WASHINGTON -- President Bush hopes to seize momentum from a just-completed budget cut bill by proposing tens of billions of dollars in savings from the Medicare program when he submits his 2007 budget on Monday.
The budget is expected to wring perhaps $40 billion over the next five years from Medicare providers like hospitals and home healthcare providers, as called for by the Medicare Payment Advisory Commission, a bipartisan panel of specialists that makes Medicare policy recommendations to Congress.
Last year, Bush urged Congress to leave Medicare alone as the administration began implementing the new Medicare drug benefit. He instead focused on finding savings from the Medicaid healthcare program for the poor and disabled.
Congress has just squeezed $28 billion from Medicaid over the next decade -- considerably less than the $45 billion proposed by Bush a year ago -- and the president is looking for big savings from the rapidly growing Medicare program, said lawmakers, staff aides, and healthcare industry lobbyists.
Bush is expected to steer clear of proposals asking for direct election-year sacrifices from Medicare beneficiaries, who are already agitated over foul-ups in the startup of the new prescription drug program.
But hospitals and other powerful interest groups are girding for battle over the cuts they will be asked to take. Adopting the Medicare Payment Advisory Commission's recommendations would give the White House political cover for Bush's new proposals.
The commission recommended reducing Medicare payments to hospitals for both inpatient and outpatient care by about half of 1 percent below scheduled inflation adjustments.
Home healthcare providers under Medicare worry they will see their payments frozen as recommended by MedPAC, as the commission is known. The panel also has recommended freezing payments to nursing homes and long-term care facilities.
''It's doable and it's good healthcare policy," Senate Budget Committee Chairman Judd Gregg, Republican of New Hampshire, said of the MedPAC recommendations.
Elsewhere, the $2.7 trillion budget will ask virtually every domestic Cabinet department except Homeland Security to operate at or below current budget levels.
The Pentagon would receive a nearly 5 percent increase in its budget, to $439.3 billion, defense officials said, with an additional $120 billion earmarked for operations in Iraq and Afghanistan.