Reconciliation To Yield Strong Public Option Or Nothing?

Brian Beutler reports:

As Senate leaders begin work on a Democrat-only health care bill, they're finding themselves confronted with an unexpected irony: Though the caucus has reached an uneasy consensus around a public option that's modeled in many ways after a private insurer, it may be necessary to make the public option more liberal, and thus, more politically radioactive, if it's to overcome a number of unique procedural hurdles [...]

"A very robust public option that scores significant savings would presumably be easy to justify doing through reconciliation," says a Senate Democratic aide. "But it is still being studied whether other, more moderate versions of a public option could pass parliamentary muster."

According to Martin Paone, a legislative expert who's helping Democrats map out legislative strategy, a more robust public option--one that sets low prices, and provides cheap, subsidized insurance to low- and middle-class consumers--would have an easier time surviving the procedural demands of the so-called reconciliation process. However, he cautions that the cost of subsidies "will have to be offset and if [the health care plan] loses money beyond 2014...it will have to be sunsetted."

And there the irony continues: Some experts, including on Capitol Hill, believe that a more robust public option will generate crucial savings needed to keep health care reform in the black--and thus prevent it from expiring. But though that may solve the procedural problems, conservative Democrats have balked at the idea creating such a momentous government program, and if they defected in great numbers, they could imperil the entire reform package.

Now this is just funny. The Democratic leadership wanted a bill called the "public option" that would essentially be a non-profit unable to reach those who get insurance from an employer. But in order to pass it through reconciliation, they'd have to pump it up significantly. In addition, this signals that a "co-op" idea wouldn't score at all and couldn't pass through reconciliation either; it would cost seed money for start-up, but wouldn't add or subtract from the budget afterwards, and so would have to be sunsetted or excised. So Senate Democrats probably figure that they'd lose too much support in the Senate on a robust public option and they should lose it altogether. But if they do that, they'll lose the support of the House, who say that they really will hold firm and not pass a bill that gives insurance companies a bailout through a forced market. So that's the space in between right now.

Judd Gregg seems to know this, and he's ready to exploit it.

Sen. Judd Gregg has hundreds of procedural objections ready for a healthcare plan Democrats want to speed through the Senate.

Gregg (N.H.), the senior Republican on the Budget Committee, told The Hill in a recent interview that Republicans will wage a vicious fight if Democrats try to circumvent Senate rules and use a budget maneuver to pass a trillion-dollar healthcare plan with a simple majority [...]

Gregg said the only way for the so-called public option to have the necessary budgetary impact to warrant procedural protection would be if the program were “very aggressive in setting rates, price controls and rationing,” an option that might cause conservative Blue Dog Democrats in the House to bolt.

Absolutely hilarious. Democrats are backed into a corner now, needing to support a real public option or none at all. And it's all up to them, since they only need 50 votes in the Senate. We'll now see pretty plainly whether Congressional Dems and the White House want to be a kept party for corporate interests or not.

I actually see the bigger problem, that insurance regulations wouldn't be able to get through in reconciliation, and would need a "sidecar" bill requiring 60 votes, and anyone bullied into passing something they didn't like in reconciliation may not be so happy about supporting the sidecar. So you'd have a public option but no exchange. Essentially, you'd have a bill made of Swiss cheese. Nevertheless, it's still worth doing to push the limits of the process obstacles in the Senate, with the overall goal of breaking them and their resistance to the change people desire.

Reconciliation began as a limited way to expedite passage of the budget bill that came at the end of each year. It did this by limiting debate and short-circuiting the filibuster. But year by year, administration by administration, it's becoming more significant. It was used to pass much of Reagan's economic agenda. Clinton expanded it to balance the budget, reform welfare and change the tax code. George W. Bush used it for tax cuts, trade authority and drilling in ANWR. Now Barack Obama might use it for health-care reform -- and if that works, for much else.

The reconciliation process's modern role has almost nothing to do with its original purpose. It doesn't reconcile budgets. It evades the filibuster. And maybe its increasing centrality is a good thing. One scenario is that reconciliation becomes a fairly common, albeit still constrained, process to pass legislation without risking the filibuster, which makes the Senate work a bit better. Another is that the need to sidestep the filibuster makes reconciliation common, but its limits begin to annoy members of both parties, and so they either unshackle reconciliation or repeal the filibuster, either of which would make the Senate work much better.

Either way, the elevation of reconciliation -- by both parties -- amounts to an admission of the problems with the filibuster, and a step towards a 51-vote Senate. The further that process advances, the better the Senate will work. In the long run, that's a good thing.

Absolutely. I support reconciliation even if it means a wacky bill, simply to highlight the inequities in the process, and hopefully, provide impetus to changing them.