Originally Published: July 10, 2003 6:10 p.m.
The Medicare prescription drug bill that President Bush wants to sign this summer has sparked a divide both in his party and between the White House and its conservative think-tank allies.
The House and Senate bills heading into a congressional conference (so that lawmakers can try to iron out their differences) each represent the largest expansion of the Medicare program since the program's creation in the 1960s. The House bill, which opens up Medicare to more market-based competition (through private insurance plans) than the Senate bill, advancing by a single vote – after major Republican arm-twisting – even as GOP lawmakers balked at its $400 billion price tag and substantial red tape.
The significant gulf between the House and Senate bills has driven a wedge between the administration and many Republicans. A letter to Bush, signed by 27 GOP senators just before the bill won approval, detailed their grievances. They want a bill that focuses prescription drug coverage "on those who need it most," one that breaks with the "inefficient Medicare price control structure," and has stronger incentives to move the elderly into private, less expensive plans of their choice.
"We fear this legislation will instead do harm to Medicare" and send its costs soaring in years to come, the senators say.
Opposition to the bills is even stronger outside of Congress among the conservative think tanks, whose members and donors represent the fastest-growing segment of the GOP's political base.
"It distresses us to see people in the administration say this is a good thing," says Ed Feulner, president of the Heritage Foundation.
In uncharacteristically harsh language, Feulner says Bush's advisers "have this naive notion that if you go into a House-Senate conference, you will get a better bill than you had going in. They should know that's not going to happen."
He told Bush political adviser Karl Rove this past month that his group "can't support this (the bill)."
More than a dozen conservative think tanks, the source of many of the administration's reform ideas, have told the White House the same thing. The policy rift over time may not be "permanent, but it's serious," Feulner told me.
White House officials admit that the competing bills do not contain all of the market-based competitive reforms they had hoped to get, and that the ultimate compromise – if there is one – will likely need further fixing in the years ahead.
What are the political implications for Bush in all this? The White House and its allies say that it will rob Democrats of their best issue, boosting the president's support among the elderly in 2004.
"Are there concerns that there are large costs downstream? Sure," says Bruce Josten, the U.S. Chamber of Commerce's chief lobbyist. "But near term I don't think there is a downside for Bush."
"Besides, this will not fully kick in until 2006," he adds. "If you are going to have exploding costs, they are way down the road" – many years after George W. Bush has left the presidency and retired to his Crawford, Texas ranch.