Bush May Fail to Fulfill Pledges on Medicare, Energy

[bigpoppanils]

Bush May Fail to Fulfill Pledges on Medicare, Energy This Year

Nov. 10 (Bloomberg) -- President George W. Bush may not fulfill his pledge to revamp Medicare -- a goal he set in the 2000 election campaign along with the tax cuts he delivered. As Congress prepares to adjourn in two weeks, the bill adding prescription drug benefits to Medicare remains unfinished.

Bush also may fail to get a new energy law intended to reduce U.S. dependence on natural gas and oil from other countries, which the president made the first order of business for Vice President Dick Cheney. Both bills face opposition from Democrats in Congress along with some Republicans.

``Right now I think the energy bill is terrible, and from what I know of the prescription drug bill it's not very good,'' said Arizona Senator John McCain, who lost the Republican nomination in 2000 to Bush and voted against the tax cuts. ``I would rather have no bill than a bad bill.''

Adding a drug benefit to Medicare would help Bush appeal to the most active voting bloc in the U.S., the 24.5 million registered voters over 65 years old who have reached the age required to use the government health program. The August blackout in the Midwest and East Coast, the largest in U.S. history, and a 23 percent rise in gasoline prices from June to August also make energy policy an issue for the 2004 election.

The Medicare and energy plans would help drugmakers such as Eli Lilly & Co. and oil companies such as Exxon Corp. and Shell Oil Co. The bills are ``important'' for the president and the Republican party, said Scott Reed, who ran Bob Dole's 1996 Republican presidential campaign. Reed, now chairman of a political consulting company, Chesapeake Enterprises, gave the bills a 50 percent chance of success.

Election Prospects

Bush pressed Congress to reach a compromise on Medicare during a campaign lunch in North Carolina Friday, saying ``we must handle our responsibilities in Washington by making sure the Medicare system is vibrant and viable and real, not only for seniors today, but for those of us who are fixing to be seniors tomorrow.''

The president's job-approval rating improved to 52 percent in a Newsweek poll conducted Nov. 6-7 compared with 51 percent the previous week. Support declined for Bush's handling of the situation in Iraq, with 51 percent disapproving. Approval of Bush's stewardship of the U.S. economy rose to 54 percent from 38 percent a month ago. The Newsweek survey of 809 registered voters has an error margin of plus or minus 4 percentage points.

The U.S. economy grew at a 7.2 percent annual rate in the third quarter, the fastest in 19 years. Bush, who promised his tax cuts would create jobs in the U.S., got a boost for his economic policies as the jobless rate dropped to 6 percent and the economy added jobs for a third month in October.

Bush's approval ratings would be hurt by the failure of one of his major campaign promises, said Karlyn Bowman, a public opinion analyst with the American Enterprise Institute.

`High-Profile Issue'

``No president in a weakened state wants a defeat on a high- profile issue,'' said Bowman.

Failure to reach compromises with Democrats before Congress leaves at the end of this month would push the bills into a year when Bush, all the House of Representatives and a third of the Senate are up for election, increasing the chance that Bush's pledges will remain empty, said Stephen Hess, a presidential scholar at the Brookings Institution.

``There is a lot of opportunity to throw sand into the gears, especially when you're moving into an election year,'' Hess said in an interview on Wednesday.

Now or Never

``If we don't get this thing done now, we don't get it done,'' House Speaker Dennis Hastert told reporters about the drug bill in a briefing on Thursday.

Republicans control both chambers of Congress and have been negotiating almost exclusively within their own ranks on the Medicare and energy bills. They can't force a vote on the proposals in the Senate because they have only 51 of the 60 votes needed to end a debate.

Senate Democratic Leader Tom Daschle has said Democrats won't allow a vote on any legislation that includes Republican plans to allow private insurers to compete against Medicare or allow oil and gas drilling in an Alaskan wildlife preserve. Other Democrats have promised filibusters over dozens of provisions.

Republicans were able to pass Bush's $1.7 trillion in tax cuts without much help from Democrats because budget bills don't require 60 Senators to agree to end a debate. This year's tax cut passed the Senate when Cheney exercised his power as vice president to break a 50-50 tie.

``Bush can't play the blame game,'' said Hess, of the Brookings Institution. ``If he fails, he can't say the Democrats in Congress are at fault. So he has much at stake.''

Tax Cuts

Bush started talking about tax cuts early in his 1999 campaign as a way of winning votes during the primaries. For the general election, he embraced a prescription drug benefit for the elderly over the opposition of pharmaceutical companies.

``Prescription drugs is going to not only be a priority, we're going to get something done,'' Bush said in September 2000 as he campaigned for the presidency.

Once in office, taxes surged to the front of Bush's agenda. His first speech to Congress in February 2001 centered on tax cuts, and he won most of his proposal with a 10-year, $1.35 trillion reduction enacted four months later.

With electricity shortages in California also dominating headlines in 2001, Bush put Cheney in charge of a task force nine days after his inauguration. The resulting recommendations have been stalled in Congress since March of that year.

Power to Delay

The ability of Democrats to delay action in the Senate on the Medicare and energy bills gives them power to demand changes in what Republicans work out among themselves, particularly with a few Republicans such as McCain ready to defect.

Democrats in both chambers say they can't support the House- passed provision that allows insurers to compete with Medicare.

Massachusetts Senator Edward Kennedy, a Democrat, told reporters last week the Medicare bill, which will cost $400 billion over 10 years, is on ``life support.'' Kennedy vowed to stall the bill over the private insurance provision, which he says would endanger Medicare by prompting its healthiest patients to defect to private plans.

Jack Rowe, chief executive officer of Aetna Inc., visited the Capitol last week and said he wants lawmakers to include in the drug bill a provision giving higher payments to insurers who already serve Medicare patients. His company, the second-largest U.S. health insurer, wants Congress to let private insurers compete against Medicare in providing the drug benefit, which many Democrats oppose.

`Political Risk'

``There's too much uncertainty and political risk to not have a bill,'' Rowe said in an interview last week.

Chances for a drug bill ``look better today than they did two weeks ago, or a month ago,'' Lilly Chairman and Chief Executive Officer Sidney Taurel said in an interview Nov. 4. His company is looking to boost sales of new drugs such as Forteo, a bone-building medication designed to help elderly patients with osteoporosis.

Medicare talks are ``difficult,'' Hastert said Nov. 6, predicting that if a bill emerges from negotiations, it will pass by the slimmest of margins. When the House passed its version of the bill last summer, it won by a single vote.

David Certner, director of federal affairs for the AARP, said his group's 35 million members over the age of 50 will be quick to blame Republicans if a Medicare bill falls short. A Harris interactive poll of adults released last week showed that Democrats have increased their lead over Republicans on health care issues in the past year.

`Difficult'

``It's going to be very difficult for the Republican Party not to deliver when they control the White House and Congress,'' Certner said in an interview last week. ``Our members care deeply about getting a Medicare prescription drug bill through and have been disappointed nothing has passed for three years.''

In the 1998 election, 60 percent of registered voters age 65 or older cast ballots, compared with 42 percent generally. They constitute 12.4 percent of the U.S. population.

On the energy bill, New York Democratic Senator Charles Schumer has said he will obstruct a vote unless a Republican proposal is removed that would provide a liability waiver for producers of MTBE, a petrochemical that's been blamed for polluting groundwater.

A collapse of the energy legislation would leave oil companies such as Exxon and Shell without taxpayer assistance for a $20 billion natural-gas pipeline from Alaska to the lower 48 states. Archer Daniels Midland Co., the nation's largest producer of ethanol, is vying for tax incentives for its products and is counting on Midwestern Democrats to keep them in the bill.

Oil & Gas

Southern Co., the largest U.S. utility by market value, wants a provision delaying until 2007 a Federal Energy Regulatory Commission plan requiring utilities to turn over control of their transmission grids to independent operators.

The Alliance for Energy and Economic Growth, a coalition of energy producers and consumers, spent $2 million to $3 million since 2001 on advertisements, a Web site and press releases promoting a bill that encourages production without requiring utilities to use more renewable energy, said spokeswoman Peggy Laramie.

Failure of an energy bill would disappoint Bush's supporters in the oil industry, who were counting on its $16 billion in tax subsidies over 10 years, said Ethan Siegal, who tracks Washington policy for institutional investors.

More risky in electoral terms, Siegal said, is the chance of another power blackout or jump in energy prices next year.

``If there's no energy bill and there is another event close to the elections, that could be a problem for Bush,'' he said.

Last Updated: November 10, 2003 00:02 EST

[jamiroguy1]

Who didn't see this coming?