Dec. 12 (Bloomberg) -- Senator Mitch McConnell, the incoming Senate Republican leader, says he will oppose key parts of the Democrats' 2007 agenda, including proposals allowing Medicare to negotiate lower drug prices and repealing oil-industry subsidies.

McConnell, of Kentucky, said in an interview that he will work with the Democrats on other proposals, such as ones to limit the influence of lobbyists and increase the minimum wage, while demanding some say in crafting those measures.

Democrats -- who will have 51 seats in the new Senate, nine short of the number needed to ensure that legislation can pass -- will have to make efforts to accommodate the Republican minority, he said.

``They're in the majority, they have an opportunity to set the agenda,'' said McConnell, 64. ``But once a measure is called up, the 49 of us will have a lot to say about what happens.''

Democrats will take control of both chambers of Congress on Jan. 4, after victories in the midterm elections. McConnell, who would have been in line to succeed retiring Tennessee Republican Bill Frist as majority leader had his party maintained control, instead will lead the minority.

McConnell said that while he will oppose some Democratic initiatives, he will work with new Senate Majority Leader Harry Reid to reduce partisanship. Last week he endorsed a proposal by Reid, a Nevada Democrat, for a closed meeting of all 100 senators on Jan. 4 before they officially convene that day.

McConnell said he wants to work with Reid on bipartisan legislation bolstering the long-term solvency of Social Security and on a measure overhauling immigration law.

`Conspicuous Accomplishments'

``I think some of the really conspicuous accomplishments of the last half century have been when we've had divided government,'' he said. A 1996 welfare overhaul and 1983 changes to Social Security passed while different parties controlled the White House and Congress, he noted. ``I would challenge our Democratic friends to consider doing some big things, important things, long-lasting things.''

Jim Manley, a spokesman for Reid, said the incoming majority leader ``looks forward to working with Senator McConnell to accomplish the work of the American people.''

McConnell is a more skilled politician than Frist and will be effective in challenging the Democratic agenda, said Roger Davidson, professor emeritus of government and politics at the University of Maryland in College Park.

``The gloss on the package will be to try to be cooperative,'' Davidson said. ``Beneath that, however, McConnell is a very clever and canny tactician. And I'm sure the Republican base will push Republican senators to resist a lot of these proposals.''

Veteran Lawmaker

McConnell is a four-term Senate veteran who has brokered some bipartisan deals, including legislation requiring the upgrading of voting-machines, while showing a history of partisanship on issues such as judicial nominations and campaign- finance limits.

In the outgoing Congress McConnell was chief majority whip, a job that involves lining up votes in his own party.

Democrats are working to push through the House early next year a ``100-hour'' agenda that incorporates their election-year promises. Because of Senate rules that allow for protracted discussion and require at least 60 votes to end debate, that agenda will likely take months to move through the Senate.

McConnell said Democrats will probably win early passage of a measure to overhaul lobbying and ethics rules, including a ban on gifts from lobbyists and limits on the use of corporate jets.

Minimum Wage Measure

He said a proposal increasing the minimum wage to $7.25 an hour from $5.15 will also clear, with some concessions. Republicans will seek tax breaks for small businesses, which they also demanded when the wage was last boosted with bipartisan support a decade ago.

``The only way the Senate can function when it's 51-49 is on a bipartisan basis, and there will need to be some features in the package that have a lot of appeal to Republicans,'' he said.

More troubling, he said, is the Democratic plan to reverse $2.8 billion in subsidies for oil and gas companies in last year's energy legislation, and perhaps repeal oil-industry tax breaks dating from the early part of the last century.

``Are you talking about raising taxes on energy?'' McConnell said when asked about those plans. ``I think tax increases will have a tough row to hoe.''

He suggested that a Democratic campaign promise to implement all proposals of the 9/11 Commission, including screening all cargo shipped into the U.S., may be too costly. ``I'd be interested to see what they want to do and how they want to pay for it,'' he said.

Medicare Drug Program

McConnell also said he sees no reason to change the Medicare prescription drug benefit for seniors. Democrats promised to alter it to allow the Medicare system to negotiate lower drug prices with pharmaceutical companies, and incoming House Energy and Commerce Committee Chairman John Dingell, a Michigan Democrat, has said he wants to require such negotiations.

McConnell said consumer surveys indicated most seniors in the program are satisfied.

``I'm skeptical that it makes sense to take a really great program and start modifying it this soon,'' he said.

To contact the reporter on this story: Laura Litvan in Washington llitvan@bloomberg.net

Last Updated: December 12, 2006 00:06 EST