The Seattle Times

May 2, 2002, Thursday Fourth Edition

SECTION: ROP ZONE; News; Pg. A6; Capital Watch

Capital Watch

DATELINE: Washington

2 plans proposed for drug coverage

WASHINGTON -- With an eye toward fall elections, congressional Republicans and Democrats yesterday touted competing measures to provide prescription-drug coverage to all seniors enrolled in Medicare.

Lawmakers on both sides are vowing to act on a measure by the fall. But health-care advocates and lawmakers say that may be an uphill battle since the parties differ greatly on how much to spend on the benefit and how it would be granted. House Republicans announced plans to set up a task force to craft legislation aimed at adding the benefit to Medicare, the federal insurance plan for the elderly and disabled. Under the draft measure, beneficiaries would pay about a $37 monthly premium and have a $250 annual deductible.

The beneficiary would pay a share of the costs up to $2,000 a year and all further costs up to $5,000. Costs that exceed $5,000 would be covered fully. Overhauling Medicare and adding the new drug benefit would have to cost no more than $350 billion over 10 years.

In contrast, a Democratic plan calls for Congress to spend $424 billion over six years for the new drug benefit. Beneficiaries would pay a $25 monthly premium and half of drug costs up to $4,000 a year. Medicare would pay all costs over that level.

Both plans, which are voluntary, would rely mostly on private insurance companies to administer the program with oversight from the federal government. Under both measures, the government would pick up the tab for low-income seniors.

White House backs off on college-loan plan College students facing thousands of dollars in loan payments won't be forced to take on variable, potentially higher interest rates.

The Bush administration has backed off a plan to force the variable rates on those who consolidate their loans.

Hoping to trim a deficit in the Pell grant program for low-income college students, the administration had proposed asking Congress to require the variable rates.

Agriculture chief backs compromise farm bill Agriculture Secretary Ann Veneman will recommend that President Bush sign a compromise farm bill, despite the administration's earlier criticism of current policies that the legislationkeeps in place.

A House vote on the bill was expected today. A final Senate vote has not been scheduled.

The bill would authorize $180 billion in spending over 10 years, a 70 percent increase over existing programs.

The legislation increases subsidies for grain and cotton farmers, who traditionally have dominated federal programs, and provides new payments for a variety of commodities, including milk, lentils, honey and wool.

U.S. faces default on national debt in May

The United States again will face an unprecedented default on the national debt -- this time by the middle of this month -- unless Congress extends the government's authority to borrow.

The Treasury Department said yesterday the debt limit is expected to be hit earlier than late June, as Treasury Secretary Paul O'Neill laid out in an April 17 letter to congressional leaders.

Also ...

The House Armed Services Committee yesterday adopted a military spending blueprint that increases troop levels and pay, provides for a new version of stealth jet fighters and adds billions to fight terrorism. ... Chandra Levy's parents were in Washington yesterday to mark the one-year anniversary of her disappearance and are expected to meet today with Police Chief Charles Ramsey.