US budget: Medicaid health program

U.S. House and Senate Republicans reached a tentative agreement on a &to=http:// ' target=_blank>budget plan for the 2006 fiscal year that cuts about $10 billion from spending on the Medicaid health program over five years and calls for about $70 billion in tax cuts, according to a Republican Senate aide.

Completion of a $2.6 trillion budget plan that includes some Medicaid cuts would be a victory for President &to=http:// ' target=_blank>George W. Bush, who requested about $51 billion in spending reductions for federal benefits programs in his budget plan, including reductions in Medicaid spending, reports the Bloomberg.

The budget is important because it sets fiscal and tax priorities for the coming year. But this year, it also has symbolic significance. As spending and the federal deficit continued to rise, fiscal restraint became a recurring theme in last year's election campaign, and the White House and the Republican leadership have promised to bring spending under control. Now, with Republicans more firmly in control of Congress, their ability to pass a budget has become a test of whether they can make good on that vow.

But coming to terms on a budget has been difficult. The House version included steep cuts in projected spending on Medicaid and other so-called entitlement programs. The two measures also differ on how far to extend President Bush's tax cuts, and whether to use a budget maneuver that would clear the way for oil drilling in an Arctic refuge.

President Bush was expected to address some of those issues in his televised news conference this evening.

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