CONGRESS ADJOURNS AFTER SENATE STALEMATE OVER GOP PRIORITIES.

The first session of the 108th Congress ended last week with Senate Democrats showing they could thwart the GOP agenda on establishing an asbestos fund, confirming judicial nominations, limiting medical malpractice awards and constraining class-action lawsuits.

But the president and Republican lawmakers succeeded in getting their agenda through the House and in getting a Medicare prescription drug bill through both chambers.

Bush used the final day of the session to sign the Medicare bill into law. The same day, Sen. Edward Kennedy (D-MA) and Rep. John Dingell (D-MI) held a news conference to announce legislation Kennedy introduced to repeal the new law.

Dingell said he would introduce the bill in the House in January.

"The more that senior citizens learn what President Bush just signed, the more concerned they are," Kennedy said. "It's a sweetheart deal for insurance companies, a bonanza for pharmaceutical firms and a travesty for senior citizens."

The Kennedy-Dingell bill would repeal the premium support demonstration project, require risk adjustment between private sector plans and Medicare, repeal the Medicare spending cap, and allow private sector plans to be paid an amount equivalent to average Medicare costs rather than an average of 109 percent of Medicare costs, as provided in the new law.

"Medicare will pay private sector plans an amount reflecting Medicare's cost for covering an individual, rather than paying HMOs a large markup as a result of failing to adjust for the better health of senior citizens who join HMOs," Kennedy said.

The bill would reduce prescription drug costs by allowing importation of drugs from Canada and by permitting the secretary of health and human services to negotiate with drug companies for discounts.

The bill would eliminate the new law's gap in coverage by requiring beneficiaries to pay 75 percent coinsurance in 2006-2008, 50 percent in 2009-2011 and 25 percent starting in 2012.

A spokesman for Kennedy said the Congressional Budget Office has not yet determined the cost of his bill, but he anticipates it will not exceed the $400 billion set aside in the budget resolution for prescription drug coverage during the next decade.

The key to the cost will be how much could be saved by paying lower prices for the drugs due to reimportation and negotiation, the spokesman said.

Consumers Union joined forces Dec. 8 with representatives from 21 other consumer, labor and public interest groups to write members of Congress asking that they immediately address negotiating drug prices on behalf of seniors.

The letter pointed out the Veterans Administration and the Department of Defense had achieved significant savings through direct negotiations with drug companies.

At the signing, Bush was flanked by the two Democratic senators who were instrumental in getting the bill through the Senate, Sens. Max Baucus (MT) and John Breaux (LA).

While praising them for their help, he clearly was claiming victory for the Republican party in delivering the largest overhaul of Medicare since Democratic President Lyndon Johnson oversaw its creation in 1965.

Bush made the point even more clear at his next campaign speech Dec. 11 at the McLean Hilton Hotel in McLean, VA.

He praised his administration and the Republican-controlled Congress for delivering on his promise of a prescription drug benefit to seniors and blamed the Democrats for creating an environment of "needless politics, endless back-biting, constant posturing." He continued:

"See, the best way to deal in that kind of environment - or with that environment - is to elevate the discourse and to focus on the people's business by delivering. And that is what we have done."

He then blamed the Senate for not having acted on the medical malpractice bill.

"The Senate must act, and some senators must understand that no one has ever been healed by a frivolous lawsuit," he said.

He also attacked Senate members for blocking his judicial nominations, whom he described as "superb men and women for the federal courts, people who will interpret the law, not legislate from the bench."

He did not specifically mention the class action bill or the asbestos fund bil, and his comments on the need for a comprehensive national energy policy did not address the issue of liability protection provided to MTBE manufacturers in the energy bill stalled in the Senate.

Senate Majority Leader Bill Frist has said he will push for action on the class action bill immediately after Congress returns in January, but has given no indication what he will do with the asbestos or energy bills.

Frist tried to broker a compromise on the asbestos fund bill but was unable to come up with cost and coverage provisions that would satisfy insurers and consumer groups.

He also was unable to come up with the two votes he needed to cut off debate on the energy bill after failing to persuade the House Republican leadership to agree to delete a provision added in conference that would have given lawsuit protection to manufacturers of the gasoline additive MTBE, a suspected carcinogen.