(Washington, D.C.) – Citizens Against Government Waste (CAGW) today blasted the Senate for stripping out  billions of dollars in budget savings, while applauding the House for maintaining greater fiscal discipline.  The House is seeking to slow the annual growth rate of total mandatory spending from 6.4 percent to 6.3 percent, translating to $69 billion in savings over five years – 31 percent more than the $51 billion in savings sought by President Bush.  The Senate voted 55-45 to remove $14 billion in cost savings to Medicaid.  The Senate also rejected the President’s proposal to combine Community Development Bock Grants (CDBG) with other economic development programs and to reduce its growth by roughly $2 billion.

“The Senate has once again demonstrated a reckless disregard for fiscal responsibility,” said CAGW President Tom Schatz.  “Call it what they want, the Senate is shrugging at the impending entitlement crunch and leaving the problem to future generations to deal with.”

Since 1995, Medicaid spending has grown by 211 percent.  This year, federal spending on Medicaid will reach $183 billion and in the next five years, will total more than $1 trillion, according to the Congressional Budget Office.  Many Senators say that federal and state officials should be given time to reform the program, and in place of spending limits, would establish a commission to explore policy changes to slow the program's growth.

“We don’t need a commission to tell us that Medicaid is rife with waste, fraud, and abuse,” Schatz continued.  “The Senate is engaged in a stalling tactic, substituting symbolism for real action.  After many years of explosive growth, states are unlikely to implement reforms on their own if Congress lacks the will to impose spending limits.”

The Office of Management and Budget’s Program Assessment Rating Tool concluded that the CDBG program is “ineffective,” citing an “unclear purpose, loose targeting requirements, and lack of results.”  The President’s budget would require cities to submit their proposals in advance and compete for funds.  The lack of accountability and standards has allowed CDBGs to become a budgetary channel for pork.  In fiscal 2005, there are a total of 1,087 economic development initiative grants costing more than $303 million.  Localities have wide latitude in using the grants and Congress does a poor job of tracking where the money gets spent.  Past grants have included $25,000 for a music conservatory and $500,000 for “streetscape improvements” in Westchester, NY – one of the wealthiest counties in the nation.  

“The elimination of these modest constraints comes at a time when legislators are clamoring about the need to reduce the deficit,” Schatz continued.  “The House seems willing to take action in order to get spending under control.  The Senate continues to ignore the enormous burden being heaped on future generations.” 

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.