Frist Optimistic on Senate Relations

Back from congressional break, Senate Majority Leader Bill Frist (search) challenged lawmakers Monday to a pair of eye-popping deadlines — pass President Bush's Medicare reform and prescription drug benefit in eight weeks and approve the biggest tax cut possible in the next two-and-a-half weeks.

"The window of opportunity is real, but it is very narrow," Frist told doctors attending the American Hospital Association annual meeting.

The window is so narrow because, as campaign season heats up, partisan politics will make the legislative progress increasingly difficult. Four of the nine Democratic candidates vying for the nod to run for president are sitting senators.

Frist's foremost problem, however, may be his reputation with fellow Republicans after what many regard as his first major gaffe.

Just before Congress left for its Easter recess, the rookie majority leader failed to inform House leaders that he had cut a deal with two GOP senators that appeared to permanently cap the Senate's tax cut package at $350 billion. That's less than half the president's $726 billion request and $200 billion less than the House approved.

Since then, Frist has been under steady fire from Republicans. On Monday, he acknowledged that he didn't play the cards right.

"I made a mistake in not, late that night, making our House counterparts aware that an agreement had been made between two senators," Frist told Fox News.

Top House Republicans, including Majority Leader Tom Delay (search) of Texas, were infuriated, accusing Frist of secret deals that undermined internal GOP relations and the president's tax-cutting agenda. Frist said the lesson he learned is not to blindside allies. He said he also thinks he can patch up the error.

"I feel reasonably comfortable that we're going to have an excellent working relationship as we go forward," he said.

Right now, House Speaker Dennis Hastert (search) appears to be going along with the mending. He told students at Texas A&M University on Monday that the "prancing ponies" that are running for office are likely to be the major impediment to a tax cut, not the backroom deal Frist made.

But he did say that it was unfortunate how events unfolded.

"We learned later they had a wink and nod to limit it" to $350 billion, Hastert said.

"We're going to have to work and work vigorously for 550, we think that's the number," he added. "We came down from 726, but we think [$550 billion] is a number we can achieve and actually get some economic stimulus. I'm afraid if it's too light, the stimulus won't be there."

In the meantime, Sen. Charles Grassley, R-Iowa, the Finance Committee chairman, has said that he is willing to add $30 billion to $40 billion in aid to states in order to win over moderate senators. House Republicans are unlikely to go along with that plan, saying states got billions in homeland security funding and unemployment benefits assistance.

They add that GOP-drafted legislation on prescription drugs and welfare could mean billions more in aid to states if enacted later this year.

Frist wants to go forward and pass the tax cuts soon and he and other congressional GOP leaders are on the fast track, working with administration officials to identify spending cuts of $100 billion that would enable the Senate to raise the $350 billion tax cut proposal to $450 billion without adding to the deficit.

Frist and Hastert are headed to the White House for meetings on Tuesday evening. A larger delegation will have their talk with the president on Wednesday.

"I'm confident that with a lot of hard work and leadership on everybody's part that we will be able to get well above $350 billion," Frist said.

The White House said Monday it would like to find the money by weeding out waste, fraud and abuse in government programs. White House spokesman Ari Fleischer said the president is keeping an open mind.

"So I think it really comes down to the nature of the specific proposal, and we'll work with Congress to see what they come up with," he said.

The White House Center for Economic Analysis also upwardly revised its estimates of the net benefit of the president's plan on Monday to eliminate the double taxation of stock dividends, a centerpiece of his economic stimulus proposal. The administration had predicted that tax cuts would create 450,000 new jobs. Now the estimate is 700,000 new jobs.

Apart from the president's tax cut, Frist also said Monday that if legislation on a prescription drug benefit is not approved before July 4, Democratic presidential candidates' partisan politics will make later passage all but impossible.

For their part, Democrats on Monday were busy talking about the politics of war and the fitness to serve. Last week, former Vermont Gov. Howard Dean, who got a lot of attention for his anti-war stance, said that the United States has to take a different approach to diplomacy because "we won't always have the strongest military."

That comment drew guffaws from the campaign of Sen. John Kerry of Massachusetts, whose spokesman said Dean's comment "raises serious questions about his capacity to serve as commander-in-chief. No serious candidate for the presidency has ever before suggested that he would compromise or tolerate an erosion of America's military supremacy."

The dovish position that worked so well before and during the war now appears to be hurting Dean, and Kerry, who is battling Dean for the top spot in New Hampshire's first in the nation primary, is taking the opportunity to knock a few points off Dean's popularity numbers.

Fox News' Carl Cameron and The Associated Press contributed to this report.