GOP calls Medicaid panel key to budget deal

WASHINGTON — Republicans in Congress said Tuesday that they were near agreement with the White House on a proposal to break an impasse over the federal budget by setting up a commission on the future of Medicaid and by cutting the growth of the program by $10 billion over the next five years.

Administration officials and Republican leaders in Congress said they hoped that a deal on Medicaid would clear the way for a broader agreement on the contours of the federal budget — a budget resolution, in the language of Capitol Hill. The House and Senate last month passed competing versions of a $2.57 trillion budget for 2006, but spokesmen for the budget committees in both chambers said Tuesday night that they were close to reconciling those differences.

"There is a broad outline of consensus," Sean Spicer, spokesman for the House budget committee, said, adding "There are details that still have to be worked out."

The sticking points included not only proposed cuts to Medicaid, which provides health insurance for more than 50 million low-income people, but also questions of how far to extend President Bush's tax cuts and whether to include a provision clearing the way for oil drilling in an Alaskan wildlife refuge.

In one sign that a budget deal was near, House Republican leaders said Tuesday evening that they had selected budget negotiators, who would convene an open meeting with Senate negotiators on Wednesday.

Medicaid is the biggest point in dispute. The Bush administration first opposed the idea of a study commission, seeing it as a way to postpone decisions over how to rein in the program's explosive growth.

Aides to Sen. Gordon H. Smith, R-Ore., said administration officials had agreed to accept Smith's demand for a commission in hopes of securing support from him and other moderate Republicans for $10 billion worth of cutbacks in projected Medicaid spending over the next five years.

"It's our understanding that the administration has agreed, in principle, to a Medicaid commission," said Demetrios Karoutsos, a spokesman for Smith.

The Senate majority leader, Bill Frist, R-Tenn., said he was "cautiously optimistic" that the two chambers would reconcile their differences and adopt a budget by Friday, when the Senate is scheduled to leave for a one-week recess.

The House budget committee chairman, Jim Nussle, R-Iowa, said the emerging agreement could be a vehicle to reorganize Medicaid. The program "needs reformation," he said, and "we need to come together as Republicans and Democrats to fix" it.