WASHINGTON (AP) – Senate Democrats presented President Bush with conditions for their support of a Medicare drug bill Thursday, rejecting what they called “arbitrary limits” on spending as negotiators struggled to find a compromise.

“The president can solve this problem,” said Democratic leader Tom Daschle of South Dakota. He appealed to the president to urge Republicans to toss out proposals to limit spending and to require traditional Medicare to compete directly with private insurance plans.

The letter was signed by 39 Democrats, one Republican and one independent. It highlighted some of the most contentious, unresolved issues that remain four months after the House and Senate passed differing versions of the legislation, which would mark the largest expansion of Medicare in its 38-year history.

Negotiations were entering a critical phase.

The core group of negotiators, House and Senate Republicans, joined by two Senate Democrats and administration representatives, stayed at the table in Rep. Bill Thomas’ Capitol private office reviewing options to resolve long-standing differences.

Senate Democrats arranged a meeting of the rank and file to review the issue.

While the letter listed several points for Bush’s attention, several Democrats speaking on condition of anonymity said it was designed largely to slow any rush toward agreement that may be developing.

House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., told GOP negotiators on Wednesday to wrap up work by week’s end.

Daschle said that was not likely, particularly if bipartisanship was a goal. “There’s a real possibility that before Thanksgiving we could get it finished,” he said.

The Democrats’ letter was carefully worded. It said that the any final compromise “must not impose caps or other arbitrary limits on Medicare spending,” for example. But it was less emphatic on another GOP priority, saying the bill should not include tax-preferred accounts for health costs.

As for Republican demands that traditional Medicare be required to compete directly with private insurance, the letter said a “restructuring of Medicare that could raise the premiums of the elderly and coerce them to join” health maintenance organizations, preferred provider organizations or other private insurance plans “is unacceptable.” A PPO is an HMO in which patients can seek outside doctors.

The letter contained an implicit threat that Democrats had sufficient strength to block the bill under Senate rules. “A partisan conference report that jeopardizes Medicare and does not provide meaningful assistance to the elderly and disabled should not and will not pass,” the senators wrote.

But Daschle said, “We’re not threatening a filibuster today.”

Chief among the unresolved issues is a demand by House GOP conservatives to have traditional Medicare compete directly with new managed-care plans.

Democrats fear that could send premiums for traditional Medicare skyrocketing. Two sources said closed-door discussions on Wednesday focused on suggestions to avoid large cost increases for current beneficiaries, those who will qualify for benefits within the next 10 years, and low-income people.

Republicans also are attempting to satisfy conservatives’ demands that the cost of the bill be held to $400 billion.

Democrats too spoke of the need to contain Medicare’s costs, but said that expanding the use of generic drugs and allowing prescription medicines to be imported from Canada would be more effective.

AP-ES-10-23-03 1653EDT

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