The Daily Strike-9/16/09-De-Bauc-le

Good evening and welcome to the Daily Strike. It was a very busy day in Washington, so let's get right to it.

BAUCUS BILL: Oh, boy. Senate Finance Committee Chairman Max Baucus (D-MT) released the full version of his health care proposal today. This plan is mostly a major, major disappointment. Baucus spent three months seeking bipartisan support in the so-called "Gang of Six." He offered concession after concession, first giving away the public option in favor of co-ops, then he weakened the co-ops, then he cut subsidies so people could afford coverage. The result? Zero Republican support. And, of course, he has angered pretty much everyone in his own caucus, as well as the House Democratic leadership. Even President Obama, who has stood by Baucus, offered only tepid support for his plan. Already, Finance Committee Democrat Jay Rockefeller (WV) said that he can't support the bill in its current form. Let's run down some problems with the bill. Our main source here, as usual, is Ezra Klein.

1. As we mentioned yesterday, Baucus gutted subsidies for people who will not be able to buy insurance. This is one of the most popular parts of the bill, and would make it far more politically appealing to the middle class. The Baucus bill has reduced subsidies for those making over 300% of the poverty line. He did this to gain Republican support, which he now does not even have. The bill also does not do enough to lower costs for people who get sick (by setting hard caps on annual expenditure etc. Not only will 4 million currently uninsured Americans be forced to buy insurance with no assistance from the government, but they'll be increasingly bitter towards those at the lower end of the spectrum who are getting generous subsidies. This principle explains why Social Security is popular, and welfare is not.

2. The co-ops were supposed to be a more politically appealing version of the public option, but in the Baucus bill, they amount to pretty much nothing. The co-ops would exist at the state level, but states could ban together to increase purchasing power. The problem is that the co-ops are only allowed to contract with individuals and small businesses. They can't contract with large employers, and therefore wouldn't be able to compete with private insurers in the private market. If you work at a big business, or a large non-profit, in other words, the co-ops would be unavailable to you, and there would still be no competition with the private insurance companies. (They would, in fairness, have to abide by new consumer protection rules). They will also not be allowed to set national payment rates, like Medicare. They'll have to negotiate individually with each provider or hospital. Thus, not very effective competition for private insurance companies (just like Baucus wants it!).

3. I have to think that with all the criticism from policy wonks that the so-called "free rider" provision will not survive the legislative process, but for now, it is in the Baucus bill. Unlike the House bill and the Senate HELP committee bill, the Baucus bill contains no requirement that employers either provide health insurance to their employees or pay a fee. Instead, it has a penalty for employers who hire workers that would require subsidies. As Ezra points out, this would incentivize companies to NOT hire low income employees (hire the teenager instead of the working mother, maybe). In fact, the penalty increases if the employee needs subsidies for his/her whole family. I don't even know what the point of this penalty is. Maybe someone smarter than me can explain it, but right now it appears pretty nonsensical.

These are just a few of the problems that jump out to me at first glance. Here's The Big Picture's take:

Let's just throw out this Baucus plan - I will be furious if a single one of these changes meant to get Grassley and Enzi and Snowe make it into the final bill if they're not going to vote for it. Which is why you don't negotiate against yourself and make concessions without ensuring final support!!!! I find it hard to believe that Baucus is just a complete idiot, so I think at least part of this is that he wanted to water it down a ton to please his industry backers, but is saying that he did it to appease the GOP.

If I were Obama, I would highlight the exchanges and the subsidies as key improvements, which appeal to some basic conservative and liberal sensibilities that most people agree with - more competition, you should have choice, insurers competing to get your business; and health care is a right, government will help the hardworking middle class afford it. Talk a LOT more about those things.

As with the stimulus, a huge mistake by Obama in the marketing of how much this is going to cost. Should have been done by year. He should have set a much higher target. Most of all, he should have explained WHY we needed that money, that it's going to real people to help them afford health care. There's still time to make that point. But right now people are like "Why are we spending this money? I thought this was going to bring DOWN costs?" Totally incoherent messaging on this crucial front.

There are a few good things about this bill. For one, the Congressional Budget Office says that it will actually reduce the deficit by about $200 billion over ten years. Those are the best deficit numbers that any health plan has seen this year. Of course, the reason for this is that Baucus decreased subsidies and instituted an excise tax on expensive health plans that could potentially be passed on to consumers. Second, the Baucus plan does apparently have a strong, national insurance exchange. The House plan allows only companies with 20 or fewer employees to join the exchange, whereas the Baucus plan would allow companies with 50 or fewer employees to join. It will be much better to have more people join the exchange, so that risk can be pooled more effectively.

Even with cuts to subsidies and all the other bad stuff in the bill, it still would institute strong new insurance market reforms that would eliminate preexisting conditions and rescission. In other words, it's better than nothing. If we were down a vote at the last second and we had tried everything in our power to get this over the finish line, maybe we could accept the Baucus bill as a compromise. But by compromising the way Baucus did, we gained absolutely nothing. In fact, in all the time we've wasted waiting for Baucus to come up with a bipartisan plan, we've allowed opposition to harden on the right, and Obama's popularity to significantly drop.

So the bottom line is that Baucus has acted like a complete idiot. There's no way around it. But we can't let that deter us. There will be ample opportunity for Democrats to amend the bill in committee, and Ezra offers some decent suggestions. Then the bill has to be merged with the HELP bill, and eventually, the House bill. There's still time to get this right. But this much is clear: the Baucus debacle has proven once and for all that: a) Republicans can't be trusted, b) Democrats have to go it alone on health care and c) never make concessions to anyone without getting something in return. Stay tuned for the markup of the bill next week.

THE HOUSE: There was plenty of legislative action today apart from the release of the Baucus bill. The House passed a good bill that authorizes spending on research and development for advanced vehicles. The bill, sponsored by Rep. Peters (D-MI), provides money for the Department of Energy to develop "cutting-edge, commercially viable vehicle technology." Sounds good to me (and to the state of Michigan!). The bill passed easily by a vote of 312-114. 62 Republicans voted yes, and only one Democrat, Harry Teague of New Mexico, voted no. Prior to a vote on final passage, the House voted on a few amendments.

The most threatening amendment, offered by Texas Republican Ralph Hall, would have frozen funding for the program through 2013. Sort of defeats the purpose of the bill, doesn't it? The amendment lost 179-253. The House voted to accept some amendments, including one by Rep. Donnelly (D-IN) that would have included recreational vehicles as part of the new research, and one by Rep. Massa (D-NY) to allow for public-private research partnerships. Democrats successfully beat back a Republican motion t0 recommit that would have allowed money to be spent only if the deficit went below $500 billion. I expect to see a lot of amendments like this as Republicans try to hammer home those deficit talking points. The motion failed 180-245, with 14 deficit hawk Democrats voting yes, and 9 Republicans voting no.

The House then started its work on the comprehensive student loan/education bill. Votes on amendments and final passage on this important piece of legislation will come tomorrow. We'll tell you more about what's in the bill then.

THE SENATE: The Senate was supposed to finish the Transportation, Housing and Urban Development funding bill today. But it didn't quite get across the finish line (shocker!). They will have to vote for 5 more amendments and final passage tomorrow morning. Several amendments to the bill were considered today. Here's a rundown (most of these are unbelievably stupid, so enjoy the ride).

1. The first amendment, offered by Senator Coburn (R-OK) would eliminate the mandate on states that requires them to spend a certain amount of money on road-kill reduction and highway beautification. What a typical Coburn amendment. These are things that may sound silly, but they're actually very important. And these types of programs create good paying jobs! Luckily, the amendment failed 39-59. Democrats Bayh (IN), Feingold (WI), Klobuchar (MN), Lieberman (CT) and McCaskill voted yes, while Republicans Bond (MO), Cochran (MS), Collins (ME), Murkowski (AK), Shelby (AL), Snowe (ME) and Voinovich voted no.

2. The second amendment, also from Coburn, sought to eliminate funding for transportation museums. I love transportation museums. I take his amendments very personally sometimes. Luckily, the amendment failed 41-57. Democrats Bayh (IN), Conrad (ND), Feingold (WI), Kohl (WI), McCaskill (MO) and Udall (CO) voted yes. Republicans Alexander (TN), Bennett (UT), Bond (MO), Cochran (MS), Shelby (AL) and Wicker (MS) voted no. They must have some good transportation museums in Mississippi!

3. This next one really grinds my gears. We seem to get some sort of gun-related amendment on every bill these days, as Republican Senators try to do the NRA's bidding. They almost always pass too, because most Democrats are scared of losing those coveted 100% ratings from the NRA. Today, Senator Wicker (MS) offered an amendment to allow guns to be carried in carry-on baggage on Amtrak. I guess since it's carry-on baggage, it shouldn't pose a danger to passengers. But it still could potentially pose some safety hazards. The amendment passed by a vote of 68-30, with all no votes coming from Democrats.

4. Next was an amendment from the clown to "affirm the continuing existence of the community service requirements under section 12(c) of the United States Housing Act of 1937." No idea what that means, but it passed 73-25. All no votes from Democrats.

5. This one also is purely silly. Senator Judd Gregg (R-NH) once had a museum named after him, but now he's upset that a tiny amount of money is being spent on signs that say "This construction was made possibly by the American Recovery and Reinvestment Act." As Senator Boxer (D-CA) wisely pointed out, nobody made these complaints when Bush spent money on letters to taxpayers telling them about rebates! Those signs make me proud to be an American! Thankfully, the Gregg amendment, designed really to embarrass the President and Democrats, failed by a vote of 45-52. Democrats Gillibrand (NY), Klobuchar (MN), Lincoln (AR), Schumer (NY) and Shaheen (NH) voted yes. No Republicans voted no.

6. Finally, the Senate rejected an amendment from Senator Ensign (R-Extramarital affairs in Nevada) that would have significantly cut funding from the bill across the board. The amendment failed 33-64. Democrats Bayh (IN) and McCaskill (MO) voted yes, while Republicans Alexander (TN), Bond (MO), Cochran (MS), Collins (ME), Murkowski (AK), Shelby (AL), and Voinovich (OH) voted no.

That's it for a very busy day in politics. Please leave us some comments!!