January 31, 2004, Saturday

NATIONAL DESK

Bush Says He'll Press Ahead On Deficit Despite Drug Costs

By RICHARD W. STEVENSON (NYT) 791 words

A day after the administration disclosed that its estimate of the Medicare bill's cost was 33 percent higher than the one used by Congress and Mr. Bush in drafting and enacting the legislation, the White House said it had no second thoughts about the measure even though the new price tag has enraged many conservatives on Capitol Hill.

Mr. Bush said he was told two weeks ago that his administration's estimate of the bill's cost over the next 10 years would be $134 billion higher than the $400 billion projection developed by the Congressional Budget Office and used by Congress when it passed the bill last year.

Mr. Bush signed the bill at a campaign-style rally in December, calling it ''the greatest advance in health care coverage for America's seniors since the founding of Medicare.'' At the time, his political advisers said it would help the president and his party blunt longstanding Democratic attacks on them over health care.

But some fiscally conservative Republicans voted against the bill, citing their concerns about creating an expensive new entitlement program, and news of the new estimate spawned frustration among them and other Congressional Republicans as they attended a retreat in Philadelphia on Friday.

The administration often comes up with different cost estimates for legislation than the Congressional Budget Office, which in this case is standing by its $400 billion projection.

But coming at a time when Mr. Bush was already under pressure from members of his party's right wing over what they regard as excessive spending and a willingness by the White House to allow rapid growth in the size of government, the new Medicare figures exacerbated a rare breach between the president and his conservative base.

Mr. Bush is expected to try to mollify Congressional Republicans by emphasizing his commitment to fiscal responsibility when he addresses them on Saturday in Philadelphia. The White House will release its budget for next year on Monday, and Mr. Bush has already said he will seek to keep spending on general government programs outside of the military and domestic security to annual growth of less than 1 percent, a rate that amounts to a cut when inflation is taken into account. Medicare, as an entitlement program whose benefits are built into law, would not be subject to that proposal for limiting spending.

The new cost estimate has been incorporated into Mr. Bush's budget. But administration officials said it did not have a large impact on their efforts to cut the deficit in half over the next five years because most of the costs relative to the Congressional Budget Office projection come in the second five years of the 10 years covered by the estimates.

Senator Trent Lott of Mississippi, a vocal opponent of the bill, said the new Medicare figures were troubling, but not surprising.

''They confirm my concerns that it was going to be way more expensive than we were told last year,'' Mr. Lott said. ''The bad news is I don't think this is going to be the end of it. I think it's going to be more.''

He said he believed the final cost, over 10 years, would ''probably come closer to $600 or $800 billion.''

Senator Don Nickles, the Oklahoma Republican who is chairman of the Budget Committee and voted against the measure, said he was not surprised. ''I always thought the bill was going to be more expensive than estimated,'' he said.

Asked by reporters about the new estimates, Mr. Bush remained supportive of the measure.

''The Medicare reform we did is good reform, fulfills a longstanding promise to our seniors,'' he said after a meeting with a group of economists. ''Congress is now going to have to work with us to make sure that we set priorities and are fiscally wise with the taxpayer's money.''

Asked whether Mr. Bush would have signed the bill if he had known the cost would be $534 billion over the next decade, Scott McClellan, the White House spokesman, did not directly reply but said the president ''absolutely strongly supports this legislation.''

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