Senate Democrats have begun discussions on a compromise approach to health care reform that would establish a robust, national public option for insurance coverage but give individual states the right to opt out of the program.
The proposal is envisioned as a means of getting the necessary support from progressive members of the Democratic Caucus -- who have insisted that a government-run insurance option remain in the bill -- and conservative Democrats who are worried about what a public plan would mean for insurers in their states.
"What folks are looking for is what gets 60 votes," said a senior Democratic Hill aide. "The opt-out idea is very appealing to people. It has come up in conversations. I know personally that a handful of members have discussed it amongst themselves."
In conversations with the Huffington Post, sources have said that while the opt-out approach to the public plan is in its nascent stages it has been discussed with leadership in the Senate. It was pulled out of an alternative idea, put forth by Sen. Tom Carper (D-Del.) and, prior to him, former Senate Majority Leader Tom Daschle, to give states the power to determine whether they want to implement a public insurance option.
But instead of starting with no national public option and giving state governments the right to develop their own, the newest compromise approaches the issue from the opposite direction: beginning with a national public option and giving state governments the right not to have one.
Essentially you'll end up with a blue-state public option, with the possibility of a few referenda to remove it in the states that allow ballot initiatives. Although, as we saw on the stimulus, threatening to opt out of a federal program is far easier than actually doing it. I'd guess that most states would go ahead with it.
As compromises go, this is about as good as anything that's been discussed, certainly better than triggers, co-ops or Tom Carper's "opt-in" proposal. It needs to be a good public option, one with Medicare's provider network and hopefully some relationship to Medicare rates, but if that's the case then it probably even beats Schumer's weak natonal proposal.
The entire exercise is to get to the conference committee with some kind of public option in both houses. That way, getting something out of conference is virtually assured. If you have no public option in the Senate bill, you're not going to get one in the final bill. That's just an educated guess. So Democrats are trying to figure out something that can get through a Senate vote. It's a difficult lift.
Outside pressure remains a factor here. But we're now talking about which kind of public option to have, not whether or not to have one at all. That's a better place to be.
I had a chance to participate in a conference call with President Barack Obama and some bloggers today about the health care debate. Clearly the very fact of this conference call's existence shows that the White House is leaving no stone unturned in searching for allies to help sell reform, and that the President is ready to step forward in this debate. That's a good thing. He still has enough political capital to manage the process where he wants it to go, and if he wants certain elements of the policy included in the final bill, provided that there is a final bill, I wouldn't bet against them getting in there. And the result of the conference call was interesting.
The President spoke for a few minutes, then took about 15 minutes of direct questions. In his opening remarks, he said that now was a critical time for the bill, and that we're closer to passage than we've been in the last 50 years. Those who are opposing have offered no credible alternative but the status quo, which he termed "unacceptable". He hoped that the blogs would help him in "debunking myths," for example the notion that this bill, which is entirely paid for as a package, would spread record deficits. He said that the default position in Washington is one of inertia, and that pressure must be kept on members of Congress - not Republicans, but members of Congress - to move the process forward. He made sure to highlight - as did David Axelrod in a short Q&A afterwards - the words of Sen. Jim DeMint, calling health care Obama's "Waterloo." Clearly that will be used by the White Hosue as a badge of honor and a rallying cry in the weeks ahead, because it evokes the same concept as the leader of the GOP Rush Limbaugh saying he hopes Obama fails.
With that, the President took questions, and it was truly unlike most press conferences you'd see by the heavily pancaked White House press corps. Bloggers wanted to know about two things - the tactics for getting a bill through, and the substance of that bill. For example, John Amato from C&L asked if the President would call on Congress to forego the August recess if they didn't reach a floor vote by the deadline, which the President pretty much dodged. He acknowledged that we cannot delay any further and that we've been debating this for 50 years, and that those who are calling for delay are doing so deliberately in order to kill any hope of passage, but he would only commit himself to working as hard as we can to see "serious forward motion" by the recess, and never fully answered what I think could be a good tactic Amato brought up, to ask the Congress to finish their work and keep reform on track. In a similar kind of question about reconciliation, Jonathan Singer from MyDD asked at what point we move to using budget reconciliation if a Senate bill stalls, and the President kept that stick of reconciliation in his back pocket, saying that they expect a bill by mid-October, but failing that, "we'd look at all options including reconciliation." He admitted that reconciliation wasn't the preferred option but that the status quo cannot continue. That speaks very well to the probability that something will pass this year.
What I wanted to ask about was something that Robert Reich wrote about today. The White House and Congress have made all these deals with key stakeholders, which do provide for hospitals, drug companies and doctors to give back some profits, but preserve additional costs that could be wrung from the system. And these "legacy costs" are making it very hard to provide the kind of controls that reformers seek and Blue Dogs pay lip service to.
Big Pharma, for example, is in line to get just what it wants. The Senate health panel’s bill protects biotech companies from generic competition for 12 years after their drugs go to market, which is guaranteed to keep prices sky high. Meanwhile, legislation expected from the Senate Finance committee won't allow cheaper drugs to be imported from Canada and won't give the federal government the right to negotiate Medicare drug prices directly with pharmaceutical companies. Last month Big Pharma agreed to what the White House touted as $80 billion in givebacks to help pay for expanded health insurance, but so far there's been no mechanism to force the industry to keep its promise. No wonder Big Pharma is now running "Harry and Louise" ads -- the same couple who fifteen years ago scared Americans into thinking the Clinton plan would take away their choice of doctor -- now supportive of Obamacare. Private insurers, for their part, have become convinced they'll make more money with a universal mandate accompanied by generous subsidies for families with earnings up to 400 percent of poverty (in excess of $80,000 of income) than they might stand to lose. Although still strongly opposed to a public option, the insurance industry is lining up behind much of the legislation. The biggest surprise is the AMA, which has also now come out in favor -- but only after being assurred that Medicare reimbursements won't be cut nearly as much as doctors first feared.
But all these industry giveaways are obviously causing the healthcare tab to grow. And as these long-term costs rise, the locus of opposition to universal health care is shifting away from industry and toward Blue Dog and moderate Democrats who are increasingly worried about future deficits.
I asked the President about this tension between these buyoffs to stakeholders and his goal to "bend the cost curve" and make health care cheaper and more effective in this country, and here's a paraphrased version of his answer.
I cannot expect the hospital association, for example, to sign up for something they don't think is right for hospitals and exepct them to back reform. So I understand what they're doing to protect their interests. I think we can negotiate and find a good way to go about this. In theory we could cram down additional savings, but to have the American Medical Association, the American Nurses Association, the drugmakers, the insurance companies, all of them on our team, that does help us move the process forward. Theoretically, there should be enormous savings inside the system. We all know that we pay more for health care than we should, and we shouldn't need additional revenue. But that's harder to do in practice, because all these powerful interests block the efforts. What I think is that we can get a framework where reform begins, one with an insurance exchange, and a robust public option, concrete reductions in cost, prevention, health IT, comparative effectiveness research, and it will be possible to achieve greater savings with a more efficient system down the road. And we can revisit the policy 10 years from now and possibly see even more savings than what was scored and anticipated.
I found that to be both a decent and a deeply unsatisfying answer. I understand that you don't want the stakeholders bringing in the Howitzers and seeding massive attacks against any reform, so keeping them on the same side is important. At the same time, with these groups bought off, and indeed knowing that they will get an ultimately good deal from Washington, the transition from the broken system we have to that theoretical one that Obama discussed gets delayed. I agree about getting a framework in place, something to tweak down the road. But we spend so much time in our politics bowing to powerful interests that it's very frustrating to concede that as a political reality. Especially when drugmakers and insurance companies are pretty reviled in the populace (though doctors really are not). Obama seems to know that there's an easy path for real reform, but it's complicated by a real control from special interests of the levers of the political debate. So we keep the dogs at bay, but in the process, we don't reform health care to the extent that we could. That animates the "if you like what you have, you can keep it" mantra (even if what you have is ultimately inefficient), and these deals with stakeholders. Then the fiscal scolds can talk about how the bill costs too much even while resisting those cost control methods because they would hurt these same stakeholders! It's maddening.
There is a bright spot, however. Obama went pretty far in support of a public option, a fairly tangible reform effort, on the call. He doubted the evidence that a co-op plan like that pushed by Kent Conrad would work, citing past experience that showed them having trouble getting off the ground. And he then said that the House and Senate bills would not be identical, that a conference committee would certainly be required. And at that point, the White House would engage in serious negotiations, with the President's fundamental principles and benchmarks in place. The House and Senate bills would not match up exactly, but that would not mean that the final bill wouldn't include certain elements, he essentially said. The President was basically saying: get it to conference, and we'll straighten it out. That probably doesn't mean that the President gets everything he wants, but it means that the big issues will be at his determination and discretion, almost certainly.
I think that's an important reminder. Past White Houses have used the conference committee very effectively to make sure bills matched preferences. Obama signaled his willingness to do that. Which means that, while we can have a role in getting this bill through each chamber, the White House will be able to make their presence felt to a degree at the finish line. In effect, he will take ownership of the policy and ensure it beats the status quo.
The Waxman-Markey American Clean Energy and Security Act narrowly passed today by a vote of 219-212. Roll call here. Eight Republicans voted for it, 44 Democrats voted against.
Anyone who understands the dynamic of the House being to the left of the Senate knows that this bill, already compromised beyond belief, has little chance of being strengthened in the upper chamber, regardless of what enviro groups are saying. To wit:
But Pelosi and Waxman’s work is far from over. The Waxman-Markey bill faces an uncertain future in the Senate.
Despite a push from Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.) and Majority Whip Dick Durbin (D-Ill.) to follow the House’s lead, most of the Senate’s climate change work has thus far been conducted by Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.).
Bingaman’s bill lacks a cap-and-trade provision, focuses more on increased domestic production, and generally goes in a wholly different direction than the Waxman-Markey bill.
So we'll probably have to rely on that conference committee again. I'm not seeing that likely to work, given these thin numbers in the House.
I think the chances of final passage on something like this bill are still only 30-70. The Senate will be a rough, rough road.
Congress on Thursday moved forward with plans to build more Lockheed Martin F-22 fighter jets, disregarding a veto threat from the Obama administration.
Lawmakers also moved to authorize the funding for an alternative engine for the Joint Strike Fighter F-35.
Congress is setting the stage for a showdown over the 2010 defense authorization bill with the administration and in particular Defense Secretary Robert Gates, as the Office of Management and Budget issued a statement outlining the veto threat Wednesday over both issues.
Gates proposed the cuts earlier this year as part of an effort that he said would better spend taxpayer dollars on military priorities. He has said he’s confident the Air Force will have enough F-22s.
Lawmakers pushing to save the programs say the F-22 and second engine for the F-35 are vital to national security.
They also argue eliminating the F-22 program would kill off jobs during a brutal recession.
I hope even the lawmakers saying that first line aren't dumb enough to believe it.
As for the "weaponized Keynesianism" of the second, keep in mind that these are the same people who constantly bite their nails about the budget deficit, who claim that government never created a job, or that a spending bill is not a stimulus bill. Not to mention the fact - a fact I don't even like - that the total military budget will expand this year, as funding for the F-22 and the needless new engine for the F-35 will shift into other military priorities, ones that also create jobs. My preference would be to shift all this military spending into something creative instead of destructive, but without being able to close out these projects when they outlive their usefulness, we just create a monster. This country spends nearly as much on our military than the rest of the world combined, and far too much of that leaks into the pockets of contractors who build things that go unused, or gets put toward projects which quadruple in cost from projection to completion. The money is wildly inefficient, comparatively speaking, and this entire notion of military spending as sacrosanct makes it impossible to fund the rest of government without the fiscal scolds carping about deficits.
To segue into a separate point, there will be a conference committee on this, and so the White House certainly has the ability to use that tool, which the Republican majority used time and again, to take this funding which the Pentagon did not seek out of the bill. Practically every bill that passed through Congress from 1994-2006 got scrubbed of anything remotely progressive and sent back to each chamber with a nice big "take it or leave it" Post-It Note on the front. Many think that this is the way a decent health care reform bill can be pushed through the Congress, and that this is all part of the 31-dimensional chess the White House is playing. While they've already offered the veto threat on the military spending, and that might come about, it's important to look at the past experience with conference committees and this Administration. The short answer is: they don't like to use them and are more concerned about their personal schedule. The credit card reform bill can be instructive here.
In the Senate vote for that legislation, Tom Coburn added a supposed poison pill amendment allowing concealed weapons in public parks. The Senate passed the bill, and the House had already passed a version without that amendment. But rather than go to a conference committee, the House just up and passed the Senate's bill, with the guns in parks amendment, Obama signed it, and now we all can take our snub-noses to Yosemite. The official reason given was that the President wanted a bill on his desk by Memorial Day.
And they did exactly the same thing with the war supplemental. Many people had problems with provisions like the IMF loans or cash for clunkers, which certainly could have been fixed if anyone cared to do so. But the White House wanted it to move quickly, and so the Senate passed the House's bill.
I should note that at the end of Ezra's post today comes this:
(The President) wants to sign a bill in October.
I'm happy to believe that the White House has a secret strategy to fix the health care bill in conference, but recent history shows that they are far more interested in scheduling than these fixes. Maybe if they really, really care about a certain provision, it will get excised or included. But none of us actually know what those concerns truly are.
So the revised credit card reform bill passed the House overwhelmingly today, after overwhelmingly passing the Senate, and the President will sign it probably within a couple days. Most of the rules in the bill would have already been instituted by the Federal Reserve, but this sped up the timeline, as they will take effect immediately instead of in July 2010. Very little else is new here, save for some slight strengthening from the Senate.
To the frustration and discouragement of many Democrats, House and Senate lawmakers and aides say it now appears likely that President Obama will this week sign into law a provision allowing visitors to national parks and refuges to carry loaded and concealed weapons.
The White House is lukewarm at best on the gun provision, which was added to a popular measure imposing new rules on credit card companies. But the Democrats who now control both Congress and the White House appear ready to allow it to survive rather than derail a consumer-friendly credit card measure that Mr. Obama is eager to sign as Congress heads off for a Memorial Day recess.
“Timing is everything in politics,” said Senator Tom Coburn, Republican of Oklahoma and the champion of the gun proposal [...]
“It is a shame,” said Senator Barbara Boxer, Democrat of California. “But you have to come to a realization around here that at this point in time, the N.R.A. gets the votes,” she said referring to the National Rifle Association.
“Either you are going to bring down the whole Senate and never do anything or you or going to swallow hard and say, ‘I will just vote my conscience on those amendments and speak out until people get a hold of their senses,’ ” Mrs. Boxer said.
Far be it from me to contradict Sen. Boxer, but I don't know what the hell she's talking about. Here's how my Civics 101 book tells me how legislation works: the House passes a version, the Senate passes a version, the differences are reconciled in conference, and both Houses then vote on the final version. That's not what happened here. The House passed a version, the Senate passed a version with an unrelated gun rider, and then the House just shrugged and passed the Senate version. Why? With Democrats controlling the conference, the rider could have easily been tossed out. And if Boxer is telling me that 40 US Senators would be able to go back to their districts and explain they voted with the credit card companies, I just don't believe her.
There was absolutely a remedy here, and no need for this measure, which does not have majority support among Democrats, to be included. But there's the matter of the clock. The President wanted a bill on his desk by Memorial Day. And the House passing the Senate's bill was the best way for that to happen. The gun measure stays because Congress wanted to facilitate the President's schedule.
Because if there's one thing Congress is known for, it's punctuality.
It's amazing how Democrats learned the worst lessons from Republicans while forgetting the simple lessons, like how to screw the opposition in conference committee.
The conference negotiations on the stimulus package are going fast and could be done by mid-day, which obviously makes it hard to find the pressure points and apply them. Americans United For Change and AFSCME are running ads against recalcitrant Republicans, and they're pretty good, but obviously they're not the issue anymore. It's the Axis of Centrism still driving the negotiations.
In a sign of their determination to reconcile the differences between the Senate bill and the $820 billion House version swiftly, the White House chief of staff, Rahm Emanuel, and the budget director, Peter R. Orszag, huddled at the Capitol on Tuesday evening with Speaker Nancy Pelosi; the Senate majority leader, Harry Reid of Nevada; and other lawmakers.
Participants in the talks said they wanted to reduce the overall price to just under $800 billion.
The officials worked late into the night, with Mr. Reid shuttling between meetings with senators in his office and House leaders in Ms. Pelosi’s suite. Centrist senators who were crucial to the stimulus deal, Susan Collins and Olympia J. Snowe, Republicans of Maine, Ben Nelson, Democrat of Nebraska, and Joseph I. Lieberman, independent of Connecticut, returned around 9 p.m. for the talks and left about an hour later.
The group broke for the night shortly before 11:30 p.m. “We’re not there,” Mr. Reid said. “But we have made a significant amount of progress in the last 10 hours.”
You read that right, they want to make additional cuts from what the House and Senate passed. Why? Because a cut is a universal good, silly.
There are differing stories out there. The New York Times piece claims that the Senate cuts to Medicaid and COBRA would remain in the final bill, while the cuts to Obama's signature middle class tax cut would be restored. But the Wall Street Journal sees Obama seeking lots of spending restorations:
The White House is seeking to restore funding cut by the Senate for schools, health insurance and computerizing health records as the economic-stimulus plan heads for a final round of negotiations in Congress this week. ... To make room for added spending, the White House, joined by House Democratic leaders, is pressing to scale back certain Senate-passed tax breaks, including ... an $11.5 billion proposal to give car buyers a tax deduction covering local sales taxes and interest on auto loans, and a $35 billion proposal to create a new tax credit for home purchases.
Clearly the home buyer tax credit is ridiculous. It will go mainly to people who were going to buy homes anyway, won't create new home construction, and will simply reinflate the bubble rather than stabilize home prices. Max Baucus said that the home buyer credit and the auto credit would probably be modified but not eliminated. Hopefully the cuts to programs like school construction, which Obama was consistently supported, will come back. However, the aid for state governments appears gone for good, which is a shame.
Obama's negotiating team insisted on restoring some lost funding for school construction projects as talks began Tuesday in hopes of striking a quick agreement, but by late in the day it appeared resigned to losing up to $40 billion in aid to state governments.
To the extent that Republicans are impacting this at all, they are making robocalls in Pennsylvania and Maine against the bill, trying to squeeze Specter, Collins and Snowe. And a separate GOP group is threatening primary campaigns against these three and anyone else who supports the bill. This is the typical way that Republicans try to maintain party discipline, and while it can occasionally work locally, it wasn't enough to beat Specter in a statewide primary six years ago.
But that doesn't matter. The Axis of Centrism sees reducing the effectiveness of the bill as an end in itself. They've already reduced it to a half-measure, and they're coming back for more. Did Obama's early emphasis on post-partisanship rather than browbeating Republicans into acceptance change this reality? I'm not really sure. The moderates seem to be goring this bill and liking it, and no matter Obama's pose he would still be constrained by the essential nature of getting something passed.
It's Susan Collins and Ben Nelson's world, we're just living in it.
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