U.S. President Bush is on a roll: The economy is roaring, consumers are optimistic, a prescription drug benefit for 40 million Americans awaits his signature, and his campaign war chest is growing ever-fatter.

After steadily rising casualties in Iraq and differences with allies on trade and other issues, Bush was ready for some good news. He quickly incorporated it into his re-election message Tuesday.

US President Bush greats senior citizens Tuesday, Nov. 25, 2003 at Los Olivos Senior Center in Phoenix moments after speaking on the passage of the Medicare prescription drug plan earlier in the day.  [AP]

The biggest development was the passage of the new drug coverage for seniors under Medicare, a step Bush heralded as evidence he is breaking the partisan gridlock in Washington. For years Medicare has been a trademark issue of the Democrats, but the Senate's vote Tuesday broke their hold.

"Some said Medicare reform can never be done," Bush said in Las Vegas. "For the sake of our seniors, we've got something done. We're acting."

Final passage of the bill came as Bush campaigned in Nevada and Arizona, two states with a high percentage of older Americans, a prime political target of his re-election drive.

The congressional victory was sweetened by news that the economy surged at a blistering 8.2 percent annual rate in the third quarter, and that consumer confidence in November climbed to its highest level in a year. And on top of that, Bush collected another $3 million for his campaign, bringing his re-election fund to at least $105 million.

Democrats were determined not to let Bush's Medicare victory go unchallenged.

Within hours of the Senate's 55-44 Senate vote Tuesday, Senate Democratic leader Tom Daschle introduced legislation to repeal several of the bill's most controversial provisions and to allow the importation of lower-priced prescription drugs from Canada and Western Europe. "This debate is not over. It's just beginning," Daschle said.

While many Democrats said the prescription drug program was inadequate, it will not go into effect for two years. By then, the presidential election will be long over.

Although the economy is improving, analysts say Bush faces other re-election obstacles, most notably Iraq.

"It's not only prosperity, it's peace and prosperity these days," pollster Andrew Kohut said.

Since operations began in Iraq, 297 U.S. service members have died of hostile action, including 183 since May 1 when Bush declared an end to major fighting. Hundreds of other troops have been wounded.

Polls show that postwar Iraq has become more of a liability for Bush just as public approval of his handling of the economy has increased.

"If Iraq gets worse or doesn't get better and we still have this steady drip, drip — this imperils the president's chances even if the economy is better," Kohut said.

Howard Dean, campaigning in Ankeny, Iowa, for the Democratic presidential nomination, said Iraq and economic problems still hang over Bush.

"The economy will be an issue as long as unemployment continues to be what it is and as long as communities find it difficult to pay their bills," Dean told The Associated Press. "The numbers make people on Wall Street and in the administration feel good, not the average person on the street."

Dean was campaigning at Des Moines Area Community College, which has seen two of its 13,700 students die in Iraq in the past two weeks.

College President Rob Denson said he would go to the wake for one student soldier Wednesday. "Obviously from a faculty standpoint, we know most of these students and certainly for these boys' fellow students, this makes the war very real, very personal," said Denson, who a week ago attended the funeral of the second soldier.

"From what I can tell, the families and loved ones are very supportive of what their soldiers are doing. We're all pulling together and being supportive. I don't think Iraq was ever abstract to Iowa, but it certainly is real now."

Dean said he's hearing similar stories across the country. "The steady death toll has had a tremendous impact. Every state has lost young people. And those communities really feel it. This is a misadventure by the president. Families all over America are paying the price."

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