By Helen Dewar
Washington Post Staff Writer
Friday, November 6, 1998; Page A04

Buoyed by Democratic gains in Tuesday's elections and resulting disarray among Republicans, President Clinton and his top congressional allies agreed yesterday to make a major push early next year to revive legislation to regulate managed health care plans.

While also giving high priority to education and a financial rescue for Social Security, Clinton and the congressional Democratic leaders agreed that the managed-care bill offered the best chance to pick up Republican support and score an early success on a popular issue.

The agreement came in the president's first strategy session with congressional leaders since the elections. The hour-long meeting, which started with expressions of "surprised satisfaction" with the election's outcome, as one participant put it, was attended by Clinton, Vice President Gore, House Minority Leader Richard A. Gephardt (D-Mo.) and Senate Minority Leader Thomas A. Daschle (D-S.D.).

"We all agree that the message from the American people in the last election is clear: that they want us to pursue progress over partisanship and to find unity over division," Clinton told reporters after the meeting. "We believe the best way to start is by taking up the 'Patients' Bill of Rights.' "

Even though the legislation failed in Congress earlier this year, "there was a feeling that we can win on this in both the House and Senate" next year, Daschle said in an interview after the meeting.

Daschle said he was optimistic that the bill would attract more Republican support than it did this year and indicated Democrats would consider modifications so long as they did not alter key provisions, such as allowing patients to sue health maintenance organizations (HMOs) for denial of care. "We want to ask moderate Republicans to help come up with a bill they would feel comfortable with," he said.

Last year, the Democrats' managed-care bill was blocked by GOP leaders in the Senate and failed by a five-vote margin in the House, which went on to approve a narrower Republican version.

With a five-vote gain in the House Tuesday, Democrats figure they have a good chance to pass their measure in that chamber and believe they will pick up more support in the Senate, where Republicans failed to add to their 55 to 45 advantage.

Many Democrats used the managed-care issue in their campaigns this fall, and it was a key issue in the winning campaign of Sen.-elect John Edwards (D), who defeated Sen. Lauch Faircloth (R-N.C.).

Because of rules that make it easier for the minority party to initiate legislation in the Senate than in the House, Daschle said the measure probably will be brought up first in the Senate -- either as a separate bill or, if GOP leaders refuse to schedule it, as an amendment to other legislation.

This could lead to an early clash between Republican and Democratic priorities in the Senate. Majority Leader Trent Lott (R-Miss.) said Wednesday he would be receptive to Republican pressure for an early vote on cutting income tax rates. Clinton and key Democrats have balked at the use of budget surpluses to finance large tax cuts, saying any surpluses should be used to keep Social Security solvent.