Agenda May Divide GOP

Posted January 2, 2004 at 5:47pm

Republican strategists say the key complicating factor in the second session of the 108th Congress will be the slightly divergent priorities of the White House and Congressional Republicans.

While Republicans on Capitol Hill would like nothing better than a smooth exit before the elections, GOP strategists say the White House believes it is necessary to ensure that President Bush and his agenda hold the attention of voters through Election Day.

For one thing, the strategists say, voters need to see that the president has a “vision” going forward. But just as importantly, the White House needs a diversion that will prevent Democrats from seizing the initiative.

“[Karl] Rove does not like an empty channel,” one White House insider said, referring to Bush’s top political strategist. “If you leave a vacuum, someone fills it.”

As for the president, the source said, “This guy saw his father go down to defeat because he didn’t have a vision for the future. [Bush] will not make this mistake.”

A prime example of this tension revolves around the expectation that Bush will press in the upcoming session for a major legislative initiative designed to encourage long-term savings, in an election-year appeal to the burgeoning “investor class.”

GOP strategists expect such a package to clump together several proposals already floated by the White House — possibly to include first steps toward Social Security reform, an issue Bush may make a centerpiece of his re-election campaign.

Such a package, however, would be almost certain to face major logistical problems in the Senate. Senior GOP aides there say the floor schedule is already packed tight with initiatives, such as the long-anticipated highway bill, that have either been postponed or face impending sunsets.

“The agenda is driven by reality. And the reality is we have a number of programs expiring,” said Bill Hoagland, a top adviser to Senate Majority Leader Bill Frist (R-Tenn.). “I think it’s clear time will be limited.”

On the House side, the question is how to ride out the session without major complications.

“I don’t think anyone believes this is going to be an ambitious legislative session,” one adviser to Speaker Dennis Hastert (R-Ill.) said.

The adviser cited unfinished business in the Senate as a complicating factor. “If they come back and do the [fiscal 2004] omnibus [spending bill] and energy, the way the schedule is laid out, it’ll be the end of March” before the Senate can get to anything else, noted the adviser.

On top of the omnibus, the Senate is indeed poised to immediately take another run at the energy bill, which is the last remaining piece of the White House’s legislative agenda from last year. And Frist promised lawmakers that the Senate will take up the controversial highway reauthorization by Feb. 29.

But other critical deadlines loom on the near horizon.

Because lawmakers were unable to reach a deal on a replacement for the 30-year Treasury bond last session, companies will have to begin making larger contributions into their pension funds — an additional burden that industry groups expect to cost the business community roughly $30 billion in the short term.

Lobbyists predict that legislation will now have to include complicated language authorizing companies to recoup those contributions.

At the same time, Congress is facing a March deadline for altering the laws that govern so-called foreign sales corporations. Failure to make the changes will expose U.S. industry to as much as $4 billion in retaliatory tariffs through the World Trade Organization.

“I see a lot of leftovers taking up a lot of the schedule early in the game,” one business lobbyist with strong ties to the White House said. “There are a half-dozen things that have to get done and have to get done quickly.”

To this point, attention has focused almost exclusively on two savings proposals first floated by the Bush administration in early 2003 but swiftly put aside. They would be a Retirement Savings Account and a Lifetime Savings Account — investment vehicles from which individuals would be able to withdraw tax-free savings.

Many analysts consider the plans to be a major first step toward market-based reforms of Social Security. That’s not the only controversial aspect, either: The LSA plan has been at the center of an intense battle within the financial services industry that has in recent weeks swept in the White House and key lawmakers.

While the tax-free accounts have drawn the most attention, some GOP strategists said they wouldn’t be surprised to see major — though less controversial — initiatives teed up by the White House for the forthcoming session. Specific measures would possibly include a plan to deal with the uninsured — an almost certain election topic — and a program to wire the country with broadband Internet capabilities.

Even with room in the schedule, there’s no clear route for major initiatives. Lawmakers don’t yet know whether to expect another request from the White House for supplemental appropriations in the war on terror, and Congress will have to raise the debt ceiling at some point — it’s just a question of when.

On top of that, Senate Republicans expect that some time in the schedule will be seized by Democrats seeking a temporary extension of federal unemployment benefits and a hike in the minimum wage, which rarely fails to be raised in a presidential election year.

Hoagland described a “trade-off” between getting work done smoothly and making a major policy imprint in the next session. The White House, he suggested, needs to make a decision about how aggressive it plans to be, weighing the risks of a legislative logjam during the election season.

“Talking about big-ticket items, I don’t think you can get two major authorizations through in an election year,” Hoagland said.

In addition to the clutter of bills slated for early consideration, the Senate has scheduled debate of the welfare reauthorization, which like the highway bill was put off in the last session. The chamber also faces tough going on measures dealing with support for higher education and the Head Start program, plus special education, where a fight continues to brew over the question of entitlement status.

The Senate will also have to squeeze in the annual budget resolution during this period.

By the time that work is completed, Frist expects to have a deal ready for the floor on the mammoth asbestos reform issue, which has escaped resolution longer than most Members have been in Congress. The Senate is also poised to consider proposals to control the costs of medical malpractice.

Then, of course, there are those 13 appropriations bills for the upcoming fiscal year.