Congressional Republicans reach tentative budget deal with tax cuts, Medicaid savings

WASHINGTON — Top congressional Republicans reported agreement Thursday on a budget that envisions $10 billion in Medicaid savings over the next five years and at least $70 billion in tax cuts.

The plan could also open the way to oil drilling in Alaska's Arctic National Wildlife Refuge.

Congressional officials said the agreement envisions spending of about $2.6 trillion for the fiscal year that begins Oct. 1, with a deficit of $382 billion.

Republican officials said the plan relies on savings from farm, student loan and pension programs to achieve President Bush's goal of cutting deficits in half over five years.

House GOP leaders said they would push for a vote later in the day.

Even before they formally unveiled the agreement, Democrats hastened to attack it. "It will add to the deficit, it won't diminish the deficit," said Rep. John Spratt of South Carolina, the senior Democrat on the House Budget Committee.

The budget blueprint itself is nonbinding and does not require Bush's signature. At the same time, it anticipates that Congress will enact follow-up legislation to implement its goals.

Overall, officials said the agreement envisioned savings of roughly $35 billion over five years from federal benefit programs. If implemented, it would mark the first time since 1997 that lawmakers have looked to this type of program for savings.

The largest single portion of the $35 billion would come from Medicaid, which provides health care for low-income Americans, officials said. Another $6.6 billion in deficit reduction would come from federal pension programs, including higher fees paid by employers. About $3 billion would come from agriculture programs.

In political maneuvering over the issue this year, Democrats have repeatedly accused Republicans of planning cuts in the program. Republicans respond that despite the anticipated curbs, overall Medicaid spending would rise annually from current levels.

GOP leaders have been haggling for days in hopes of nailing down an agreement before the Senate begins a weeklong break on Friday. Officials said leaders in both houses were checking with members of the rank and file before sealing their agreement, to make sure they would be able to pass it.