Democrats have said they would use the savings produced by the negotiations to reduce a coverage gap that is common in many plans.

But they suffered a significant setback on the issue on Wednesday when the nonpartisan Congressional Budget Office said the legislation was unlikely to result in lower prices.

"The secretary would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by (the plans) under current law," wrote Donald B. Marron, the CBO's acting director.

Actuaries for the Centers for Medicare and Medicaid agreed in their own estimate released during the day.

Republicans argue that individual insurance companies already negotiate lower prices on behalf of their customers and that the Democratic approach was tantamount to calling for federal price controls.

The legislation also would ban any attempt to limit the array of drugs available to Medicare beneficiaries by creating formularies. That stands in contrast to the Veterans Administration, which has lower prices for its beneficiaries but uses formularies that limit patient choice.

The detailed CBO response to Dingell. Don't have the actuary documents, but I can find them if you need to have it spelled out in more detail.

In other words, more legislative smoke and mirrors from the Democrats. This would make little difference in prices.

The Democrats have been furious that Bush pulled this issue out from under them, and have been trying to recover the advantage ever since.