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3 <br />Smaller savings are to come from increases in the premiums paid <br />by Medicare beneficiaries and a delay in the initial eligibility to <br />the first day of the month following a beneficiary's 65th birthday. <br />Medicaid cuts are to amount to $1 billion in FY86 and will rise <br />to $5.7 billion by FYSS as a result of a planned federal cap on <br />payments to states. Congress last year refused to continue an <br />earlier three year cap on the program despite an Administration <br />request that the cap be extended. <br />The overall impact of cuts in the Medicare and Medicaid <br />programs is a shifting of costs to beneficiaries, providers and <br />local and state governments. <br />ALTERNATIVE BUDGETS FROM CONGRESS <br />Many senior Senators and Members of Congress have already <br />rejected the Administration budget and have pledged to draft their <br />own alternatives. Majority Leader Dole is leading an effort in the <br />Senate to draft a budget plan and release it prior to the <br />Administration's budget submission date of February 4. <br />In addition, many Members of Congress are promoting the concept <br />of a temporary one-year budget freeze which would reduce the deficit <br />by significantly more than the Administration's budget. Their plan <br />is to use the one year period to devise a more permanent <br />alternative method of reducing the federal deficit. <br />