The delicate balancing act that remains on Medicare

To get a compromise, the GOP has to placate House conservatives, but that may erode Senate support.

In an ideal political world for the Bush reelection team, the president would sit down on July 30 - the 35th anniversary of the Medicare program - and sign the biggest expansion of benefits in that program's history.

But neither the White House nor GOP leaders in Congress are touting deadlines as they prepare for what could prove to be the most difficult negotiations of the 108th Congress.

Early Friday morning, the Senate passed a broad bipartisan bill on a strong 72-21 vote. In the House, GOP leaders held their vote open for nearly an hour to eke out the winning vote at 2:33 a.m. Despite the lopsided vote tallies, the bills in both houses represent fragile agreements that could unravel in conference.

Another challenge is ongoing opposition from the party's conservative base, both in and out of Congress - the engine behind every other big vote this session. Vote for the bill now, and it will be "strengthened" in conference, President Bush told restless conservatives at a June 25 meeting at the White House.

And there's the rub: The enhancements that would make the bill more acceptable to House conservatives, such as stronger incentives for seniors to quit traditional fee-for-service Medicare in favor of private plans, will unravel support in the Senate. And visa versa.

"If the details aren't just right coming out of the conference, it gives a green light to Democrats in the Senate to pull out and filibuster, in which case Republicans will get most of the blame," says Larry Sabato, a political scientist at the University of Virginia.

The key to a big bipartisan vote in the Senate was preserving equality of benefits between Medicare and new private options. Both Democrats and moderate Republicans in the Senate threaten to pull their votes if this principle is abandoned in the final version of the bill.

"Vital to achieving this 'balance' between the tested and the new was maintaining an equal benefit no matter which option is selected," said Sen. Olympia Snowe (R) of Maine after the Senate vote. A key GOP moderate, Senator Snowe says she would not be able to vote for the final bill if that agreement fell apart in conference.

GOP conservatives, on the other hand, fear that a $400 billion prescription-drug benefit will lock in a big entitlement that future generations will not be able to afford. On the eve of last Thursday's vote, 42 House Republicans said they would withhold their votes unless the bill set up direct competition between Medicare and new private plans by 2010. Ten Republicans opposed the bill in the Senate.

"We're creating $4 to $5 trillion in liability that our children are going to have to pay in taxes just to get us through the next election," says Sen. Judd Gregg (R) of New Hampshire, who opposed the Senate version of the bill. He also worries that a new government entitlement for prescription drugs will encourage private companies to drop such coverage for their employees. "It's a windfall for General Motors," he adds.

In the end, what muscled the bill over the line in both the House and Senate was a provision of benefits for rural constituents, including bonus payments for doctors in medically underserved areas. That appealed to moderate Republicans and rural Democrats.

"The main reason I'm supporting this bill is because of the rural parts of the package. I'm going to have many more physicians going out of business in my district unless we get this through," says Rep. Collin Peterson (D) of Minnesota.

If the final agreement shakes any one of those assumptions, it could scuttle prospects for the bill, analysts say. "President Bush has a lot at stake. With Republicans in charge of both houses, there will be no excuse," says Mr. Sabato.

Meanwhile, Democrats say a compromise will be impossible without direct involvement from the White House. "I don't see much progress being made in the conference without the intervention of the president," says Rep. Charles Rangel (D) of New York, the ranking member on the House Ways and Means committee.

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