A House Divided

George W. Bush convinced many swing voters that he was "a uniter, not a divider." He pledged to work with Republicans and Democrats to change the tone of partisan rancor in Washington. But Washington is not Austin, and the sense of a stolen election has strengthened Democratic unity in a closely divided Congress. Any move to the center by Bush will also risk alienating conservatives in his own party.



In the Bill Clinton era, each party sometimes peeled off defectors from the other. Democrats were able to push through family leave and minimum wage legislation, both of which proved too popular for Republicans in swing districts to resist. Republicans mostly got their way on welfare reform, "charitable choice," and the privatization of some social services. In some cases, the effective governing coalition was Clinton and most congressional Republicans, the epic examples being welfare reform, the North American Free Trade Agreement, and trade relations with China.



Bush's successful enactment of a center-right agenda will depend on a balance between how many Democrats he can enlist for key elements of his program and how many Republican legislators defect to the Democratic side on popular issues like patients' rights and Medicare reform. In other words, his accomplishments will be determined by which party shows more unity on behalf of a legislative agenda.



There's less to Bush's famous bipartisanship than meets the eye. In Texas, Bush had no choice but to work with Democrats, since they controlled both chambers of the legislature when he became governor. The Texas Democrats he worked with were generally more conservative than those he'll face in Congress. The "big issues" Bush campaigned on while running for governor--juvenile justice, tort reform, overhauling education, and reforming welfare--were already in the pipeline before he took office. And the bipartisanship Bush touts is partly a byproduct of his frequent concession to let Democrats lead the legislative process. The part-time Texas legislature is not even formally organized along party lines; people from both parties chair key committees. "What a lot of people missed in Texas is that Democratic legislators liked him not just because he was a nice guy, but because they pretty much got their way," an aide to the Democratic leadership in Texas points out.



Some of the issues that appear to invite easy compromises are more divisive than they seem. During the presidential campaign, Bush tried hard to narrow perceived differences with Al Gore on popular Democratic issues like prescription drug coverage under Medicare and patients' rights. But it's no accident that both bills have been stalled in Congress. Democrats want relatively generous drug coverage under the public Medicare program. Republicans want government subsidies for meager coverage via private insurers. On patients' rights, the two parties are deeply divided over the patient's right to sue for malpractice if an insurer wrongfully second-guesses the doctor. In both cases, the Republicans work hand in glove with powerful industries. So Bush must now bring before a bitterly divided Congress the genuine policy differences he managed to obscure in the campaign.


Here are some of the key issues that will test Bush's skill as a compromiser and the cohesion of both party caucuses.



Education. If Bush can put off school vouchers, education is one issue where constructive bipartisan compromise is likely. In principle both parties agree on the need for standards, assessment, and accountability, as well as for increased federal assistance. Last year Connecticut Senator Joseph Lieberman, Gore's running mate, wrote legislation that would consolidate and streamline several federal education-aid programs, add tougher performance standards, and increase funding. The bill was similar in principle to one written by the conservative Heritage Foundation that was supported by Bush--with the key difference that Bush wants voucher alternatives to "failing schools," whereas Lieberman would mandate more state direction. Last year centrist Senate Democrats hoped for a deal with Republicans to pass something like the Lieberman bill, but in an election year the Republican Senate leadership was opposed to anything with Lieberman's name on it.



Liberals in Congress, including Senator Edward Kennedy of Massachusetts and Representative George Miller of California, now appear willing to take a bill like the Lieberman proposal as a starting point. The big trade-off is more money targeted to needy districts in exchange for tougher standards and more flexibility in how the money is spent. But using public funds to pay for private education is out of the question. By wide margins, voters in Michigan and California rejected voucher initiatives. And though some New Democrats have endorsed vouchers in the past, in the current political environment there is almost no congressional support for such subsidies among Democrats. So Bush could probably win credit for enactment of a major bipartisan education bill.



Tax cuts. Bush campaigned on a $1.3-trillion across-the-board tax cut. But he is very unlikely to get it. Many in his own party, most notably House Speaker Dennis Hastert of Illinois, favor piecemeal cuts. If Bush is willing to settle for something narrower, however, he can split the Democrats, especially on proposals to eliminate the estate tax and the marriage penalty. Both passed the House of Representatives last session with the support of many Democrats. Outright repeal of the estate tax passed by a vote of 274 to 157, with 53 Democrats crossing over. Interestingly, the Blue Dog Coalition, made up of southern and fiscally conservative Democrats, did not support repeal, out of concern for the effect on the budget. Some more-liberal congressmen--notably in the West, where real estate prices have soared--backed estate-tax relief to spare their constituents from paying taxes on inherited homes.



Democrats will likely propose a more modest form of estate-tax relief--one that targets family farms, businesses, and residences--while emphasizing that absolute repeal would be fiscally irresponsible and would benefit the very rich. The final vote could be close, and even if the Democrats lose, this is probably good politics. On the larger issue of across-the-board tax cutting, Democrats should have an easy time contrasting Bush's proposed $1.3-trillion cut with smaller and more politically attractive targeted alternatives such as a reduction in the payroll tax, an expansion of the Earned Income Tax Credit, or relief for working families along the lines of Gore's campaign proposals, whose cost totaled $500 billion. Democrats could well enjoy more unity on this issue than Republicans could.



Until recently each revision of the projected budget surplus was larger than the one before; this made it harder to hold the line against huge tax cuts. But slower economic growth portends a smaller surplus, and that means less money to give to taxpayers. Yet slower growth also invites a traditionally Keynesian tax cut to stimulate the economy. At the same time, however, a large tax cut might frighten the Federal Reserve, which is better positioned to provide a quick stimulus with a rate cut as long as Congress is being fiscally prudent. In exchange for targeting, Democrats could support tax relief totaling several hundred billion dollars more than they would prefer. The question is whether Bush will take the deal or go down fighting for a bigger, more regressive cut.



Prescription drugs. During the presidential campaign, Bush effectively blurred the differences between his prescription drug plan and Gore's. In actuality the plans differ significantly. Gore's would provide a prescription drug benefit to Medicare recipients that covers half of all costs. It would also allow the federal government to negotiate with drug companies for volume discounts in order to lower prices. Bush's plan would cover only the poorest elderly and those facing catastrophic medical costs. It would not be provided under Medicare, nor would it seek to control drug prices. Instead, Bush would offer subsidies to help the elderly buy private insurance for prescription drugs. The incoming president adamantly opposes a Medicare entitlement and considers price controls anathema. To attract Democratic support, he could expand the scope of his plan, possibly by raising the income level of those who can receive a drug benefit.



While Gore's proposal drew the support of 180 Democratic caucus members, some New Democrats chafed at what they considered government price controls. "The real ideological rub is going to be the degree to which the market is involved in setting the prices for prescription drugs," says a New Democrat strategist. If Democrats can unite in opposition, Bush would be vulnerable to criticism on three fronts: His plan doesn't cover enough people, doesn't come under Medicare, and doesn't control soaring drug prices. Framing Bush's plan as a favorite of insurance companies and HMOs would also help rally public opinion to the Democratic side.



Patients' rights. Here, too, Bush benefited by co-opting progressive language and blurring differences. During the campaign, Bush claimed to have supported a patients' bill of rights in Texas. In fact, he vetoed one bill under heavy pressure from the insurance industry and allowed a second one to go into law without his signature. The major difference is that while Gore supported the right to sue HMOs, Bush doesn't. In the last Congress, many Republicans joined House Democrats to pass the bipartisan Dingell-Norwood bill, which allows patients to sue for large damage awards. Though Republicans blocked the bill in the Senate, they may leave the final call to Bush. On the question of HMO liability, public sentiment lies squarely on the Democrats' side. But Bush will be under great pressure from his financial backers in the insurance industry and his party's right wing not to compromise on this point. He could try to win Democrats with minor concessions such as a limit on HMO liability. But if Democrats hold firm, as seems likely, they don't need to pass a better Democratic plan in order to prevail. Even a nominal victory for a weak Republican plan could be used against the GOP in the midterm elections.



Medicare reform. Bush would like to privatize Medicare by adding HMO-like entities to create competition; recipients could then choose from a range of private and government health plans. He has insisted that any prescription drug benefit accompany this reform. But with the high-profile exception of Louisiana Senator John Breaux, most Democrats oppose drastic changes in Medicare. Bush has signaled his support for the Breaux-Thomas plan, which would essentially turn Medicare into a voucher system under which recipients would be given a limited amount of money to spend on the best health care deal they could find. While conservatives frame it as a cost-cutting measure, Democrats can argue that any broad attempt at privatization is a disastrous dismantling of the popular Medicare system. They can also push for a better alternative (like Gore's) that introduces competition in some areas, such as by offering incentives to choose less expensive plans, but doesn't jeopardize the program. Most important will be making their case to the public.



Little support exists in the House Democratic caucus for Medicare vouchers. Only about five House New Democrats--led by Congressmen David Price of North Carolina and Cal Dooley of California--find the idea appealing, even in principle. "Our constituents live in rural areas and tend not to have managed care plans," a senior aide to one Blue Dog member observed. "They are also very dependent on the current Medicare system and wouldn't want it changed." Says one Democratic strategist: "What Democrats must keep relearning is that Medicare is very popular because it works, and HMOs are not popular and don't work for a whole lot of people. We don't have to bow to Republicans on this."



Social Security. Bush made this a big issue in the campaign, but he would want more than marginal Democratic support to pass something as momentous as partially privatized Social Security. While the idea has some appeal among younger voters, seniors overwhelmingly rejected it. Bush has yet to explain the details of how he would pay for the program. Most legislators and strategists interviewed for this article see scant Democratic support for Bush's plan. In fact, the only time that partial privatization came up for a recorded vote in the House--the Kolbe-Stenholm bill--just four Democrats besides co-sponsor Charles Stenholm of Texas voted aye. Bush has hinted that he may defer action and appoint a bipartisan committee to study the issue.



"There are clearly some Democrats who would want to play and share in the credit for thinking differently about the issue and possibly saving Social Security," says one Democratic House leader. "The closer Bush gets to issues that already create some tension among Democrats, the harder it would be to maintain party unity on this." But keeping Social Security as a public program remains a defining issue for most Democrats. In the campaign, Gore finessed Bush on this issue by proposing an individual account system subsidized by government as a supplement to Social Security rather than a partial diversion of Social Security funds. Two of the most visible Democratic supporters of partial privatization, former Senators Daniel Patrick Moynihan and Bob Kerrey of Nebraska, have now left Congress. And the plummeting stock market has removed a lot of luster from the idea.



So Bush will not likely find the crossover votes he needs to enact his two signature proposals--an across-the-board tax cut and partial privatization of Social Security. In the end, party unity will be everything. Given Bush's weak legitimacy, Democrats could try to do what the Republicans did to Bill Clinton in 1993 and 1994: deny the president any legislative victories other than token ones. Or they could search in good faith for common ground on issues with genuine substantive overlap, like education. Bush, for his part, will need to rein in the right wing in Congress if he is to enact much of anything. His nominal five-seat majority in the House includes a couple of dozen northern and western moderates who must face re-election in two years, mostly in swing districts. And at least five moderate Republican senators like bipartisan compromise more than they like their party's own right wing.



Bush does have the advantage of facing a Democratic caucus that is somewhat more moderate than it once was. But he also faces severe pressure from GOP conservatives to deliver the type of agenda that will alienate just those potential collaborators. "A lot depends on what the Republicans do," says Ed Kilgore, policy director for the Democratic Leadership Council, whose members will be among those most tempted to work with Bush. "If Bush takes [his election] as '95 all over again and thinks he has a mandate to roll over Democrats, there's going to be no problem maintaining [Democratic] discipline."



Early indications suggest that Bush's handlers recognize this danger and will steer clear of it. Instead, it will fall to Demo-crats to sharpen divisions on issues like the minimum wage, a patients' bill of rights, and prescription drug coverage, as well as on social issues--like abortion, gay rights, and hate crimes--on which Bush fared poorly in Texas. "There is an institutional interest in being able to dramatize to the public that Bush's proposals are bad for you," says a top Democratic strategist. "Democrats have to do what Gore couldn't--draw the distinction from day one between Bush and the Democratic Party."



A more plausible course for Bush--one potentially more dangerous to Democrats--would be to target a series of small but safe initiatives, as Clinton did so successfully after the 1994 midterm elections. A modest Bush agenda, enacted against a backdrop of gridlock and lowered expectations, could take on magnified importance with a weary public. If they can maintain unity, Democrats can present voters with better alternatives and remind them that they don't have to settle for small compromises. But if Bush is clever and resists his own right wing, it could be Democrats who suffer the soft bigotry of Bush's low expectations. ยค

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