THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, October 28, 1995 TAG: 9510280344
SECTION: FRONT PAGE: A7 EDITION: FINAL
SOURCE: KNIGHT-RIDDER NEWS SERVICE
DATELINE: WASHINGTON LENGTH: Long : 197 lines
Entering a national park would cost more. And you might pay an extra quarter or two for a hamburger while waiting for Old Faithful to erupt.
Your hourly wage could go down if you're a janitor who cleans a federal office building or a security guard who protects one.
And if you're in the market for something unusual, consider what Congress wants to sell: Governors Island in the New York harbor, the federal helium supply and the Teapot Dome oil shale reserve in Wyoming.
In ways big and small, the House and Senate bills to balance the budget would affect virtually every American.
Middle-income parents would get a tax break. Rich elderly would pay much more for Medicare benefits. More welfare mothers would have to work. Fewer poor people and immigrants would qualify for federal aid.
Even burial insurance would be affected: The minimum tax-free death benefit would be adjusted upward. But you could face higher taxes if you won big at bingo.
Here's a look at how the House and Senate bills would affect different people and places. Keep in mind that differences between the two bills still have to be worked out, and that the legislation will not become law unless President Clinton signs it. The elderly
Medicare recipients would pay higher premiums, which would permanently be set at 31.5 percent of the program's cost, instead of dropping to 25 percent under current law. Monthly premiums would rise from $46.10 per month this year to an estimated $89 by the year 2002. Still uncertain is whether the Part B deductible would also rise.
There would be incentives for the elderly to join private managed-care plans. Some expenses for long-term care would be treated as medical expenses for tax purposes. Elderly receiving Medicaid assistance for nursing-home care could also face cutbacks if states opt to restrict eligibility.
The promised payoff: a more financially solvent Medicare. Parents
Most middle-income parents would receive a tax credit, probably at the Senate level of $500 per child. Still to be worked out: at what income level the credit would be discontinued. The House wanted to make families making as much as $250,000 eligible for some break, but that looks unlikely. Savers
Rules for existing-style Individual Retirement Accounts would be liberalized to allow more people to contribute to them. In addition, a new form of IRA would be created and be available to any taxpayer. Details still have to be worked out, but the idea is to encourage deposits in a nondeductible IRA. Taxes would be paid on money before it was deposited, but the interest would not be taxable - unless the money was withdrawn for a nonapproved expense. It could be withdrawn for such expenses as purchase of a first home and college tuition costs. Future retirees
The House and Senate differ on giving corporations permission to withdraw billions of surplus dollars from their pension funds. The House is for it; the Senate, against it. The Clinton administration is also opposed, warning that it would weaken the soundness of the funds. On another matter, Senate Republicans had wanted to gradually raise the eligibility age for Medicare from 65 to 67, but Democrats succeeded in knocking the provision out of the bill on Friday. Welfare mothers
More women would have to work to qualify for benefits, and states would have more discretion on setting eligibility standards. Still to be worked out: whether additional children born while a parent is on welfare can get federal cash benefits, and whether children born to mothers under age 18 can qualify for aid. Immigrants
It would be much harder for immigrants to qualify for federal programs such as Medicaid, food stamps and Supplemental Security Income. Still to be worked out: whether to exempt legal immigrants already in the country from the aid ban, and whether to allow immigrants to receive aid after they've been in the country for five years. The disabled
Drug addiction and alcoholism no longer would be considered a disability for the purposes of qualifying for Supplemental Security Income. Rules would also be tightened on low-income children classified as disabled for SSI purposes. The poor
Able-bodied men between 18 and 50 with no dependents would be required to work for food stamp benefits. Still to be worked out: whether some of the poor, such as pregnant women and their children, would automatically qualify for Medicaid benefits. College students
Details still have to be worked out, but college students could face higher interest costs when repaying their student loans. Parents also could face higher interest rates on loans they take out to pay for their children's education. The rich elderly
The richest 10 percent of Medicare recipients would start losing the subsidies they receive from other taxpayers for their Part B Medicare benefits. Individuals with incomes above $50,000 and couples with incomes above $75,000 would be affected under both the House and Senate plans. Federal workers
Both the House and Senate plans require federal workers to contribute more to their retirement plans. Members of Congress and their staffs would also take a hit: Their pension plans would be made a little less generous. Veterans
Both the House and Senate bills would overturn a recent Supreme Court decision that requires the government to compensate veterans injured or disabled at a Veterans Administration hospital, even if the facility was not negligent. Veterans entitled to annual cost-of-living adjustments for disabilities would receive slightly lower payments. Low-income workers
Many low-income workers now are eligible for the Earned Income Tax Credit, a benefit aimed at encouraging work. Even workers who don't make enough to pay taxes can qualify. Both the House and Senate would make the EITC less generous. Childless families would no longer be eligible. And some workers with families above the poverty line could lose benefits. Two-income couples
The so-called marriage penalty, which occurs when a married couple pay more in taxes filing jointly than they would if they were unmarried and filing separately, would be curbed. Details still have to be worked out, but the Senate bill promises to eliminate the penalty for 23 million couples. Indian tribes
Tribes that have benefited in recent years by the establishment of casinos on reservations would be subject to a federal tax under the House bill. If the provision survives, a legal battle would almost certainly ensue because the Internal Revenue Service has ruled that Indian tribes are exempt from federal income tax. Farmers
While the House and Senate bills differ on the details, many farm programs are in line to be restructured. Among them: the dairy price-support program, peanut price-support program and other crop subsidies. Federal policies that encourage farmers to plant the same crops every year and not plant on sections of their land also are likely to be overhauled. Hospitals
A slowdown in payments to hospitals for treating Medicare and Medicaid patients could hurt some institutions. Children's hospitals, inner-city hospitals and rural hospitals would be among the most vulnerable. Hospitals that already have lots of managed-care contracts should do better. Doctors
The House bill would give doctors their version of malpractice reform, looser regulation of their business, and the right to form their own insurance plans. But doctors could face reduced payments for treating Medicare and Medicaid patients. The environment
Over the objections of environmentalists, both the House and Senate would permit the leasing of lands in the coastal plain of the Arctic National Wildlife Refuge in Alaska for oil and natural gas exploration and drilling. Cities
A number of provisions would affect cities, particularly ones with large concentrations of poor people. Cutbacks in Medicaid and in payments to hospitals could strain urban hospitals that care for the poor. Under the House bill, smaller banks would be exempted from a current requirement designed to encourage lending in low- and moderate-income neighborhoods.
Subsidized public housing also would be affected. The House would eliminate a tax credit for those investing in housing for low-income people. The Senate would change tenant rules for subsidized housing programs. Currently, 50 percent of the units are reserved for the homeless and very poor. That rule would be replaced with one requiring at least 50 percent of the new tenants be employed. States
In general, states would have much wider authority to run welfare, Medicaid and other anti-poverty programs jointly financed by the federal and state governments. Fewer federal rules would be imposed, but states might have to limit aid or cut the number of recipients to compensate for reduced federal funding. Miscellaneous
The Senate bill would raise entrance fees for visitors to national parks, and concessioners would have more discretion to raise their prices. The House and Senate target different government assets for sale, including Governors Island in New York, site of the Coast Guard's largest facility; 40 ski areas owned by the National Forest Service; the federal helium reserve; and oil shale reserves in Colorado, Utah and Wyoming.
The House bill would also repeal the Service Contract Act, which requires that contractors providing services to the federal government - such as laundry or janitorial services - pay the prevailing wage in that area.
KEYWORDS: BUDGET by CNB