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By LAURIE MCGINLEY
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- For AARP chief William Novelli, the ride toward a prescription-drug benefit alongside a Republican president is becoming rocky.
Since Monday, when Mr. Novelli announced AARP's enthusiastic endorsement of a Republican-led Medicare bill, he has come under fierce, and increasingly personal, attack by disgruntled Democrats and seniors.
Wednesday, in a protest backed by union groups, a band of AARP members showed up to destroy their membership cards outside the group's downtown headquarters here.
Other seniors have been demanding, on AARP message boards, that Mr. Novelli be fired from his $420,000-a-year job running the 35-million-member group. AARP says it is getting about 1,500 calls a day on the matter, and Mr. Novelli says most of the calls have been negative. A new survey of AARP members commissioned by the AFL-CIO shows that only 18% want Congress to pass the Medicare package.
Meanwhile, Democrats, calling AARP the "American Association of the Republican Party," are vilifying Mr. Novelli as a longtime closet Republican who forfeited his leverage and cut a lousy deal. Senate Minority Leader Tom Daschle of South Dakota Wednesday charged that AARP "may have a conflict of interest" because it might sell prescription-drug policies to seniors under the legislation.
The 62-year-old Mr. Novelli says the criticism is harsher than he expected but insists his decision was "the right thing to do. ... It's like Kermit the Frog said: It's not easy being green. Well, it's not easy being in the middle."
It is all the harder for the fact that it seems so unexpected. Long associated with Democratic policy views, AARP finds itself on the opposite side of the Medicare debate from liberal leaders such as Massachusetts Sen. Edward Kennedy and Sen. Daschle.
The reason is a combination of Mr. Novelli's personality and the political dynamics of this year's Medicare debate. Mr. Novelli, a public-relations and marketing man who took the helm at AARP in 2001 from the cautious Horace Deets, is considered a pragmatist who was determined to get a prescription-drug deal this year -- even if it meant compromising more than others at AARP wanted, friends and foes say.
Republican leaders courted him, knowing AARP's endorsement was essential for overcoming objections from liberal senators and conservative House members.
Mr. Novelli sees the marriage of convenience as a last chance to give seniors a new drug benefit before an exploding budget deficit makes the biggest-ever expansion of the 38-year-old program politically and fiscally impossible.
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To Democratic detractors, the pact he helped negotiate threatens to undermine Medicare, the federal health program for 40 million elderly and disabled people, by introducing limited competition between the traditional program and private insurance plans, which could drive up premiums for people who stay in the regular program.
Democrats aren't the only ones with misgivings. With the legislation likely headed for the floor this week, supporters Wednesday were making last-minute changes to win over the votes of wavering members.
Wednesday night, Republicans said cost estimates from congressional budget analysts are very close to $400 billion over 10 years, the amount set in previous budget legislation. That could help calm some conservatives worried about cost, though many believe spending actually will be much higher. House and Senate negotiators are expected to meet Thursday to sign off on the final conference report.
Increasingly, the attacks on Mr. Novelli aren't about what is in the bill. House Minority Leader Nancy Pelosi of California Wednesday criticized Mr. Novelli for writing the foreword to an April 2003 book on health care by Former Speaker Newt Gingrich, who in 1995 tried to slash future Medicare spending. Democrats also have been circulating e-mails noting that Mr. Novelli in 1972 worked on the re-election campaign of President Nixon.
And the consumer group Public Citizen Wednesday distributed a memo from two liberal Harvard Medical School professors, longtime advocates of national health insurance, showing that AARP received more than $123 million in royalties from insurance companies last year marketing AARP-approved health and life insurance policies, and saying that AARP would reap hundreds of millions from the bill.
Mr. Novelli says he doesn't know whether AARP will sell prescription-drug policies to Medicare beneficiaries but staunchly denies that the group's stance was motivated by financial considerations. Currently, some of the AARP-approved policies on the market offer drug coverage. But AARP spokesman Steve Hahn says these policies, which aren't subsidized by the government, would be rendered obsolete by the legislation, which calls for government-funded drug coverage. In addition, Mr. Novelli says he is an independent, not a Republican, and that it is in AARP's interests to align itself with neither party.
Everyone involved knew AARP would be an important player in the Medicare drug legislation this year. Asked at a September CNBC dinner whether there would be a bill this year, Sen. Kennedy pointed at fellow guest Mr. Novelli and said "you need to talk to him."
When House-Senate negotiators deadlocked on contentious issues, House Speaker Dennis Hastert and Senate Majority Leader Bill Frist began consulting Mr. Novelli to try to win the group's endorsement. Unlike many Democratic lawmakers, Mr. Novelli had already concluded that no bill could pass without some direct competition, called premium support, that Democrats oppose. So he agreed to its inclusion even though it angered Sen. Max Baucus (D., Mont.), who was trying to kill the idea.
Now under heavy fire from liberals, Mr. Novelli says he worked to limit the experiment and doesn't expect it ever to take place in any event. "It's a fig leaf" to assuage conservatives, he says.
Some observers see echoes of how Mr. Novelli handled the tobacco issue when he headed a group called Campaign for Tobacco-Free Kids. The group was the only public-health organization involved in secret talks with the tobacco industry and state attorneys general to try to reach a settlement on government regulation of tobacco and other issues. The resulting settlement, unveiled in the spring of 1997, was attacked by many antitobacco activists as too weak. Critics said Mr. Novelli, founder of the Porter Novelli public-relations agency, was more interested in making a deal than in making good policy.
Mr. Novelli's view is different: that overreaching by much of the public-health community was responsible for the demise of tobacco regulation on the Senate floor. They "were holding out for the perfect," he says, "and as a result, we lost comprehensive tobacco legislation."
He is unlikely to back off on the Medicare deal. In a profile on the Web site of Mr. Novelli's alma mater, the University of Pennsylvania, the AARP chief says he is guided by a Finnish haiku: Problems worthy of attack prove their worth by attacking back.
--Sara Schaefer Muñoz contributed to this article.
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