back December 19, 2005 House Takes Steps to Exercise Fiscal Restraint, Rein in Growth of Government Spending WASHINGTON DC – The final version of legislation that would reform entitlement programs to save about $40 billion over five years passed the House today by a vote of 212-206. First District Congressman Paul Ryan voted in favor of this legislation – the Conference Report on S.1932, the Deficit Reduction Act of 2005 – because it will slow the pace of growth in government spending on entitlements, improve fiscal responsibility, and help offset some of the cost of the hurricane recovery spending. The legislation is the consensus product of House and Senate negotiations to resolve difference between their versions of this budget savings bill. Voting on a separate measure today (the conference report on H.R. 2863, the defense spending bill for Fiscal Year 2006), the House also approved a one percent across-the-board reduction in discretionary spending on federal programs except veterans’ programs. Ryan voted in favor of the bill and supported this move to restrain federal spending and ensure that savings come from all parts of government, including the Pentagon.  “To reduce the deficit and balance the budget, Congress must control government spending,” Ryan said. “This is especially true after this year’s devastating hurricanes, which made tens of billions in additional emergency spending necessary. Now Congress has three options: let the deficit increase, raise taxes, or work to make government more fiscally responsible and rein in the growth of government spending. We must not shift this burden to our children or raise taxes on Wisconsin families and small businesses. A tax hike would only hurt our economy and take away jobs. That leaves the third option: finding ways to make government programs operate more efficiently and save money. Congress also must cut wasteful pork-barrel spending and lower its spending across-the-board.”  The Deficit Reduction Act focuses on controlling the growth of mandatory spending, which is growing at an unsustainable rate, through savings in a range of entitlement programs. Unlike spending enacted through the annual appropriations process, “mandatory” spending on entitlements operates largely on auto-pilot and is not subject to regular annual review.  The final version of the Deficit Reduction Act would slow the growth of spending on mandatory programs from an average of about 6.4 percent to approximately 6.3 percent per year over the next five years. To put it in another context, this would result in savings of $39.732 billion out of projected spending of $14.3 trillion over the next five years.  Among its specifics, the final version of the Deficit Reduction Act:  Enacts reforms based on the cost-saving recommendations made by the bipartisan National Governors Association to enable Medicaid to grow at just under 7.6 percent each year over the next ten years, instead of the projected 7.7 percent. The amount spent on Medicaid would continue to rise under this plan.  Prevents Medicare physician payment cuts in 2006 by providing a freeze in payment rates for physician services. Includes significant new quality reporting initiatives for hospitals and home health agencies as well as increases transparency on quality measures.  Increases student loan limits to allow more students access to more higher education and reduces fees. Finds savings from reducing excess lender subsidies. Frees up vital spectrum for first responders by auctioning off spectrum used by analog broadcasters, as recommended by the 9-11 Commission last year.  Makes $1 billion in additional budget authority available in Fiscal Year 2007 for the Low Income Home Energy Assistance Program (LIHEAP); 25% allocated through the program formula and 75% through the contingency fund. Related Note: The defense appropriations bill (conference report on H.R. 2863) that passed the House today contained $2 billion in home energy assistance funding for Fiscal Year 2006, including $1.5 billion for the LIHEAP contingency fund. (This is in addition to the regular LIHEAP appropriation.)  Extends the Milk Income Loss Contract Program for another two years. Print Contact: Kate Matus (202) 226-7326