Nelson Playing Possum?

Chuck Schumer remarked yesterday on the dynamic facing moderate Dems with respect to health care and the public option:

So if you have a conference committee where the House has it strongly, almost rock solid, in their bill, and the Senate...if we don't have it in the bill there are 54, 55, 56 Democratic senators for it, how are they going to report back a bill without it?

This is the key question. Everybody wants to agree on jettisoning the public option, but the debate got so far away from the White House and Congress that the public option became synonymous with reform, and now nobody wants to be the one to excise it from the bill. You've even got Shep Smith going off script and slamming Republicans for distorting the public option debate. Nobody wants to put the stake through its heart.

But before everyone congratulates themselves on how health care reform "won" because conservaDems wouldn't dare to kill it, check out what Ben Nelson told Brian Beutler earlier today:

With a 60-seat majority in the Senate, Democrats are poised, theoretically, to prevent Republicans from filibustering key agenda items. Liberals and health care reformers see that as a potential bulwark against Republican obstruction and are pressuring party leaders to enforce unanimity on key cloture votes, so that nominations and major bills (like health care) can be decided by a simple majority. And just how are they doing on that score?

Sen. Ben Nelson (D-NE), one of the Senate's most visible centrists, tells me leadership hasn't said anything about it to him.

I asked, "Has leadership been in discussions with you and other moderates about voting with the party on procedural votes?"

In a statement that will bedevil liberals, he responded, "I don't know about others, but not with me."

There's almost no way that's true. And if it is, the Democratic leadership should collectively resign. There's almost nobody in the caucus whose vote needs to be assured OTHER than Ben Nelson. My suspicion is that Nelson is deliberately misreading what's been said to him to set himself up with the ability to leverage his opposition into concessions. With 60 Democratic votes, it really only takes one to vote down cloture. Everybody has the potential to demand something from reform. And Nelson is just allowing that to continue.

Meanwhile, he's being smartly squeezed back at home:

The Nebraska Democratic Party put the state's senior senator, Ben Nelson, in an awkward spot on Saturday by passing a resolution making support for a government-run insurance option a central aspect of its platform.

In a nearly unanimous vote at a committee meeting in Fort Omaha Metro Community College, about 70 attendees approved language that urges members of Congress "to vote for such health care reform proposals that contain a robust public option at all stages of the legislative process including conference and reconciliation, and encourage legislators to pass such reform."

Nelson remains one of the highest-profiled U.S. Senate Democratic holdouts on the public plan, even recently declining to commit to voting against a Republican filibuster of legislation that included the provision.

Officials at the Nebraska Democratic Party said the committee vote was not meant as a rebuke of the senator, who has historically taken a conservative approach to public policy issues. More an encouragement to all Democratic state legislators.

North Dakota Democrats just did the same thing, putting pressure on Kent Conrad - the resolution actually supports single payer with a public option as a "fallback". I don't know if these Senators are reachable, even by their home states, but it's worth a shot.

Point being, I don't think we can just assume that the Dems have 60 locked up for cloture just yet. There's a long way to go.

We Made Him Do It

I agree with most everyone that it's good to have this out there:

Despite months of seeming ambivalence about creating a government health insurance plan, the Obama White House has launched an intensifying behind-the-scenes campaign to get divided Senate Democrats to take up some version of the idea in the weeks just ahead.

President Barack Obama has long advocated a so-called public option, while at the same time repeatedly expressing openness to other ways to offer consumers a potentially more affordable alternative to health plans sold by private insurers.

But now, senior administration officials are holding private meetings almost daily at the Capitol with senior Democratic staff to discuss ways to include a version of the public plan in the health care bill that Senate Majority Leader Harry Reid, D-Nev., plans to bring to the Senate floor later this month, according to senior Democratic congressional aides.

Among those regularly in the meetings are Obama's top health care adviser, Nancy-Ann DeParle, aides to Reid, and Senate finance and health committee staff, both of which developed health care bills.

At the same time, Obama has been reaching out personally to rank-and-file Senate Democrats, telephoning more than a dozen lawmakers in the last week to press the case for action.

If the "left of the left" didn't agitate and activate folks throughout the debate, this story wouldn't exist. And neither would the public option. The White House is now trying to save face by getting something they can call the public option into the bill. They cannot not have it, at this point. The pressure has been ratcheted up too high.

So there will be a public option in there, I'm convinced of that now. The question is what will it look like? Chuck Schumer seems to be saying that Tom Carper's state-based network would maybe be the answer. That's really no worse than Schumer's level-playing field version. None of them will have the scale and scope to really compete with insurance companies. But all of them can be expandable. And that's what's important at this point.

It took several months of banging on these politicians just to get a weak version of a public option in a position to possibly succeed. Meanwhile some conservative can just say the word "ACORN" and get their federal funding revoked. There's a definite imbalance there. But progressive power is at least imaginable, and hopefully when this passes and the world doesn't go up in flames, it will get easier.

Public Option Finance Committee Live Debate

(Bumped)

I'm listening to the public option debate in the Senate Finance Committee at this link. I guess I can embed it right here:

Visit msnbc.com for Breaking News, World News, and News about the Economy

Chuck Grassley is going on and on with his series of lies about the public option. All you need to know is that it saves hundreds of billions of dollars, and everyone who presumes to be worried about the total cost of the bill and at the same time rejects the public option is full of it.

Jon Walker has a good liveblog going. Earlier, Jay Rockefeller went to town on the Baucus bill:

10:24 - Rockefeller quoted in his defense of the public option former Cigna excutive Wendell Potter who called Baucus's bill the, "the Insurance Industry Profit Protection and Enhancement Act."

10:33 - Rockefeller pointed out that while the private insurance companies will receive a half trillion dollars in federal money, there is no requirement in the Mark for the private insurance companies to spend that money on care. The House bills has an minimum 85% medical loss ratio. Baucus's bill has no minimum medical loss ratio

10:37 - Rockefeller is putting the private health insurance industry on trial. He is going through all the different ways private insurance companies screw over their costumers and deny claims.

Chuck Schumer just now asked Grassley what he thinks of Medicare. He called it "part of the social fabric of America." It wasn't in 1964! Maybe in 40 years, the public option will be part of the social fabric of America. Grassley is dancing.

Bill Nelson interjects saying "how in the world do you make that leap" that a public option will lead to single payer? Grassley uses the Lewin Group statistics, not based on the public option plan on offer - also Lewin Group is owned by United Health Group and not an unbiased source.

...just to be clear, it's likely for us to lose this one. But this debate, according to Schumer, will revitalize the debate for the Senate floor. Hopefully Schumer will ensure that the floor amendment on the public option will only require a majority vote. Robert Reich has a good story on this as well.

...Orrin Hatch is trading off of the decades-old demonization of government from the Reagan era onward, saying that DC bureaucrats cannot manage health care. Well, I eagerly await Hatch, essentially a DC bureaucrat, recusing himself from all health care votes this session, including participating in any filibusters, because he clearly considers himself such a bad manager. Incidentally, the reason we're doing health care reform right now is because private management of health care has failed.

...Bob Menendez comes out for the public option. I think he may have been on the fence until now. That's another member of the leadership, the head of the Democratic Senatorial Campaign Committee, for the public option. He's the guy who delivers resources to Senate candidates, including incumbents, so that's notable.

...Note the states Menendez singled out for having no competition in the insurance market - Maine, Wyoming, Iowa, Montana, North Dakota. Every one in the Gang of Six!

...Conrad is up. Calls his co-op crap "the public interest option"! His main complaint is the Medicare reimbursement rate, which is more of an issue than I made of it last week. We'll see if he votes yes on the Schumer amendment, which does not tie a public option to Medicare rates. I think there's a way to meet halfway on this. Tying the public option to Medicare rates saves lots of money, but it could save half that by equalizing the reimbursement rates in some states.

...Nelson asks Conrad to change the name of his co-ops to something even more indecipherable.

...Bingaman is up. He's getting some clarifications. Rockefeller is getting a little fed up with the distortions of his amendment.

...Bingaman supports a public option, but it looks like he'll only vote for the Schumer "level playing field" public option instead of Rockefeller's. That's a cost, according to the CBO, of $85 billion dollars, if you look at the House bills. So I'm sure Bingaman will come up with $85 billion in new funding to make up for that, right?

...Schumer is making a very strong case for the public option. Of course, his plan would score lower and save less money, which he admits.

...TPM has that exchange between Schumer and Grassley, where Grassley calls Medicare part of the social fabric of America.



John Ensign is dredging up that Belinda Stronach (Canadian MP) came to the US for health care canard. He won't mention that she raised money for adding the cosmetic surgery she needed - COSMETIC, not the care itself - in the Canadian health care system.

Then Ensign claimed that US health care is great because if you take away every car accident and gun death, it turns out our preventable death rate is excellent. Which is just about the stupidest thing I've heard yet in this debate. Is John Ensign calling for a total gun ban in the United States?

...Debbie Stabenow's going to wrap up the debate before a lunch break. Stabenow frames the public option as "the grand compromise," which it is.

Public Option Nears Finance Committee Vote

The public option debate in the Senate Finance Committee was originally scheduled for a vote today, but it was pushed back to Tuesday. While the chief cheerleaders on the committee are not entirely hopeful about its prospects in the committee, they certainly sounded confident about it overall.

"The health care bill that is signed into law by the President will have a good, strong, robust public option," (Chuck) Schumer said.

How that will happen remains an open question. But the Senators assured reporters on the call that we're all going to get a taste of their passion and persuasiveness on this issue at the ongoing Senate Finance Committee hearings on Friday.

"I think it's a great idea," (Jay) Rockefeller said of the public option. "Chuck Schumer thinks it's a great idea. And we're going to be all over it tomorrow." [...]

Schumer said that "a large majority of Democrats are for a public option" -- but that the ratio is higher in the House than the Senate, and higher in the Senate than in the Senate Finance Committee.

"I think we have a real good chance on the Senate floor," he said.

Schumer and Rockefeller have a lot of weapons at their disposal. First off, there's the pure popularity of the measure, which has ticked up in recent weeks, at 65/26 in the latest New York Times poll. This is also true in the case of swing district Democratic seats, who not only express a fundamental desire for health care reform this year, but support a public option and reject a trigger. This is also a crucially important piece from that polling:

It's wrong to think about the public option in isolation from other elements of reform. Forcing an individual mandate without a public option is a clear political loser (34% Favor / 60% Oppose), and only becomes more palatable when a public option is offered in competition with the private sector (50% Favor / 46% Oppose)

And swing district voters have already decided the private sector has failed to keep healthcare affordable, and want a public option now (48%) instead of waiting for a trigger (36%).

A mandate without a public option will be extremely unpopular because people can sense that the idea of a forced market for private insurers is designed in the interests of those insurers, not them. This is really elementary stuff.

I don't know if whether this report about Blue Dogs fading in their opposition to the public option relative to other health care goals is a sign that they're learning from these reports or not. They seem to be more interested in the regional disparities in Medicare reimbursement rates, which is really a payoff, but if those rates were adjusted, opposition to a public option tied to Medicare rates in some fashion would probably fade away. Especially considering that it's the fiscally responsible thing to do, per the CBO.

The original House bill required the public plan to pay providers 5 percent more than Medicare reimbursement rates. But as part of a package of concessions to Blue Dogs, the House Energy and Commerce Committee accepted an amendment that requires the HHS Secretary to negotiate rates with providers. That version of the plan will save only $25 billion.

In total, a public plan based on Medicare rates would save $110 billion over 10 years. That is $20 billion more than earlier estimates, a spokesman for House Speaker Pelosi said.

We'll see if this arsenal of evidence can convince Senators who really just want to protect the status quo, and more important, protect industry profits. We're finally going to see where they stand when the Finance Committee votes. We'll be watching.

Intrigue In The Palace On Health Care

The President will apparently support and endorse the public option in his speech tonight but fall short of demanding it. More on that in a later post. Really, if the members of Congress supporting a public option don't show their mettle in this debate, it won't totally matter what the President supports.

Over the past 48 hours, the blogosphere has blown all kinds of holes in Max Baucus' bill, but on Capitol Hill people are being a bit more circumspect, probably because they just want him to pass the sucker out of his committee so we can get on with the work of health care reform. And yet even media types are slagging Baucus for delaying the same bill he could have had in June for three months for no particular reason. So clearly, his centrality to the debate has lost traction.

The center of gravity has really shifted toward Olympia Snowe. And therefore, it's good to see Robert Reich knock her trigger proposal back to kingdom come. Reich rightly notes that this idea we can devise a formula to know definitively if insureres are living up to their responsibilities is ludicrous. Therefore, corporate interests and Republicans (redundant) will just argue the numbers on the trigger and delay the public option forever. And adding a five-year delay just snuffs out all of the political energy for change.

Even better than this is Chuck Schumer arguing enthusiastically for using reconciliation for at least part of the bill - and a public option would fit that mold.

Q: I’m curious, the leadership was trying to use reconciliation as way to force Republicans to the bargaining table. Do you think that failed and do you think reconciliation is still part of the plan?

A: I think we still have to look seriously at reconciliation because even with 60 Democrats, you know, if we’re able to get somebody here from Massachusetts, it’s not easy to do.

Q: Are you planning on having an interim appointment from Massachusetts?

A: No, I don’t know. That would be up to the Massachusetts state legislature but I know they’re considering it. Ah, so, so the bottom line is that even with 60 or even if Olympia Snowe comes to some kind of agreement, it’s going to be hard, and I’ve always favored using reconciliation for good parts of the bill. I think that will get you the best bill, the strongest bill and the bill that will have the greatest positive effect on the American people. Ultimately, we’ll be judged not by whether we pass the bill, but ultimately we’ll be judged by weather it works. Leaving the bill as something that doesn’t work, even if we pass it, leads to hurting both the country and the party.

Now if THAT could only become the center of gravity opinion in the health care debate...

In addition to the slagging of Baucus-care and Snowe-care and the talking up of reconciliation, you have the insistence from House progressives to only vote for a bill with the public option. And as Anthony Weiner notes, there's a strategic component to this as well:

Dem Rep. Anthony Weiner, who’s taken on a counterintuitive and increasingly high profile role defending the public plan, just said for the first time in an interview with me that he doesn’t see “any way” he can vote for a bill without the public option in it.

“I dont see how I could,” said Weiner, when I asked whether he’d vote for a bill without a robust public plan. “I dont see any way I could.” His throwing down of the gauntlet is more striking when you consider that he’s known at home in New York as a moderate who’s not known for bucking leadership [...]

“All of the protest letters in the world don’t add up to much if you don’t finally stand up and vote No on something the President and Nancy want,” Weiner said. “There is clearly a sense that progressives in Congress are easily rolled.”

“If the Congressional left can’t pass even something as modest as a watered down public option, then frankly I don’t think anyone is going to take the left very seriously later on in this Congress,” Weiner continued. “When Blue Dogs talk, there are fewer of them but they have more influence than when progressives talk.”

Yes, this is a proxy for future fights and a means to change the dynamic in the Congress, getting respect for progressives pushing the agenda that got most Democrats in Congress elected. The combination of all of these things is adding up to a decent enough strategy, but the President is also no bystander here. More on that in a moment.

Top-Level Democrats Assault The Extremist Astroturfers

The White House took the lead on this, publicly calling the teabagger disruptions an example of astroturfing and citing conservative industry-backed groups taking credit for activating the rioters. Now other elements of the Democratic Party are taking up the baton. Dick Durbin and Chuck Schumer blasted the clown show today:

Speaking outside the White House after meeting with President Obama, Sen. Dick Durbin of Illinois and Chuck Schumer of New York both dismissed the significance of boisterous protesters who have been interrupting Democratic lawmakers' events.

"It is a small fringe group," Schumer told the Huffington Post, "and if we let a small group of people who want to monopolize the conversation and not listen to the facts win, you may as well hang it up."

"These town hall meetings have been orchestrated by the tea baggers and the birthers to just be a free-for-alls, make a lot of noise, go on YouTube and show discord," said Durbin. "I mean that is what they are determined to do. But that is not going to accomplish what we need to accomplish: real health care reform."

Likewise, the DNC called the protesters "right-wing extremists funded by K Street" and alluded to the Palin/McCain rallies with the ugly cries of racism and xenophobia. The House Speaker's blog has a pretty comprehensive list of the extremism of the rioters, the links to special interests, and the coordinated strategy to shut down debate. And I've seen every single Democrat on cable news today talking about the Brooks Brothers riot, astroturfing, lobbyist-funded front groups, and the like. It's pretty interesting.

Will this push either the extremism or the astroturf element of this into the conversation, given the obvious evidence of lobby groups strategizing on this? I'm not sure. The media has a depressing tendency to treat a mob like a poll sample of public attitudes. In fact, public support for health care is still very strong. But the various ambushes throughout the country will still get national and (perhaps more important) local ink.

I'm glad that Democrats are fighting back, but I'm compelled to note that their charges also have to get into the game themselves. The ads have largely been garbage, the organizing hasn't gotten the traction from the media, and they have been unable to drown out the shouters. There is a gap here.

The Battle Over The F-22

One area where President Obama deserves some praise is his stand on the F-22, at odds with parochial interests in Congress and even splitting some senior Democrats:

Democratic leaders support an amendment that would strip the $1.75 billion for seven additional jets from the 2010 defense authorization bill, which is being debated on the Senate floor this week.

But several senior Democrats are from states that will see gains from building more F-22s.

Sen. Chris Dodd (D-Conn.), who represents the state where Pratt & Whitney builds the F-22 engine, told The Hill he was working with his Democratic colleagues to convince them to support the purchase of more jets despite the president’s opposition. Dodd also faces a tough reelection campaign next year.

Sen. Charles Schumer (N.Y.), the vice chairman of the Senate Democratic Conference, will be a key vote to watch. The watchdog group Project on Government Oversight, which supports removing the F-22 funds, lists Schumer as poised to vote against stripping the money.

Schumer declined to say how he was voting, telling The Hill he is still studying the issue, and advised: “Watch the vote.”

Sen. Levin withdrew the amendment temporarily today so the Senate could take up the hate crimes bill. Sounds to me like Levin feared he didn't have the votes.

Matt Duss lays out what this is really about.

So just to be clear, this argument over the F-22, at least as it’s occurring in Congress, not really a debate over defending the country — it’s a test of whether the requirements of electoral politics can outweigh the requirements of American national security as defined by the Department of Defense. This isn’t to suggest that Congress has no role in determining American defense requirements — of course it does, but let’s not pretend that seven extra planes is the difference between air dominance and ceding the skies.

Meanwhile, Mike Goldfarb observes that “one thing that’s been consistent throughout this process has been quiet support for F-22, in contrast to the vocal opposition from Obama, Gates, and McCain. Most people thought that F-22 was DOA as soon as Gates released the administration’s defense budget. But it turns out that support for the program in Congress is pretty broad.”

I don’t know if I’d call Lockheed and Boeing spending $6.5 million and $2.4 million, respectively, on lobbying in the first three months of 2009 “quiet support.” But yes, it is rather impressive what kind of support can be gotten for an item that the military doesn’t want by spreading its production out into 48 different states, donating vast sums of money to various political action committees, and sending armies of lobbyists onto the Hill. It’s almost as if politicians were interested in getting re-elected or something.

We're moving into a phase of whether we can take even this minor step in defying the military-industrial complex - remember, the overall military budget will increase this year - or whether we're resigned to defense contractors eating up massive government contracts forever, permanently hamstringing our budget. That's what's at stake in this amendment.

Rahm Is Desperate To Cave

In The Wall Street Journal, Rahm Emanuel explained how he could live with a trigger option on the public plan:

It is more important that health-care legislation inject stiff competition among insurance plans than it is for Congress to create a pure government-run option, White House Chief of Staff Rahm Emanuel said.

"The goal is to have a means and a mechanism to keep the private insurers honest," he said in an interview. "The goal is non-negotiable; the path is" negotiable [...]

One of the most contentious issues is whether to create a public health-insurance plan to compete with private companies.

Mr. Emanuel said one of several ways to meet Mr. Obama's goals is a mechanism under which a public plan is introduced only if the marketplace fails to provide sufficient competition on its own. He noted that congressional Republicans crafted a similar trigger mechanism when they created a prescription-drug benefit for Medicare in 2003. In that case, private competition has been judged sufficient and the public option has never gone into effect.

The President quickly walked back the comment, saying that "one of the best ways to bring down costs, provide more choices, and assure quality is a public option that will force the insurance companies to compete and keep them honest."

It's curious that Emanuel cites the trigger in the prescription drug benefit. That has never been tripped, and indeed the White House needed to strike a deal with the pharmaceutical industry to lower costs under Medicare Part D. So a lack of competition unnecessarily raised profits for the industry by at least $80 billion (the cost of the deal) over a decade, and there's STILL no public drug company option. These triggers are Washington compromises designed to never meet the standard where they would have to be tapped.

Emanuel's orientation is to accommodate centrists and kick liberals. He's been doing it since he entered politics. There's plenty of elements to health care just as important as a public option, but that's the most controversial, and so the Chief of Staff wants to cave on it to reach a compromise. The other issues, like the health insurance exchanges, the subsidies for the poor, Medicaid eligibility, the baseline level of care, etc., isn't getting the same attention, so Emanuel figures he can just strangle them behind closed doors. With the public plan, a high-profile issue, Emanuel probably thinks he has to lay the groundwork for a capitulation. Or, he's maybe lowering expectations, so Chuck Schumer can rush in and dictate the process, watering down the public plan down to a "level-playing field" piece of insignificance. But Rahm's problem is exactly the same as during the Clinton Administration:

If short-term pressures to accommodate concerns about the deficit curb Obama's ambitions, the result could be not only disaffection among progressives but also disappointment among the less ideologically inclined. Despite their skepticism about government, most in this latter constituency want Washington to foster economic expansion and improve their health coverage.

The president will thus have to balance worries about losing some moderate support against the larger danger of failing to achieve the sweeping change he promised. The obvious path for Obama -- the one he is likely to take -- is first to achieve his reforms, particularly in health care, and later to pivot to dealing with the deficit, once the economy starts improving. (Obsessing about the deficit in a downturn is not a recipe for recovery.) And centrist Democrats in Congress could usefully recall that the party's inability to deliver on Bill Clinton's 1992 campaign pledges, particularly on health care, led to a stunning defeat two years later that decimated its moderates and liberals alike.

In his first six months, Obama showed he was up to the job. This summer will test his ability to make agonizing choices -- and make them stick.

The public won't be bullshitted by a bill, any bill. People will need a tangible benefit, and for better or worse, that has become the public plan. Those who stand in the way will have trouble reclaiming their legitimacy.

The Ever-Circling Trigger

Olympia Snowe, one of the few Republicans who may support a health care overhaul, has returned to the concept of a "trigger" for the public option, delaying its implementation and allowing the insurance industry an effective monopoly.

Sen. Olympia Snowe, a key figure in shaping federal health care legislation, said Monday that a government-run plan that would take effect if the private insurance market fails to deliver affordable coverage could bridge the partisan divide that threatens to derail President Barack Obama's efforts to reform the system.

Snowe, R-Maine, said she's working with Sen. Chuck Schumer, D-N.Y., to establish that kind of a framework in the bill expected to emerge next month from the Senate Finance Committee.

In an Associated Press interview in Portland, Snowe said it would be unfair to include a government-run health insurance option that would take effect immediately.

"If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market ... the public option will have significant price advantages," she said.

Responding to Snowe's comments, Schumer spokesman Brian Fallon said the Democrat will continue to seek a consensus with Republicans but believes there must be a public option that "is available to all Americans from the first day."

Schumer will talk with anyone, but his principle of a public option on day one is completely at odds with Snowe's concept. By the way, Schumer's vision of a public option, which apparently appears in the Senate HELP Committee's draft legislation, isn't good enough. It's the "level-playing-field" option that forsakes Medicare bargaining rates for a public insurance plan, turning it into a weak non-profit that won't drastically impact the marketplace.

But Snowe's concept, which would undoubtedly set an unrealizable standard to prevent the public option from ever coming into existence - that's how it works with Medicare Part D, which has a trigger as well - is a complete non-starter. And keep in mind, EJ Dionne informed us yesterday that the main GOP negotiator in the Senate, Chuck Grassley, will not sign onto a deal if only Snowe supports it, which means it would have to move to the RIGHT of Snowe's concept. And those Republicans are out there today demonizing the public plan as a "Washington takeover".

Fortunately, Democrats have been warning the GOP that they're willing to go it alone on health care if they remain unhelpful, using budget reconciliation requiring only 50 votes. There's still hope that the debate over the public option and health care reform generally will remain internally focused. But seeing Snowe step out on the trigger is worrying.

Meanwhile, consistent with my belief that more than the public option matters in this debate, here's Ezra Klein on health insurance exchanges, a concept that would add competition to every health care marketplace. Any public option would live in here, but it would also break the mini-monopolies in various regions, by offering an exchange that would allow consumers to choose from a variety of policies. The idea is to create a true insurance marketplace. However, if a national exchange gets whittled down to a state-based one, then it's effectively no different than current rules for the individual insurance market.

The strong version is national, or at least regional. It's open to everyone: The unemployed, the self-employed, and any business, no matter the size, that wants to buy its workers in. There's risk adjustment to reduce the incentive for cherrypicking. And all this means that each exchange has many tens of millions of people, giving it tremendous advantages in scale, simplicity and standardization. With tens of millions of potential customers, insurers are eager to participate, and they will bid aggressively to ensure they're included in the market and compete aggressively to make sure they're successful within it. Over time, the combination of increased efficiencies and greater competition drive down costs in the exchange, which will lead more employers to use it, which will in turn give it more scale and bargaining power.

The weak version is state-based. It's open to only the unemployed, the self-employed and small businesses. Risk-adjustment, if it exists at all, is crude. With such a limited pool of applicants, insurers aren't driven to compete, and the efficiencies of scale and competition are minimal. It never really grows, and instead exists as a marginal policy to mop up those who aren't covered by employers.

"Strong exchanges now!" doesn't exactly make sense on a bumper sticker, but it's plenty important.

Learn, Damn You, Learn!

Something fairly interesting happened today. It doesn't mean we will get a public health insurance option to compete with the insurance industry, but it doesn't exactly hurt. Apparently some Democrats thought that if they only watered down such a public option to nothing, they would get that vaunted bipartisan support, and everybody could go back to their districts and claim they did something when they in fact would have done nothing. But as those of us who have been observing this have known for some time, these aren't your father's Republicans, or your grandfather's, or any other relative. They are the rump conservative party, openly hostile to using government for any means other than profit-taking, and preferring to tell their constituents "good luck" instead of making any tangible difference to their struggles. And somehow, Democrats just discovered this.

Some Senate Democrats have considered nixing the public option proposal in order to win Republican support for the bill.

Schumer's role is important because he had been acting as an intermediary between liberal Democrats and moderates who are trying to strike a deal on the issue with Republicans on the Senate Finance Committee. Of the five House and Senate committees working on health care, Finance is the only one that appears to have a chance at reaching a bipartisan agreement.

Schumer said Finance Republicans had rejected several proposals designed to beef up the suggested nonprofit insurance co-ops. These included setting up a national structure for the co-ops, $10 billion in government seed money, power to negotiate payment rates to medical providers nationwide and creation of a presidentially appointed board of directors.

The Democrats tried to basically bury the public option as long as they could get any manner of support for the weak substitute. And the Republicans wouldn't budge. Like in 1993, their mission is to kill health care reform, period. Why anyone would think that any alternative would be true is beyond me, but Senate Democrats obviously needed to play Tic-Tac-Toe with the computer endlessly until they realized what a strange game it all is, and that "the only winning move is not to play." Ezra Klein comes to the same conclusion.

Republicans, (Schumer) suggests, are standing lockstep even against efforts to create a private co-op system that could offer an alternative to for-profit insurance. Their concern with the co-op plan is not that the government would be taking over the health-care system. It's that the current insurance providers would face unexpectedly aggressive competition in the marketplace. Which raises an interesting, and potentially clarifying, question: Are Republicans in this to preserve the healthy functioning of a competitive private market or preserve the profits of the currently dominant insurance companies?

Further proof of that learning experience came today from Kent Conrad, the man who devised this health co-op plan by throwing a dart against a board, as he appeared to acknowledge its limitations.

The wheels looked to be coming off with health care reform last week. But a poll showing huge public support for a public health care option and a strong bill from the House of Representatives have changed the dynamic.

Schumer and other backers of a public option insist that any plan must be national in scope, have substantial funding at the beginning from the federal government, and include national purchasing power in order to negotiate lower prices.

Conrad ticked off the areas of agreement that were reached Monday.

"National structure: I believe to be effective there has to a national entity with state affiliates and those affiliates have to have the ability to regionalize. I think his concern there can be addressed," said Conrad. "Second, he believes there needs to be national purchasing power. I think that's a good point that the national entity would be able to do purchasing on behalf of the state and regional affiliates and on behalf of the national entity itself."

Now, Schumer's vision of a public plan is a compromise from the House vision of a public plan, which is a compromise from single-payer health insurance. But things are moving in a better direction today than yesterday, when DiFi flat-out said Democrats don't have the votes to pass anything.

This teachable moment has a value for those outside the system who want to push for a real public option that can use bargaining power to force competition from insurers. Because now, as Matt Yglesias says, there's no excuse for Democrats to water down their bills in order to "seek bipartisanship" and make them durable. Republicans have revealed themselves. And given budget reconciliation and the imminent fact of 60 votes in the US Senate, Democrats have nobody else to blame. They can talk about political realities but those have essentially been voted out of existence, with respect to Republicans. Whether it's because of health industry campaign contributions or a desire to limit competition in small, rural states, a desire to get the glory for saving policy from the brink or just an ideological disinclination, individual Senate Democrats will have the collapse of any health care reform on their hands.

And yes, I mean Democratic senators. The Republicans, with a few possible exceptions, have decided to do all they can to make the Obama administration a failure. Their role in the health care debate is purely that of spoilers who keep shouting the old slogans — Government-run health care! Socialism! Europe! — hoping that someone still cares [...]

The real risk is that health care reform will be undermined by “centrist” Democratic senators who either prevent the passage of a bill or insist on watering down key elements of reform. I use scare quotes around “centrist,” by the way, because if the center means the position held by most Americans, the self-proclaimed centrists are in fact way out in right field.

What the balking Democrats seem most determined to do is to kill the public option, either by eliminating it or by carrying out a bait-and-switch, replacing a true public option with something meaningless. For the record, neither regional health cooperatives nor state-level public plans, both of which have been proposed as alternatives, would have the financial stability and bargaining power needed to bring down health care costs.

It helps to have clarity on who is blocking what the public desires. The grassroots will redouble their efforts, doing to the rest of the wayward Democrats what Change Congress did to Ben Nelson. Blue America are lining up a similar pressure Campaign for Health Care Choice on Blanche Lincoln, and you can contribute to that cause at this link.

HELP's Health Care Bill

Ted Kennedy's committee will try and influence the debate on health care with the release of their comprehensive legislation, which includes some pretty solid proposals.

Sen. Edward M. Kennedy (D-Mass.) is circulating the outlines of sweeping health-care legislation that would require every American to have insurance and would mandate that employers contribute to workers' coverage.

The plan in the summary document, provided by two Democrats who do not work for Kennedy, closely resembles extensive changes enacted in the senator's home state three years ago.

In many respects it adopts the most liberal approaches to health reform being discussed in Washington. Kennedy, for example, embraces a proposal to create a government-sponsored insurance program to compete directly with existing private insurance plans, according to one senior adviser who was not authorized to talk to reporters.

The draft summary also calls for opening Medicaid to those whose incomes are 500 percent of the federal poverty level, or $110,250 a year for a family of four.

If you're looking for the left-most counterpart to whatever happens in Max Baucus' Senate Finance Committee, this is it. MassCare is doing decently, but not getting the job done on its subsidies because a small state has no chance to drive down costs in any meaningful way. The cost controls - and how to pay for the subsidies - are the two keys here.

But it's notable that Kennedy includes a robust public option. Howard Dean today painted Chuck Schumer's compromise public option as the limits of where he would allow the conversation to go.

As a sticking point, he's insistent that any reform effort include a public plan. The public entity would provide insurance that, by avoiding the demands of the private market, could help control cost and expand coverage. Cognizant that such a proposal will engender stiff -- if not universal -- opposition from Republicans in the Senate, Dean said he had no objection to Schumer's modified version.

"If we can get Schumer's proposal out of the Senate, I think that would be a very good thing," he told the Huffington Post. "It can't be any weaker than that though. We don't want what would be a fake public option."

As one of the leading progressive voices on health care reform, Dean's endorsement of the Schumer proposal is no small thing. The New York Democrat has envisioned a plan for insurance coverage that, while run on public funds, is self-sustaining and subject to private market rules. Money would come from the payments and premiums of consumers. The same officials who ran the plan would be forbidden from regulating it. And a reserve fund would be set up to handle a potential influx of claims.

The stipulations, Dean said, would assuage critics without actually diminishing the public option itself.

"[Schumer's proposal] is still run by the public," he added. "But it is subjected to insurance rules that are there in order to protect the public from for-profit institutions, which is obviously not necessary if you are running your plan on the public side. Because the consumer needs the protection because of the profit-motive, but they don't need protections from a non-profit or the government. So Chuck has those things in there to level the playing field. I understand that. And I don't think we need to be doctrinaire about this. But I think, the bottom line is a public option is run by the public and financed by the public, it is not administered by the private sector."

I'm not quite as sanguine as Dean about Schumer's public option because it would act much like a nonprofit, without getting the Medicare bargaining rates needed to drive down costs. It would represent an improvement, but only a slight one. However, framing the conversation as a choice between Schumer's version or Kennedy's, not Schumer's version or nothing, is crucial. That's the importance of the Kennedy bill.

My New TV Show

I'm calling it "That Jew.

Arkansas state Sen. Kim Hendren, who is currently the only announced Republican candidate for U.S. Senator against Democratic incumbent Blanche Lincoln in 2010, has apologized for referring to Sen. Chuck Schumer (D-NY) as "that Jew," at a county Republican meeting last week.

"I don't use a teleprompter and occasionally I put my foot in my month," Hendren told Arkansas blogger Jason Tolbert.

"At the meeting I was attempting to explain that unlike Sen. Schumer, I believe in traditional values, like we used to see on 'The Andy Griffith Show,'" he explained. "I made the mistake of referring to Sen. Schumer as 'that Jew' and I should not have put it that way as this took away from what I was trying to say."

Great apology. "I was simply trying to explain that, unlike dirty Jews, I believe in values! I don't believe in soaking my matzos in the blood of Christian babies, unlike whatever it is those fellers do in Jew York! Is there a problem with that?"

The thing is, I don't even like Blanche Lincoln. But the Republicans make it so hard for me to focus on the big picture...

Public Enemy

The health care debate thus far has really focused on creating a public option to compete with private insurance companies. The various players are choosing up sides. The Obama Administration, expressed by their Health and Human Services Secretary, supports it, as a means to encourage competition and innovation. The White House is joined by 70-odd members of the House who have said no public plan, no deal, and 21 members of the Senate (so far), including moderates like Claire McCaskill and Jim Webb. On the opposite side are, well, Republicans, and their paymasters in the health insurance industry, simply because they want to preserve their monopoly over the market and their advantages that don't impact the bottom line for consumers, but instead get shoveled into profit margins and executive pay. The health insurance lobby's view is that they will adopt modestly more fair practices (guaranteed issue, modified community rating) as long as the government forces individuals to buy health care and subsidizes them, an indirect payment from the Treasury to the insurers themselves. Not surprisingly, these views mirror those of "moderates" like Ben Nelson, who coincidentally has taken millions from the insurance industry in campaign contributions, and previously owned a major insurance company.

(By the way, memo to the media: what the insurance industry is offering does not add up to a concession. These are the same "concessions" made by the industry in 1993, and yet they bashed the final plan and stopped its passage. These measures would reform insurance but not reform health care, which can only come through increased competition and a resetting of the perverse incentives that insurers have to limit treatment. Only real reform would lower costs and provide better care, and forcing a monopoly doesn't exactly get all the way there.)

Chuck Schumer has tried to design such a plan, and does a good job of defending it and naming it ("Plan USA"), but under the guise of a "level playing field," it's hard for me to understand how his plan would be anything more than a non-profit insurance option doing little to truly lower costs unless it were scaled up massively. Sure, this kind of public plan would limit overhead and advertising costs, and wouldn't pay executives. But if it can't bargain for lower rates in the way Medicare can, in fact over time you'd probably see what happened in Medicare Advantage (the private insurance supplement to Medicare), where the playing field got tilted to the private market until the government stepped in this year to put a stop to it.

We all know that the only way to truly bargain down costs is through a single payer option. I'm willing to support a public option grafted onto the current system, for now, as long as it retains any ability to bargain for lower costs in the way that single payer would. However, we're getting a bit afield of the nut of the issue if we continue to discuss the mechanism of the public plan. Because a far bigger obstacle to meaningful health care reform is how the hell to pay for it. Literally every funding stream that has been discussed gets quickly shut within a matter of days. Today, Charlie Rangel ended the option of capping or taxing employer-provided health benefits. Earlier they cut out Obama's plan to cap charitable deductions. We're talking about well over a trillion dollars, with big outlays in the short term to get the system to bend costs downward, and if nobody wants to determine a way to pay for it, health care reform dies.

When Is A Public Plan Not A Public Plan

Chuck Schumer has decided to wade into a debate where he's not needed and craft a compromise where no compromise is desired. And this compromise would turn a legitimate public option into a non-profit providing the same crappy insurance everyone's already used to.

In an effort to defuse the most explosive issue in the debate over comprehensive health care legislation, a top Senate Democrat has proposed that any new government-run insurance program comply with all the rules and standards that apply to private insurance.

The proposal was made Monday by Senator Charles E. Schumer of New York, the third-ranking member of the Senate Democratic leadership, in a bid to address fears that a public program would drive private insurers from the market [...]

President Obama campaigned on a promise to create a public plan, in an effort to compete with private insurers and keep them honest. But insurance companies and Republican lawmakers say a government-run plan could drive private insurers out of business and eventually lead to a single-payer system run by the government.

Scorched by Republican opposition to the idea of a new public program like Medicare, Senate Democrats are looking for a middle ground that would address the concerns of political moderates. One way they propose to do that is by requiring the public plan to resemble private insurance as much as possible.

Those aren't fears, they're hopes. And insurance companies and Republican lawmakers should not, in theory, be nearly enough to stop this bill, given that it requires 50 votes through reconciliation. That excuse has left the building along with Arlen Specter. We only have corporate Democrats to blame this time.

When you get to the heart of what Schumer proposes, essentially he's creating a non-profit health insurance option without any bargaining power to lower costs.

¶The public plan must be self-sustaining. It should pay claims with money raised from premiums and co-payments. It should not receive tax revenue or appropriations from the government.

¶The public plan should pay doctors and hospitals more than what Medicare pays. Medicare rates, set by law and regulation, are often lower than what private insurers pay.

¶The government should not compel doctors and hospitals to participate in a public plan just because they participate in Medicare.

¶To prevent the government from serving as both “player and umpire,” the officials who manage a public plan should be different from those who regulate the insurance market.

In addition, Mr. Schumer said, the public plan should be required to establish a reserve fund, just as private insurers must maintain reserves for the payment of anticipated claims. And he said the public plan should be required to provide the same minimum benefits as private insurers.

Agree with 3 & 4, maybe 1 & 5, but #2 is the ballgame. The entire point of a public plan would be to pool resources and lower costs. Heck, that's the entire point of insurance. A "single-payer" plan sets rates through government bargaining power. Schumer here unintentionally proves that single payer is cheaper, but that's a small consolation considering he strangles the public plan that would be an entryway to it.

Wanting a public option but not wanting it to be able to offer anything better than current private insurance make no sense at all. It reminds me of Arlen Specter saying he supports the Wyden-Bennett plan, funded by eliminating the tax deduction for employer-provided health insurance, and then saying he doesn't support that funding. As Matt Yglesias notes, we can go around this maypole all day.

My great fear is that this is how health care reform is going to die. A handful of very conservative members of congress may position themselves as “against” reform. But many people on the center and the right are going to say that they’re all for reform. They’re just going to be against particular things such that reform is impossible. When Barack Obama proposed reducing tax deductions for wealthy taxpayers, that idea died a swift and sudden death on the Hill. And you also don’t see Senators who are eager to start taxing health benefits. Nor do I see Senators who are eager to pay for health reform with steep cuts in defense spending or a new VAT or by raising income tax rates to above their Clinton-era levels. But I’m having trouble thinking of any other possible sources of revenue.

In other words, with all that stuff off the table, health reform dies.

Funding health care is an area where progressives have had little conversation and even less unity. But the Senate is systematically drying up all the options. In the end, we have to pay for this thing.

Gay Marriage: Justice Rolling Downhill

Vermont's legislature will pass a law allowing same-sex marriage, likely with veto-proof majorities, and become the first state to actually legalize gay marriage through the legislative process instead of the courts. California passed a gay marriage law through both chambers but Gov. Schwarzenegger vetoed it twice. Media elites who like to cover for Arnold often forget that.

But perhaps more important to the marriage equality movement is Chuck Schumer's endorsement, suggesting that even national Democrats are defying their fears and coming around to the just position on this contentious issue.

Schumer's office confirmed the meeting and also the senior senator's change of heart, issuing the following statement from the Brooklyn Democrat (who is traveling upstate today):

"It’s time. Equality is something that has always been a hallmark of America and no group should be deprived of it. New York, which has always been at the forefront on issues of equality, is appropriately poised to take a lead on this issue."

It's hard to overstate the significance of this in the eyes of gay marriage advocates.

With the ascent of Kirsten Gillibrand to fill Hillary Clinton's vacant US Senate seat, Schumer was the last remaining statewide elected official who backed civil unions over full marriage equality.

(Recall that one of the first issues Gillibrand "evolved" on was marriage, although her office has insisted she always personally supported it).

Far into the future, successive generations are going to look at this debate and wonder what all the fuss was about over stopping two people who loved one another to commit their lives to being together.

This Is A Silly Country

I can't believe that one of the biggest fights, on a bipartisan basis, in recent days has been over forcing out Chas Freeman, a knowledgeable and qualified candidate for Chairman of the National Intelligence Council, because he doesn't toe the party line of unthinking, unquestioning support for every policy Israel has ever undertaken. Not only did the anti-honest broker forces succeed, but Chuck Schumer sees fit to brag about it:

“Charles Freeman was the wrong guy for this position. His statements against Israel were way over the top and went beyond anything I have seen from any administration official. I repeatedly urged the White House to reject him, and I am glad they did the right thing.”

We have no debate on Israel inside Washington. You have to be mindlessly in support of whatever they do - in fact, you have to say that the role of the United States "is to support the decisions that are made by the people of Israel." Yet no country is infallible, no country is above criticism. That would be the logical view. But as a Jew expressing that, I would be called an anti-Semite and a racist. That's going to be an impediment to doing the necessary diplomacy, even with those groups we're not supposed to like, to create a stable peace in the Middle East.

Meanwhile airstrikes are STILL landing in Gaza. But it's important that someone with the capacity for critical thought isn't part of the Obama Administration.

UPDATE: Freeman is unhappy, and he has every right to be.

I have concluded that the barrage of libelous distortions of my record would not cease upon my entry into office. The effort to smear me and to destroy my credibility would instead continue. I do not believe the National Intelligence Council could function effectively while its chair was under constant attack by unscrupulous people with a passionate attachment to the views of a political faction in a foreign country. I agreed to chair the NIC to strengthen it and protect it against politicization, not to introduce it to efforts by a special interest group to assert control over it through a protracted political campaign.

There is a special irony in having been accused of improper regard for the opinions of foreign governments and societies by a group so clearly intent on enforcing adherence to the policies of a foreign government – in this case, the government of Israel. I believe that the inability of the American public to discuss, or the government to consider, any option for US policies in the Middle East opposed by the ruling faction in Israeli politics has allowed that faction to adopt and sustain policies that ultimately threaten the existence of the state of Israel. It is not permitted for anyone in the United States to say so. This is not just a tragedy for Israelis and their neighbors in the Middle East; it is doing widening damage to the national security of the United States.

The outrageous agitation that followed the leak of my pending appointment will be seen by many to raise serious questions about whether the Obama administration will be able to make its own decisions about the Middle East and related issues. I regret that my willingness to serve the new administration has ended by casting doubt on its ability to consider, let alone decide what policies might best serve the interests of the United States rather than those of a Lobby intent on enforcing the will and interests of a foreign government.

Well said.

Bipartisan Coalition On Screwing The Unemployed

The public has internalized the concept of bipartisanship as practiced by George Bush - he meant it as "Everyone agrees with me," and the public wants to see bipartisanship defined as everyone agree with Obama. This won't make it into many high Broderist discussions, but people seemingly want the agenda that they actually voted for. What a concept.

However, there are some issues where Democrats and Republicans are able to get together and agree. Especially when the "Democrat" in the scenario is a corporate whore who wants to punish the unemployed.

Tennessee and Georgia may turn down some of the economic stimulus money if the restrictions outlined in the package cause budgetary hardship in the future, the governors said Monday.

After meeting with President Barack Obama, Tennessee Gov. Phil Bredesen said some provisions in the package for unemployment benefits would force states to expand their programs permanently, even though the stimulus funding only lasts for two years.

“We are evaluating this piece of money, whether it makes sense for us to take it,” he said. “We may well be one of the states that say we can’t take on that portion of it.”

In short, these Governors don't want to take money now to qualify more people for unemployment, fearing that increased eligibility would remain in 2-4 years when the federal dollars run out, costing employers in their state money. The concerns always seem calibrated to industry and the Chamber of Commerce, oddly enough. Never mind that extending unemployment benefits is one of the most effective stimulus programs there can be and the increase in consumer spending as a result will outweigh any projected and purely conjectural costs years down the road (don't take my word for it, take the word of noted liberal hippie Ben Bernanke).

Chuck Schumer is out with a letter arguing that the stimulus isn't an a la carte menu and that Southern Governor grandstanding aside, picking and choosing is not an option:

As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy.

For instance, at least two governors have proposed rejecting a program to expand unemployment insurance for laid-off workers. Economists consistently rank unemployment insurance among the most efficient and cost-effective fiscal stimulus measures; by one frequently cited estimate, it provides an economic return of as high as $1.73 for every dollar invested. Thus, by denying this provision for their residents, these governors are not just depriving some of the neediest Americans of relief in a dire economy; they are undermining the overall stimulative impact of the package.

Big thanks to Phil Bredesen for giving this rank political grandstanding a patina of bipartisanship. Really helps the country.

Nationalization Rumblings - Senators Step Up

Big news today on the bank nationalization front. First, Sen. Dodd states the obvious:

Senate Banking Committee Chairman Christopher Dodd said banks may have to be nationalized for “a short time” to help lenders such as Citigroup Inc. and Bank of America Corp. survive the worst economic slump in 75 years.

“I don’t welcome that at all, but I could see how it’s possible it may happen,” Dodd said today on Bloomberg Television’s “Political Capital with Al Hunt” to be broadcast this weekend. “I’m concerned that we may end up having to do that, at least for a short time.”

Bank of America and Citigroup, which received $90 billion in U.S. aid in four months, tumbled as much as 36 percent today on concern they may be nationalized. The Obama administration today said a “privately held” banking system is the “correct way to go” and House Financial Services Committee Chairman Barney Frank said nationalization ought “to be avoided.”

And then Chuck Schumer followed suit:

Sen. Charles Schumer (D-N.Y.) believes that failed "zombie" banks, no matter what their size, should be taken over by the government, which should then wipe out shareholders, fire management, clean up the banks and quickly resell them into the marketplace. Such a move, he cautioned, should come only if the "stress tests" being conducted by Treasury Secretary Timothy Geithner determine a bank to be insolvent.

Schumer argued that there are good and bad ways to nationalize banks, and that the loaded nature of the term often leads to confusion. "'Nationalization' means many different things to many different people, and somebody needs to clear it up," said Schumer. "We have to distinguish. I like the good and don't like the bad."

Schumer also pressed that nationalization should be a last resort. "It should be the last arrow in the quiver. The danger here is when a government takes [a bank] over, it drives down shares of other banks that might not be in as bad shape," he said. "Let me be clear about this because I want to be very careful: I am not speaking of any specific institution, just a general comment about a general situation. And I don't have -- and please write this -- I don't have any specific institution in mind."

These aren't backbenchers. They're the Chair of the Senate Banking Committee and Wall Street's man in Washington. And they're merely saying out loud what already has the markets in a panic. The right will try to pin any erosion of the banks on Dodd and Schumer, surely, but the problem is not loose lips, but that many banks are insolvent:

We are not talking about fears that leftist radicals will expropriate perfectly good private companies. At least since last fall the major banks — certainly Citi and B of A — have only been able to stay in business because their counterparties believe that there’s an implicit federal guarantee on their obligations. The banks are already, in a fundamental sense, wards of the state.

And the market caps of these banks did not reflect investors’ assessment of the difference in value between their assets and their liabilities. Instead, it largely — and probably totally — reflected the “Geithner put”, the hope that the feds would bail them out in a way that handed a significant windfall gain to stockholders.

What’s happening now is a growing sense that the federal government, in return for rescuing these institutions, will demand the same thing a private-sector white knight would have demanded — namely, ownership.

And they'd better get to it soon before the whole financial sector goes over the cliff.

To Filibuster Or Not To Filibuster

While I'm sure there are elements within the Senate GOP caucus that would like to derail the stimulus bill, that isn't the message from the leadership. A day after appearing to threaten a filibuster and doubting passage without major changes, Mitch McConnell today sounding more dulcet tones.

Senate Minority Leader Mitch McConnell on Monday dismissed the idea that Republicans are trying to block passage of a massive economic stimulus plan.

"Nobody that I know of is trying to keep a package from passing," the Kentucky senator said at a news conference Monday. "We're trying to reform it."

McConnell wouldn't get into any specific amendments he wants, but he said the package his members would support would be "dramatically different" from what passed in the House and from what is being worked on in the Senate Finance Committee and Appropriations Committee.

He said he wants to see the bill focus on helping homeowners and relieving the burden on middle- and low-income taxpayers.

There is some actual pressure against being seen as obstructionist, at least a little more than in the past. That's why Republicans are using Obama's "bipartisanship" talking point to try and persuade the public that they merely want a voice in the final package. In addition, there's some downward pressure from GOP governors, who actually have to deal with this mess, who need that stimulus money to keep their states going.

There are two other factors. First, the Senate bill is far more business-friendly already than the House bill. There are more business tax cuts in it as well as a popular patch to the Alternative Minimum Tax. Second, Democrats are perfectly ready to compromise on major elements of the bill, though probably not the tax cuts.

Senator Charles E. Schumer, Democrat of New York, said that Senate Democrats were interested in considering Republican proposals to do more to help the sputtering housing market, including instituting a $15,000 tax credit for all home buyers.

“One of the Republican proposals is to raise the $7,500 tax credit we give to new home buyers, raise it to up $15,000 and do it for all home buyers,” Senator Schumer said on CBS’s “Face the Nation.” “That’s something that we look favorably upon.”

Mr. Schumer, who is a member of the Finance Committee, also said he was also interested in passing legislation aimed at getting mortgage rates down to 4.5 percent, although he said he thought that might go in the next part of the bailout measure approved by Congress last year, not the stimulus package.

He added, “I think we will get real agreement on the housing part.”

Senators of both parties also said on Sunday that they expected a significant amount of additional money — about $20 billion to $30 billion — to go toward infrastructure spending on such things as roads and bridges. Senator Schumer also said he supported an additional $5 billion for mass transit spending.

But there was significant disagreement along party lines over whether the additional spending should add to the bottom line dollar figure of the bill. With interest, the $819-billion version of the bill that passed the House last week could actually cost up to $1.2 trillion, the director of the Congressional Budget Office, Douglas Elmendorf, told the House Budget Committee on Tuesday.

Senator John Kerry, Democrat of Massachusetts, speaking on NBC’s “Meet the Press,” said that he would be willing to “raise the total price tag” of the bill to include get the additional spending sought by the Republicans.

For the record, I don't ever remember interest being factored into any Bush-era spending bill to inflate its cost. Also, I'm pretty down on the business tax cuts and the "reinflate the housing bubble" approach in the Senate bill. But clearly, they're going to attempt an even more bipartisan effort than the pre-compromised House bill. The real question, as said in the article, is whether that increases the overall cost, or if other spending programs are taken out to make room.

But for many of these reasons, I don't think the Republicans can actually pull off a filibuster. While there's a core of probably 35 Republicans who won't support practically anything of this nature, I'm not sure they can get the rest. Both Nate Silver and Chris Bowers break down the numbers, with Bowers adding a convenient list:

Overall Stimulus Whip Count

* Likely Supporters (58): 56 Democrats plus Collins and Snowe
* Undecided (5): Kent Conrad (D-North Dakota), Mel Martinez (R-Florida), Ben Nelson (D-Nebraska), Richard Lugar (R-Indiana) and Arlen Specter (R-Pennsylvania).
* Special Case (1): Judd Gregg (New Hampshire). It has been suggested that Gregg's vote might be swayed through an appointment as Commerce Secretary. That's a pretty high price for a vote, but it is worth noting here nonetheless.
* Likely Opponents (35): All Republicans. Take the 34 Republicans with public statements opposing the stimulus, remove Judd Gregg, and add John Barrasso and Mike Johanns. There is simply to way that freshman Republicans from two of the last five remaining Republican states in the country will back President Obama over their party leadership.

Sounds about right. And I would think that within all of that, you can find two votes to give 60 for cloture, even if they don't vote for the final bill. This is why Republicans are basically picking around the edges of this bill, arguing against elements that make up a tiny fraction of overall spending, because they probably know that they can't stop it. As Silver says:

Now, I wouldn't rule out the possibility that there is more tangible Democratic opposition to the stimulus in its present form. But if so, I imagine those Senators would let Obama know ahead of time and work with him toward tweaking it rather than having him endure the embarrassment of a failed cloture vote. In other words, I doubt that Harry Reid goes to the floor unless he feels fairly assured about 60. I also wouldn't rule out the possibility that the filibuster fails and then the stimulus passes, but with only 53-55 votes.

But in terms of sustaining a filibuster, I think McConnell is most likely bluffing. Then again, I didn't think the GOP would manage unanimous opposition to the recovery bill in the House.

Anything's possible, but I think McConnell's sitting with a bad hand and he knows it. He's hoping the bipartisan fetishists will force enough changes to the bill to make it less painful (and probably ineffective, which suits Republican needs, perversely).

Stuart Smalley Saves The Senate?

So Al Franken is going to be certified the winner of the Minnesota Senate election as early as today, but Minnesota state law asserts that the parties must wait for an election certificate for seven days, at which time either side can pursue a legal challenge. Norm Coleman is expected to do so, and the certification won't be official until those challenges are exhausted.

Fortunately, top Democrats, having waited to speak on the matter until the end of the recount, are finally pushing back in the PR war, asserting that Franken has won and calling on Coleman to step aside. Here's Chuck Schumer, outgoing head of the Democratic Senate Campaign Committee:

"With the Minnesota recount complete, it is now clear that Al Franken won the election. The Canvassing Board will meet tomorrow to wrap up its work and certify him the winner, and while there are still possible legal issues that will run their course, there is no longer any doubt who will be the next Senator from Minnesota. Even if all the ballots Coleman claims were double counted or erroneously added were resolved in his favor, he still wouldn't have enough votes to win. With the Senate set to begin meeting on Tuesday to address the important issues facing the nation, it is crucial that Minnesota's seat not remain empty, and I hope this process will resolve itself as soon as possible."

And Harry Reid:

I believe that tomorrow the bipartisan state canvassing board will certify Al Franken the winner. After all, early on Senator Coleman criticized Al Franken for wanting a recount and wasting taxpayer money. I would hope now that it is clear he lost, that Senator Coleman follow his own advice and not subject the people of Minnesota to a costly legal battle.

I hope to see that pressure ratcheted up in the coming days. Coleman can't win, he can only delay the matter.

It is important to note that, from a mathematical standpoint, only seating Al Franken will not affect the balance of power in the Senate, given the Roland Burris fiasco. With only 98 Senators at the moment, Democrats would need 59 to end a filibuster (they would have 57, including Lieberman and Sanders, in their caucus). If Franken is installed as Senator #99, that threshold would rise to 60, leaving Democrats still two votes shy. Only by seating Democratic Senators from Minnesota and Illinois would Democrats move within one vote of a filibuster-proof majority. Nate Silver explains further. The importance of this depends on whether you think 60 Democrats or 60 votes is the most crucial bar to clear, whether you think the party will be unified, etc.

As for Burris, he'll be showing up in Washington tomorrow for his swearing-in ceremony, which will be a fiasco. Expect lots and lots of racial politics:

At the Chicago church, residents said they had formed a group in the past week in support of Mr. Burris’s appointment, a group that seemed far less focused on Mr. Blagojevich than on the need for a black leader in the Senate.

“The U.S. Senate must reflect all of America,” said Bishop Simon Gordon, one of several pastors at the sendoff.

Representative Bobby L. Rush, an Illinois Democrat who attended the event, described the standoff over Mr. Burris in racial terms, portraying the Senate as “the last bastion of racial plantation politics in America.”

Ugly. For his part, Reid did not close the door to Burris being seated on Meet the Press yesterday. Maybe he's done the math, too.