February 7, 2006
Bush Domestic Agenda for 2006 Is 'Small Ball'
By Mort Kondracke

President Bush famously disdains "small-ball" policymaking, preferring to swing for the long ball. But, with the exception of big new tax cuts and his competitiveness initiative, his 2006 domestic agenda aims at scoring singles, not homers.

The gigantic tax cuts, costing at least $2 trillion over 10 years if Congress merely extends current reductions, plus a Republican desire to appear fiscally "responsible" are preventing Bush from undertaking ambitious efforts on health care, education and energy.

He will extend health insurance to only a fraction of the 45 million Americans who lack it, make only modest investments in health information technology, postpone extension of his No Child Left Behind education reforms to high schools and fall far short of a "Manhattan Project" for energy independence.

And Bush's 2005 failure to gain traction for his long-ball Social Security reform plan has forced him to push the enormous problem of the baby boom generation's retirement - a challenge made worse by his tax cuts - onto yet another commission.

The competitiveness initiative, costing $136 billion over 10 years, is a departure from the small-ball pattern and is being praised, deservedly, by sometime critics such as former Lockheed-Martin CEO Norm Augustine and former Speaker Newt Gingrich (R-Ga.).Augustine, who chaired a National Academy of Sciences study that Bush cited in his State of the Union speech, told me that he was "extremely happy" with Bush's proposal to double funding for research in the physical sciences over 10 years, to permanently extend tax credits for research and development and to upgrade science and math education.

The NAS study warned that the United States is in danger of losing its traditional comparative advantage in high technology to China and India, two countries that are making huge investments in research and science education.

One item on the Augustine agenda that's not included in Bush's program, because he doesn't want to spend the money, would fund 25,000 undergraduate and 5,000 graduate scholarships in science and engineering and 10,000 scholarships for science teachers.

Gingrich told me that Bush is "modestly breaking with the past, but it's nonetheless real. It starts a new dialog." He noted that a bill sponsored by Sens. Lamar Alexander (R-Tenn.) and Jeff Bingaman (D-N.M.) that incorporates the NAS proposals now has 60 co-sponsors, 30 from each party, and he recommended that the White House and House Republicans push for bipartisan action, too.

On the health front, Gingrich said he was "puzzled" by the fact that "they keep talking about electronic health records, but they don't act decisively. I think it's very dangerous for the country to not go to electronic health records as rapidly as possible."

It's "dangerous," he said, "because paper kills. We kill between 44,000 and 98,000 Americans in hospitals every year from mistakes. If things like that were happening in civil aviation, you'd have an absolute rebellion. But people just shrug off these deaths."

He said it would cost less than $10 billion but would save much more in the long run because of reductions in litigation costs and recovery from unnecessary medical errors. And, Gingrich said, the federal government should be doing more than Bush proposes to advance medical "transparency," providing information to patients about drug costs and hospital and physician performance.

Gingrich noted that in Florida, Bush's brother, Jeb, has introduced Web sites called FloridaCompare, where patients can punch in their ZIP code and the drugs they take and get readouts on drug prices, saving as much as two-thirds. They can also get information on hospital costs and quality performance.

Information is key to Bush's No. 1 health reform idea, health savings accounts, which aims to put more power and responsibility into the hands of consumers, who will "shop" for health care and reduce overall costs.Bush proposes to increase the amount of money that people can deposit on a tax-favored basis into HSAs to use to pay out-of-pocket medical costs and to buy high-deductible insurance policies that cover catastrophic medical costs.

Critics contend that, in medical crises, sick people and their families aren't able to "shop around" and that, in any event, accurate information isn't available. They also contend that lower-income people don't have money to invest in HSAs and derive little tax advantage from setting up accounts because they pay so little in taxes.

Moreover, they charge, HSAs could encourage employers to stop providing insurance coverage to their workers, thereby increasing the ranks of the uninsured. Administration officials have no estimate yet of how many of the uninsured - 45 million of whom lack insurance during part of a year and about 20 million who lack it all year long - might become newly covered under Bush's plans, but it's almost certain to be fewer than the 6 million who would have been newly covered by proposals he made in 2004 and 2005.

The administration claims that the number of HSAs has jumped from 1 million to 3 million in the past year, but critics point out, correctly, that this is the insurance industry's estimate of the number of high-deductible policies sold, not HSAs created. In a White House briefing, Bush economic adviser Al Hubbard said that just 37 percent of those with such policies were previously uninsured and that 40 percent had incomes under $50,000, seemingly validating criticism that HSAs are attractive mainly to "the rich, the young and the well."

On energy, former oil man Bush has definitely taken a turn by declaring that the United States is "addicted" to oil and proposing upgrades in research on alternative fuels including clean coal, "cellulosic" ethanol, hydrogen and lithium car batteries and nuclear power.

Still, the investments are mainly in the millions of dollars, not billions. The administration admits that human activity might cause global warming, but it has yet to come up with answers on how to stop it, and it refuses to mandate energy efficiency for SUVs to protect domestic automakers. It also adamantly opposes gasoline taxes.

I agree with Gingrich: Bush is "modestly" breaking with the past and is addressing "the right topics." But "small ball" won't solve America's big problems.

Mort Kondracke is the Executive Editor of Roll Call.

Mort Kondracke

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