February 6, 2007
Budget Plan Sparks Mixed Reactions Among Lobby Groups
Max Wegner - Congress Daily

President Bush's proposed FY08 budget Monday elicited a thumbs-down from a variety of interest groups ranging from hospitals to contractors to farmers. But it met with praise from at least one major business lobby: the U.S. Chamber of Commerce.

Hospital groups roundly panned the budget's proposed cuts in Medicaid and Medicare as devastating for children, seniors and the disabled.

"They are being unfairly singled out to carry the burden of achieving a balanced budget," declared American Hospital Association President Rich Umbdenstock. "The proposed budget includes a tidal wave of cuts that will inflict real damage on hospitals' ability to care for these patients."

Umbdenstock was echoed by AARP Chief Executive Officer William Novelli, who charged that the budget is an acknowledgement of a healthcare crisis in the United States that fails to provide the resources to address it.

"The $95.6 billion in cuts to Medicare and Medicaid proposed in the president's 2008 budget reflect an ongoing and annual rite in Washington -- piecemeal cuts that threaten to damage critical programs without addressing the fundamental problems that exist in our entire healthcare system," Novelli said.

For their part, the Associated General Contractors of America lamented proposed cuts of over $500 million for the Army Corps of Engineers, $400 million for water infrastructure spending and more than $200 million for the General Services Administration.

AGC Chief Executive Officer Stephen Sandherr said contractors would benefit from the budget's proposed increases for defense and homeland security spending, but contended that the plan does not adequately provide for the country's infrastructure.

"While there is real concern about fiscal restraint and winning the war on terror, this budget does not address our nation's long-term capital investment needs," Sandherr said.

And American Farm Bureau Federation lobbyist Dana Brooks responded to proposed cuts in farm subsidies by pointedly noting that it would be up to Congress to pass the spending bills. "That is the president's budget," Brooks said. "Congress will write its own budget. We plan on working on this."

Others saw opportunity in the new budget proposal.

A spokesman for the Renewable Fuels Association pointed out that the FY08 request includes $179 million for the administration's Biofuels Initiative, an increase of 19 percent over its FY07 request. It also proposes $1.24 billion for the Energy Department's Office of Energy Efficiency and Renewable Energy, an increase of 5 percent.

"In general, this budget is a step in the right direction and we look forward to working with Congress as they develop their legislation," the spokesman said.

The defense industry stands to gain significantly from Bush's budget, which proposes an 11 percent increase in Pentagon spending in FY08.

Defense lobbyist Jeff Green, until recently a top aide for House Armed Services ranking member Duncan Hunter, R-Calif., is working to introduce clients that have not historically sought defense contracts. He said his current emphasis is "to show them opportunities" of potential defense work.

"The bottom line for those of us in the defense industry is the administration is proposing more funds," Green said. "The more players the Department of Defense can get into the game, the ultimately better prices they should get."

As an example, he cited one of his clients: Magna PowerTrain, a global manufacturer of transmissions for the auto industry. The company has technology that could be used on Humvees and other military vehicles, Green said.

The Chamber's chief economist, Martin Regalia, called the Bush budget conservative in its revenue and growth projections, saying that the administration's budget complements many of the Chamber's initiatives on health care, energy and education policy.

"The overall approach to this budget, the overall envelope, is largely in sync with many of the Chamber's priorities," he said.