of doctor visits.

Medicaid

Would cut $4.8 billion

Would reduce payments for prescription drugs and tighten rules for funds that can be used for nursing home eligibility. Permits states to reduce benefits and increases co-payments paid by beneficiaries.

Pensions

Would raise $3.6 billion

Businesses would be required to contribute that amount to the Pension Benefit Guaranty Corp., the federal agency that protects certain pension plans.

SOURCE: Associated Press