Posted By: Mark Thatcher
James Rowley and Brian FalerWed Nov 8, 5:02 PM ET
Nov. 8 (Bloomberg) -- House Democrats, boosted by their
first majority in 12 years, plan quick action on an agenda that
includes raising the minimum wage and curbing Medicare drug
prices.
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Even if they succeed, their legislative honeymoon will soon
end when they confront issues that divide the party, such as
immigration policy, tax cuts or abortion. President George W.
Bush's veto power also may limit Democrats to modest victories.
``Whether it's sweeping tax reform, big initiatives on
domestic programs, we are going to have divided government,''
said Robert Greenstein, director of the Center on Budget and
Policy Priorities, a Washington-based policy group. ``I don't
think big stuff is going to happen.''
Democrats gained at least 27 seats to take control of the
House and they came within one seat of taking control of the
Senate. A recount in Virginia's Senate race will determine
whether Democrats control both chambers.
House Democratic leader Nancy Pelosi has vowed in the first
100 hours of the new Congress in January to seek votes to lift
restrictions on federal funding for stem-cell research, cut
interest rates on student loans and restrict the influence of
lobbyists.
Democratic leaders may struggle to preserve party unity
after the initial legislative flurry. Some newly elected
Democrats from the Midwest and South have separated themselves
from the party or signaled opposition to Democratic priorities
on taxes, spending and the war in Iraq.
`On Track'
``Pelosi has an interesting job of keeping her caucus on
track,'' said Stephen Hess, an analyst at the Washington-based
Brookings Institution, a public policy research group.
Democrats of all ideological strips are committed to being
``the party of reform and the party of change,'' Illinois
Representative Rahm Emanuel (news, bio, voting record), who headed the Democrats' campaign
to take the House. ``There's more that unites us,'' he told
reporters in Washington.
On immigration, Democrats will find reaching a consensus
``as vexing or almost as vexing as the Republicans do,'' said
Steven Camorata of the Washington-based Center for Immigration
Studies, which favors restrictive laws. House Democrats are as
split over giving legal status to 11 million undocumented
immigrants as Republicans, he said.
Consensus Possible
Still, Bush and House Democrats said consensus on
immigration is possible in the next Congress. ``I think we have
a good chance, it's an important issue,'' Bush told reporters.
``Immigration can be worked on,'' Emanuel said. ``There is
a lot more consensus than you think.''
The Senate passed legislation backed by Bush that would
have authorized a guest-worker program and a path to legal
status for 11 million undocumented aliens. House Republicans
refused to support the measure.
Some Democratic initiatives might handcuff their own
spending plans. A proposal to enact budget rules that require
all tax cuts to be financed by spending reductions will make it
harder to find money in the budget for their own favorite tax
relief measures, such as reviving a $4,000 tax deduction for
college tuition.
Piecemeal Changes
Democrats are likely to seek piecemeal tax changes rather
than immediately moving to reverse the tax cuts Bush has signed
since 2001, which aren't due to expire until the end of 2010.
``If you can get it passed, you've got to send it to a guy
named Bush, who has to sign it,'' said Bruce Josten, chief
lobbyist for the Washington-based U.S. Chamber of Commerce,
which represents 3 million companies. ``Do you think he is going
to sign legislation repealing his tax cuts?''
Democrats have argued that the tax cuts expanded the U.S.
deficit. Still, many support extending some deductions, such as
one for companies' research and development.
Democrats plan to increase oversight on Bush administration
policies. And issues that Republicans used to appeal to
religious voters, such as constitutional amendments to ban same-
sex marriage and outlaw flag desecration, won't get traction in
the Democratic-controlled House.
``The social agenda goes into hibernation until perhaps
there is another Republican Congress,'' Hess said.
The Democrats' agenda includes plans to end some subsidies
for oil companies and encourage production of alternative
sources of energy, such as ethanol, with a goal of U.S.
independence from oil-producing nations by 2020.
Prescription Drugs
Political analysts and lawmakers say that Bush is likely to
veto any legislation to authorize Medicare to negotiate with
drugmakers the price of medications it purchases as part of its
prescription drug program. Enacted in 2003, the program provides
Medicare recipients with discounts on drugs for a monthly
premium, which averages about $24.
``The best way for the price of drugs to get set is through
the market,'' Bush said in a Nov. 1 interview.
Democrats are likely to block a Republican proposal to cut
the $1.4 trillion combined mortgage assets of Fannie Mae and
Freddie Mac. Republicans have pushed to scale back the
investments of the government-chartered mortgage companies,
arguing the holdings are so large they threaten to destabilize
financial markets.
Frank's View
Massachusetts Representative Barney Frank (news, bio, voting record), who is in line
to chair the House Financial Services Committee, said
discussions with Treasury Secretary Hank Paulson may still
produce a deal.
Any measure would have to include an increase in the share
of profits the two mortgage giants must donate to a fund to help
low-income people buy housing, Frank said in an Oct. 31
interview. ``I am going to get as much as I can,'' he said.
Frank also says he plans to push legislation to give company
shareholders more power to review stock options and other
bonuses for corporate executives.
With Democrats in charge of the House, Bush will find it
even more difficult to renew trade-promotion authority he has
used to reach trade agreements with more than 10 countries.
The so-called fast-track authority, which expires July 1,
passed the Republican-controlled House by just one vote in 2001.
Only 21 Democrats voted in favor of the requirement that
Congress approve or reject trade accords negotiated by the
president without making any modifications.
``There have been a lot of noises from certain members of
the Democratic Party that might suggest our bipartisan
commitment to free trade will come under stress,'' said Hank
Cox, a spokesman for the National Association of Manufacturers,
a Washington-based trade group.
Lobbyists said they are ready to work with either party's
agenda.
``Whoever wins, it's their card table,'' said Josten of the
Chamber of Commerce. ``I have to play on, either way.''
To contact the reporters on this story:
James Rowley at
jarowley@bloomberg.net ;
Brian Faler at
bfaler@bloomber.net
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