Medicare conferees continue to work on the Medicare Prescription Drug legislation. However, there are still a number of disputed proposals, including premium support that would put traditional Medicare in direct competition with private plans beginning in 2010.

Conferees are also trying to reach agreement on ways to guarantee that spending on a drug benefit would not go beyond $400 billion set aside for the bill in the fiscal 2004 budget resolution.

The negotiators are also still sharply divided on two other issues. The first is whether consumers should be allowed to import drugs from foreign countries where they are often less expensive. The second is whether to create new health savings accounts, which would permit consumers to put aside money for medical expenses on a tax-free basis. These accounts would be available to all taxpayers, not just Medicare beneficiaries.

Congress has set an adjournment date of Nov. 21.

Several House GOP conservatives continue to repeat their insistence that premium suport and the health savings accounts be included in the final product and have told House Speaker Hastert that they will not support the final bill unless it includes these items.

Leaders in the House and Senate have instructed appropriators to wrap up work on as many spending bills as possible by November 21st. With leaders in both chambers wanting to adjourn by Thanksgiving, any spending bills not completed by November 21st will likely be rolled into an omnibus spending bill. Senate Appropriations Chairman Ted Stevens (R-Alaska), along with ranking member Robert Byrd (D-West Virginia) and Senate minority leader Tom Daschle (D-South Dakota) favor passing each spending bill separately, so lawmakers will have the chance to add amendments.

Senator Stevens has indicated that the Senate will consider the Department of Agriculture appropriations bill (S.1427) and the Veterans Affairs-Housing and Urban Development spending bill (S.1584) later this week. Next week, if debate on the two aforementioned bills proceeds smoothly, the Senate will then move to the appropriations bill for the departments of Commerce, State and Justice (S.1585). Also, the Senate must finish work on the D.C. appropriations bill (H.R. 2765), which was abruptly pulled from the floor a few weeks ago after the Democrats threatened to filibuster the bill over a provision creating a pilot school voucher program in the District of Columbia.

Stevens has developed a timetable for completing all spending bills by November 21st, which was approved by Senate majority leader Bill Frist (R-Tennessee). The timetable calls for the Senate to finish work on all spending bills by November 12th and for such bills to be passed out of conference by November 18th, leaving three days for both chambers to approve bills negotiated in conference.

While the President has only signed three spending bills into law, three more may be ready for his signature by the end of the week. Measures providing funding for the Interior Department, Military Construction and Energy and Water may reach the President's desk by week's end or early next week.

Senator Stevens will have a difficult time expediting passage of the remaining spending bills because of $3 billion in funding commitments promised to lawmakers. Funds needed for election reform, veterans' health care, and AIDS programs may result in an "across the board cut", which many lawmakers will object to. Because each remaining spending bill in the Senate involves contentious issues, Senator Stevens has asked Senators to offer "only relevant and meaningful amendments."

With regard to other spending bills still in conference committee, the Foreign Operations spending bill (H.R. 2800) just passed the Senate and is being worked on in conference. The Transportation-Treasury appropriations bill (H.R. 2989) is also in conference, but is being bogged down by debates over Amtrak funding. The bill to fund the departments of Education, HHS and Labor (H.R. 2660) has been in conference for almost two months, but the conferees have been unable to negotiate a compromise over new overtime rules promulgated by the Labor Department.

Please check back with us for any new developments.

The Health, Education, Labor, and Pensions Committee in the Senate unanimously approved legislation to reauthorize Head Start, a program serving nearly 1 million children nationwide. The program serves three and four year olds and is run by private and public agencies on the local level.

Democrats originally feared that the Bush Administration would mandate testing for children. Previous House-passed legislation (HR 2210) did not have any new testing mandates.

The compromise reached with Senate Democrats produced language that the testing could only be used to improve program curriculum. Testing could not be linked to any funding decisions.

The bill is scheduled to go before the full Senate in the beginning of next year.

Chairman James M. Inhofe (R-Oklahoma) has announced that the Committee on Environment and Public Works mark up of S. 1072, Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003 (SAFETEA) has been postponed until Wednesday, November 12. Mark up was originally scheduled for Wednesday, November 5th. The bill reauthorizes the Federal-aid surface transportation program through FY 2009.

Over on the analysis side of the website we've just posted a look at "ARRIVE 21". From the piece:

According to his staff, Senator Ernest Hollings (D-South Carolina), ranking member on the Senate Commerce, Science and Transportation Committee, will soon introduce The American Railroad Revitalization, Investment, and Enhancement Act of the 21st Century (ARRIVE 21). Although we do not know when Hollings will introduce ARRIVE 21, the bill will likely be considered when the committee begins to reauthorize TEA-21 programs under their jurisdiction. Senator Hollings is keen on including a strong rail component in a TEA-21 reauthorization bill and therefore would like to have a Republican co-sponsor for ARRIVE 21. Senator Kay Bailey Hutchinson (R-Texas) has been mentioned as a possibility...

Want more? Head over to the password protected area to read the rest.

The Senate Committee on Environment and Public Works has announced a mark-up November 5th of the highway title of the TEA-21 reauthorization bill. A draft of the bill emerged on October 27 and we posted it on our website the same day. Click here to go to the draft. Our sources on Capitol Hill cast doubt on whether the ground is sufficiently prepared with committee members for a mark-up so soon.

The proposed bill will ultimately provide $255 billion in funding for highway programs, which is in accord with the FY 2004 budget resolution. Currently, funding levels in the draft bill only total $216 billion, but about $40 billion in additional highway funding to states is expected to be added during floor debate. The Bush Administration proposal only called for $192.5 billion in highway funding over the next six years.

The Senate EPW Committee is calling their bill, "The Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003," (SAFETEA), which is what the administration’s draft proposal was called. Like the DOT proposal, the committee proposal has a strong focus on enhancing highway safety programs. The bill would provide set asides for states and localities to spend money on eligible activities aimed at increasing highway safety. Eligible activities include intersection safety improvement, pavement and shoulder widening, installation of rumble strips, elimination of roadside obstacles, improved highway signage, pavement markings, guardrails, and barriers, and installation of signs at pedestrian-bicycle crossings and in school zones.

With regard to RABA (Revenue-Aligned-Budget-Authority), the draft bill makes a few changes. RABA, introduced in TEA-21, provides additional money to highway programs if revenue generated by the highway trust fund exceeds earlier projections. This occurred three times over the six-year TEA-21 period. In TEA-21, RABA used a “look back” and “look forward” approach in making revenue projections for the highway trust fund. The committee bill scraps the “look forward” approach and proposes just using the “look back” approach, making funding more stable and predictable.

The committee bill would also create the "Infrastructure Performance Maintenance Program", which would fund ready-to-go highway projects. Money from this program would be distributed to states with projects, where construction is ready to begin in less than six months. The administration recommended that the highway trust fund be drawn down by $1 billion annually to finance such ready-to-go projects. The committee bill proposes more money for ready-to-go projects. In fiscal years 2004 through 2006, the committee bill provides $2.5 billion annually for such projects. For fiscal 2007 and fiscal 2008, that number drops to $2 billion, and further drops to $500 million for fiscal 2009.

Throughout the year, as debate on TEA-21 reauthorization began to intensify, some state highway officials and contractors were pushing to expedite the environmental review process for highway projects. The committee bill would designate DOT to replace the EPA as the lead agency in enforcing the National Environmental Policy Act review process. As the lead agency, DOT would be responsible for determining project purpose and need, determining the range of alternatives to be considered, convening dispute resolution efforts, and taking other actions necessary "to facilitate the expeditious resolution of the environmental review process for the project." This provision will be very controversial.

Here is breakdown of the funding levels in the committee highway bill:

• Interstate Maintenance Program: $5.5 billion annually for fiscal 2004, $6.3 billion for fiscal 2005, and 6.5 billion annually for fiscal 2006 through fiscal 2009
• National Highway System: $6.65 billion for fiscal 2004, $7.65 billion for fiscal 2005, and $7.95 billion annually for fiscal 2006 through fiscal 2009
• Bridge Program: $4.7 billion for fiscal 2004, $5.4 billion for fiscal 2005, and $5.6 billion annually for fiscal 2006 through fiscal 2009
• Surface Transportation Program: $6.95 billion for fiscal 2004, $7.95 billion for fiscal 2005, and $8.25 billion annually for fiscal 2006 through fiscal 2009
• Congestion Mitigation and Air Quality Improvement Program: $1.9 billion for fiscal 2004, $2.15 billion for fiscal 2005, and $2.225 billion annually for fiscal 2006 through fiscal 2009
• Appalachian Development Highway System Program: $590 million annually for fiscal 2004 through fiscal 2009
• Park Roads and Parkways: $300 million for fiscal 2004, $310 million for fiscal 2005, and $320 million annually for fiscal 2006 through fiscal 2009
• Multi-State Corridor Planning Program and the Border Planning, Operations, and Technology Program: $112.5 million for fiscal 2004, $135 million for fiscal 2005, $157 million for fiscal 2006, $180 million for fiscal 2007, $202.5 million for fiscal 2008, and $225 million for fiscal 2009
• National Scenic Byways program: $34 million for fiscal 2004, $35 million for fiscal 2005, $36 million for fiscal 2006, $37 million for fiscal 2007, and $39 million annually for fiscal 2008 and fiscal 2009

If the EPW committee does act on November 5th, there will still be a need for three additional Senate committees to act before the Senate can complete its work on their version of the bill. The Senate Banking Committee has jurisdiction over the transit program, the Commerce Committee oversees highway safety and rail and the Finance Committee handles the tax title of the bill. None of those committes has indicated plans to hold a mark-up before the end of the year.

Please watch this space for additional information on the evolving process for reauthorizing the nation's surface transportation programs.

After the failed promise of a Democratic filibuster, the Senate confirmed former Utah Republican Governor, Mike Leavitt, as head of the Environmental Protection Agency.

Six Democrats in the Senate held up the confirmation as a means of highlighting the environmental record of President Bush and his administration. After the administration made several deals with key Senators, Leavitt was confirmed 88-8.

A total of 36 Democrats and Senator Jeffords (I-Vermont) joined all 51 Senate Republicans during the confirmation vote. Leavitt has served as Governor of Utah for three terms and also has chaired the National Governor’s Association.

Senator Jeffords, the one time Chair of the Environment and Public Works Committee made clear that the vote should not be construed as an “endorsement of the Bush Administration’s environmental policies.”

While Governor, Leavitt helped push through a multi-state agreement aimed to lessen regional haze. However, Leavitt received sharp criticism from environmental organizations and their allies when he brokered a deal with the Department of the Interior to ease the protected status of public lands in Utah.

All dissenting votes were Democrats.

Senators George Allen (R-Virginia) and Ron Wyden (D-Oregon) are trying to convince a few colleagues from blocking their bill – S. 150, “The Internet Tax Freedom Act” (ITFA). Four senators – two Republicans and two Democrats - currently have holds on the bill.

A temporary moratorium on taxing Internet connections expires on November 1. ITFA had been expected to pass easily, but state and local governments have begun an intense lobbying effort against the bill, because of alterations added to the existing moratorium.

Under the current moratorium, nine states currently possess "grandfather" provisions allowing them to tax Internet acess services. In addition, the expiring moratorium classifies high speed DSL service as a "telecommunications service", allowing it to be taxed by 27 states and the District of Columbia. The new ITFA eliminates both the grandfather clauses and reclassifies DSL as an "internet access service" which will prevent state and local governments from taxing it. Finally, S. ITFA makes the moratorium on such taxes permanent, as opposed to the current act which which was originally enacted in 1998 and renewed once to carry it through 2003.

State and local governments are pushing instead for a simple reauthorization of the current moratorium, which would prevent the loss of between $150 - $190 million in revenue annually between the 27 states and DC.

On October 29, the Senate Health, Labor, Education and Pensions Committee (HELP) is marking up the Senate version of the Head Start reauthorization. Including in the Senate version is a controversial provision that would expand testing for the nearly 1 million participants in the early childhood program. The new mandate for testing was not included in the House passed bill (HR 2210).

Senator Judd Gregg (R-New Hampshire), Chairman of the HELP committee, has indicated that he would like to move the legislation in a bipartisan manner through committee. Democrats, however, are concerned about the “regular assessment of Head Start children” language.

Not included in the Senate version of the bill, is the Bush administration proposal, contained in the House version, that would allow eight states to take over local Head Start centers and coordinate them wit their own early childhood programs.

The Senate bill also does not have any authorization funding levels because Senator Gregg prefers to debate that detail on the Senate floor. Democrats have filed a separate bill (S 1483) that would authorize an additional $9.3 billion over the next five years with $3 billion specifically devoted to training and salaries for Head Start teachers..

Transportation Secretary Norman Mineta is standing behind the nomination of Kirk Van Tine as DOT Deputy Secretary, despite attempts by the FedEx Corporation to thwart it.

Van Tine, who previosuly served as DOT General Counsel, was involved in the distribution of compensation funds to transportation carriers totalling $5 billion in the aftermath of September 11th. To help expedite the financial recovery of carriers, the department asked such carriers to provide an estimate of their losses relating to the events of September 11th. Fifty percent of those estimated costs were bequathed to carriers very quickly with the presumption that the department would re-examine actual losses at a later date. The FedEx Corporation estimated their losses to be $200 million after September 11th. When DOT more closely examined the actual losses of FedEx and other carriers, the department determined that FedEx could not document losses beyond $70 million. DOT apparently gave FedEx the opportunity to contest the department's approximation of their September 11th related losses, but according to a department spokesperson, they opted not to dispute the charges or negotiate a settlement with the department.

FedEx claimed it was owed $119 billion by the department and they took their case to the U.S. Court of Appeals in the District of Columbia. Oral arguments were heard the week of October 13th. Of the 63 carriers that over-estimated their post-September 11th costs, 53 have repaid the difference and 15 have negotiated settlements. To demonstrate their malcontent with Van Tine's estimation of atcual losses, FedEx has enlisted the support of a number of lobbyists to help block the nomination.

The Senate Commerce, Science and Transportation Committee has not yet scheduled a nomination hearing for Van Tine. However, Norm Mineta's chief of staff, John Flaherty, has maintained that the Secretary stands firmly behind the nomination of Van Tine. "This is a solid guy, a consummate professional who is hand and glove with the Secretary, which is why he want's him as his deputy," said Flaherty.