The P.O. Yo-Yo

Harry Reid pulled the yo-yo trick today. First some anonymous staffers were quoted in the NYT that the Majority Leader's merged bill that will go to the Senate floor would not include a public insurance option. Then Reid's spokesman denied it to Greg Sargent.

These yo-yo maneuvers really dispirit people, and I don't know if they're meant to be trial balloons or what, but the leadership needs to at least try to crack down on the leaks. Anyway, the public comments are quite enough, thanks. Reid himself called Olympia Snowe's trigger option "pretty doggone good" last weekend. Bill Clinton did the same thing on Meet the Press. There's no need for an additional article contributing to the death narrative. It saps the energy for reform from the most vociferous reformers, and that's probably by design.

The public option will come up for a vote in the Senate Finance Committee as soon as tomorrow. Liberal supporters admit they don't have the votes. But it will force many centrists to go public on the issue, opening them up to criticism. And even if Reid doesn't include the provision in the bill, he'll certainly allow amendments to that effect on the floor. So this is really just the beginning of a fight that will continue right through to the conference committee.

In the end, whether or not the public option survives depends on the White House's advocacy. So the only tea leaves worth reading are the ones about which politicians they are pushing to support the bill.

...I've now seen a couple assertions that 60 votes will be required for any strengthening amendments on the Senate floor. I'm not sure where people are getting this, but historically that has been something used to preserve the final bill. If this is the case, then, as Chris Bowers writes, Reid's inclusion of a public option in the merged bill really is the hinging point for whether or not it will ultimately be included.

Calm Before The Storm

I don't know if Mike Lux is right and the White House has thrown in with Olympia Snowe and her trigger idea, or if Sam Stein's sources are more credible, and nobody in the White House is pushing this to progressive groups overtly. But you'd have to be blind not to see this as the eventual endgame.

The White House has already pronounced themselves desperate for a bill, any bill. As much as they've talked about reconciliation, it's clear that they don't want to use it and would rather get 60 votes. They are pushing their membership in that direction, but enough of them have expressed reservations with the public option that they would probably reject the whole bill for that reason. Nobody asks them why they'd be willing to deny people health care because of one "sliver" of reform, but no matter. The White House has certainly kept themselves open to a compromise along the lines of triggers or co-ops; Peter Orszag did so again today. Getting Snowe's support means more about the Ben Nelsons and Mary Landrieus of the world signing off on cloture than it does just her vote. So the bill has been hijacked for Snowe's benefit. She's the same person who tried to delay the bill by a couple weeks to move it past the reconciliation window, which is an explicit attempt to kill the public option.

So there's not a lot of mystery here. Whether progressive groups are being sold something or not, the dynamic of the debate necessarily puts us with a trigger. Here's Mike Lux explaining that policy:

Senator Snowe is writing language into an amendment that is literally a Catch-22. The legislative language says that a public option will be set up in a state in which health care is not affordable to 95% of the state's residents, but it defines affordability as after the new tax credits that are written into the bill to make health care affordable. Not only would this be an incredibly weak public option (doing it in one state will mean it can't get the market power to compete with the big insurers), but it would be a public option that is written by its definition to never be triggered. This is a trigger specifically, intentionally designed to kill the public option.

As Lux later says, this will trigger something - not a public option, but a real civil war inside the Democratic Party.

The AFL-CIO, Howard Dean and Democracy for America, bloggers, MoveOn.org, progressive media figures, and the tens of thousands of people coming to Obama rallies and cheering wildly for a public option will figure out quickly that this trigger proposal is a farce specifically written to kill any chance of a public option. The Congressional Progressive Caucus, the Congressional Black Caucus, the Congressional Hispanic Caucus already are angry at having legal immigrants thrown under the bus by Baucus, all will explode.

As someone who spends every single day working hard to build and strengthen the bridge between the progressive community and the White House, I feel like the White House is triggering a bomb to blow the bridge up from under me (pun fully intended).

The trigger is a classic Obama "on the one hand, on the other hand" proposal. I'm afraid that nobody's going to buy that. Too many people have placed their hopes on health reform on a real alternative for competition with the private insurance industry. The White House may not like that it's dominated the debate, but it has. And there's little chance to turn that around.

Health Care Update

Looks like lawmakers are gradually expanding the puny subsidies in the Baucus health care bill:

The chairman of the Senate Finance Committee, Max Baucus, said Monday that he would modify his health care bill to provide more generous assistance to moderate-income Americans, to help them buy insurance.

In addition, Mr. Baucus said he would make changes to reduce the impact of a proposed tax on high-end health insurance policies.

Mr. Baucus, Democrat of Montana, disclosed his plans in an interview a day before the committee is to begin meeting to debate and vote on the sweeping legislation, which is intended to remake the nation’s health care system and guarantee insurance for millions of Americans.

Mr. Baucus said the changes showed that he had heard the criticism of his bill from colleagues, who asserted that many people would be required to buy insurance who could not afford it — even with federal subsidies to help defray the cost of premiums.

“Affordability — that, I think, is the primary concern,” Mr. Baucus said. “We want to make sure that if Americans have to buy insurance, it’s affordable.”

Affordability to Baucus means reducing the limit of policies from 13% of total income to 12% of total income, through subsidies up to 400% of the poverty level. That's at least a start, though still short of what's in the House bills.

As it says above, responding to changes Baucus will reduce the impact of taxing insurance companies, basically by raising the threshold when plans start to hit the tax. But this is paradoxical. Raising the subsidy levels costs money. Raising the tax threshold takes away money. Lawmakers want the bill to protect more people on affordability while taking away some of the money that would pay for those protections. There is a late and familiar entry here, however, and that's Jay Rockefeller's idea to add back in a variation of what the Obama Administration sought all along:

In fairness to Rockefeller, he's got some ideas along those lines.

He's said many times he would be perfectly happy with the sort of financing they have in the House--i.e., a straight-up tax on the rich. And while such a scheme might have trouble in the Senate, Rockefeller is trying gamely to intorduce a more scaled-down version.

Among the amendments he's introduced for this week's Finance Committee hearings is a proposal to cap the deductability of charitable contributions at 35 percent--which would, in effect, reduce the deductability of contributions that very, very wealthy people make to charities. It seems to be a version of what President Obama proposed at the beginning of this process, an idea that still has a lot of merit even though many Senators rejected it out of hand.

Would they reject it again? Maybe not in scaled-back form, which might be enough. In the end, the most likely solution to the funding problem is some sort of combination strategy--a tax that hits expensive health benefits, a tax that hits the wealthy, and, maybe, some sort of tax sugary drinks or tobacco. The new Rockefeller proposal, according to Capitol Hill sources familiar with it, will probably raise about $90 to $100 billion--which is a decent chunk of change and could pay for a lot of new subsidies.

The President wanted to roll the charitable deduction credit back to 28% - exactly where it was during the Reagan Administration, at a savings to the government that could easily top $300 billion over ten years, enough to make the subsidies big enough to make health care truly affordable for everyone. And it would only hit those who make enough money to take advantage of the charitable deduction to begin with. It's really a no-brainer.

Of course, there are more areas of conflict in the bill beyond affordability and financing. There are various amendments in the Senate Finance Committee to add a public option, as well as Olympia Snowe's amendment to add a trigger, and a weak trigger to boot. Obama went on the record saying “I absolutely do not believe that (the public option is) dead," although his close colleague Dick Durbin said today that only a "variation" of it could make it through the Senate. Nancy Pelosi continued her public statements that the public option must be included to pass the House, though House liberals, wary of a bait and switch, asked the Speaker to stand with them when the bill reaches a conference committee. Jerry Nadler reiterated the seriousness of the threat from the progressive side:

Rep. Jerrold Nadler (D-N.Y.) said Monday he is optimistic that any healthcare bill from the House will include a public (or "government-run") option, and are undertaking a whip count to test lawmakers' commitment to that measure.

"The public option is still very much alive only because the progressives have stood together and held our ground and said that, regardless of what the President or Leadership says, we won't vote for any bill [without] a public option," Nadler said in a chat online hosted by the liberal AMERICAblog.

Nadler told the blog that 60 lawmakers had pledged to vote against any healthcare bill lacking the public plan, and that liberal Democrats are "undertaking a whip count now to see how firm these pledges are."

While affordability and financing may come to some compromise position that is at least passable, the statements above show that there's no such middle ground for the public option. This may vex the White House, but they will eventually have to show their cards.

Rockefeller And Wyden: Senate Finance Holdouts

Ezra Klein had two very good interviews today, with Sen. Jay Rockefeller and Sen. Ron Wyden, detailing their concerns with the Senate Finance bill and how they hope to change it. I know that people are getting bent out of shape about the emphasis on the Finance Committee bill when four other committees have jurisdiction, but right now, it's the only committee left to report something out, Wyden and Rockefeller sit on the committee so they represent the best hope for improving that version, and let's be honest, the White House is certainly using Baucus' bill as a framework, with the hope to at least just get it out of there. So it's important to take a look at their concerns.

Wyden, who like Rockefeller spent time at the White House this week, emphasized affordability concerns, like most other Democrats have. But Wyden also wants his proposal for Free Choice in the bill, allowing anyone to buy insurance off the exchange, not just those who don't get coverage through an employer. I thought he answered the concerns about the "end of the employer-based system" (you say that like it's a bad thing) pretty well:

Let me ask you about some of the concerns people have on this bill. One is that it will hasten the decline of the employer-based system. Young workers will leave quickly for cheap, catastrophic plans on the exchange. Workplaces will be left with older, sicker workers, and they won’t be able to continue offering health-care insurance.

That just doesn’t make sense, either from an economic standpoint or the nature of American life. First, companies will continue to see good benefits as a recruitment tool. It remains a primary way to attract young, talented workers. Second, as we look at this in terms of who would leave, I don’t get the sense that young, healthy workers will be the first to traipse off. Are they really going to be the ones to fill out the forms and contact the exchanges and all that? I think the most likely to go shopping are middle-class people who are pinched right now. We’ve also put into the bill safety valves for any worst-case scenario: after-the-fact risk adjustment that will review who stayed and who left and make adjustments based on that fact.

If what we’re saying is that we can’t find a sweet spot between blowing everything up in 15 minutes and telling people that you can’t improve your situation and have more choices, we’re not doing our job. And I think this is that sweet spot.

Wyden also spoke strongly against the "free rider" position, and said he is working with the Center for Budget and Policy Priorities to improve it.

Rockefeller, who has become the stand-in for liberals on health care in the Senate, has a whole different set of concerns, while still keying on affordability.

There are a number of big things. The Children's Health Insurance Program is put into the exchange. That's like putting it into a farmer's market. It loses its defined benefits. And children need defined benefits.

Obviously the public option. I feel very strongly about that as a discipline on the private health insurance market. The public health insurance option doesn't have to make a dime. It doesn't have to make Wall Street happy or shareholders happy. It just has to sell a product at cost. That will put pressure on private insurance companies to bring down their premiums. What's the alternative? My staff has done extensive research on co-ops and everyone says they can't do health insurance. The best health care co-op exists in the state of Washington, and both of Washington's senators are adamantly for a public option. That ought to tell you something.

Another issue is that 46 percent of the American people have health insurance from fairly large companies that self-insure. And they're not included in the regulations. They have to have protection from preexisting conditions and lifetime caps and rescissions too. People hear that the regulations in the bill don't apply to these companies and they think it's not possible. But it's true. And it's almost half of the insurance market!

Another piece is the MedPAC proposal. if you really want to be honest about it, eight to 10 percent of the members of Congress understand health care. At maximum. I chaired the intelligence committee, and health care makes it look like riding on a tricycle it's so complicated. So what you have is lobbyists picking on congressmen who don't know health-care reform, and they say, you know what, you could get a lot more jobs in your state if you only put more money into oxygen or a certain medical device. If you're going to do Medicare right, understanding that the trust fund is going to go downhill in 2016, you can't have Congress making these decisions. You need professionals.

My understanding is that MedPAC is in the Baucus bill, but I could be wrong. The self-insurance thing is something I discovered only recently. Large conglomerates like Disney and GE run their own insurance companies, essentially, contracting out to a health insurer to do the billing, at a fixed rate. So the profit that an insurance company could make off of insuring the employees of a large company is actually going to that large company themselves. They are running a small profit center off of their own employees. And that seems insane to me. So Rockefeller is right to bring this up.

Rockefeller did offer this bit of optimism, though.

What's the mood in the Democratic Caucus like right now?

There's very hot discussion. At the second-to-last meeting with Baucus, Democrats really let loose at Baucus. When you're getting close to the time you need to vote, public policy takes on a new type of intensity. Baucus, to his credit, had another meeting last night, and it was the best meeting we've ever had with the chairman. He told me they'd make sure CHIP is preserved. He knows he needs our votes. That's why I said I wouldn't vote for the bill. Democrats need leverage.

Rockefeller added that Olympia Snowe is getting hammered by Republican leadership for her dalliances with supporting the bill. Maybe that's why she laid down a subtle hint that "the party left me" and maybe she'd be better off elsewhere.

The fact that some Democrats are getting louder about what they would and would not accept is extremely healthy for this process. Maria Cantwell said yesterday that she wouldn't vote for a bill without a public option, and like Rockefeller and Wyden she's on the Finance Committee. Ultimately, progressives should encourage those who want to bring the bill back to the center of the Democratic caucus and away from being a Republican-lite bill.

Affordability Changes On The Way?

A bunch of Senate moderates praised Max Baucus for his health care bill yesterday, leading many to believe that Baucus-care wasn't totally dead. But there was an important caveat - the letter says, "While we each have outstanding concerns we wish to see addressed, Senator Baucus has taken an important and critical step forward with this legislation." It looks like the major concern is affordability. Olympia Snowe, one of those moderates, expressed as much in today's New York Times as well as the Washington Post.

Senator Olympia J. Snowe, Republican of Maine, voiced the same concern. In an interview with The New York Times and CNBC, Ms. Snowe said that for her to support the bill, “there would have to be more subsidies” for low- and middle-income people and that she was trying to figure out how to pay for them.

Ms. Snowe said “the time has come” to pass comprehensive health legislation. But she added that it was important to get the policy and the details right, because they would affect every American.

Max Baucus has signaled an openness to work on the affordability issue.

Specifically, Baucus is talking to Democratic members of his committee about addressing one of their chief complaints about the bill — that it won't do enough to make insurance affordable to the middle class. That's a crucial question, because the legislation would, for the first time, impose a requirement that virtually everyone have some kind of coverage or face a fine. Under Baucus' bill, the government would provide some help-giving subsidies to help those earning up to three times the poverty level (in other words, a family of four making as much as $66,000 a year) buy insurance and setting caps on their out-of-pocket expenses.

But many in his party say that help doesn't go far enough — especially in comparison with the version that the House is working on, which would provide assistance for those earning up to 400% of the poverty level (or a family of four making $88,000). "We're working to address that concern," Baucus said, adding that one idea "very much on the table" is to increase the refundable tax credits for those purchasing insurance. That, however, would likely increase the overall price tax for the measure, which in its current form would cost $774 billion over the next decade, according to estimates by the Congressional Budget Office.

Karen Tumulty gets at the main point here. Snowe has talked a lot about affordability, and wants to expand coverage subsidies. But she doesn't want to spend any more money on the bill, which in order to raise the subsidies, you would have to do. From the other side of this, Democrats and Republicans want to shrink the tax on high-end insurance policies which, under current health inflation, would quickly hit more average-sized policies. But of course, that's how the bill is paid for in the Baucus plan.

Senators of both parties said Thursday that they would seek significant changes in a Democratic proposal to tax generous high-cost health insurance policies.

The tax, proposed as a way to help finance coverage of the uninsured, would be levied on insurance companies. But the senators said they worried that it would be passed on to individual policyholders, families and employers who buy insurance for their workers.

Senator John Kerry, Democrat of Massachusetts, who first proposed the insurance tax, said Mr. Baucus had set the thresholds too low. As a result, Mr. Kerry said, “working folks with a lower level of income will get dragged in,” and the tax could affect union members who have sacrificed pay raises to get health benefits.

Mr. Kerry said the threshold for family coverage should be at least $24,000.

So those inclined to vote for health care want more subsidies in the bill and less taxes on insurers. And I want a pony. But the President laid down a marker of not adding to the deficit, and so in order to do both those things, you need to find another revenue source.

Fortunately, there are several. Just repealing the Bush tax cuts a year early and applying that to health care would save $135 billion dollars. Or using the initial Obama Administration idea of lowering the charitable deduction rate to 28% from 35% would capture something like $300 billion. Or the House's surtax on the wealthy would add even more. There are plenty of options; but will there be the political will?

There's definitely the will to increase the subsidies. The White House is assuring liberal members of that, although not about the public option. The question is, will that be enough to satisfy progressives, particularly in the House? Paul Krugman asks that today.

It would be disastrous if health care goes the way of the economic stimulus plan, earlier this year. As you may recall, that plan — which was clearly too weak even as originally proposed — was made even weaker to win the support of three Republican senators. If the same thing happens to health reform, progressives should and will walk away.

But maybe things will go the other way, and Mr. Baucus (and the White House) will, for once, actually listen to progressive concerns, making the bill stronger.

Even if the Baucus plan gets better, rather than worse, what emerges won’t be legislation reformers can love. Will it nonetheless be legislation that passes the threshold of acceptability, legislation they can vote for? We’ll see.

Indeed.

The Unceasing Disaster That Is Max Baucus

This is it. A year of planning. Three months of intensive bipartisan discussions. Weeks of preparation for the public. And Max Baucus is going to deliver his health care bill... without a single Republican vote. Which anyone with a brain could have told you would be the outcome right from the start.

Senate Finance Committee Chairman Max Baucus (D-Mont.) will release his long-awaited health care reform bill Wednesday – but without the Republican support he has sought for months.

Baucus tailored his proposal to win the backing of some Republicans, hoping to keep alive the possibility that Congress would pass a bipartisan bill.

But after months of closed-door talks, none of the three Republicans involved the bipartisan Gang of Six is expected to declare support for the bill Wednesday.

Baucus said he was still hopeful the bill will emerge from the committee vote with bipartisan backing.

Get that? Baucus wrote a Republican bill, essentially, one that is a gift to the insurance industry, and he got nowhere. And for his efforts, he got blasted by Charles Grassley, who disapproves of the "process." See, he wanted another year or two at the bargaining table delaying a final product, anything else is just a power grab. By the way, Baucus is still "hopeful" for a bipartisan vote. Which means what, he'll add in riders criminalizing abortion and commemorating Rush Limbaugh Day?

The GOP freeze-out on the Baucus bill includes Olympia Snowe, who's actually concerned, like many Democrats, about the weak affordability standards.

But let's not lose sight of why Snowe balked at the Baucus framework. For one thing, she's concerned about the financing mechanism, which she believes would hit Maine hard. But just as importantly, Snowe also believes (as I do) that Baucus' plan offers weak and inadequate subsidies. "The affordability question is crucial," Snowe said. "It's a central component, because at the end of the day people have high expectations they will have access to affordable health insurance."

In other words, one of the leading Republican negotiators on health care reform believes Baucus' plan is too conservative.

More Democrats have spoken up about the affordability concerns, which fall on the poor and middle class. At best, the weak subsidies would force loads of Americans to opt out of the mandate, making the bill useless. At worst, people would be forking over large portions of their income to private industry for substandard coverage. It's just another version of the middle-class squeeze.

Mr. Norton, 49 years old, is an adjunct professor at a local community college who earns about $40,000 a year. He's also one of roughly 200,000 Massachusetts residents who remain uninsured despite a state law requiring residents to have health insurance.

"I can't use up all of my savings just to buy mandatory insurance," Mr. Norton says. It's like penalizing "the homeless for refusing to buy a mansion." [...]

An independent contractor, Mr. Norton doesn't get benefits through the state-run Quinsigamond Community College where he works. His wife's employer, a dental practice, covers her, but not dependents. With a combined income of between $60,000 and $70,000, the family goes without cellphones for Mr. Norton and his teenage daughter, and a needed roof repair, but still makes too much to qualify for subsidies.

The cheapest plan available to him and his 16-year-old daughter costs $464 a month, or $5,568 a year, and comes with a $2,000 deductible per person.

"It's insurance you can't possibly use," he says, referring to the thousands of dollars he'd pay in premiums and deductibles before the coverage would kick in.

Baucus has an anodyne op-ed putting the best face on his plan. Those who've taken a look at it know better. And it has to be improved before getting out of the Senate.

...here's the Baucus chairman's mark. It's mostly in plain English.

Deal Of The Century

So Max Baucus will reveal his long-awaited wet kiss of a bill tomorrow, with subsequent votes in committee in the coming week. We've already seen an outline of it, so we know that it would still cripple people financially who have the temerity to get sick, it would criminalize people who do not buy inadequate private coverage from the insurance industry, it would incentivize employers to offer crappy coverage and discriminate in hiring against people who have no coverage from a family member, and it would not include a public insurance option to compete with private plans. It won't even include a trigger, because the original trigger backer, Olympia Snowe, has decreed that it's a dead letter. Those weak state-based co-ops designed to allow nonprofits like Blue Cross, some of which control 90% of the insurance market, to access billions in government seed money, will be as close as we get in the Finance Committee to a public option. Seemingly, the only reason for the death of the trigger is that Susan Collins said they might lead to a (horrors!) public option, and Snowe probably wants her along as cover for a final bill.

You can pretty much tell what a steaming pile of garbage the Baucus bill would be by the fact that the drugmakers are going all in to support it.

The drug industry’s trade group plans to roll out a series of television advertisements in coming weeks specifically to support Senator Max Baucus’s health care overhaul proposal, according to an industry official involved in the planning.

The move would be a follow-up to the deal that drug makers struck in June with Mr. Baucus and the White House. Under that pact, the industry agreed to various givebacks and discounts meant to reduce the nation’s pharmaceutical spending by $80 billion over 10 years.

Shortly after striking that agreement, the trade group — the Pharmaceutical Research and Manufacturers of America, or PhRMA — also set aside $150 million for advertising to support health care legislation.

President Obama has cited the deal with the group as signifying a new era of cooperation. But some critics say the advertising fund could be wielded against alternative approaches to health care legislation. Some House Democrats, including Henry A. Waxman of California, are seeking drug industry givebacks not covered in the deal with Mr. Baucus and the White House.

You rarely see bribes like this spelled out so succinctly and directly. $150 million is certainly more money than has been spent on health care advertising to date. And it's all going toward the Baucus plan, based on a quid pro quo agreement. Other committee chairs like Henry Waxman want to find more savings that what Big Pharma agreed to by letting the government to bargain for lower drug prices, like many other industrialized nations. But Baucus dutifully abided by the deal, and so his plan will get the ad backing. Matt Taibbi further explains.

The $150 million it committed to support Obama’s bill is now being rolled out in pro-reform ads, which are being aired mostly in the districts of freshman congressmen. The ads are cheesy, half-hearted tripe blandly supporting the weak-as-fuck remnants of Obama’s health care plan, an example being this “Eight Ways Health Reform Matters To You” ad that salutes the end of coverage denials for those with pre-existing conditions.

Now we’re also seeing pressure from a group of freshmen and Blue Dogs, who have composed a letter to a quartet of House Committee chairs requesting that the Waxman language be removed from the health care bill and replaced with the PhRMA language, which happens to be the language the White House is pushing and which will appear in the Baucus bill in the Senate. The pro-PhRMA language retains the preposterous government subsidy to the pharmaceutical industry in the form of laws banning Medicare from negotiating market rates. It is completely useless and of no possible social benefit to anyone except pharmaceutical companies, but this group still managed to get 60 people to sign this bill.

What does this letter say? Does it argue that the PhRMA language is better for America than the Waxman language? Does it say it will cost taxpayers less and provide cheaper drugs to more people? Hilariously, no. What it says is that this PhRMA language, while worse than the Waxman language, is not quite so bad as you think (it doesn’t save as much as the Waxman language, but it still has a 50 percent price reduction, which isn’t terrible!). Moreover, the letter says, substituting this language will help the bill get passed! Here’s the actual language, addressed primarily to Waxman:

“Your efforts to remove this onerous burden on Medicare beneficiaries… are to be greatly commended. However the commitment by President Obama and the AARP to support legislation that would provide a 50 percent reduction is a dramatic step forward in helping fill the doughnut hole. Equally important, it moves us toward our goal of health care legislation.”

In other words, your attempt to put in a real reform is cool and all, but PhRMA has us by the balls, so help us out.

At the same time, the drug industry is employing scumbag from way back Tony Coelho, who may be single-handedly responsible for Democratic silence in the face of the decimation of American manufacturing in the 1970s and 1980s, to attack comparative effectiveness research, another part of the Obama plan. I guess there's nothing two-way about that loyalty.

While we were going back and forth on a public option, this backroom deal to fund future Democratic campaigns (I don't believe for a second that the $150 million will be spent now, but on protecting conservative Democratic incumbents who protected drug industry profits next year) in exchange for backing off a huge subsidy to giant corporations was put into motion. Baucus' delay actually may have crimped this and forced Big Pharma to start spending now. With industry out in front, however, a bill will probably pass.

Just don't read it so closely.

President Snowe's Capriciousness

Despite the Obama joint session of Congress speech having moved the needle in the public for health care reform, Republicans still feel cocky that nothing's happening this year. They'll even put out phony whip counts to prove it. But if there's one reason to err on their side, it's because the moderates that have largely co-opted the debate seem destined to destroy it of their own volition.

Another Republican negotiator voiced concerns to Fox. Sen. Olympia Snowe, R-ME, said there is still concern about the size of the package which is carrying a near $900 billion price tag. “Maybe we could shrink that to $800 billion or below,” the moderate senator said, citing a skeptical public with bailout fatigue and concern for rising deficits. Snowe said she is certain there will be amendments offered in committee to scale back the scope of the bill.

As for the much-touted idea of a “trigger,” a set time at which if current plans don’t provide affordable, quality care, a government-run plan kicks in, this appears to be more talk in the media than in the negotiating room. Snowe told Fox that she thinks the White House is talking about it more than senators. She would not even concede that it will be offered as an amendment, and as the Baucus plan currently stands, there is no mention of a “trigger.” Baucus even told reporters that it was not mentioned in compromise talks.

That the trigger is a non-starter in the Senate is certainly interesting. But Snowe is being completely ridiculous here. She's lowering costs just for the sake of lowering costs. This won't help people get affordable health care; quite the opposite. It won't lower the deficit because the President has asserted that the legislation will be deficit neutral or he'll veto it. She just wants to take $100 billion out of the bill for the purposes of giving herself cover for voting for it. This is despite her stated interest in improving the subsidies to those who can't afford insurance, which, um, cost money. This is just not the way to legislate:

Ideally, we'd have policymakers identify the problem, come up with a solution, and then figure out how to pay for it. Instead, we have a few too many policymakers come up with a price tag first, whether it's sufficient in solving the problem or not.... (b)ecause it just sounds better. Less is necessarily superior to more, the argument goes, for vague, personal reasons that have nothing to do with addressing the problem at hand.

I realize we're talking about a lot of money here, but the difference between a $900 billion reform package and an $800 billion package is $10 billion a year. Given the size of the U.S. economy, the federal government's budget, and the willingness of lawmakers to spend freely when it was debt-financed Bush-era initiatives on the line, an additional $10 billion a year to help Americans have quality, affordable health coverage is more than reasonable.

Making health care reform worse, based on nothing but capricious standards on what price tags sound nice is absurd.

More from the usual suspects. The only thing I can think of for this is that she has enough cachet inside the Administration that the Republicans are using her as a vehicle to create a terrible bill that everyone will blame the Democrats for passing.

Spark Of Life

Some excerpts of the President's speech tonight are now available. I will say that there's a bit of a harder edge in these remarks, particularly toward out-and-out opponents of reform, the likes of which have disrupted town halls all last month. This follows the feistiness of Obama's Labor Day speech to the AFL-CIO. Here's an excerpt of the excerpts:

But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned [...]

But know this: I will not waste time with those who have made the calculation that it’s better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what’s in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now.

Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true.

That is why we cannot fail. Because there are too many Americans counting on us to succeed – the ones who suffer silently, and the ones who shared their stories with us at town hall meetings, in emails, and in letters.

"More will die as a result." That's not half-stepping it at all. And I'm glad that Obama didn't take Saxby Chambliss' patronizing advice and show "humility". From the looks of these excerpts, he won't.

And yet, this is an easy target. Teabaggers and Birthers do not have a role to play in this debate. The President might want everyone to think they do, but they don't. They don't have the votes to stop anything if the majority really wants to pass a bill. The universe of 50-60 votes in the Senate and 218 in the House, those are the ones who will enact health care reform or not. And to them, early reports show that he will be tepid and broadly receptive to whatever they might demand.

He's going to support medical malpractice reform, a sideline of the debate which has little positive value (just see the results in the states which have already enacted it) and may make it harder for patients to seek justice if harmed by their doctor. What's more, it will not change any Republican minds on the overall bill. With respect to the public option, Obama reportedly plans to endorse it, though pointedly, it appears nowhere in his excerpted remarks. What's more, David Axelrod said again today he would not draw lines in the sand and seek compromise on the provision:

He thinks that could be good for consumers, and he's going to make the case for that, but he's also going to make the point that this is not--this is an ends to a means. It's not the essence of this debate. It's a part of--it's one of the tools, and there are other ideas out there that-to-bring competition and choice that are--that are worthy as well," Axelrod said [...]

Questioned further by Wolf Blitzer, Axelrod said Obama will nod at both of most commonly suggested public option alternatives: the co-op model, and the triggered public option.

"He will acknowledge [co-ops]," Axelrod said. "There's the idea of putting trigger on the public option so it goes into effect at some date when it's clear that a market is uncompetitive. There are a number of ideas, but what is very important is that we have the kind of competition and choice that will help consumers in many states in this country."

This just seems to me like arguing from a position of weakness. You allow room for a compromise and your opponents will pounce. Olympia Snowe basically said today that the White House must give up on the public option, as she knows he'll be flexible and she can just wait him out.

A lot of people are talking about what they want to see in the speech. Jon Cohn argues that he wants some commitment to universal coverage, something that future governments would have to take away. That's good on the policy side. Drew Westen wants a simple message and draw clear lines between allies and enemies, letting the public know who is responsible for the broken system. Tim Noah doesn't want any more speeches, because with reform so close, the goal should really be pounding on moderates until they submit. Paul Krugman says that Obama should eschew details and go for the gut, laying out the personal horror stories and the urgent need for action now. Actually, I think based on the excerpts that he's going to do just that.

I think all of this is right for its own reasons, but more than anything, I actually want to see some spirit. The Republicans have clearly made a decision to destroy Obama's Presidency through endless fearmongering and fauxtrage. They started a bonfire over this Van Jones hiring and the White House let the hit squad walk all over them. This didn't appease the right but whet their appetites for more. The only way to fight such bullying, such blatant hatred, is through showing some toughness.

First of all you have to decide if you really want to win. If you just want to spend your time debating hypotheticals and dreaming of how swell things could be while weaving yourself a safety net of emergency qualifiers in case things don't go the way you planned, go get a job at the fucking Brookings Institution. But if you're gonna go to ideological war, then go to ideological war. And if you are going to fight this war you have to ask yourself "what would Dick Cheney do?"

Never apologize.
Never admit weakness.
Never concede points.
Never defend.
Always attack.

You have to remember that, in the case of the Glenn Beck conservative wing (a group of people who make the Dittoheads look like Quakers), you are dealing with a crazy salad of stupid people (and let's quit excusing them as "low information voters"...they're dumbshits), lunatics, assholes, racists, political performance artists, opportunists, and the kind of people who make eugenics seem desirable if not downright necessary.

These are not the people you need or want. You want the mushy middle and the mushy middle loves people who project strength and power. It makes them feel safe. They like being on the winning team. Power and winning intoxicates them. If they write for the Politico, it gives them boners and they'll write anything you want them to. But these people do not respond in the quite the same way to squishy papering over of defeat.

Many of those who have abandoned Obama of late are doing so because they have openly questioned his leadership and resolve. They don't know if he's willing to fight for them. They aren't so concerned with the details, but they want to know that they have a champion for their interests. So act like a winner. Show confidence and not even-handedness. Show the spark of life.

...good news: Marc Ambinder, sock-puppet for the White House press shop, reports that 100 House liberals will be the intended audience for the speech.

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.

Baucus Moves Forward

As shitty as the Baucus bill is, we do need him to report it out of committee, to move along the process. His committee has been holding things up for months. So it's a major step in the fight for a bill that he'll start marking up the week of September 20.

Senate Finance Chairman Max Baucus (D-Mont.) told a Democrats-only meeting of his committee Wednesday that he plans to begin marking up a health care reform bill the week of Sept. 20, with or without a bipartisan deal in place.

According to a source with knowledge of the situation, Baucus informed his Democratic Finance colleagues that he would move forward next week regardless of whether the gang of six bipartisan Finance negotiators brokers a deal.

A Democratic Senate source said Baucus would lay down the mark on Tuesday, the Sept. 15 deadline the chairman set for a deal with the gang on a bipartisan plan. This source said that as of now no Republicans are on board with the framework for reform that Baucus has proposed.

“He [made] clear in the meeting that this is the time for action and time to move forward to get a bill done by the end of the year,” the source said.

Better, Baucus signaled his intent to move forward regardless of whether Republicans sign on. So the Gang of Six is basically dead, and the move from the Senate appears to be to deliver something that Olympia Snowe can hopefully support, removing from them the need to go the reconciliation route. That probably means no public option and maybe a trigger, at least for the time being.

It's good that Baucus has given us time to see his framework and whip up opposition to its most egregious provisions. As for the public option, that really is going to depend on Presidential leadership, IMO.

Fines For Failing To Pay Insurance Companies

This was a spectacular headline to weather for a full day atop Drudge:

Americans would be fined up to $3,800 for failing to buy health insurance under a plan that circulated in Congress on Tuesday as President Barack Obama met Democratic leaders to search for ways to salvage his health care overhaul [...]

The latest proposal: a bipartisan compromise that Sen. Max Baucus, D-Mont., a moderate who heads the influential Finance Committee, was trying to broker.

Baucus, meeting with a small group of fellow senators, promoted a plan that would guarantee coverage for nearly all Americans at a cost to taxpayers of under $900 billion over 10 years.

Some experts consider that a relative bargain because the country now spends about $2.5 trillion a year on health care. But it would require hefty fees on insurers, drug companies and others in the health care industry to help pay for it.

Just as auto coverage is now mandatory in most states, Baucus would a require that all Americans get health insurance once the system is overhauled. Penalties for failing to get insurance would start at $750 a year for individuals and $1,500 for families. Households making more than three times the federal poverty level - about $66,000 for a family of four - would face the maximum fines. For families, it would be $3,800, and for individuals, $950.

As I've pointed out, the bill is a bargain because Baucus achieves it through allowing insurers to provide less comprehensive health coverage to practically everyone in the country.

This will, and should, be the next line of attack for conservatives - that everybody will have to pay $3,800 to the government if they don't buy health insurance. That's just the maximum fine, but that will become the individual fine for everyone in the country after a trip through the conservative puke funnel. And there's an exemption if you can't find insurance premiums less than 10% of your income. But I prefer to look at the other side of this. This bill forces you to give up to 10% of your income to insurance companies who have, as part of their business, lied their way out of paying for health care for decades. Health insurers can also charge individuals five times as much based on their age, under this plan, a stark difference from the 2:1 community rating in the other Congressional plans. And the coverage doesn't have to be very good, particularly for young adults, who can get "only-if-you're-hit-by-a-bus" coverage. I believe in an individual mandate to increase the risk pool to the maximum level, but the above headline is its threat - that it just looks like a stick-up.

If Baucus wants Olympia Snowe to sign on to this, and the bill appears to be designed that way, he's probably going to have to increase the subsidies to 400% of federal poverty level, or at least 350%. Of course, that would cost more money, and Snowe wants to pay for the bill entirely through internal system costs, which I don't think can fill that gap. Baucus' numbers on revenue don't even seem to add up. Maybe something like David Cutler and Judy Feder's plan could make it in:

Health policy experts David Cutler and Judy Feder, however, have an innovative proposal for making them count. In a paper for the Center for American Progress, they argue for the implementation of "failsafe" policies — crude, surefire interventions — that will kick in if the expected savings don't manifest. Limiting the growth of Medicare payments, for instance. Increasing the excise tax on insurers. Moving the public plan towards Medicare rates.

You can think of a dozen with little trouble. But if you kept them looming behind the curtain — the Oddjob to your Goldfinger — in the event that the expected modernization savings didn't manifest, it would make the anticipated savings visible to CBO, and free up money for affordability. Moreover, it would make those savings more likely to manifest, as insurers wouldn't want more of tax on their heads and hospitals wouldn't want lower rates, and so there would be more of an incentive to implement some of the softer, gentler reforms.

All in all, I understand why policy experts think the pendulum is swinging back toward reform happening. But without a public option, forcing people under penalty of fines (and what if they don't pay the fines? Prison?) to fork out a bunch of money to private insurance companies is just going to be flat-out unpopular. Especially if the help from the government to pay for that insurance is not affordable, which I don't believe it is in the Baucus plan. I guess Snowe's trigger would be tied directly to affordability, but it just seems like a trigger would be written so as to assure its never coming into existence.

Pelosi Starting To Warm To The Trigger...

It looks like all the Washington gossip has gotten to Nancy Pelosi, seen today trying to thread the needle on triggers.

But I said it before and I'll say it again: The health insurance industry, which is out there fighting the public option tooth and nail because it does increase competition, which they don't want. They'd be better getting a public option now than one that is triggered because if you have a triggered public option, it's because the insurance industry has demonstrated that they're not cooperating, they're not doing the right thing, and I think they'll have a tougher public option to deal with.

She's trying to keep progressive activists on her side by saying that she would only accept a trigger that would bring into existence something like Medicare for All. But that assumes the trigger would be written in such a way that it could ever conceivably get pulled. And I think we all now that's not how this works. The formula for pulling the trigger would get debated endlessly, insurers would sue based on their version of the formula, and conservatives would call it a government takeover of health care and the beginning of the death panels and all the things you saw on display in August.

Pelosi's trying to sell a dead fish as a pet. There's nothing called a "triggered public option" that will satisfy progressives who think the market for health insurance is irreparably broken and private insurers are not to be trusted. Triggers are a Washington type of solution, where the solution isn't offered, but gives everyone involved something they think they can run on down the road.

As Paul Krugman describes well, the politics of reform without a public option will be extremely damaging to the Democratic Party for years to come.

Remember, to make reform work we have to have an individual mandate. And everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.

What worries me is not so much that the backlash would stop reform from passing, as that it would store up trouble for the not-too-distant future. Imagine that reform passes, but that premiums shoot up (or even keep rising at the rates of the past decade.) Then you could all too easily have many people blaming Obama et al for forcing them into this increasingly unaffordable system. A trigger might fix this — but the funny thing about such triggers is that they almost never get pulled.

Let me add a sort of larger point: aside from the essentially circular political arguments — centrist Democrats insisting that the public option must be dropped to get the votes of centrist Democrats — the argument against the public option boils down to the fact that it’s bad because it is, horrors, a government program. And sooner or later Democrats have to take a stand against Reaganism — against the presumption that if the government does it, it’s bad.

But they're not doing that. They're sensing an opportunity to pass something, anything, and because Olympia Snowe supports triggers, they figure most ConservaDems will agree. So we have the half a loaf caucus in the House telling Democrats that they'll have to accept whatever the Senate rams down their throats. (The Senate could actually pass a public option as a deficit reduction play through reconciliation right now - but nobody wants you to know that.)

Rahm Emanuel was been pushing for triggers since well before the summer. It protects the insurance industry while allowing everyone to pretend they passed a strong bill. And that means industry will still line the pockets of Democrats as a token of thanks for preserving the status quo.

That's the decision for people to make when they assess this - whether to endorse that.

No Need To Kid Ourselves

I don't think it takes a genius to see where things are leading:

CNN has learned that the White House is quietly working to draft health care legislation after allowing Congress to work on its own for months.

Multiple sources close to the process tell CNN that while the plan is uncertain, they are preparing for the possibility they could deliver their own legislation to Capitol Hill sometime after the President Barack Obama's speech to a joint session of Congress Wednesday, with one source calling the possibility of new legislation a "contingency" approach if efforts by Finance Committee Chairman Max Baucus to craft a deal fall through.

Multiple sources say the current thinking among administration officials is that the president will lay out a path to reform in his speech next week that the White House hopes can bridge the various differences in the competing proposals. Sources expect the president to emphasize the message: If Congress passes something now, it will serve as a foundation to pass further reform in the future. (emphasis mine)

The Baucus caucus met today, and Baucus said he'll simply put out his own bill, and basically they'll either have a bipartisan solution by September 15 or break up the Gang of Six and go to a markup.

It's pretty obvious what's going on. The President will settle for the trigger and try to get President Olympia Snowe to write the bill. The trigger has basically already been triggered, that's why the crisis has moved to a point where we need reform. And we know from experience that the trigger will be set up so it never gets triggered to bring a public option into being.

A trigger for the public health insurance option would create underpowered public plans that would be swallowed whole by the insurance industry. A trigger would also tell the insurance industry the exact minimum level of care and service they need to provide (a level worse than they provide now) before they face competition, giving them incentive to stay at that level and no better. That trigger will never be triggered - instead, it will kill the public health insurance option. But most importantly, a trigger wants us to wait for our crisis to worsen before we fix it.

That's not a compromise. That's not even a rational proposal. Waiting for the crisis to get worse does nothing but help the insurance industry at the expense of our wallets, our health, and our lives.

The trigger kills the public health insurance option. It is not health reform. It should be rejected.

Liberals are angry but have been marginalized in the last few days. ConservaDems, emboldened by hopes of protecting their corporate contributors, are taking a victory lap. Fight on, radical moderates, fight on.

And in between, the mainstream Dems want to take half a loaf.

Clyburn said Democrats should be satisfied if they can only achieve "half a loaf" of reforms, noting that President Lyndon Johnson didn't get all of his landmark civil rights legislation through Congress on his first try.

"We can pass a health-care bill that will do a lot of good," Clyburn said. "It may not be perfect, but we ought not to sacrifice the good on the altar of the perfect."

The writing's on the wall here. And we'll see if the Progressive Block in the House means anything.

...In his conference call with Progressive Caucus members, Obama straight up asked House liberals "how far they're willing to compromise on the public option". Greg Sargent has more. He apparently told them that they had the luxury of being in safe seats, although while they may be safe D, they won't be safe from primary challenges if they have to give on what has become this fundamental pillar of health care reform.

Requiem For A Dream

White House spinners tried to keep the home fires burning on the public option today, but it's quite clear they're putting a stake in it. They're letting Olympia Snowe, who supports a trigger, where a public option would only be authorized if the insurance industry failed to meet certain benchmarks, basically write the bill. And telegraphing desperation is not exactly the way to hold firm to principle, even if Obama "favors" a competition mechanism for private industry.

“It’s so important to get a deal,” a White House official said, speaking on the condition of anonymity in order to be candid about strategy. “He will do almost anything it takes to get one.”

That's a recipe for success.

The only specifics in the Robert Pear article include the White House following that same tactic of cutting out whatever the small minority of screamers have determined to be outrageous, like the end-of-life care provisions (death panels!), or the health disparity data provisions (taking our personal information!), as if that will somehow placate people who don't want government, let alone reform. And then, since he's telegraphed weakness, there's even down to this:

If Mr. Obama does not gain traction by making these concessions, his allies on Capitol Hill said, they may have to consider bigger changes. For example, they said, rather than requiring all Americans to carry health insurance, Congress might start by requiring coverage of children, or families with children.

Giving up on universal health care? Great, he's bargaining back to John Kerry's 2004 platform. Fantastic.

Quietly, Progressive Caucus members are being told that the public option is a dead letter. But it sounds to me like the whole thing will wither away as well. Olympia Snowe is going to offer a bill with a few insurance reforms, a smaller price tag that would cut either coverage subsidies or Medicaid expansion, and... that's it. Insurance companies, if there's an individual market, would get a bailout, essentially, a license to print money by making refusal to buy their product a crime. Jerry Nadler put it best:

"Without a public option, this bill will do a lot of nice things but only by throwing a couple hundred billion dollars at insurance companies," says Nadler, adding that a public option is necessary to hold down the cost of health insurance. "What is the point of passing a bill that mandates people to buy insurance that is going to be unaffordable?" he says [...]

What of the argument that the House Dems should not permit the perfect to be the enemy of the good? Isn't half a loaf better than none? "I am convinced," Nadler remarks, "that you can't take a loaf without the public option because that's not sustainable, with the costs going up. If we did this, what will we accomplish in the end?"

This is going to start a major split in the party. Just what we need to put things back together!

The Good, The Bad and The Ugly On The Health Care State Of Play

I've now offered heaps of negative and a dash of positive with respect to the leaks and grumbles from the White House on health care. I hate to chase the media scuttlebutt so hard, but we're starting to see something that looks really bad, tempered by the fact that it could all be bullshit.

First, the bad. Ezra Klein, recipient of a few WH trial balloons before, gets another talking about the "two camps" in the White House on health care, with no decision yet made, and both of which sound like pretty horrendous compromises.

Both camps agree that the cost of the bill has to come down. The question is how much, and what can be sacrificed.

The first camp could be called "universal-lite." They're focused on preserving the basic shape of the bill. They think a universal plan is necessary for a number of reasons: For one thing, the insurance market regulations don't work without universality, as you can't really ask insurers to offer standard prices if the healthy and the young don't have to enter the system. For another, it will be easier to change subsidies or improve the benefit package down the road if the initial offerings prove inadequate. New numbers are easier than new features. Creating a robust structure is the most important thing. This camp seems to be largely headed by the policy people.

The second camp is not universal at all. This camp believes the bill needs to be scaled back sharply in order to ensure passage. Covering 20 million people isn't as good as covering 40 million people, but it's a whole lot better than letting the bill fall apart and covering no one at all. It's also a success of some sort, and it gives you something to build on. What that sacrifices in terms of structure it gains in terms of political appeal. This camp is largely headed by members of the political team.

Both camps accept that the administration's proposal will be less generous than what has emerged from either the HELP or House Committees. The question, it seems, is how much less generous.

The linchpin for this approach appears to be Olympia Snowe. Ed Henry just said this on CNN:

HENRY: My colleague Dana Bash and I have learned from a source, each one of us, that this White House right now is very quietly in serious conversations with Republican Senator Olympia Snowe, a key moderate.

She is basically the last Republican out of those gang of six senators who have been negotiating, really the last Republican that has an open line to this White House right now.

What we're hearing that she's talking about with White House staff is sort of a scaled-back bill that would focus on insurance reforms that both sides could agree to, but would not have a full public option, instead, would have a so-called trigger. What that means in layman's terms is basically that the insurance companies would have a couple of years to make some dramatic changes.

If they do not make those changes, then a public option would be triggered. So, it would be used down the road. They would hope that this would appease liberals by saying it's not completely off the table. And the big hope is that this could bring along another moderate Republican, like maybe Susan Collins of Maine, some conservative Democrats, like Ben Nelson and Mary Landrieu in the Senate, who don't want a public option, but would sort of potentially be open to a trigger like this.

Suzy Khimm did a decent reporting job trying to understand Snowe's perspective on the health care debate. She's actually to the left of many moderate Democrats on the issue, but there's a lot that's clear. She wants triggers and not a public option (she calls it a "safety net plan"). She likes subsidies up to 300% of FPL and may even go to 400%, though with a smaller bill, that's impossible. She supports financing from "within the health care system," which is only possible with massive scale-backs, and certainly eliminates any talk of wealth taxes or limiting the employer deduction. She's open to reducing the minimum benefit floor, making an even higher profit margin available for insurance companies. She also wants to open the insurance exchange to more businesses, which isn't bad, wants to stop price discrimination for older consumers (limit the modified community rating so older people aren't gouged), and wants to avoid reconciliation because at the end, you'd wind up with a worse bill. So it's a mixed bag.

Snowe doesn't want to be alone on the bill, so she'll have to rope in someone to her right - probably Susan Collins or George Voinovich - bound to water down the final product even more. And if this is all true, we're at bad-bar-hiding-the-fact-they-have-no-liquor level right now. You're talking about a cheaper bill, and since all the money goes to coverage expansion that means more poor people left without coverage or forced into coverage they cannot afford. The "universal-lite" proposal would be compromised and clambering, but at least could be improved upon later. The scale-back approach will do nothing to control costs and put us in a terrible spot down the road. And I don't understand if Snowe supports universality. We know she supports triggers, which, based on past experience, will be created in such a way that they can never be attained.

Basically, a Snowe bill would be a big sloppy kiss to the insurance industry, at the expense of working people who cannot afford the coverage they may be forced into getting.

On the other hand....

I've seen enough signs that things are moving well to not be bowled over by random chatter. Mike Lux is right that we shouldn't freak out at every anonymous quote meant to demoralize the base, and we should continue to push for a strong bill, which is well within reach.

Other than occasional unnamed White House staffers who enjoy dissing their progressive friends for their own reasons, and the occasional progressive blogger who takes everything Politico and Ceci Connolly says seriously and is therefore convinced Obama is out to do us wrong, I see little evidence Obama and progressives are at war over health care. It is progressives, after all, who are actually fighting for the ideas Obama laid out or health care in his campaign and earlier this year, ideas Obama has not renounced or said he is giving up on. From what I can tell, Obama is doing everything he can to try to get a bill out of Senate Finance and then out of the Senate itself, while continuing to support Pelosi in her efforts to get the strongest possible bill out of the House.

Having fought this fight in 1993-94 and so far this year, I know how tough this is to pass, and how ugly the process is. I take nothing for granted, and take nothing on faith. Health care reform could still die; war over what goes to the floor could still tear the Democratic Party apart; politicians including Obama could still sell progressive activists down the river to get a bill, any bill, passed. But all of the above is conventional wisdom, not fact and not a done deal.

The White House has just announced that Obama has raised the stakes even higher, through the roof in fact, by doing an address to a joint session of Congress next Wednesday. That means this White House is determined to pass a bill on health care reform by hook or by crook, by any means necessary. I hope that also means that the White House realizes passing some meager, small compromise of a bill, with the stakes this high, would be a political nightmare. But one way or another, they will show their cards next Wednesday. Will the President, in front of a joint session of Congress, meekly give up fighting for anything big? Will he declare war on his progressive friends? Will he announce that he no longer cares about keeping insurance companies honest? We will know the answers after his speech, but I wouldn't be drawing any firm conclusions until after you listen to the speech.

I think this is generally good advice. Obama's been actually selling reform for weeks, and so whatever he's got prepared for this joint session had better be something new instead of a statement of broad principles. So we'll know when he lays out his cards.

Baucus Caucus: Less Health Care For America NOW

The six-headed Presidential hydra, also known as the sub-group in the Senate Finance Committee, has decided to ignore everybody and keep working diligently to do absolutely nothing on the health care bill.

Senate health-care negotiators agreed late Thursday to ignore the increasingly strident rhetoric from Republican and Democratic leaders and to keep working toward a bill that can win broad support from the rank-and-file in both parties, according to sources familiar with the talks.

In a conference call, the three Democratic and three Republican members of the Senate Finance Committee agreed to redouble their efforts to craft a less costly alternative to the trillion-dollar initiatives so far put forward in Congress. They discussed the possibility of also reining in the scope of their package, the sources said.

The senators rejected the idea of imposing a deadline on their negotiations, and they agreed to talk again Sept. 4 -- four days before lawmakers are scheduled to return to Washington from their August break. The consensus, one participant said, was "to take your time to get it right." [...]

Before leaving for the month-long recess, Baucus had pegged the cost of the negotiators' ideas at less than $900 billion over the next decade. Thursday's discussions focused on driving that cost lower, the sources said.

Their draft bill was already woefully short in terms of subsidies for those who can't afford insurance. The Gang of Six wants to drive them even lower.

I'm sure the people most enamored of themselves did reject having a timeline on their circle jerk. But look who is making these decisions. Chuck Grassley has basically said he'd vote against his own bill, even if he gets everything he wants, if he cannot get more than 80 Senators total on board. The #2 ranking Republican in the Senate has already said that votes for reform aren't coming. So Grassley, one of the key negotiators here, has admitted that he won't support anything the Gang of Six does. Mike Enzi is probably stronger in that direction. Olympia Snowe admitted today that the public option was never on the table in this Gang of Six, and that co-ops are worth exploring, even though two months ago she called them worthless. Kent Conrad has been ideologically opposed to the public option for as long as anyone can remember, and came up with co-ops, in all likelihood, as a way to steal seed money for the "non-profit" Blue Cross of North Dakota, which has captured 90% of the market in his home state. Max Baucus admitted as far back as March that the public option was nothing but a bargaining chip. Jeff Bingaman hasn't been getting nearly enough heat for being part of this charade, but he has talked the talk on co-ops as well.

These six Senators, who come from states representing 2-3% of the population, have proposed ideas out of step with 77% of the public, and think they're entitled to hijack the entire process in Congress to serve those ends.

The question is what to do about this. 270,000 people listened to the President's strategy session yesterday, and over 5,600 supporters have contributed almost $350,000 to lawmakers standing up for the public option. These six lawmakers, most of whom probably want no bill at all, know that the longer they hold up the process the harder it becomes to pass anything. Harry Reid needs to use whatever means necessary to force a bill out of the Senate - discharge petitions, going around the committee of jurisdiction, whatever. At that point, we're talking about a conference committee. Which is what Obama has asked for all along. The problem is a matter of trust, as Paul Krugman put it today.

...Chris Bowers is right that this is the worst part about it - the Senate Finance Committee has decided to take two additional weeks off before meeting again. They are so bound and determined to get health care right that they'll do nothing for weeks, presumably in the hopes that health care reform will die on the vine and they won't have to do anything at all.

7-10 Split

FTW:

The White House and Senate Democratic leaders, seeing little chance of bipartisan support for their health-care overhaul, are considering a strategy shift that would break the legislation into two parts and pass the most expensive provisions solely with Democratic votes [...]

Most legislation in the Senate requires 60 votes to overcome a filibuster, but certain budget-related measures can pass with 51 votes through a piece of parliamentary sleight-of-hand called reconciliation.

In recent days, Democratic leaders have concluded they can pack more of their health overhaul plans under this procedure, congressional aides said. They might even be able to include a public insurance plan to compete with private insurers, a key demand of the party's liberal wing, but that remains uncertain.

Other parts of the Democratic plan would be put to a separate vote in the Senate, including the requirement that Americans have health insurance. It also would set new rules for insurers, such as requiring they accept anyone, regardless of pre-existing medical conditions. This portion of the health-care overhaul has already drawn some Republican support and wouldn't involve new spending, leading Democratic leaders to believe they could clear the 60-vote hurdle.

I wouldn't call budget reconciliation, which is how the Bush tax cuts came into being, a "sleight-of-hand." It's been on the Senate rulebooks for decades. Furthermore, passing something by a majority vote should NEVER be seen as something foreign and exotic. It happens to be the prevailing law of the land. Only recently have we had this magic 60-vote requirement on all legislation. Only recently have Republican obstructionists used it in every single case they can. THAT would be the sleight-of-hand, getting the media to believe that a definitive 60-vote standard exists.

I don't think Republicans would sign on to the less controversial elements of reform knowing that the more controversial ones will go the reconciliation route, so you'll still need to convince all Democrats to support cloture on the insurance reform/individual mandate section of the bill. But if the leadership can get that done, I'd say go for it. Jim Manley, Harry Reid's spokesman, said in the article, "we are determined to get something done this year by any legislative means necessary."

This, by the way, is an absurd statement by Olympia Snowe:

The idea of using reconciliation angers even such moderate Republicans as Ms. Snowe. "At a time when we need to bolster the public's confidence in whatever we do with health care, I don't think the reconciliation process will serve the purpose of providing affordable health security for all Americans," she said.

Nobody in America cares about the process used. People aren't staying up at night angered that the Bush tax cuts used a particular Senate process to pass. They may be angry that George Bush cut taxes on the wealthiest Americans in a time of war. If the bill actually provides affordable health care for all Americans, the number of votes will not have any bearing whatsoever on public confidence. In fact, the public does get confused when they hear 58 Senators voted affirmatively for something and the bill failed. The byzantine, anti-Democratic process of the Senate is what saps the public confidence in government.

Health Care Notes

Just a few things I saw today:

• Orrin Hatch will no longer participate in the Senate Finance Committee's bipartisan discussions on health care reform. I'm surprised he hung in as long as he did. If Ted Kennedy came to him and asked to vote for cloture, I think it'd be 50/50.

• Olympia Snowe has become queen of the weasel words. In her district she had a statement read supporting a public option;



But back in Washington, she adds an extra line that wasn't read that turns it into a trigger. Now THAT'S weaselly.

• In the Nancy Pelosi interview I noted before, she has some interesting comments on MedPAC reform:

MedPAC has been an idea out there for awhile. There have been some concerns about it among many of us because it's a big transfer of authority to the executive branch. I myself could have argued the issue both ways. Do I want my members figuring out how much oxygen people need or do we want to pass it on? But how we pass it on was important. Does Congress participate in appointing membership? Do we establish criteria to make sure we bend the curve in a way that protects people?

Steny [Hoyer] and Mr. Waxman and Mr. Dingell and, I think, Mr. Rangel were among those who did not fondly receive this proposal at first. It became more of an issue when we were seeing what CBO was going to score. When we found out they could score that, we thought okay, with the proper criteria, this is something we could probably live with.

They mention the Defense Base Closure and Reauthorization Commission. But leadership has appointments to BRAC. We want to see representation, not some ex officio group we have no say over.

That's probably a fair compromise. And it's vital to get the kid of cost savings many seek.

• Michael Steele actually doesn't know what kind of health insurance he has. This is the leader of the Republican Party. And the RNC doesn't have a choice of plans, either. Some free market.

• John Kerry's proposal in the Finance Committee is pretty interesting:

Orszag also said the White House is open to a proposal by Sen. John F. Kerry (D-Mass.), a Finance Committee member, to tax insurers for very generous health policies. The idea is a variation on a provision that Baucus, Grassley and others on the committee had pushed: to tax beneficiaries who receive generous policies through their employers.

Obama staunchly opposed taxing beneficiaries as a candidate, and on Monday he threatened to veto a bill that targets individuals. But Orszag said that the White House is open to the Kerry alternative, noting that a fee on high-value policies would "create an incentive for companies to create more efficient plans."

A senior House leadership aide said Democratic lawmakers there are keenly interested in the Kerry provision, along with other revenue measures with consensus support in the Finance Committee, to replace the wealth surtax that Baucus and others have already declared dead on arrival. "Our guys want to see some movement there," the aide said. "They're loath to vote on a tax increase if it is not going anywhere in the Senate."

It's a shame that nobody's willing to say that America is worth paying for. But I'm with Digby. As long as we're stuck in this paradigm, with the old dialogue about taxes, you might as well try to accomplish the same goal - reducing incentives for "Cadillac" health care plans - as limiting the employer deduction through a tax on the insurers. In the end it's the same deal.

• It's sad that the White House won't release the documents of which health industry stakeholders they've met with. It reverses the expressions of transparency he vowed in the campaign and continues to vow. CREW is suing and I hope they win - secret government should not become precedent.