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Bush Allies May Defect Over Fiscal Proposals

By Jeffrey H. Birnbaum and Jonathan Weisman
Washington Post Staff Writers
Wednesday, December 15, 2004; Page A01

The AARP bulletined its 35 million members last week that President Bush's plan to make personal investment accounts part of Social Security was the "wrong direction" and would "make the problem worse." The National Retail Federation has cautioned lawmakers that a national sales tax would hurt the economy. And health lobbyists have begged the White House to retain tax breaks for health insurance.

As the White House opens a two-day conference today to promote its second-term fiscal priorities, powerful interest groups that once supported Bush are either actively working to undercut him or are wary of his proposals. The result, experts say, is that the president will probably have a hard time passing his ambitious plans, which include cracking down on medical malpractice lawsuits and overhauling both the federal tax code and Social Security.

President Bush met with Social Security trustees Thursday. He must convince a much larger audience that partial privatization would be sound reform. (Lawrence Jackson -- AP)

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"Combining all three of these major issues mobilizes the largest interest groups in America, including the trial lawyers and AARP," said James A. Thurber, director of the Center for Congressional and Presidential Studies at American University. Added Marshall Wittmann, a former Republican congressional staffer and now a senior fellow at the pro-business Democratic Leadership Council, "No one has ever tried to do as many of these at once, and he will be very lucky if he achieves just one of his goals, let alone all of them."

To be sure, Bush will have coalitions to back him. The Alliance for Worker Retirement Security, for instance, is a group of business trade associations that has lobbied to let workers invest some of their Social Security taxes in private retirement accounts. On Monday, a new group called Women for a Social Security Choice put out a news release supporting the president's efforts. And in his attempt to rein in lawsuits, Bush will have a potent and big-spending friend in the U.S. Chamber of Commerce's Institute for Legal Reform.

The White House itself will be an imposing force. Using the pulpit of the presidency, Bush rallied support for repeated tax changes and other controversial legislation in his first term, facing down sometimes vigorous pressure-group opposition. White House aides said the conference today is the opening salvo in what will be a massive public relations campaign to raise the popularity of Bush's plan.

But the vocal opposition of groups like the AARP will be an imposing obstacle to Social Security overhaul. The group is the largest senior citizens lobby, and its backing was pivotal last year to the success of Bush's Medicare prescription drug benefit.

Along with rallying its members against the Social Security plan, the AARP is coordinating with other influential groups. The heads of the AFL-CIO, NAACP, National Organization for Women and the Alliance for Retired Americans plan to announce Thursday that they have formed a coalition to oppose the partial privatization of Social Security. AARP officials have been meeting with organizations like these for weeks to discuss strategy.

Some traditional backers of Bush are also withholding support until the administration's proposals are more fleshed out. The Tax Relief Coalition, which was instrumental in pushing three Bush tax cuts in the first term, has been silent so far about tax overhaul. A senior official of the coalition, who spoke on the condition of anonymity because he wasn't authorized by the group to speak publicly, said Bush's plan could hurt some businesses while helping others, depending on how extensive it is. Given the low level at which corporations pay federal income taxes, the official added, a thorough revamping of the code could increase taxes for individual industries, potentially transforming some Bush friends into enemies.

Other organizations that often move in tandem with Republicans have been pushing in their own directions. The National Retail Federation has been meeting with lawmakers and executive branch officials to warn about what they see as the dangers of imposing a national sales tax, a levy that could dampen store sales. Separately, the Association for Manufacturing Technology has been talking up the idea of accelerating tax write-offs for equipment, while the National Association of Realtors has been urging lawmakers to reject measures that would hinder homeownership.

The overall impact is to make today's conference even more important for the president. Even such a cheerleader for Bush's initiatives as Dirk Van Dongen, president of the National Association of Wholesaler-Distributors, said the conference is needed to "lay a foundation for a consensus agenda for what are very complex and difficult issues."

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