Tuesday, September 8, 2009

The Daily Strike-9/8/09-Baucus' Move

Good evening and welcome to the Daily Strike. It feels good to have Washington back in business after a long hiatus. Let's get to the day in politics.

HEALTH CARE: As President Obama prepares to give his highly anticipated address to Congress tomorrow night on health reform, we're finally seeing some movement in the Senate Finance Committee. For months, the so-called "Gang of Six" has been telling us to be patient, that they will be "ready when (they're) ready." Finally, Senator Baucus released his own plan this weekend, and he is telling his "gang" that they have until tomorrow to submit suggested changes. Otherwise, he will, reportedly, go ahead and bring the bill in front of the committee regardless. This could potentially set up hearings in the next couple of weeks.

The Baucus plan is far from perfect. In fact, it is clearly the worst of the proposals currently be considered in Congress. The plan does not include the public option. It instead has co-ops that would be initially funded by the government, but would be run by consumers. The bill contains subsidies for those who can't afford insurance, but they would only apply to those making up to 300 percent of poverty (about $65,000 for a family of 4). The subsidies would get progressively lower as incomes get higher. These subsidies are less significant than those in the other bills. The bill is financed by a combination to cuts within the system (like the other plans), taxes on high cost insurance plans, and additional fees on insurance companies.

The lack of the public option is disappointing, but not unexpected. The House version of the bill will most likely contain a public option, and we can push for it heavily when the House and Senate go into conference. I'm more concerned about the smaller subsidies for consumers. The subsidy portion of the bill is crucially important. The bill will mandate that individuals buy insurance. If this mandate is in effect, but people can't afford insurance, they will be forced to either go bankrupt by buying insurance, or to pay fees to the government for NOT buying insurance. This is not only bad in a policy-sense, but it would be a political calamity. If subsidies only reach the poorest of the poor, middle class Americans will feel left out. More than left out, they will feel bitter that the poor are getting helped out and they are not. This is why poorly means tested programs inevitably fail. The long-term future of health reform depends on the middle class feeling that their lives have been made better, not worse.

Ezra Klein argues that the Baucus bill, if enacted, would still be the most progressive piece of legislation since LBJ. In many ways, he's right. The bill contains strong consumer protections that will ban companies from discriminating based on preexisting conditions, and will set caps on out-of-pocket expenses. If there is no other way we can get a health care bill enacted, I would support this bill as a first step. I don't think we're at that point yet. I think we can do better. Democrats better come to the Finance Committee armed with amendments to make the bill better. No matter what the Gang of Six wants, Democrats still hold a strong majority on the committee. They can make the Baucus plan more progressive (more generous subsidies!) and still manage to send the bill to the full Senate.

While we're on the subject of health care, House Speaker Nancy Pelosi and Majority Leader Reid met with President Obama to discuss health care strategy. After the meeting Pelosi said that the public option will be crucial in getting a bill through the House. Leader Reid left open the possibility of passing the bill with 50 votes under reconciliation procedures. Stay tuned...

THE SENATE: The Senate voted today to limit debate on the Travel Promotion Bill, which would seek to promote tourism in the United States (see this morning's entry for a complete description). Cloture was invoked by a vote of 80-19, with all no votes coming from Republicans. For the first time this year, every single Senator duly chosen and sworn actually showed up to vote! For much of the year, Senator Byrd (D-WV) was sick and unable to show up to vote. Today, he made it into the chamber for a relatively non-controversial bill. This is an auspicious sign for close votes (like health care), assuming Byrd can maintain relatively good health for the next few months (he's 91). Debate on the bill (and amendments) will continue for the next couple of days. I expect a vote on final passage Thursday or Friday.

THE HOUSE: The House today voted on several suspension bills. Usually these non-controversial bills pass easily, but two out of the three considered today actually failed. One of them sought to designate a national heritage area in Arizona, and the other one dealt with
Leadville Mine Drainage Tunnel Remediation, whatever that means. More suspension bills on deck tomorrow.

We will have complete coverage of the President's address to Congress tomorrow and Thursday. See you then!

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