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WASHINGTON, Dec 27, 2005 (UPI via COMTEX) -- A federal spending cut bill passed by the U.S. Senate mandates $40 billion in cost reductions while the government will spend about $13 trillion in five years.
The programs that will feed the cuts the most will be the federal student loan program, Medicare and Medicaid. The savings represent about 0.3 percent of the federal budget outlays in a five-year period.
The student loan program is expected to see some $12.7 billion in savings over the next five years by setting interest rates at 6.8 percent, even if loan rates from other sources are lower, the Christian Science Monitor reported Tuesday. The loan rates are currently about 5.3 percent.
Medicare is predicted to show $6.4 billion and Medicaid $4.8 billion over the same time period, with those savings coming from increased co-payments and premiums. Congress has also made it tougher to qualify for reimbursement for nursing home care under Medicaid, the Monitor said.
Since Senate Democrats were able to get small changes in the bill, it must return to the House for approval, which is likely, before going to President Bush for signature, the Monitor said.
Copyright 2005 by United Press International