WSJ: Bill Strains Republicans' Ties

[question everything]

Bill Strains Republicans' Ties

Budget Measure Sets Some Industry Allies On a Collision Course
By DAVID ROGERS
Staff Reporter of THE WALL STREET JOURNAL
December 9, 2005; Page A4

WASHINGTON -- Don't look now, but two Republican patrons -- the oil and pharmaceuticals industries -- could end up colliding in House-Senate negotiations on the party's $45 billion deficit-reduction bill.

Oil companies and Republican leaders want to use the year-end budget bill to open up portions of the Arctic National Wildlife Refuge for energy exploration. But to make this happen, a political deal is needed on health-care savings that may require Republicans to reduce the money drug companies can keep on sales of medicines to Medicaid.

Medicaid is a flashpoint because of its effect on the working poor and lower-income Gulf Coast states where the leadership is looking for Democratic votes. Rep. Nathan Deal (R., Ga.), who helped shape the House Medicaid package, wants to maintain some of the structural changes but a rebate increase, he said, is now "a distinct possibility." If it means saving ANWR, the Pharmaceutical Research and Manufacturers of America, the drug industry's lobbying group, could relearn the limits of friendship in Washington.

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ANWR is less a cause for big oil companies than for their Western Republican allies in Congress who want the government to do more to tap natural resources. Inside PhRMA, the lines are also murky since individual states have negotiated higher rebates on a case-by-case basis, and the impact varies among manufacturers according to their marketing plans. But the competition illustrates the political intrigue behind the giant budget bill. Mining companies, dairy farmers, banks and broadcasters all have their pieces in the most intricate legislation attempted by Republicans in this Congress. Failure would have huge implications for the majority party's ability to continue governing without raising income taxes.

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Community pharmacies complain that some of the Senate savings, such as factoring in cheaper mail-order drug sales, don't apply to their smaller operations. Drug makers say they worry about the effect on their distribution system. Generic companies, who enjoy greater price flexibility in the current system, fear the cost squeeze will hurt their ability to compete with brands.

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Write to David Rogers at [e-mail]

URL for this article:
http://online.wsj.com/article/SB113409649037818095.html (subscription)

[quaoar]

1. Just confirms

that opening ANWR to exploration is not the highest priority of oil companies. It's an ideological issue, not an energy issue.