Democrats divided as Congressional health overhaul efforts stall

Jul 9 2009

Senators working feverishly to pass health reform ahead of Congress' August recess raised doubts Wednesday on whether they will be able to pass reform on schedule, The Boston Globe reports.

"Republicans called on Democrats to slow the pace of deliberations, and Democratic leaders sounded decidedly less confident about speedy approval amid festering divisions. Members of the Senate Finance Committee, which is searching for a bipartisan compromise, acknowledged they were not close to a deal."

"Pressed by reporters yesterday on whether the Senate could pass a bill by August, the Senate Finance Committee chairman, Max Baucus, (D-Mont.), sounded less certain than he had a month or so ago. 'I hope,' he said. 'It's a goal. We'll see'" (Wangsness and Milligan, 7/9).

The New York Times: "One plan that Mr. Baucus had been weighing would have generated $320 billion in revenue over 10 years by taxing health benefits above a threshold set slightly higher than the basic health plan offered to federal employees, a figure estimated at $17,000 a year for a family.

"But opposition emerged on several fronts, and there was a deep rift between urban states, with large numbers of unionized workers who would be hard hit by the tax, and rural states like Montana and Iowa, home to Senator Charles E. Grassley, the senior Republican on the Finance Committee, where relatively few people would have to pay it" (Herszenhorn, 7/8).

Roll Call: "Baucus on Wednesday also sought out one-on-one meetings with centrist Democrats who have been cool to a public plan in an attempt to find out what they can support, one senior Democratic aide said" (Pierce and Drucker, 7/9).

The Senate Finance Committee needs to find $320 billion over a decade to pay for reform, Dow Jones Newswires reports, and a higher cap on taxing employer provided health benefits may not pay for it all: "(Sen. Kent) Conrad (D-N.D.) said that committee members discussed capping the tax exclusion at $25,000 per household, which he said would generate $90 billion. That would still require the committee to generate over $200 billion in new revenue" (Yoest, 7/8).

CNN: "Raising that exemption level is aimed at softening Democratic criticism of the proposal because it means only people with high-value health benefits -- so-called Cadillac plans -- would have to pay the new tax" (Barrett, 7/8).

On the House side, more liberal Democrats are looking into that tax on the rich to make the gap up, The Associated Press reports: "As discussed in the tax-writing House Ways and Means Committee, the surtax would apply to individuals with adjusted gross income of more than $200,000 and couples over $250,000, according to officials involved in the discussion. Most spoke on condition of anonymity because the talks were private. In addition, key lawmakers are expected to call for a tax or fee equal to a percentage of a worker's salary on employers who do not offer health benefits." House Democrats are trying to complete their bill by Friday to bring it to a committee vote next week (Werner, 7/9).

Politico: "That idea gained new currency in the Senate and the House Wednesday in part because it would not divide the Democratic base as much as taxing health benefits, which could hit the middle class, and unions strongly oppose it." (Brown and O'Connor, 7/8).

All the seemingly unilateral Democratic wrangling has alienated the GOP, The Hill reports: "'The Republican caucus has a whole handful of lollipops, and we keep offering them to the Democrats, saying, "Here's the red one, here's the blue one, here's the green one, why don't you take one and let's go to work on it,"' (Senate Republican Conference President Lamar) Alexander (Tenn.) said. 'Most of them are being rejected out of hand.'" … When asked if more time would lead to more bipartisan success, (Budget Committee ranking member Judd) Gregg (N.H.) said he disagreed. "'It appears that more time is making less of a difference on bipartisanship,' he said. 'They've got 60 votes. They won the election. It appears they've decided maybe to go this alone'" (Rushing, 7/8).

Dallas Morning News: "'You are beginning to see some fissures and fractures on the Democratic side when it comes to things like the so-called public option, the pay-or-play mandates or controversial issues like that,' (Sen. John) Cornyn, R-Texas, said in a conference call Wednesday with reporters. 'That's not even getting to the tax increases that are going to be required to pay for this huge expansion of government'" (Michaels, 7/9).

But Democrats - with their new 60-member majority in the Senate - may not need any Republican votes to pass reform on their own, Time reports: "Democrats will have to decide in the coming weeks whether they are willing to go it alone on health reform, or whether they will continue to negotiate with Republicans for a bill that would likely be less expensive and contain far less of a role for government in the health care system" (Tumulty, 7/9).