Events Stir the Agenda in D.C.

Legislation to overhaul Medicare -- and its expansion to include a prescription drug benefit -- has passed the House and Senate, but the two bills differ in important respects. The House bill, which barely passed on a party-line vote, goes much further than the Senate toward one of Bush's key goals: giving private health plans a larger role in Medicare in an effort to increase market competition and control costs. The Senate bill, which was approved by a wide margin, allows a stronger continuing role for the federal government.

Congressional staff members met in August to discuss less-controversial differences, with mixed results. Tentative agreement was reached on providing drug discount cards to the elderly during the transition to a full prescription drug benefit. But talks were disrupted last week by a feud between Senate and House Republicans over health care in rural areas.

Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) ordered his staff to boycott several meetings because he believed aides to House Ways and Means Chairman Bill Thomas (R-Bakersfield) were not paying enough attention to provisions that would expand Medicare benefits in rural areas, a major issue in Grassley's home state.

GOP aides say they expect the storm to blow over when lawmakers return. But it indicates the thicket surrounding even seemingly tangential provisions of the massive legislation -- making it hard for some on Capitol Hill to see how agreement on a final bill can be completed any time soon.

A key question is how far GOP negotiators will go to make the bill acceptable to Democrats, who were crucial in passing the bill in a narrowly divided Senate. Kennedy, who was among those who voted for the measure, said that Bush will have to insist that House Republicans give ground on their push to expand the role of the private sector if the bill is to pass.

"Unless the president is prepared to stand down his right wing, we won't get a bill," Kennedy said. "The only way we can get a bill is if it is bipartisan."

The effort to finish work on the measure, which will cost an estimated $400 billion, was not helped by new projections from the Congressional Budget Office predicting that the federal budget will run record deficits in 2004 -- and remain in the red for years to come.

Many conservative Republicans have supported the Medicare bill reluctantly, expressing concern about the long-term cost of creating the prescription drug benefit. Growing deficits will make it harder to win support from some of these Republicans, senior GOP strategists say.