Obama And The Base

Everybody has gotten to this before me, but I did want to say a few words about Obama and the progressive base. You can see in recent polling that the slide in the President's numbers is coming not from the right, who have already lined up against him, but from the left. Liberals and Democrats are not seeing the change they voted for, and are responding by rejecting this President. Liberals tolerated a lot of the slow-walks and aping of Bush policies in the areas of civil liberties, gay rights, the banks, and other realms, but the wobbling over the public option was the last straw, as they say. Digby explains it well.

There have been a series of issues, one on top of the other and each one more distressing, in which the fundamental principles on which Obama ran have been either betrayed or compromised. It's been too much, too many, in too short a time, from civil liberties to secrecy to cozying up with industry behind closed doors. These aren't minor issues --- they go directly to values and principles.

He's losing trust among the base because he appears to believe that those constituents have no serious claim on his agenda. Even the appointment of Sotomayor did not reflect a liberal commitment beyond the breaking of ethnic barriers, which is wonderful, but cannot be seen as a substitute for progressive principle. Bargaining away the one substantial progressive demand in health care reform is seen as simple bad faith.

I'm not one to trust politicians, but I recognize that most people do, even ardent partisans. They are busy, they don't want to have to follow every detail of the political sturm and drang or try to read between the lines of the NY Times every day to try to figure out what's going on. They more or less inform themselves before an election about what their representatives say they believe in, they assess their sincerity and commitment to certain broad principles and values, and then they leave the governing in their hands, trusting them to do what they said they would do to the best of their ability. Obama promised a lot. A whole lot. And he garnered the trust of many millions of liberal minded folks. When that kind of trust is betrayed, it's very hard to get it back.

I certainly hope they are not fighting the last war. Bill Clinton did not suffer a backlash in his base because he was operating in an environment of conservative dominance and a very weak left flank. The base was desperate and demoralized. But it's not 1996 anymore and that strategy just won't work this time. The conservatives are a clownish group of know-nothings whose approval ratings are in the single digits. They should not, in a democratic society, have the power to shape strategy to the extent they are and the president should not be empowering them. Big business and finance is even more discredited and has no trust among the poeple whatsoever. Openly catering to them in this environment is nothing short of defiant (and politically suicidal.)

Glenn Greenwald and Joan Walsh make largely the same points. I want to say a few things about it.

• There is no question that the Obama Administration isn't getting a lot of credit among the public at large from essentially preventing a Great Depression. If the environment was such that the crises happened a year earlier, and Bush's bumbling put us firmly into Depression, Obama would probably have received a lot more credit for digging us out that preventing things from getting to that point. You can argue with his team's methods for preventing such a crisis, namely shoveling all kinds of money to the banks. But EJ Dionne is right - this prevention has led conservatives to go right back to talking up deficits and spending and big government, as if big government didn't just prevent the worst economic calamity in post-war history.

• That said, Obama isn't blameless for the problems with the base. Indeed he has cozied up to industry in unseemly ways - playing golf with the head of UBS, a company his Justice Department is trying to investigate for harboring illegal tax shelters, is just a metaphor. Bungling multiple gay rights issues and the open hostility of the DOMA brief was just stupid.Joe the Nerd was correct when he told the President on Michael Smerconish's radio show that his "knees were buckling" a bit by trying to compromise with people who have no interest in such a compromise. And the civil liberties outrages are truly contemptible, amounting mainly but not totally to covering up the sins of the past, and in turn abetting them.

• The actual tipping point for all of this was not necessarily the weak-kneed language on the public option, but something that happened a little before, when it came out that the backroom deals Obama cut with industry would save them plenty in the health care reform and shield their profits. Bob Herbert wrote about this last week, but it's been rumbling under the surface for a while. In fact, it was my question to the President at that blogger conference call a few weeks back:

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."

He's basically admitting that he allowed industry to cut favorable deals to keep them on the side of reform. This is still reverberating. Today's New York Times has hospital associations crowing about the benefit to their members over the 10-year window in the form of reimbursement payments for the newly insured. Drug companies are seeing a freer hand to deny access to affordable drugs abroad so they'll keep their end of the bargain on health reform. When people started to put two and two together, and realize that the health reform bill looked more like a giveaway to the stakeholders, they got extremely upset. I don't begrudge hospitals and drugmakers the ability to make money if they are healing more people, but there's a real disconnect when the groups who profited from the broken system stand to profit more off of something called reform. THAT was the moment things went off the rails.

• Nevertheless, I think that Obama has a chance to turn this around. It's not just about progressive outreach, however; it's about the actions he will take, or be forced to take. The President late last week started to use forceful, moral language about the need for health care reform, and that's great too.

It has never been easy, moving this nation forward. There are always those who oppose it, and those who use fear to block change. But what has always distinguished America is that when all the arguments have been heard, and all the concerns have been voiced, and the time comes to do what must be done, we rise above our differences, grasp each others’ hands, and march forward as one nation and one people, some of us Democrats, some of us Republicans, all of us Americans.

This is our chance to march forward. I cannot promise you that the reforms we seek will be perfect or make a difference overnight. But I can promise you this: if we pass health insurance reform, we will look back many years from now and say, this was the moment we summoned what’s best in each of us to make life better for all of us. This was the moment when we built a health care system worthy of the nation and the people we love. This was the moment we earned our place alongside the greatest generations. And that is what our generation of Americans is called to do right now.

But actions will now drive the outcomes, because liberals have heard enough talk throughout the campaign and the first seen months of the first term. Whether the White House likes it or not, the public option has become central to most progressive conceptions of the health care debate. Calling it a source of confusion or a sliver or reform simply won't work. And liberals who are needed at the end of this fight will not work for a policy in which they do not believe. The President put himself down this rabbit hole, and only he can bail himself out. Because progressives are going their own way.

For many Obama supporters who supported President Obama's candidacy because they believed he would rally the public to pass a reform agenda, the White House focus on legislative chess in the healthcare debate has resulting in grumbling about whether or not President Obama is the President they voted for. Fairly or unfairly, Obama now faces a rising tide of doubt in his administration from the very supporters who have backed him most steadfastly since the election.

Many of these supporters are now using internet tools and small donations to signal that their support of healthcare reform anchored in a robust public option would be stronger than their support for an Obama administration willing to negotiate away or weaken a public option.

Thus, weeks before any final bill has actually been written, the healthcare debate has already brought about the most significant change in the American political landscape since Obama won the Iowa caucus to become the leading contender for the Democratic nomination.

The idealists who elected the President are siding with their ideals rather than their candidate.

Obama can choose to live up to those ideals, and turn the tide at this stage of his Presidency, or he can play the same games he's been playing, and lose the base - perhaps permanently.

...Arianna has some very good thoughts on this.

In Praise Of Lobbyists?

If you haven't been following the health care debate, this AP article will strike you as curious.

A strong force, perhaps as powerful in Congress as President Barack Obama, is keeping the drive for health care going even as lawmakers seem hopelessly at odds.

Lobbyists.

The drug industry, the American Medical Association, hospital groups and the insurance lobby are all saying Congress must make major changes this year. Television ads paid for by drug companies and insurers continued to emphasize the benefits of a health care overhaul — not the groups' objections to some of the proposals.

Why on Earth would the drug industry, insurance industry, hospital industry and the AMA be so interested in protecting the passage of health care reform? Because they would all grab some goodies in the process. As a result of all those meetings with health industry executives, the President secured their support for reform. But it came at a price. The drugmakers got to extend their patents for biologics and didn't have to completely fill the doughnut hole for Medicare Part D. The insurance industry got their individual mandate that will require millions of Americans to sign up for their coverage. The AMA got the sustainable growth rate (SGR) formula for Medicare physician reimbursement dumped, which will likely increase their payments. And hospitals are working hard for their piece of the pie as well. All of these deals, which constrict the ability for Congress to wring more costs out of the system, would fall apart if no reform bill passes, leaving these interests vulnerable. So of course they want the process to advance. Yet if you take the Blue Dogs at their word, that they are concerned about costs, these deals are INHIBITING progress, not promoting it.

Deals, of course, are made to be broken, and Nancy Pelosi, who didn't sign on to any of them, will not adhere to their guidelines if it risks cost control.

House Speaker Nancy Pelosi said Thursday that she doesn't feel bound by the $235 billion in deals that the White House and the Senate Finance Committee cut with hospital and pharmaceutical companies to defray costs of a new health-care plan, stating that she thinks the industries could do more.

"When we're trying to cut costs, certainly we know that there are more costs to be cut in hospitals and pharmaceuticals. . . . So we'll be subjecting everything to some very harsh scrutiny as we see whether we can get more savings," Pelosi said in a late-afternoon interview, shortly after she left a marathon negotiating session with White House Chief of Staff Rahm Emanuel and conservative "Blue Dog" Democrats, who have put the brakes on the House version of the health-care reform bill. "As we look, there may be some more ways to get money out of pharmaceutical companies."

Pardon me if I don't see the lobbyists as the key to real reform. I think Nancy Pelosi's calculus might have more to do with it.

Obama Blogger Conference Call On Health Care

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.

(UPDATE: C&L has the audio.)

A Thousand Or So Words Of Despair On Health Care Reform

I may have dismissed the difficulties in paying for health care and the time frame a little prematurely. To be sure, it's a problem. Not the nature of the revenue ideas themselves - a surtax on the wealthy may work, although I'd prefer to go back to President Obama's idea to lower the charitable deduction, and Matt Yglesias explains why:

When possible, it’s better to raise money by broadening the tax base—curbing loopholes, deductions, and exemptions—than by simply raising the rates. The reason is that higher rates on a narrow base do a lot to encourage people to shift income into loopholes, which both undermines your revenue-raising efforts and also distorts the economy. Both the employer tax exclusion proposals and the itemized deductions proposal fit that good model.

The problem is that we're pretty far down the road on the various bills and we're still trying to figure out how to pay for it, which suggests to me that Congress doesn't want to make any hard choices on it. They have a bunch of ideas, but no real strategy. And they've taken the employer deduction off the table because unions don't want to give back what they already have, which makes sense for them but not necessarily the country.

One related point I'd make on this is that there is, in progressive circles, a tendency to confuse the interests of labor unions and the interests of progressivism. The two things often overlap. But they are not, in fact, the same. And that's okay. But this is very much one of those cases. The employer tax exclusion is regressive. It gives employers more power over workers. It reduces choices, fractures the system and increases health-care costs (which in turn decreases wages). Unions are protecting what they have, and that's their right. But protecting the employer-based health-care system, particularly at the expense of a regulated and integrated alternative, is not a terrifically progressive thing to do.

And without changing the incentives in health care and reversing the dynamic of doctors ordering more, insurance companies trying to pay for less and employers still paying the bulk of the costs in an inefficient way, we're not reforming health care. We're just expanding coverage and heading toward the same fiscal iceberg. Which is important in its own way, but not a full solution.

And meanwhile, as the timing of the bill slips, conservatives get emboldened and start running ads in the districts of key Senators. Blue Dogs and Conservadems get cold feet and start looking for ways to deep-six the bill. The problem in that case is that the answer to the Blue Dogs' entreaties would be more reform, which they don't want either.

The emerging bill "lacks a number of elements essential to preserving what works and fixing what is broken," 40 members of the Blue Dog Coalition of moderate to conservative Democrats wrote in a letter to party leaders. To win their support, they said, any legislation would need to be much more aggressive in reining in the growth of health care.

A public option and capping the employer deduction would go a long way for that, but they're against that, too.

Meanwhile, the White House is making all these deals with stakeholders that may have strings attached that would preserve their revenue streams and fail to rein in health care costs. Take a look at this, for example:

The Wall Street Journal reports: "Industry representatives met at the White House Tuesday with officials to consider specifics of a cost-saving agreement the industry reached last month with health-care negotiators and to discuss other concerns that the pharmaceutical industry has with the larger health-care overhaul being considered by Congress. As a presidential candidate, President Barack Obama endorsed re-importation, an idea the industry opposes. White House officials have told the industry if the larger health care bill passes, the cost savings will be so great that reimportation will be unnecessary, according to Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America." Some of the pharmaceutical companies represented at the Tuesday meeting included Merck & Co., Pfizer Inc., Amgen Inc., Abbott Laboratories and AstraZeneca.

The Wall Street Journal notes: "Sen. Bernie Sanders, an independent from Vermont, said he disagrees with any move to drop the reimportation idea. He has pushed to import drugs from Canada, where they are cheaper because of price controls" (Mundy, 7/7).

Are we going to side-deal ourselves to death here? Will we assure medical equipment makers that we will not ensure comparative effectiveness research that would align costs with results instead of the mish-mash we have today? Will we deal with hospitals but leave the full picture of how they rein in costs unanswered? Who will decide the limits to the system, and the tough choices around end-of-life care, now managed by insurers?

The major problem we are running into with health care is that the political class is so obsessed with allowing everyone to keep what they have, and not putting enough emphasis on the system's unsustainable course, that they risk wringing all the benefit for real people out of the bill, and at that point, it can tip over and die.

This isn't terribly surprising: it's not obvious what health-care reform will do for the average American. I could give you a long answer about delivery system reforms and so forth because it's my job to know these things. But it would have to be a long answer. The basic structure of health-care reform has been specifically built to avoid changing people's existing arrangements. The hope was that Americans would be convinced that their health-care coverage wouldn't change for the worse. But that's also made it hard to explain why it will get better.

One of the president's health-care reform principles is that everyone must be able to keep what he or she currently has. But that means we're not really going to change, or improve, what they have. And that means they're not getting much in the way that's new. Higher taxes aren't buying them obvious benefits. Instead, they seem to be paying the health-care bills of poorer Americans.

If support for the overall effort were more robust, the polling on the tax exclusion would matter less. People are willing to pay for things they want to buy. But though they might abstractly favor health-care reform, it doesn't seem directly related to their lives.

This is the problem of liberalism since the Great Society - people don't feel like they're getting anything for their payments to government, because Democrats have stopped pushing for anything tangible for everyone. A reform constructed to expand coverage for the poor without something tangible for everyone - like a public option to bring down premium costs and not wed people to their job for the health benefits - just will not pass. It has no shot. Because the public needs convincing that they have something at stake in this reform.

Holding Back The Tide

The White House has done a pretty good job of rolling out these deals with the health care industry. They made the main announcement of $2 trillion in savings months ago, and that got a large news hit. Then they've been dribbling out each element of the industry and their pledges to lower costs. We haven't reached $2 trillion - in fact, we haven't come close - but every time they do it, the White House gets another news hit. It's pretty brilliant.

The latest is an agreement with the hospital industry to give back $155 billion in profits over a decade, on the heels of an $80 billion dollar agreement with the drugmakers to help fill the dreaded donut hole for prescription drugs for seniors. Because of the way in which Max Baucus (who is brokering most of these deals) and the White House have done it, assenting to changes in how they are paid, this money can be used to help pay for reform, unlike the $2 trillion, which was outside the purview of the CBO. But they seem to be bargaining, like the drug industry, for the best deal they can get, instead of designing the policy and forcing the various industries to accept it.

Still, you have to wonder: Could these industries be giving up more? The drug deal, at least, doesn't look all that great--except, perhaps, to the drug industry. My reading of the agreement--and, to be clear, there's still a lot of ambiguity here--is that the drug industry has agreed to kick in some of its own money to help fill in the "donut hole" in the Medicare drug benefit.

That's very nice and will, I think, make it easier for seniors to afford their drugs. But it also seems that, as part of the deal, seniors have to buy more drugs from name-brand manufacturers rather than generics. It's entirely possible that the name-brand drug industry--that is, the companies represented by PhRMA--could actually come out ahead [...]

The expected hospital agreement seems may be more signfiicant--and, for liberals, more encouraging. Although it's impossible to know without seeing the details, $155 billion is a decent chunk of change. That could represent a serious sacrifice on the part of the hospitals.

On the other hand, it's not clear whether, perhaps, this is an example of some hospitals effectivelly cutting a deal that hurts others. Insofar as the savings come from reduced payments for charity care--payments that now flow through Medicaid--is this a case in which suburban and speciality hospitals actually do just fine but charity hospitals take a hit?

Perhaps the most important question to answer is what these industry groups are getting in return. Changing payments to the health industry isn't simply about generating savings that can finance expansions of insurance coverage. It's also about changing the behaviors of these industries--and, in so doing, creating a health care system that offers better quality care for less money.

To accomplish that, reform should ideally include measures like strengthening the hand of the Medicare Payment Advisory Commission (MedPAC), developing more data on comparative effectiveness (CE), or building a strong public insurance plan. But hospitals don't like the idea of a stronger MedPAC, drug makers are pretty hostile to good CE, and insurers (among others) hate the idea of a public plan. When the industries cut these deals, are they prying promises from Baucus--or the White House--not to push too hard on these levers?

The effect has been to set a ceiling for what the drugmakers and the hospital industry and the other stakeholders will accept, brokered through the most conservative and industry-friendly committee in Congress, Max Baucus' Senate Finance Committee. Any committee that seeks more savings from industry immediately gets attacked, even though they never made such an agreement.

Having struck a bargain with Senate Finance Committee Chairman Max Baucus (D-Mont.), the industry is aggressively targeting individual House Democrats, warning of repercussions in the 2010 elections if they go along with a tougher set of savings advocated by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.).

PhRMA, the powerful Pharmaceutical Research and Manufacturers Association lobby, is openly playing one chairman against the other. Billions of dollars are at stake; a politically sensitive population, the elderly, is caught in the middle. With House Democrats expected to finalize their bill this week, President Barack Obama could face pressure to come off the sidelines and spell out better where he stands.

What Baucus agreed to specifically in his June 20 bargain is still in some dispute. But PhRMA is bluntly telling House moderates that the senator will oppose the rebates demanded by Waxman and that the smart move is to kill that provision outright and save themselves political pain in 2010.

Then there's the effort in the Senate Finance Committee to deny women legal medical services inside any insurers operating inside the Health Insurance Exchange:

The Senate Finance Committee has been writing a health care reform bill and struggling to create legislation that will have bipartisan support. Chairman Max Baucus considered several compromises to win Republican support, so they can claim it is bipartisan legislation. One of these potential compromises comes in the form of an abortion exclusion, which would prevent abortion services from being covered by some or all insurance plans in the Health Insurance Exchange. We fear that members of the Senate Finance Committee are considering such a compromise.

Remember, most of the groups inside the insurance exchange are private companies. I thought conservatives didn't want to put a government bureaucrat between the patient and the doctor. I guess when it comes to reproductive choice, that's OK.

The Senate HELP Committee's favorable budget score raised hopes that a workable solution was on the way, which was affordable and used a public health insurance plan to increase that affordability. But there's a whole maze of committees and votes to maneuver through. And the Senate Finance Committee is really building a dam to hold back the tide of a legitimate overhaul. Must be all of that industry money.

...see also the tactic of arbitrarily lowering the cost of the bill for no real reason other than $1 trillion is a nice round number.