10-19-2002

POLITICS: Hanging in the Balance

Abortion


Although the prospect of the Supreme Court's ever overturning its 1973 Roe
v. Wade decision recognizing a right to abortion appears increasingly dim,
activists on both sides of the abortion-rights debate continue to stress
the importance of carefully screening judicial nominees. Both sides have
aggressively lobbied Senate Judiciary Committee members in recent years to
take tough stands against judicial nominees perceived not to share their
views. And the committee's proceedings have become increasingly rancorous
and partisan, with Democrats voting against would-be judges thought to
oppose abortion rights and Republicans doing the opposite.


On the legislative front, foes of abortion rights have taken the
initiative since the 1994 Republican takeover of the House. For example,
in 1996 and 1997 they persuaded the House and Senate-then both in
Republican hands-to pass legislation that would have banned the procedure
that abortion-rights foes call "partial-birth" abortion. But
President Clinton vetoed the ban both times, and the Senate failed to
override those vetoes.


Now that the Senate is under Democratic control, backers of the
partial-birth bill have been unable to bring it to the floor. The
Republican-controlled House passed a ban again this July.


Still, even if Republicans win back the Senate in November, they would
probably need the support of 60 senators just to bring a partial-birth
bill up for a vote. The measure does have some Democratic supporters in
the Senate, but if a Republican majority were small, the bill probably
couldn't overcome a filibuster.


Republicans in the House have also passed the Abortion Non-Discrimination
Act, which would bar states from requiring hospitals to provide abortions.
National Right to Life Committee Legislative Director Douglas Johnson said
he isn't optimistic about the bill's chances. "Unfortunately, the
Senate Democratic leadership will probably kill this bill this year, just
as they are killing the bill to ban partial-birth abortions," he
remarked.


The NRLC has run into similar roadblocks on its other priority bills, such
as the Human Cloning Prohibition Act and the Unborn Victims of Violence
Act. The latter would define any attack on a pregnant woman as two crimes.
The House has passed both bills, but the Senate has not moved on either.
Meanwhile, abortion-rights advocates and their Democratic backers in the
Senate have blocked the crime bill because they see it as a step toward
legally recognizing a fetus as a human being. -Shawn Zeller


Amtrak


To see how far apart the two parties stand on Amtrak, just look at the
appropriations bills that have been voted out of committee only to get
stuck in limbo. In the Democratic-led Senate, the Appropriations Committee
has passed a bill that gives the passenger rail service exactly what it's
asking for: $1.2 billion for fiscal 2003. But in the GOP-controlled House,
the appropriations panel gives Amtrak just $762 million in a measure that
would require significant reforms, such as finding a way to cut annual
costs by $100 million.


So it's pretty clear: If the Democrats can take back the House and retain
control over the Senate, expect a Congress that's much friendlier toward
Amtrak. Rep. James L. Oberstar, D-Minn., who has always been a big Amtrak
supporter, would most likely become chairman of the House Transportation
and Infrastructure Committee, and Rep. Martin Olav Sabo, D-Minn., would
likely chair the House Appropriations Committee's transportation
subcommittee.


The Democrats' "position all along has been to throw more money at
[Amtrak]-just give it a big check," said one House GOP aide.


But if Republicans gain control over Congress, expect some tough love.
Republicans have stressed that if the rail service gets additional funds,
there will have to be some strings attached. In fact, when Republicans
ruled both chambers in 1997, they passed legislation that gave Amtrak $2.2
billion but also required the rail service to cover its operational costs
by the end of this year (which it has failed to do).


Yet even if Republicans win the Senate, there will still be some GOP
senators-such as Trent Lott of Mississippi and Kay Bailey Hutchison of
Texas-who are ardent Amtrak supporters. Other Republican senators might
think twice about eliminating train service that runs through their home
states. If Democrats control both chambers, they probably won't have
enough money at their disposal to truly revamp Amtrak and to expand
high-speed rail, particularly if the economy is still struggling and the
United States goes to war against Iraq.


This state of affairs probably means that passenger rail service will
continue to receive what it has always gotten in the past: just enough to
survive. And that certainly isn't good news for Amtrak. Last year, it lost
about $1.2 billion, and it had to mortgage a part of New York City's
Pennsylvania Station to meet expenses. -Mark Murray


Health Care Costs and the Uninsured


Several legislative approaches to curbing health care costs and helping
the uninsured have gained momentum during the last year, only to become
entangled in partisan wrangling. A change of party control, along with a
mounting public concern about these problems, could transform the dynamics
enough to get some bills to the president's desk.


For example, a Senate-passed drug bill that has been held up by House
Republicans might make it through the House if Democrats were in charge.
That measure would ensure that lower-cost generic drugs get to market
faster by making it more difficult for brand-name drugmakers to extend
their patents. "Democrats are going to focus whenever they can on
drug costs" in attempting to hold down health care costs, said Robert
Blendon, professor of health policy and management at the Harvard School
of Public Health. A congressional Democratic aide agreed: "If there's
a Democratic House, Democrats would do something about prescription costs.
[The generic drug bill is] dying in the House. If there's a Democratic
House, the bill could get by."


On the other hand, if Republicans take control of the Senate and retain
control of the House, they might pass medical malpractice legislation that
would limit non-economic damages (pain-and-suffering awards) to $250,000.
Doctors complain that growing malpractice awards are producing huge
increases in the premiums for their malpractice insurance and that those
insurance costs are being passed along to patients. In September, the
House-with the strong support of the White House-passed legislation to cap
malpractice awards, but the Democratic-controlled Senate has not taken it
up.


With recent announcements that the ranks of the uninsured have swollen to
more than 41 million, there's likely to be added pressure on both major
parties to act next year. But the approach taken will depend on which
party is better able to call the shots. Democratic control of both houses
could place health care higher on Congress's To Do list and lead to
expansion of such existing government programs as Medicaid and the
Children's Health Insurance Program. Both of those programs are
federal-state partnerships. "Charlie Rangel running Ways and Means
instead of Bill Thomas would definitely be a change," Howard
observed.


If Republicans keep control of the House and take over the Senate,
Congress might agree to some variation of President Bush's proposal to
provide tax credits to help the uninsured pay for private insurance. The
president has also proposed expanding eligibility for CHIP and Medicaid
and doubling the number of community health centers nationwide.


"Republicans might want to do more on tax credits than [on] patients'
rights," Blendon said. "I think they would push forward, and
they might cover 2 [million] to 3 million people. If they had both houses,
they would probably enact what the president proposed. Democrats might
force them to do more on Medicaid and CHIP, but the core would be [the
Republicans'] proposal, and the president would say, `I've done something
for people to get insurance,' " Blendon predicted. -Marilyn Werber
Serafini


Immigration


House Democrats could put President Bush in a very tough spot on
immigration heading into the 2004 election. "If the Democrats take
the House, clearly they are going to try to press this issue of
immigration reform. And if the Republicans keep the House, they're going
to take their cues from President Bush," predicts Frank Sharry,
executive director of the National Immigration Forum.


Bush is in a particularly difficult position, because until 9/11 he had
been advocating a legalization program for undocumented Mexican workers.
Since the terrorist attacks, however, he's been silent about the issue.
And negotiations between the United States and Mexico have stalled.
Mexican President Vicente Fox, a Bush pal, has even openly criticized Bush
for inaction.


Democrats have already begun to pressure Bush. Last week, House Minority
Leader Richard A. Gephardt, D-Mo., announced legislation to allow illegal
immigrants who have lived and worked in this country for at least five
years to get on a track to legal status. But House Democrats would have a
lot more leverage if they were in the majority. If they could pass
Gephardt's bill, they would have something tangible to point to when
criticizing Bush. The Senate, regardless of who's in control, tends to be
somewhat receptive to the arguments of pro-immigration groups.


The bill that would create a Homeland Security Department would also
restructure the Immigration and Naturalization Service. If the Senate
fails to act on the bill this year, Republican control of the Senate would
increase the measure's chances of passing next year, said Deborah Meyers,
a policy analyst for the Migration Policy Institute. In the meantime,
Meyers said, the INS is "in limbo, and that's not good for
anyone." -Siobhan Gorman


Judicial Appointments


The pace of judicial appointments is likely to pick up next year. If
Republicans were to take control of the Senate, the acceleration would be
dramatic and most nominees would likely win quick confirmation-on that
much, observers agree. "The future of the Supreme Court and the
federal judiciary is the most important domestic issue facing the
nation," says Ralph Neas, president of the liberal People for the
American Way. "It really is an epic battle over the role of the
federal government."


The impact of an influx of Republican-appointed judges could be
significant, as a number of terrorism cases wend their way through the
courts. The impact on affirmative-action cases and church-state issues
would be equally great. Democrats fear a rollback of civil liberties and
women's rights, while Republicans say that the new judges would make the
federal bench more "balanced."


Republicans have chafed under Senate Judiciary Committee Chairman Patrick
Leahy's control over the vetting of judicial nominations, especially for
circuit court judges. Under the leadership of the Vermont Democrat, the
committee has approved 65 of Bush's 98 district court nominees. Of Bush's
32 appeals court nominees, it has approved 14, rejected two, and held
hearings on four others. If the Republicans take over the Senate, expect
the two rejected appeals court nominees-Charles W. Pickering and Priscilla
R. Owen-to be renominated and to get speedy floor votes. Heritage
Foundation legal analyst Todd Gaziano predicts that a GOP-led Senate would
confirm both. And a GOP-led Judiciary Committee would act rapidly on the
embattled circuit court nominees who have had hearings but no committee
vote-Miguel A. Estrada for the D.C. Circuit, Dennis W. Shedd for the 4th
Circuit, John Rogers for the 6th Circuit, and Michael W. McConnell for the
10th Circuit. Within six months, said Gaziano, the committee would
probably erase the current 47-nominee backlog. The Democrats, however,
could resort to the filibuster, the traditional weapon of the Senate
minority. The GOP, meanwhile, might find it difficult to get the 60 votes
needed to ensure a floor vote on controversial nominees, says University
of Baltimore law professor Charles Tiefer, who noted that John D.
Ashcroft's nomination to be attorney general passed by just 58-42 in a
Republican-controlled Senate.


A shift to Republican control in the Senate might affect whether one or
more Supreme Court justices choose to retire before the next presidential
election. "I don't think we'll see retirements from the Court if the
president doesn't regain the Senate," says former Reagan White House
Counsel Doug Kmiec.


Even if Democrats stay in control, compromise is more likely after this
election. "Nobody is willing to bargain, because the ultimate terrain
isn't clear," Kmiec observes. One likely compromise, he says, would
be for President Bush to begin consulting with senators before making
nominations; he could do that in exchange for a guarantee that his
nominees would have a hearing within six months of being named.


But not everyone expects-or wants-compromise. Gaziano recommends that Bush
play hardball with a Democratic Senate by making recess appointments, then
calling the Senate back into session to vote on more judicial nominees.
-Siobhan Gorman


Labor


So far, George W. Bush's presidency has been a nightmare for the AFL-CIO
and other labor unions (with the notable exceptions of the Teamsters and
the Carpenters, which both have cozy relations with the Bush
administration). But if Democrats recapture Congress, labor might be
flexing its muscles on Capitol Hill next year.


Take, for example, the heated debate over the proposed Department of
Homeland Security. The president, citing national security, wants the
flexibility to hire and fire the department's workers with ease. The
GOP-controlled House has voted to give Bush that flexibility. But the
Democratic-controlled Senate is balking. Labor's best hope is for the
Democrats to take control of both houses of Congress, since the party
would likely omit such flexibility from legislation creating the new
department.


Also, both chambers in a Democratic-controlled Congress would start
working on legislation that organized labor cares about deeply:
strengthening Social Security, raising the minimum wage, and passing the
ergonomics regulations that the GOP-controlled Congress and the Bush White
House rejected in 2001. Bill Samuel, the AFL-CIO's legislative director,
said a change in House leadership would help on ergonomics legislation,
requiring employers to gear workplaces and tasks toward avoiding
repetitive-motion injuries and the like. "I think we could pass it
today, if the leadership wasn't denying us a vote," he said.


Of course, even with a Democratic-controlled Congress, labor's legislative
agenda would probably have considerable difficulty being written into law
as long as Bush is in the White House. Yet, Samuel said, "if the
Democrats do win, there's the possibility he'll be more flexible on these
issues. Or he could decide to veto every bill that comes down Pennsylvania
Avenue." But if the Democrats do run Congress, one thing's for sure:
On all of these issues-homeland security, minimum wage, and ergonomics-the
pressure would be on a president clearly reluctant to wield his veto
power. -Mark Murray


Land Use


Although President Bush took office vowing to put the nation's public
lands "back to work," some of his major land-use proposals to
allow more drilling and logging on federal lands have been thwarted or
slowed by the Democratic-controlled Senate. If Republicans gain control of
both houses of Congress, however, those brakes will come off.


In the Senate, a GOP takeover would usher in a dramatic philosophical
shift. This year, the Senate blocked White House proposals to allow oil
drilling in Alaska's Arctic National Wildlife Refuge. Democratic leaders
also blocked Bush's wildfire protection plan, which would have set aside
environmental protection laws and allowed loggers to remove large,
commercially valuable trees in exchange for thinning the brush and smaller
trees on 10 million acres of Forest Service land. If the Senate were in
GOP hands, both proposals would receive a more favorable
reception.


Under the Republicans, conservative Sen. Don Nickles, R-Okla., would
probably chair the Senate Energy and Natural Resources Committee, which
oversees most of the lands controlled by the Interior Department or the
Forest Service. (Sen. Frank Murkowski of Alaska is currently the ranking
Republican on that panel but will leave the Senate if he wins the
governorship of his home state. Murkowski is now leading in the polls.)
The League of Conservation Voters gave Nickles a "zero"
environmental rating. Property-rights advocates consider Nickles to be one
of their best friends in the Senate. In fact, the American Land Rights
Association gives him a 100 percent vote rating. Meanwhile, pro-business
Sen. James M. Inhofe, R-Okla., would chair the Environment and Public
Works Committee, which has jurisdiction over the laws that protect
endangered species and over fish-and-wildlife refuge programs. The
logging, mining, and oil and gas industries have long advocated weakening
the Endangered Species Act.


If voters elect a Democratic House, however, Bush's aggressive
pro-industry land-use proposals would face tougher oversight than they now
do in the House. Democratic Rep. Nick J. Rahall of West Virginia, who
would chair the House Resources Committee, has a 79 percent environmental
voting record, according to the League of Conservation Voters.


Democratic control of both the House and the Senate could result in more
scrutiny of the Bush administration's efforts to rewrite federal
regulations in order to encourage more mining, logging, and drilling on
Forest Service and Bureau of Land Management lands.


The majorities in both the House and the Senate are likely to remain
narrow. Nevertheless, if one party wins control of both chambers, that
party will be in a position to put its imprint on the nation's
conservation policy-either by giving a green light to Bush's
"back-to-work" land-use proposals or by blocking them. -Margaret
Kriz


Non-Judicial Nominations


If Democrats maintain control of the Senate, President Bush might have a
more difficult time reshuffling his Cabinet and other top posts that
require Senate confirmation than if his party were back in control. Bush's
original nominees-with the exception of Attorney General John D.
Ashcroft-had a relatively easy time being confirmed, back when Republicans
were in charge of the Senate. But that honeymoon is over.


For instance, Office of Management and Budget Director Mitchell E. Daniels
Jr. faced no opposition to his confirmation, since he was familiar to
senators because he had served as an aide to Sen. Richard G. Lugar,
R-Ind., and had run the National Republican Senatorial Committee. But as
the budget director, Daniels has angered both Republicans and Democrats;
both sides accuse OMB of exercising too much control over the spending
process. Daniels has been mentioned as a possible 2004 candidate for
governor of Indiana and has said he will consider running. If Daniels were
to depart, it's safe to assume that any replacement would have more
trouble than he did in being confirmed and would likely face stiff
questioning.


The same could hold true for the eventual successors to Cabinet members.
Both Treasury Secretary Paul H. O'Neill and Health and Human Services
Secretary Tommy G. Thompson are rumored to be eyeing the door.


Future Bush Cabinet nominees would no doubt have an easier time if
Republicans took back the Senate than if the status quo continued.
"We're not trying to leverage these folks on other issues," the
way the Democrats would, said an aide to Senate Minority Leader Trent
Lott, R-Miss. "We'd do it in a fair way."


The Lott aide admitted that if the Republicans were in control, Democrats
could choose to filibuster nominations to gain influence on a variety of
issues-a tactic that essentially would mean that a nominee would need 60
votes in order to get confirmed. "The first thing to do is to move
[nominations] to the floor," the aide said. "Once we get to the
floor, we could find ways to get 60 votes, if necessary." -David
Baumann


Patients' Rights


Long-stalled patients' rights legislation might get moving again if
Democrats were in charge of both houses of Congress. Unlike other
legislation that Democrats have been unable to push through the Senate
because of their one-seat majority, a patients' bill of rights enjoying
bipartisan support did pass the Senate. "I'm sure we could do it
again," said one Democratic aide.


The House has also passed a patients' rights bill, but it's so
fundamentally different from the Democratic-supported measure that
congressional negotiators have been unable to reach a compromise.
"One of the things that made it difficult was the House. By a tiny
margin, they passed a bill that was different. It would make a difference
if it was the same bill in both houses," the aide said. To be sure,
the president has veto authority, "but he would be in a difficult
position to have to utilize it," said the aide.


The most controversial element of the Democratic legislation has been that
it would allow patients to sue their insurance company for denied
services. Many states have already enacted laws that give patients other
protections included in the Democratic plan. And the insurance industry
has changed somewhat in response to patient complaints. Some health care
analysts argue, therefore, that federal legislation is no longer needed.
And many conservatives continue to contend that patients' rights
legislation would increase health care costs too much. Nevertheless,
Democrats would likely pursue a patients' rights bill if they controlled
both houses.


A shift of power to the Senate's Republicans, on the other hand, probably
wouldn't do much to change the status quo. "If the House changes
hands, [patients' rights legislation] might move," said Ed Howard,
executive vice president of the Alliance for Health Reform. "If the
Senate changes hands, we still have a stalemate.... If you have a one-vote
majority in the House, the rules are structured there so [the majority]
can really run things.... If the House changes hands, it's a much bigger
impact on the legislative process."    -Marilyn Werber
Serafini


Pollution Control


This fall's congressional elections have nothing and everything to do with
national environmental policy. Few voters will be fixated on pollution
control when they cast their ballots in November. But if the Republican
Party wins control of both the House and the Senate, federal environmental
policy is likely to undergo a dramatic transformation.


During his first two years in office, President Bush has pushed for major
changes in many of the nation's bedrock environmental programs. His
proposals to relax federal environmental controls haven't gotten very far,
however, because they've been blocked-or at least closely scrutinized-by
the Democratic-controlled Senate and by Sen. James M. Jeffords, the
Vermont independent who chairs the Environment and Public Works
Committee.


If the Republicans regain control of the Senate and maintain dominance in
the House, Congress is likely to endorse the Bush administration's
campaigns to rewrite the Clean Air Act and revise the National
Environmental Policy Act, which requires federal agencies to consider the
environmental impact of their proposed actions. Republican leaders also
are more receptive to administration proposals to transfer control over
the Clean Water Act and the Superfund toxic-waste-cleanup programs to the
states. A Republican-controlled Congress "could do major damage to
the critical network of environmental laws that has been put in place over
the last 30 years," says Debbie Sease, legislative director for the
Sierra Club.


Environmentalists are already bracing for some significant changes in
Congress. In the Senate, for example, Sen. Bob Smith, R-N.H., who in the
view of environmentalists has a fairly good voting record, lost the
Republican primary to Rep. John E. Sununu. As a result, Smith's slot as
top Republican on the Environment and Public Works Committee is expected
to go to a much more pro-business senator, James M. Inhofe of
Oklahoma.


If the Democrats regain the House, Rep. John D. Dingell of Michigan will
likely assume the chairmanship of the House Energy and Commerce Committee,
which has jurisdiction over most Environmental Protection Agency programs.
Dingell has long been protective of the auto industry, but has a moderate
overall record on environmental issues. In a Democratic-controlled House,
Bush's aggressive proposals to overhaul federal environmental programs
would be more closely examined than they have been in the GOP-controlled
House. -Margaret Kriz


Prescription Drugs


It would be awfully hard to find a congressional candidate speaking out
against helping seniors with prescription drug costs. Yet despite a broad
consensus that legislation is needed, the political parties' radically
different approaches have thus far made it impossible to get a bill
through a divided Congress. Having both chambers controlled by a single
party could change that by tilting the scales toward one approach or the
other. "Prescription drugs is the most obvious example of where
[change of party control] makes a difference," argues one health care
lobbyist.


If past debates are any guide, a Democratic-controlled Congress would want
to spend more money to support a traditional Medicare benefit that's
administered by the federal government. Unlike in the major Republican
proposals, the actual benefit wouldn't have a gap in coverage. The GOP
plans would have patients pay for drug costs above a given floor and below
a given ceiling. On the other hand, if Republicans controlled both houses,
they would probably pass legislation requiring private insurers to deliver
a prescription benefit. They'd be hoping that competition would result in
lower drug costs.


The partisan shift that might have the most impact on prescription drugs
would be a Democratic takeover of the House. "In the House, it's
really just a question of party discipline," said one Democratic
congressional aide. "This year, Republicans all voted for the Thomas
bill," legislation introduced by Ways and Means Committee Chairman
Bill Thomas, R-Calif. If, instead, a Democratic majority all voted for a
bill sponsored by Rep. Charles B. Rangel of New York (who would take
charge of Ways and Means in a Democratic House), and Rep. Fortney H.
"Pete" Stark of California (the top Democrat on the panel's
health subcommittee), "it would make a substantial difference,"
the aide said. That could pressure the Senate-no matter who's in charge of
it-to pass similar legislation, assuming that chamber remains closely
divided.


Several lawmakers, including Sen. Debbie Stabenow, D-Mich., are widely
thought to have won election in 2000 largely because of their pledge to
work to pass a prescription drug benefit for the elderly. Those members of
Congress-and many of their colleagues-are under pressure to produce such a
benefit. "Between 2002 and 2004, they'll have to agree on some
bill," said Robert Blendon, professor of health policy and management
at the Harvard School of Public Health. "There's no question that, if
both houses are of the same party, the chances are better," he added.
"There will be pressure to find some agreement so everyone can run in
2004." -Marilyn Werber Serafini


Social Security


For Congress to make major changes in Social Security next year, the
political constellations would have to be almost perfectly aligned:
Republicans would need to control both House and Senate, and President
Bush would have to be willing to spend a great deal of his own political
capital. Even then, majority support in each chamber would likely be
narrow. "If the president wants it, he will have to work hard, and he
will need guts," says Rep. Paul Ryan, R-Wis., who serves on the House
Ways and Means Committee and is an enthusiastic advocate of creating
personal accounts in the retirement program. "Then, we would have a
chance."


Robert Blendon, a health policy and management professor at the Harvard
School of Public Health, agrees that the GOP seems prepared to undertake a
daunting task. "It's something they want to do.... If Republicans end
up with both houses, even though seniors have anxiety, they will say
[opposition to personal accounts] had no salience" in the election.
Still, he cautioned, Republicans would carefully scrutinize public opinion
polls before moving ahead.


Despite the barrage of ads that Democrats have unleashed against their
candidates in the most-competitive congressional campaigns, GOP
strategists contend that these attacks have had little real impact.
"The Democrats' strategy has been a failure. Its premise that we
support `privatization' has been ludicrous," contends a GOP campaign
insider. "Personal accounts" differ from privatization,
Republicans say, because the federal government would retain overall
control of the payroll tax, as well as the investment options.


But Rep. Karen L. Thurman of Florida, a Ways and Means Committee Democrat
who is locked in a competitive re-election race, disagreed that a
GOP-controlled Congress would forge ahead on Social Security. "All
politics are local," she said. "The Republican rank and file is
running away from the issue in the campaign. Where would they get the
impetus to make this a legislative priority?"


As Republicans showed when they passed the tax cut four months after Bush
took office, they usually line up solidly behind the president's
high-profile legislative initiatives after relatively modest tinkering.
When in the majority, GOP leaders in each chamber have not been shy about
using parliamentary rules to their advantage. In the Senate, they would
likely handle Social Security legislation under the limited-debate
features of the budget reconciliation process to circumvent a certain
filibuster by opponents.


But in contrast to the 2001 tax bill, the details of a Social Security
overhaul package have not been publicly vetted-not even by the temporary
commission that Bush created to explore proposals for reform. That doesn't
matter, Ryan said. "We can draft a bill that meets the policy tests
and protects current beneficiaries," he maintained. A prime issue
that they would need to resolve, he added, is whether to fund the new
accounts from a "carve-out" of the current payroll tax or to
create an "add-on" to the system.


If Democrats control either chamber, advocates of significantly changing
Social Security will find it virtually impossible to pass legislation.
-Richard E. Cohen


Taxes


A Republican takeover of the Senate wouldn't much improve the chances for
passage of the biggest tax proposals, such as the efforts to make the
nine-year Bush income tax cut permanent or enact a tax-code overhaul,
something the president might want to run on in 2004. Even in a rout of
Democrats, the GOP would fall far short of the 60 senators needed to force
a vote on such a proposal. Likewise, a $65 billion bill to bail out Wall
Street investors-passed by the House earlier this month-would not survive
a likely Democratic filibuster in the Senate.


But a strong victory by Republicans in the Senate could tip the balance on
one bill that is within a few votes of 60, the plan to make permanent the
temporary estate-tax abolition that was approved in 2001. Although the
retirement of Sen. Phil Gramm, R-Texas, will rob the cause of one of its
most tireless advocates, a few more Republican votes could bring the
idea's proponents within hailing distance of a filibuster-proof majority.
It got 54 votes the last time it was offered as an amendment on the Senate
floor. GOP control of the Senate could make it easier to find another
couple of Democrats (especially those up for re-election in 2004) who are
eager to score points with farmers or other estate-tax foes who might help
finance a re-election campaign.


Supporters of that repeal effort hope to pass it next year, even if
Democrats control the Senate, since it already has the support of the
Democratic chairman of the Senate Finance Committee, Max Baucus of
Montana. While running this fall for re-election in a heavily Republican
state, Baucus has supported a number of causes more closely associated
with Republicans. Estate-tax repeal is a cherished goal of wealthy
farmers, ranchers, and other landowners in the Big Sky State.


The less-likely election result that has Democrats retaking the House
would have a profound impact on tax legislation, which, under the
Constitution, must originate in that chamber. Under Republican rule, the
House has often passed tax cuts that didn't stand a chance in the
Senate-even when the Senate was also controlled by the GOP. A Democratic
speaker of the House and a Democratic chairman of the Ways and Means
Committee might even push through legislation freezing or rolling back the
Bush income tax cuts. Business might be able to sneak through some minor
tax cuts with Democratic support, but major cuts or major tax-code changes
would be dead letters. -John Maggs


Trade


Next year, trade is likely to continue taking a backseat in Congress.
Free-trade agreements with Chile and Singapore are the trade items most
likely to be on the congressional calendar. And some lawmakers will spend
considerable time on oversight of the ongoing multilateral trade
negotiations in Geneva. In the end, the trade agenda may be dominated by
the question of how to tax the overseas profits of U.S.
corporations.


Democratic control of the House could force tighter labor and
environmental provisions in the pending free-trade deals, which most
observers believe will eventually pass. GOP control of the Senate, a
greater GOP majority in the House-or both-could facilitate rewriting
trade-related tax law and could take the edge off congressional
oversight.


U.S. Trade Representative Robert Zoellick "makes calculations on
political grounds," complains one worried House Democratic staff
member. "If the GOP builds its cushion, the administration will
listen to us even less than they do now."


Battle lines are already being drawn over the Chile and Singapore deals.
Liberal Democrats argue that Washington should have the option-as it does
in the free-trade agreement with Jordan-of using trade sanctions to
pressure nations to enforce their labor and environmental laws. The GOP
disagrees. "To follow the provision of this past agreement exactly
would ignore the clear will of Congress as set forth in the TPA
[trade-promotion authority] bill," argues Sen. Charles Grassley,
R-Iowa.


House Democrats stand little chance of prevailing unless they seize a
majority of seats on Election Day. Senate Democrats have less enthusiasm
for linking trade to labor and environmental standards.


U.S. tax treatment of exporters' profits has been ruled illegal by the
World Trade Organization. With both political parties divided over what to
do, Congress has yet to find a way to revise the U.S. tax code without
raising taxes on major U.S. firms. But if Congress doesn't act in the next
session, the European Union is likely to begin imposing up to $4 billion
in sanctions on U.S. exports. House Ways and Means Committee Chairman Bill
Thomas, R-Calif., has a plan that many big exporters oppose. Nevertheless,
his proposal could pass if the GOP builds its majority in the House and
regains control of the Senate. Publicly, House Democrats promise that if
they have the opportunity to revise the tax, they will balance companies'
costs and benefits. Privately, however, some joke that attempting to find
that balance would be such a no-win situation that it might be best not to
return to power.


Finally, TPA mandated new congressional oversight of ongoing trade talks.
And House Democrats would undoubtedly be more aggressive about oversight
if they set the agenda. One wild card could be mounting, bipartisan
frustration with U.S. losses of major disputes at the WTO. There is no
obvious legislative solution, but hearings and resolutions are
possible.


In the end, it will be a slow year for trade-but one with the potential
for sharp fights over labor, environmental issues, and taxes.	 -Bruce
Stokes




National Journal