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Minimum Wage, College Costs Top Agenda; Party Less Unified on Tax Reform, Energy

WASHINGTON (By Amy Goldstein and Lyndsey Layton, Washington Post) November 19, 2006 — After retrieving control of Congress for the first time in a dozen years, Democrats will set out to redefine the domestic agenda through policies they say would address the economic needs of middle and working-class Americans.

Striving for a few quick legislative victories in January and longer term goals whose details — and viability — are not yet certain, Democratic lawmakers want to shift the dialogue on Capitol Hill to workers' pay, college tuition, health-care costs, retirees' income and other issues that touch ordinary families.

Their success is not assured. Democrats will hold a tenuous 51 to 49 majority in the Senate, where Republicans and the Bush administration will be well-positioned to thwart their legislation, and Democrats in the House already are showing signs of division. Democrats will face a conflict, too, between the cost of some of their policies and their pledge to tighten federal spending rules.

Still, key Democrats interviewed in recent days portrayed their strategy as an attempt to do several things at once: distinguish themselves from the outgoing Republican majority, heed voters' messages from the midterm elections and lay groundwork for the 2008 presidential campaign, in which they predict the widening income gap in the United States will be a prominent theme.

During the last several years of Republican reign in Congress and the White House, "all we've had . . . has been trying to scare the bejesus out of people with the word 'terrorism' and using that as an excuse to ignore everything else," said Rep. Fortney "Pete" Stark (D-Calif.), who is in line to lead the House Ways and Means health subcommittee.

"What we saw in the course of this campaign was, people wanted to know who's on their side," said Sen. Edward M. Kennedy (D-Mass.), who will chair the Health, Education, Labor and Pensions Committee. "Whether it's health care or wages or retirement issues, they want to have someone on their side."

The broad appeal to the middle class is not the only thread running through Democrats' ambitions. The party will get its first chance in years, for instance, to push views on energy and the environment that diverge sharply with those of the White House and congressional Republicans.

Democrats want to replace the current emphasis on oil production and nuclear energy with an approach that encourages conservation and alternative fuels. Meanwhile, Sen. Barbara Boxer (D-Calif.), who will chair the Environment and Public Works Committee, has said she will pursue mandatory limits on greenhouse gases.

If such environmental stances appeal to Democrats' older, liberal constituency, the heavy emphasis on pocketbook issues reflects the party's narrow electoral victory this month. "Since it was the middle class that was the swing voters, this agenda is designed to reward that group and to win them over," said Ross K. Baker, a political-science professor at Rutgers University. "The theme is the preservation and salvation of the middle class."

Danielle Doane, the Heritage Foundation's director of congressional relations, said the agenda also represents those issues on which most Democrats concur, mirroring the "Contract with America," the policy statement of the GOP when it took control of Congress in 1994.

To hold voters' support and to navigate legislation through a divided government, several incoming House and Senate committee chairmen said, it will be critical to forge productive working relationships with Republicans.

"The first thing I have to do is bring some civility and trust to the committee," said incoming House Ways and Means Chairman Charles B. Rangel (D-N.Y.). "Nothing could please me more than to be the chairman that had tax reform, Social Security reform and health reform. I have no clue as to what can really be accomplished until I see how serious people are in being willing to compromise."

Democrats also will have to reconcile their policy goals with their promise to find ways to cover new spending through additional revenue or cuts elsewhere in the federal budget. "There is, as is often the case, an element of schizophrenia there," said Robert D. Reischauer, president of the Urban Institute and a former director of the Congressional Budget Office. "You have an expansive programmatic agenda that you're trying to reconcile with a desire to be fiscally responsible."

The necessity of some GOP votes, combined with the austere fiscal climate, has influenced how Democrats plan to proceed in their first weeks. Rep. Nancy Pelosi (D-Calif.), the next speaker of the House, has said that one of the first domestic issues she will bring up will be an increase in the minimum wage by $2.10 per hour, to $7.25. The cost of that would largely be borne by private employers, not the government. President Bush has supported similar proposals, said Dana Perino, a White House spokeswoman.

Other changes would be far more expensive and divisive. Democratic leaders have vowed to protect middle class households from the alternative minimum tax. For now, they are planning a one-year fix. They have not decided on a permanent reform. "That's a tough one. It's easy to say, 'We are going to do away with it.' The challenge is how to pay for it," said former senator John Breaux, who co-chaired a presidential tax commission last year that estimated that eliminating the tax would cost $1 trillion over the next decade. The White House favors reforming the tax only if Congress considers other tax changes, which Democrats might not like.

The tax is one of several priorities that the Democrats have not determined specifically how to address. To make college more affordable, they want to cut interest rates on student loans, but they have not decided whether to make that change for all loans or only federally subsidized ones for low-income students.

On other issues, it is not clear whether the Democrats can even agree among themselves. Many in the party want to change Medicare's new drug benefit so the government can negotiate prices directly with pharmaceutical companies. Incoming Senate Finance Committee Chairman Max Baucus (D-Mont.) remains unsure. "We need to be very honest in getting the facts" about whether such a switch would be helpful, he said. And Baker, of Rutgers, predicted that energy policies could "erode Democratic cohesion."

"These will be years of testing," said William A. Galston of the Brookings Institution, who was a domestic policy adviser to President Bill Clinton. "The American people are going to be watching very carefully."