In The Hands Of President Baucus

Jon Chait gets at something I've been noticing for a while, which is that the Blue Dogs in the House don't necessarily want to stop health care reform at this stage so much as they want to stop having to vote on health care reform before the Senate Finance Committee releases their bill. The House went first on climate change, and these moderate Dems think it's better for their political futures if the Senate goes first on health care. That's why I believe Nancy Pelosi when she says a health care bill will pass the House without question: if the Senate goes ahead and passes, a lot of that opposition from the Blue Dogs will melt away. They just want to avoid a tough vote, like all politicians.

Which means that the action on health care has shifted to that Finance Committee in the Senate, which remains on lockdown:

No one knows what Sen. Max Baucus is doing right now. Well, that's not quite true. Chuck Grassley probably knows. And Olympia Snowe probably knows. And Kent Conrad. And a few other senators and staff members. But that's about it. The Finance Committee, in recent months, has entered total lockdown -- even from itself. Sen. Jay Rockefeller, who chairs Finance's health subcommittee, has been totally shut out of the process. So too have a number of other Democrats on the Committee.

That's created a huge amount of uncertainty at the center of health-care reform. Baucus is the key senator on the key committee. And very few know what he's doing, or why it's taking this long, or what the sticking points are. House Democrats are terrified that they'll take a tough vote on an aggressive health-care reform bill only to see their legs cut out from underneath them when Baucus emerges with a tepid -- but bipartisan -- alternative. Senate Democrats are furious that Chuck Grassley and Olympia Snowe have had more of a role in the process than they have. And above all, everybody is confused.

My semi-informed guess is that if you want to see where Finance is going, look at what Doug Elmendorf, the director of the Congressional Budget Office, is doing. He is systematically, and fairly explicitly, closing off every door to control costs save for reforming the employer tax exclusion. He has dismissed any serious savings from the Independent Medicare Advisory Council proposal and the public plan and comparative effectiveness and general efficiencies. He has said that in the House bill, "the curve is being raised." This prompted Grassley to say that Finance is working to "overcome the shortcomings" of the House's effort.

Doing away with the employer deduction has no political support on the Hill. But capping it, and particularly through taxing the insurers who distribute Cadillac policies to executives, could potentially have lots of support. I love how Goldman Sachs' health care benefits has entered the discussion today.

Goldman’s 400 or so managing directors and its top executive officers participate in the bank’s executive medical and dental program as part of their benefits, according to documents filed with the Securities and Exchange Commission. The program generally costs the bank $40,543 in premiums annually for each participant’s family.

Those taking part in the plan include the company’s chief executive, Lloyd C. Blankfein, and four other top officers, as well as managing directors, whose base salary is $600,000.

Goldman’s medical coverage entered the health care discussion on Sunday when David Axelrod, senior adviser to President Obama, cited the Goldman program as an example of the expensive benefits the administration might consider taxing to help pay for its health care program.

“The president actually was asked this the other day by Jim Lehrer, and what he said was that this was an intriguing idea to put an excise tax on high-end health care policies like the ones that the executives at Goldman Sachs have, the $40,000 policies,” Mr. Axelrod said.

However, this is not the only thing that the Senate Finance Committee has up its sleeve. They're also looking to lower the subsidies available in the bill to people who cannot afford health insurance. This is one of those elements that will tangibly impact millions of Americans, and should be among the first order of importance. But Baucus and his gang want to keep the subsidies down to keep the cost of the bill down to an arbitrary number.

Under the legislation, insurers generally must accept all applicants and could not deny coverage because of a person’s medical history.

But Senator Ron Wyden, Democrat of Oregon, acknowledged that “there are some questions” about whether insurance would be affordable. “People who are making $50,000 or $60,000 a year and are spending $13,000 on health insurance may not get much of a subsidy,” said Mr. Wyden, a member of the Finance Committee. “Those people will ask, ‘How am I going to make this work for me and my family?’ “ [...]

The Senate Finance Committee is considering proposals to limit eligibility for subsidies, a move favored by some fiscally conservative Democrats in the House Blue Dog Coalition. One proposal would bar subsidies for people with incomes over 300 percent of the poverty level ($66,150 for a family of four.)

Richard J. Kirsch, the national campaign manager of Health Care for America Now, a consumer group, expressed concern. “If Congress sets the limit at 300 percent of the poverty level,” Mr. Kirsch said, “millions of middle-income families would not be able to buy insurance because they could not afford the premiums on their own.”

A similar reform concerns limiting out-of-pocket expenses for individuals and families.

As Krugman says today, complaining about subsidies while working to expand federal outlays for health care in other areas makes no sense whatsoever, but that's essentially what a lot of Blue Dogs have been arguing for many weeks. I really think that's because they don't want to move first on the bill, so they're throwing up every objection possible and inventing impossible hoops for House leaders to jump through.