New Year, New Fear

Shortly after the Republican sweep of Congress in November, President Bush said he looked forward to working with lawmakers to "make our country a better and more compassionate place." And when Sen. Bill Frist was elected majority leader in December, the Republican from Tennessee promised to "listen, to diagnose, to treat ... to heal," and to focus particular attention on strengthening Medicare, lowering the number of uninsured and boosting the economy.

All worthy goals, but don't hold your breath. Just doing the math makes it highly unlikely that the Republicans, now in control of just about everything in Washington that matters, will come up with any programs to solve the health-care crisis for low- and moderate-income people, or any other pocketbook issues for the poor.

For starters, consider Bush's proposal to cut taxes by $674 billion over a decade. Throw in the tens of billions of dollars it will take, at a minimum, to fight a war in Iraq. Couple that with already ballooning federal deficits and one has to ask where the money is going to come from for domestic social programs. Beyond the fiscal issues, the Republican agenda includes drilling for oil in the Arctic National Wildlife Refuge, appointing more conservative judges to the courts and making it harder for women to receive abortions. These bills are aimed more at pleasing the conservative base than tackling social ills and enacting meaningful changes.

Let's start with health care. It's a top priority for Frist, a former heart and lung transplant surgeon, and for the White House. Both Republicans and Democrats recognize that this could be a key issue in the 2004 presidential election, particularly for elderly voters. Both sides are determined to reform the Medicare program [see Marcia Angell, "Dr. Frist to the Rescue," page 37] before it goes bust and to deliver a promised prescription-drug benefit. But the White House is expected to push a Medicare plan that would act more like private health insurance than the current fee-for-service approach. "That scares the hell out of those of who are Medicare supporters," a House Democratic staffer says, adding that the Bush-Frist approach would effectively end Medicare as an entitlement program. Medicaid coverage could still help the poor, assuming state governments don't cut funding due to their budget shortfalls. But that's a huge assumption given the fiscal realities in most states these days. Low- and middle-income workers not covered by Medicaid would feel the pinch the most. Some Republican proposals would offer better coverage for seniors but require higher premiums. That means sick seniors who are wealthy would be able to afford better care than those who are poor. And because Bush has said he won't accept a prescription-drug package without Medicare reform, seniors who no longer want to have to choose between buying food and buying drugs may have to sign on to the administration's overall plan.

Republicans also say they want to reduce the number of uninsured Americans, whose numbers increased by 1.4 million in 2001 to roughly 41 million, by issuing tax credits to help them purchase health insurance. But health-care experts, such as Henry Aaron of the Brookings Institution, predict the effect of doling out such credits would be "negligible to negative." Few people are likely to use the credits directly because they would be small. "You really couldn't buy much more than a bare-bones plan," Aaron says. Worse, employers may use the credits as an excuse to drop their coverage of employees. And while the administration talks about improving health-care coverage, the White House has a record of trying to reduce funding for programs that provide assistance to people with HIV and AIDS, and for community health centers, among other things.

Bush knows all too well what happened the last time a president sought re-election amid a weak economy. His economic plan, aimed at making sure he doesn't share his father's fate, proposes to eliminate dividend taxes, accelerate tax-rate cuts, end the marriage penalty, increase the child-tax credit, enlarge the amount small businesses can write off for equipment expenditures and move more lower-income taxpayers into the 10 percent tax bracket. Some portions of the plan, such as the child-tax credit, were thrown in to rebut Democratic claims that the entire package is tilted toward the rich. But the fact is that wealthy Americans benefit disproportionately. As the Urban-Brookings Tax Policy Center pointed out, the 10 percent of U.S. taxpayers with incomes greater than $100,000 would receive close to 60 percent of the benefit from the Bush tax cuts. It's hardly surprising that White House Press Secretary Ari Fleischer told The Wall Street Journal that Bush "believes people should not be denied tax relief because they are successful. This is a classic difference between the two parties and we welcome it."

For this president, tax cuts are a panacea for many of the problems facing the United States. But if the $1.35 trillion tax cut two years ago didn't ease our economic woes, is a plan roughly half that size really going to do any better? And given the fact that the budget surplus disappeared after the 2001 tax cut, would it be wise to go further into debt? The Department of the Treasury was so worried about the package that it released a list of quotes from 19 "prominent economists and industry leaders" who support the plan. But there was no shortage of economists and political observers who said the plan was flawed. As Bruce Katz of the Brookings Institution says, "If you provide tax relief to the low and moderate end of the spectrum, you'll see more consumer spending in the near term." Of course, low- and moderate-income workers aren't the Republicans' base; wealthy ones are. Much of the Republican plan would go into effect after 2003, which raises the question: How much of Bush's plan is really about providing a stimulus and how much is about helping the rich? As The Wall Street Journal noted in a headline the day after Bush unveiled his plan, "Bush Stimulus Package Needs Many Assumptions to Pan Out."

It's highly unlikely Bush will get everything he wants, and his advisers seemed to concede that the plan is a best-case scenario. House Democrats, by contrast, proposed a $136 billion plan that actually seems geared toward giving the economy a quick shot in the arm; it has most of the tax breaks taking effect right away, including a tax rebate for workers, tax incentives for business investment and help for unemployed workers. "What our economy needs now is an immediate boost that will get people back to work, provide help to those who are hurting most and benefit the millions of middle-income families whose consumer spending has kept the economy afloat throughout the Bush recession," Rep. Robert Matsui (D-Calif.) said.

But tax cuts aren't the only way Republicans plan to reward their base this year. Lawmakers also plan to introduce legislation to outlaw partial-birth abortions, make it a separate crime to harm a fetus and fund abstinence programs. Pro-choice advocates expect Republicans to "drive very hard, very fast on their social agenda," says Susanne Martinez, vice president for public policy at the Planned Parenthood Federation of America, who called this the most difficult time for pro-choice groups since Roe v. Wade was decided. "We're preparing for it and assuming the worst," she said. The Republicans also want to spend more money on abstinence awareness to cut down on the rate of people on welfare (as if suggesting that stopping people from having sex is alone going to reduce the welfare rolls) and make it easier for religious organizations to win government contracts (so much for the separation between church and state).

They're also expected to introduce a ban on cloning human embryos for research and to push for oil drilling in Alaska. Compare that with the Democrats' agenda, which Senate Minority Leader Tom Daschle (D-S.D.) unveiled recently. His priorities include increasing education funding, raising the minimum wage and enacting a prescription-drug benefit -- one that doesn't end Medicare as we know it. It's an agenda that actually focuses on the needs of most Americans, rather than catering to the few.

On the opening day of the 108th Congress, Bush wasted no time in renominating several judges, including Charles Pickering Sr. and Priscilla Owen, whom the Democratic-led Senate had rejected. Pickering, who comes from former Senate Minority Leader Trent Lott's home state of Mississippi, has been accused of some of the same segregationist leanings as Lott. Meanwhile, the unemployment-benefit extension signed into law by Bush will help some who are out of work for a few months. But that gives liberals little solace. Jim Manley, a spokesman for Sen. Edward Kennedy (D-Mass.), who worked closely with Bush on the 2001 education bill, said Kennedy is "very concerned" that the administration is unwilling to fund some of the programs that were included in the bill. As one longtime budget expert told me, Republicans "just don't like social programs, period. Their compassion may be real talk, but it certainly isn't money."

The right wing will no doubt push Republicans in Congress aggressively during the next two years. With control of the House, Senate and White House, Republicans have "no excuses" for not getting things done, as freshman Sen. Lindsey Graham (R-S.C.) recently said. The good news is that with a narrow margin and untested leadership in the Senate, Republicans will be limited in what they can do. The challenge for Democrats is to keep the pressure on the opposition. Daschle plans to introduce a hate-crimes bill, ensuring that voters don't soon forget Lott's recent remarks. Kennedy has threatened a filibuster on some of the judicial nominations. And Democrats who worked with Bush on his last tax cut don't appear as willing to cooperate this time. That kind of determination will be necessary for Democrats to stop the Bush agenda on Capitol Hill. Otherwise, it's likely to be a very long two years in Washington.

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