This is a partial transcript from The Beltway Boys, November 22, 2003, that has been edited for clarity.

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(BEGIN VIDEO CLIP, AARP AD)

UNIDENTIFIED FEMALE: We know there are millions of Americans...

UNIDENTIFIED MALE: ... who can't afford to wait for perfect.

UNIDENTIFIED FEMALE: They need action now.

UNIDENTIFIED FEMALE: This is a good opportunity that will be gone if not approved this year.

UNIDENTIFIED MALE: That's why AARP (search) supports this bill as a good first step.

UNIDENTIFIED MALE: And we promise to keep fighting to make your prescription drugs more affordable.

UNIDENTIFIED FEMALE: Tell Congress to keep their promise.

(END VIDEO CLIP)

MORT KONDRACKE, CO-HOST: That was the AARP's ad touting Medicare reform.

And joining us to talk about the congressional fight over Medicare is AARP's policy director, John Rother.

Well, John, you almost lost this thing last night. AARP had a lot riding on it. Did you stay up all night?

JOHN ROTHER, AARP POLICY DIRECTOR: I tried to. But there was a long vote there, over three hours. And, of course, that was happening out of sight, and we couldn't tell what was going to go on. We didn't know whether we were going to win or lose until 6:00 this morning.

KONDRACKE: Now, last week you told me that, that the Democrats' opposition to this thing was based more on politics than policy. What did you mean by that?

ROTHER: Well, we felt that a fair reading of the bill does lead you to the conclusion that seniors would be much better off with it than without it. And so the vitriol of these attacks and the overstatements about AARP's motives really are not based, in my view, on the merits of the bill, but rather on political considerations.

KONDRACKE: Now, what do you think the political effect of this is going to be for 2004? After all, the program doesn't take, doesn't go into effect till 2006, so seniors who were expecting something right away aren't going to get it. And the Democrats are going, presumably, or at least they say they are, are going to be hammering away on the, what's not in the bill.

ROTHER: Well, I think the Senate vote will be more bipartisan. I think the American public and particularly seniors will appreciate what's in the bill as they learn more about it. But they will also appreciate the shortcomings. So I don't think it's going to be a one-sided win, one party or another. I think it's going to be more a mixed verdict.

And that's why we say it's not a perfect bill, and we're going to continue to work on it going forward.

FRED BARNES, CO-HOST: Well, you say in that ad that the bill is just a, a good first step. What's the second step?

ROTHER: Well, the second step is to do a lot more about keeping pharmaceuticals affordable. There's pretty weak cost containment in this bill, and I think that's obvious place to look for a next step.

BARNES: Well, what about working with Republicans in the future? You certainly did on this bill. Republicans seem to think that you all will be a permanent ally, they can get back with you all next year, and, and get more reform in Medicare, by which I think they mean they want more competition between Medicare and private insurance companies.

ROTHER: Well, AARP is a nonpartisan organization. We mean that we work very closely with both sides of the aisle. I think that no one should assume that we're going to be a permanent ally on either side. Our permanent interest is our best interests of our members.

And this year, that was to get this Medicare bill enacted. In previous years, we worked very closely with Democrats on issues like Social Security and universal health care, and I'm sure we will continue to do that in the future.

BARNES: Will you all oppose the introduction of any more competition between Medicare and private insurance companies other than this test that begins in 2010?

ROTHER: Well, we've generally supported more choices in Medicare, so long as the fundamental program is protected. And that's why we oppose the premium support idea. But I think we will see a test starting in 2006 of how well some of these private plans can do when they come into the Medicare program. Seniors will be able to vote with their feet.

And I think we'll know pretty quickly whether or not that's going to be a successful experiment or not.

KONDRACKE: Let me, let me ask you about the effect on the AARP. I mean, you had the Democrats savagely attacking the organization and the president, Bill Novelli, for conflicts of interest and, and bad motives and I just wonder whether you're going to, you think you're going to lose members, and how you're going to patch it together again with the Democrats.

ROTHER: Well, first of all, none of those allegations were true, and I think some of the people making those allegations knew they were not true. Secondly, I think the membership loss was a few hundred members. I hope that we will be able to regain their trust shortly.

And as for Democrats, there are many issues that we will be working with them on going forward. I mentioned Social Security, broader health care coverage for the uninsured, cost containment.

I think that there's, you know, a breach right now, but ... as we both operate in good faith, I'm sure ... we can ... work together.

KONDRACKE: ... just quickly, let me just ask you one major point that the Democrats were raising, and that is, that 2 to 3 million seniors who, retirees who now get coverage from their, from their old companies are going to lose it, because there's only an $80 billion subsidy for private companies, but billions and billions of dollars in unfunded liability on the part of these employers.

ROTHER: Well, this bill is quite generous to employers as a way of keeping their retiree coverage intact. I think the amount of the subsidy amounts to about $800 for every retiree as a way of keeping a good retiree coverage there.

So we're hopeful that that will work, and if it doesn't work, if employer has to drop, it's going to be awfully important that a strong Medicare program be there, so that people aren't left with nothing.

KONDRACKE: OK. Thanks, John.

ROTHER: Thank you.

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