President Bush asked congressional leaders this week for an additional $25 billion for military action in Iraq and Afghanistan. This is a reversal of the administration's earlier insistence that no money would be needed until next year. While many speculated that a supplemental would be requested, conventional wisdom was that it wouldn't be requested until after the November presidental elections.

The announcement this week is certain to trigger more election-year sparring over administration policy in Iraq.

The administration has launched an offensive aimed at countering Democratic criticisms that new drug discount cards are too confusing and only offer meager savings to senior citizens.

Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, has estimated the cards would save seniors 10% to 17% off the average retail price for name-brand drugs.

The drug cards were created by last year’s Medicare law and serve as an interim mechanism to help seniors with health costs until a full prescription drug benefit is created in 2006.

Democrats say the drug cards are confusing and offer little if any savings from prices already available to consumers at online pharmacies like drugstore.com and Costco.com.

McClellan predicted that prices will drop as card issuers and drug manufacturers begin to see what competitors are charging and negotiate better deals. Drug card issuers –including health insurers and pharmacies – can change their prices once a week. Seniors may only switch cards once after initial enrollment.

McClellan rejected a call from congressional Democrats to implement a 30-day “grace period” that would allow seniors to change cards after they sign up. He instead urged seniors to wait to sign up and compare prices carefully.

CMS is still opposed to liberalizing importation of prescription drugs from countries where they often sell for less than in the U.S.

The issue of drug prices is important to voters this election year, and many lawmakers on both sides of the aisle have responded by pushing for legislation to allow importation. Secretary Tommy Thompson has acknowledged that the issue had gained such momentum that an importation law could pass this year.

A bill to provide $5.2 billion over three years to improve the nation's transit security systems was introduced and marked in a Senate Banking Committee business meeting May 6.

The bill--announced by Chairman Richard Shelby (R-Alabama), Ranking Member Paul S. Sarbanes (D-Maryland) and Subcommittee on Housing and Transportation ranking member Jack Reed (D-Rhode Island)--would create a needs-based grant program within the Department of Homeland Security (DHS) to identify risks and vulnerabilities within transit systems across the country. "The Public Transportation Terrorism Prevention Act" would require DHS to develop strategies for alleviating those risks and create a framework for government agency coordination.

The size of the U.S. transportation system, which includes 3.9 million miles of roads, over 100,000 miles of rail, 600,000 bridges, more than 300 ports, and almost a thousand train and subway stations, provides a substantial number of attractive targets to terrorists and simultaneously makes it difficult to provide the level of security associated with air travel.

The bill would provide funding through three grant sources.

1. Capital Grant Program: Would provide $3.5 billion for security infrastructure such as surveillance, fencing, redundant-systems equipment, communications and tracking equipment, and detection systems for chemical, biological, radiological and explosive agents.
2. Operation Grant Fund: Would provide $800 million in 2005, $500 million in 2006, and $200 million in 2007 for workforce training, public awareness campaigns, canine patrols, and costs associated with events of national or international importance.
3. Research Grant Fund: Would provide $200 million for the study of chemical, biological, radiological or explosive detection technologies, imaging technologies, and others which may have the potential to be effective in deterring terrorist threats.

Republican leaders in the House and Senate were unable to resolve their differences with the White House over funding totals in the transportation reauthorization bill last night and admitted they will have to work out the funding total in conference. Whether lawmakers will actually be able to go to conference remains to be seen, as Senate Democrats are refusing to let Senate Majority Leader Bill Frist (R-Tennessee) name conferees, a matter that could be put to a vote later this week. Despite recent indications that the White House would support a $275 billion bill, up from its previous funding ceiling of $256 billion, Republican lawmakers and White House Chief of Staff Andrew Card failed to reach an agreement during a meeting that began late in the day of May 4.

The Bush administration has threatened to veto both S. 1072, the $318 billion Senate bill, and H.R. 3550, the $284 billion House-passed measure. Both bills exceed the administration's preferred $256 billion spending total, and House Speaker Dennis Hastert (R-Illinois) and Frist do not want to force the White House to veto popular, job-creating legislation in an election year.

On April 29, the White House met with the Republican leadership and agreed the three sides should come to an agreement on the funding total for the transportation bill before proceeding with the conference to reauthorize the Transportation Equity Act for the 21st Century (TEA-21). However, lawmakers abandoned that approach following yesterday's meeting.

It is unclear whether GOP Senators will be able to overcome the objections of Senate Democrats and proceed to conference. Senate Minority Leader Tom Daschle (D-South Dakota) is expected to continue blocking attempts to go to conference until he has a guarantee that the Senate number will be preserved and that Democrats will be included in the conference. Daschle is continuing to push for a "preconference" of the bill, fearing that without Democrats' involvement, GOP leaders will bow to pressure from President Bush and agree on a smaller funding total than was passed by either chamber. Daschle agreed last week to a cloture vote this week on the motion to proceed to conference, although Frist has not yet set aside time for the vote.

The cloture vote, which needs 60 votes to pass, will be held on the motion to conference the House transportation bill, the first step in a multistage process of naming conferees. Typically, lawmakers move towards conference by passing these motions by unanimous consent, but Senate Democrats have refused to comply.

It has been reported that the White House did not want to entertain suggestions of a five-year bill, which should quash speculation that with fiscal year 2004 half done, the administration might support a $256 billion bill over five years.

Tuesday the Senate adopted an amendment from Tom Harkin (D-Iowa) which would block the Labor Department from adopting new rules governing the payment of overtime. The vote of 52-47 garnered the support of 5 GOP members, and was similar to a vote late last year which also sought to overturn the then-prospective rules during the debate over the Labor-HHS appropriations bill. After President Bush threatened to veto the bill, the Harkin amendment was abandoned in conference.

After criticism of the rule changes increased, Labor Secretary Elaine Chao changed the regulations, issuing new ones in April that would protect more workers (including police officers and firefighters) than the original version. Democrats claimed the revised rules did no go far enough, as the measure still strips eligibility from several occupations including IT workers and journalists.

A two month extension of the expiring TEA-21 legislation was quickly cleared last night after Majority Leader Bill Frist (R-Tennessee) spoke with Senator Christopher Bond (R-Missouri) to release his hold on the legislation. Funding for the programs in the Department of Transportation will be released, avoiding a costly shutdown this weekend, although progress is still slow on the eventual conference over a new transit bill. House and Senate negotiators met with the White House yesterday to resolve funding differences, with few details released. Thursday, 20 GOP Senators joined all 48 Democrats in signing a letter insisting that the Senate's higher $318.9 billion funding level was the lowest all could accept, far above the House and White House requests.

The expected passage of a sixty day extension to the existing TEA-21 legislation bogged down in the Senate after it cruised through the House Wednesday. Senator Christopher Bond (R-Missouri) placed a hold on the bill in response to Minority Leader Tom Daschle's (D-South Dakota) threat of holding up the new transit bill in conference. Daschle has expressed in public his desire to see Democrats treated differently during House/Senate conferences on pending legislation. Bond, in turn, expressed he was "outraged" Daschle was preventing a move to conference on the two different transporation bills already passed (S 1072 and HR 3550) by their respective members, according to CQ Today.

The Senate version called for $318 billion in spending, while the House version was estimated at $284 billion. The administration is holding the line at $256 billion, but unless a reathorization of the existing law is passed immediately, funding for surface transportation programs will begin to expire on Friday.

A new Equal Employment Opportunity Commission (EEOC) ruling may draw Congress into a politically sensitive debate over health care coverage.

The commission voted on April 22 to adopt a proposed rule that would allow companies to reduce health benefits they provide to retirees older than 65 – the age at which seniors qualify for the federal Medicare program.

The rule would give legal protection to employers who, in effect, shift some of the cost of their retirees’ health care to the government program. AARP opposes the proposed rule, and contends that Congress will ultimately have to weigh in with legislation requiring that employers provide equivalent health coverage out of their own pockets for all retirees, regardless of their age.

Congress is in no hurry to intervene. Some warn that forcing companies to pay as much for older retirees’ health coverage as they do for their younger retirees will tempt employers to provide less for all retirees.

Companies routinely offer retirees over 65 coverage that supplements Medicare benefits, instead of a more complete package of health benefits that employers usually offer workers who are not eligible for Medicare.

Lawmakers tried to address this issue during last year’s debate on the Medicare prescription law. The Senate passed version of the bill, included language similar to the EEOC ruling. However, to gain AARP’s support for the bill, lawmakers dropped that provision.

Both AARP and employer groups would like to see their positions written into law. Lawmakers opposing the rule could seek to offer an amendment to a fiscal 2005 appropriations bill that would deny the EEOC funding to implement its new rule.

The proposed EEOC rule will be reviewed by relevant federal agencies and the Office of Management and Budget.