The political process of moving health reform legislation hit a major roadblock last week and has come close to grinding to a halt. Blue Dog Democrats and other moderate members in the House spent most of the week publicly squabbling with the House leadership and Energy & Commerce Committee Chairman Henry Waxman, D-Calif., over the process, contents and cost of the health care reform legislation (H.R. 3200). The House Energy & Commerce Committee – the last of the three Committees with health care jurisdiction to consider the legislation – has suspended its debate because it lacks sufficient support to vote the bill out of the Committee. Chairman Waxman has agreed to keep negotiating with Democratic Committee members.
Blue Dog and moderate Democrats have numerous concerns about the bill, including geographic disparities in Medicare payment rates; the significant tax increases proposed ($800 billion over 10 years); the proposed public insurance option; the employer mandate; and the long-term costs of the legislation. House speaker Nancy Pelosi instructed staff to work through the weekend to try to address these concerns.
It is unclear whether House leaders will be able to bring a bill to the floor before their month-long recess which begins August 1. However, Pelosi insists she has the votes to pass a bill and may try to bypass the Energy & Commerce Committee and move a bill without the Committee taking a vote. Democratic opponents of the bill said Pelosi's vote count was somewhere between wildly optimistic and dead wrong. Regardless, the bill could become a major test of Pelosi's leadership, and unless she gets it moving soon, Republicans will claim victory throughout August and into September.
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Bypassing the Energy & Commerce Committee would risk solidifying Blue Dog opposition to the bill, making it more difficult to reach the 218 votes needed for final passage. Moderate Democrats fear that health care will resemble the recent climate bill when many House members cast a difficult political vote in favor of the legislation, only to watch the Senate push the issue to the fall. These moderate Democrats will continue pressing House leaders to not repeat the same mistake. Many House Democrats are also wary of casting a contentious and controversial vote to raise taxes to pay for expanded health coverage unless Democratic senators are also on board for a tax increase.
Meanwhile, Democratic liberals are worried by constant negotiation with Blue Dogs and Pelosi's statements that what the more conservative Senate Finance Committee does could influence the bill.
"We have to stay on our toes," said Rep. Lynn Woolsey, D-Calif., co-chairwoman of the Congressional Progressive Caucus. "We know what we want and we don't want to get rolled."
Rep. Jan Schakowsky, D-Ill., who leads the charge for the Progressive Caucus on health care, said liberals have been reminding their Blue Dog colleagues that they might be the ones stopping a bill if a public option is watered down.
"A number of us have conveyed to the Blue Dogs that there are 82 people who are insisting on a 'robust' public option," Schakowsky said.
In the search for new revenue in order to pay for health reform, the Senate Finance Committee is seriously considering a tax on insurers based on their premium charges. The approach was floated by former Senator Bill Bradley in the 1993-1994 health reform debate when he served on the panel as a Democrat from New Jersey, but drew opposition from employers and unions. Economists believe that such a tax could drive down costs because insurers would keep premium charges down to avoid taxation. The tax could possibly be levied on high-cost plans offered by insurance companies.
But as in the past, there is also plenty of concern with the idea. Critics argue that insurers will never pay such a tax, but rather the additional cost would be passed on to employers and consumers. They further argue that such a tax could never be structured to apply only to insurance companies. Many employers, especially large ones, self-insure rather than purchase insurance for their workers directly from insurance carriers. To raise any significant revenue at all, and to treat all health insurance equally, any such insurance premium tax would have to apply to self-insuring employers, as well.
For the second time this month, the Congressional Budget Office has dealt a blow to the Democrat's health reform efforts, this time by saying a plan touted by the White House as crucial to paying for the bill would actually save almost no money over 10 years. Last Tuesday, Energy & Commerce Committee Chairman Waxman and moderate House Democrats agreed to a White House-backed proposal that would give an independent panel, the Medicare Payment Advisory Commission, the power to make cuts to Medicare. But on Saturday, the Congressional Budget Office said the proposal would only save about $2 billion over 10 years, a drop in the bucket compared to the bill's $1 trillion price tag.
The proposal's meager savings are a blow to Democrats working to bring down costs in order to win support from Blue Dogs. The proposal was heralded as a breakthrough on Tuesday after Blue Dogs and Waxman emerged from the White House with an agreement to give the independent panel, rather than Congress, the ability to rein in Medicare spending.
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