BPresident Bush’s proposed federal budget is raising questions in Oregon about which state programs will be most affected, and policymakers and other experts are examining the budget in hope of gaining a clearer perspective of the state’s fiscal future.
Many have discussed the proposed budget’s effects on the Oregon Health Plan and the Bonneville Power Administration, a company that provides nearly half of the Northwest’s electricity, saying the plan will have a negative impact on Oregon.
A Feb. 12 report by Robert McCullough, managing partner of McCullough Research, said Bush’s proposal to raise BPA’s rates by 20 percent per year will result in more than 40,000 job losses in Oregon and Washington.
Michael Leachman, a policy analyst with the Oregon Center for Public Policy, said the federal budget proposal would mean a $47 million loss for Medicaid, which could result in the disqualification of approximately 16,000 children from Oregon Health Plan eligibility.
“If we had been able to just lower taxes and to cut deeply into basic programs that really do help a lot of families, that would be one thing; but what the president is proposing is deep cuts to Medicaid,” Leachman said.
Lynn Read, deputy administrator at the office of medical assistance programs for the Oregon Department of Human Services, said while the proposed budget harms Medicaid’s financial state, there are other aspects of the budget that are beneficial.
According to the White House Web site, the proposed federal budget would improve health care in the country by creating more than 1,200 community health centers nationwide to “make health care more accessible.”
Read said investing more money in federally qualified health centers is a helpful way of “expanding that safety net,” but she added the costs of such an endeavor could be quite high.
Part of the budget also includes a change in how states reimburse for prescription drugs, which Read said could prove to be a more accurate and financially fair reimbursement process. The budget would switch Medicaid reimbursement for pharmaceuticals to a system that uses the average sales price rather than the average wholesale price, which the National Conference of State Legislatures said inflates reimbursements. The change is expected to save $542 million in 2006, according to the NCSL.
Read said the budget also includes increased support for a children’s vaccine program, which could prove very beneficial.
“It seems like any expansion that would allow children access to vaccines would be positive,” Read said.
Carl Hosticka, an emeritus associate professor in the public policy, planning and management department and a Portland City Councilor for District 3, said it is important to remember that the budget is just a proposal and has to pass through Congress before any adjustments can be made.
“These budgets are very political and very often the game isn’t about what the person who proposed the budget actually wants to see enacted into law; it’s about what political trade-offs they can force the other side to make,” Hosticka said.
Hosticka, who served as a state representative in Lane County from 1983 to 1994, said Bush’s rate increase proposal for BPA and his plan for Medicaid are unlikely to make it through both Congressional chambers and are primarily political statements about the need for fiscal responsibility.
“It’s not a very pretty way of doing things, and that’s part of why the public is so skeptical over how (politicians) do business,” Hosticka said, referring to the process of political bargaining.
Rep. Peter Buckley, D-Ashland, said it is unlikely the budget will make it through Congress without undergoing significant changes, and the proposal should be seen more as a representation of the Bush administration’s ideological priorities than its immediate policy plans.
“It does give kind of a horrifying view of what the priorities of the
administration are,” Buckley said, adding that the budget proposal is “fiscally irresponsible and morally reprehensible.”
Leachman said proposed tax cuts add insult to injury for those who will already be feeling the effects of the reduction in Medicaid funding by giving relief to the very wealthy and not the families struggling to get by.
Many low-and middle-income families have seen tax decreases under the Bush administration and Leachman said those were beneficial but become overshadowed by the program cuts being proposed.
A decrease in food stamp funding as proposed in the budget would harm the improvements to Oregon’s hunger rate that have come about since the state expanded the qualifications for the food stamp program, Leachman said.
“We would have to scale back the program, and we think that will hurt Oregon’s anti-hunger act,” Leachman said.
Hosticka said the political ideology behind Bush’s budget proposal is such that the consequences of the proposal could be an irrelevant topic of discussion because of the likelihood it will go through drastic changes.
Leachman said the impact political ideologies have on policymaking is apparent with each year’s budget proposal.
“It becomes quite clear that it does make a difference who’s president,” Leachman said.

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