Alex's Outlook

Thursday, July 03, 2003

Apparently the Medicare expansion (largest entitlement expansion since LBJ at least) isn't a sure thing. The 216-215 passage in the House was won only after attaching some provisions that have no chance of passage - like Medical Savings Accounts, which will cost the govt $164b over the next ten years. That pulled over enough conservatives to ensure passage. However, MSAs have no chance in conference. The marginal privatization passed in the House also has no chance in conference. If either provision gets out of conference, the Senate will shoot the bill down. If they don't survive conference, Bush will have a hard time getting the House Republicans to vote for the bill.

Bush will probably ask DeLay to sprint leftwards and just expand the entitlement with no reform. In that case, the Democrats will have an interesting choice to make: they can drastically expand the entitlement, which would be an ideological victory for them and a political victory for Bush; or they can ally with the conservatives in shooting the bill down, because it's not juicy enough for them while it's too much for the conservatives. That would be a major defeat for Bush and a huge victory for conservatives and fiscal responsibility, and the Democrats would undoubtedly score significant political points because of it.

Tom DeLay could also stick up for conservative principles and neuter the bill in conference, as he did with the Child Tax Credit.

The Medicare expansion isn't a slam dunk, yet.

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