A group of seven Senate Democrats led by Senate Majority Leader Harry Reid (D-Nev.) on Friday criticized provisions in the fiscal year 2008 budget proposal released last week by President Bush that would reduce funds for many rural health care programs, CQ HealthBeat reports. The budget proposal would eliminate the Rural Hospital Flexibility Grant Program, which helps fund rural hospitals with 25 or fewer beds; the Small Rural Hospital Performance Improvement Grant Program, which helps fund efforts to reduce medical errors, improve quality and protect medical privacy at rural hospitals; and the Rural Health Network and Outreach Grant Program, which helps fund new rural health care networks. According to Sen. Blanche Lincoln (D-Ark.), the budget proposal would reduce by 87% funds for rural health care programs administered by the Health Resources and Services Administration. The National Rural Health Association estimated that the budget proposal would reduce funds for the Health Professions Programs by $193 million, a move that could limit the ability of the federal government to address health care provider shortages in rural areas (Reichard, CQ HealthBeat, 2/9). Reid said, "People all over the West will suffer tremendously because of this wrongheaded budget" (Deehan, CongressDaily, 2/9). The group of Senate Democrats also included Sens. Kent Conrad (N.D.), Byron Dorgan (N.D.), Amy Klobuchar (Minn.) and Ken Salazar (Colo.).

HRSA Reaction
HRSA in a statement said that the budget proposal "supports more targeted efforts to provide direct health services for underserved populations," adding that the plan would reduce funds for programs "similar to other HHS programs that provide resources to rural areas." HRSA said that the Health Professions Programs "have not demonstrated an impact on placing health professionals in underserved areas" and that the budget proposal focuses "on activities that are more effective in placing health professionals in underserved areas, such as the National Health Service Corps" (CQ HealthBeat, 2/9).

Budget Proposal Examined
Several newspapers recently published articles that examined the budget proposal. Summaries appear below.

• McClatchy/Albany Times Union: A provision in the budget proposal that would eliminate annual indexing on income thresholds to require a larger number of higher-income Medicare beneficiaries to pay increased premiums seeks to "raise revenues ahead of a monumental demographic shift," McClatchy/Times Union reports. According to acting CMS Administrator Leslie Norwalk, the provision would affect an estimated 1.7 million Medicare beneficiaries by 2017. David Certner, director of legislative policy for AARP, said, "By not indexing, what effectively you are doing is lowering these thresholds so that over time, more and more people will be affected by these higher premiums until, eventually, everyone is" (Hall, McClatchy/Albany Times Union, 2/10).
  
  
• AP/Long Island Newsday: "Students are among those who could be hit by the regulatory changes" in the budget proposal that could take effect without congressional approval, AP/Newsday reports. The Bush administration estimates that the elimination of Medicaid reimbursements to schools for the arrangement of speech and physical therapy for children could save the program $3.6 billion over five years. Mary Kusler, assistant director of government relations for the American Association of School Administrators, said, "This would transfer the burden onto local school districts and local taxpayers" (Freking, AP/Long Island Newsday, 2/10).
  
  
• Washington Post: Budget experts call the budget proposal "one of the most significant efforts in years to rein in federal spending on entitlement programs," but health care providers and patient advocates "call the proposed cuts arbitrary and say they would exact an unaffordable toll on a big part of the nation's health care system," the Post reports. Senate Finance Committee Chair Max Baucus (D-Mont.) said, "I know it's difficult, but the administration would be doing this country a much greater service by finding ways to lower the underlying costs of Medicare and Medicaid, rather than just lopping off the top." However, Stuart Butler, a budget expert at the Heritage Foundation, said that the proposed reductions in funds for Medicare and Medicaid are "the only way forward in dealing with a huge unfunded obligation that right now is being left in the lap of our children and grandchildren" (Lee/Montgomery, Washington Post, 2/11).