Agreement on Medicare Drug Benefit Proves Elusive

Both Sides Digging In; Outcome In Doubt

By James R. Hood

WASHINGTON, July 14, 2003 -- It wasn't long ago that the Bush White House was giddily pushing Congress to reach agreement on a Medicare drug benefit before August. Today, President Bush likely is pondering the "third-rail" principle which holds that any politician who dares touch the Medicare issue faces immolation.

As the summer wears on, it becomes increasingly doubtful Congress will reach agreement until September ... if ever.

As a conference committee is formed to reconcile differing House and Senate bills, acrimony is growing, positions hardening and both sides digging in. With each day it becomes more likely that bitter partisanship will stall agreement or even derail the measure completely.

With 40 million elderly and disabled Americans facing growing drug costs and the 2004 election drawing near, the Bush Administration faces the embarrassing prospect that it will not achieve the centerpiece of its domestic agenda.

Senate Democrats reluctantly joined in supporting the Senate version of the drug benefit bill but warn they will withdraw their support if major provisions of the more conservative House bill wind up in the final measure.

Sen. Edward Kennedy (D-Mass.) and other prominent liberals were part of the bipartisan three-to-one majority to vote for the Senate measure. But the House measure was drafted almost entirely by Republicans and passed by only one vote, with many conservative Republicans saying they voted for the bill only because of intense White House arm-twisting.

"There is a morning-after realization that this is a lot tougher than many of us might have hoped," AARP policy director John C. Rother told The New York Times.

The differences between the massive bills are significant. The House measure would set up direct competition between traditional Medicare and private health plans in 2010. If the traditional Medicare program by that time was costing more than private plans, elderly beneficiaries would face higher premiums.

Conservative Republicans say such competition is essential but Democrats say the higher premiums would be devastating to the oldest and sickest Americans, who are most likely to stick with the traditional program.

Sen. Kennedy and other Democrats say the competition provision is a deal-breaker and they are threatening to withdraw their support if that provision is in the final bill.

In the House, conservatives are angry because they view the drug benefit as an expensive add-on that is little more than a "drug giveaway," as Rep. Sam Johnson (R-Texas) called it. "If it doesn't reform Medicare, it's not worth doing," Johnson said.

Last week, 76 House Republicans sent Mr. Bush a letter demanding that any Medicare drug bill include the competition provision and threatening to defeat any bill that lacks that measure. Meanwhile, Sen. Kennedy and other Democrats wrote Bush and said they would defeat any bill that includes the competition plank.

Both sides are keeping a careful eye on 2004. Democrats have positioned themselves both as defenders of Medicare and as backers of a prescription drug benefit.

Republicans, though, have a serious internal disagreement. The Bush Administration and Senate Majority Leader Bill Frist have staked their political futures on adding a drug benefit. But the more conservative wing of the party fiercely opposes any expansion of Medicare without fundamental reforms that would hold down costs and create private-sector competition.

Strategically, the Democrats have a major advantage. With Republicans controlling the White House and both houses of Congress, Democrats could benefit from public outrage if the measure fails entirely and they successfully position themselves as having fought for Medicare against the zealots of the GOP's conservative wing.

Republicans, on the other hand, could face a large contingent of angry voters no matter what happens. Incumbent Republicans could encounter heavy flak if a bill passes that the conservative wing condemns as too generous. Conversely, they could face the wrath of angry seniors if no bill is passed this session.

It's still too soon to say what provisions are truly deal-breakers. However, there's a sobering realization that the battle is not only not over but that it may yet be fought with weapons of mass destruction that would do major damage to one or more of the major players.