NCPA - National Center for Policy Analysis


January 3, 2006

Entitlement reform is one of the most important challenges facing Congress. More than half the federal budget goes to these programs. Mandatory spending went up 7 percent last year, says U.S. Senator Chuck Grassley (R-Iowa).

Regarding the GOP-sponsored deficit reduction bill is that sort of initiative, Grassley says:

  • It's modest, representing just one-half of 1 percent of what would otherwise be spent during the next five years.
  • Its Medicaid provisions reflect what governors nationwide -- Republicans and Democrats -- asked Congress to do to help them manage the program in their states and ensure its viability for low-income pregnant women and children.
  • One change would let states collect what is owed from insurance companies rather than taxpayers getting the bill; the state and federal dollars saved from provisions aimed at Medicaid fraud and other abusive practices would go to health care for the needy.
  • The measure would also increase spending for the poor in key areas such as child care for welfare recipients headed to work and expanded Medicaid coverage for disabled children.

Moreover, explains Grassley, this legislation is needed to protect 14 million families from the alternative minimum tax meant for wealthy individuals. It includes tax breaks for higher education and teachers who buy classroom supplies. It closes tax shelter loopholes. And it includes pro-growth measures that have helped fuel our economy.

Source: Chuck Grassley, "In the right direction: Bill would reform public aid, yet keep tax cuts that help economy," USA Today, January 3, 2006.


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