- The Washington Times - Tuesday, July 14, 2009

The health care battle in Congress is getting hotter, fueled by growing opposition to taxing health insurance benefits, mandating small-business coverage and cutting Medicare payments and by creeping doubts about a public plan for the uninsured. And this is just among Democrats.

In the past week alone, President Obama’s proposal for full-scale health care reform has been taking a beating from members of his own party who are unhappy with one or more parts of the draft bills being circulated on Capitol Hill, including a suggestion from his own chief of staff that hinted of backing away from a single-payer federal insurance plan strongly supported by his party’s liberal base.

That is sparking doubts that any kind of legislative breakthrough is possible on the health care front this year and hopes among other interest groups that in the end, some kind of scaled-back plan eventually will pass.

“Enactment of major health reform legislation this year is nearly impossible. Coalitions are fracturing, and opposition is growing both inside and outside Congress. The Senate will never accept the ultraliberal bill the House is writing. And Congress would have to pass enormous tax increases to pay for it all during the steepest recession in decades,” said health care analyst Grace-Marie Turner of the Galen Institute.

“It is more likely that they will pass something smaller and somewhat less controversial and call it a victory,” she said.

AARP, whose nearly 40 million members have a huge stake in health care reform, is more optimistic that major legislation will be passed.

“Sometimes you have to look beyond the story of the week because at various parts in this debate, it was completely bipartisan, then veered partisan, and at the end of the week, we’re back to bipartisan,” said AARP spokesman James A. Dau. “It’s more helpful to look at the bigger picture instead of getting sucked into the developments that we all knew were coming that were always inevitable and that we knew we would have to get past.”

Still, the pitched political battle of the past week suggested that health care reform is running into huge tax-and-spend obstacles that had the Democrats characteristically fighting among one another. Among the biggest disputes:

• Senate Majority Leader Harry Reid said he could not vote for a bill being drafted in the Senate Finance Committee that could tax employer-provided health insurance benefits above a certain threshold — strongly opposed by unions — warning that the bill would lose 10 to 15 Democrats from urban states.

• White House Chief of Staff Rahm Emanuel told the Wall Street Journal last week that the president was open to negotiating the creation of a government-run health plan that would be only a fallback “mechanism” if the private sector does not provide competitive health care plans of its own.

That statement jarred the administration’s liberal supporters. Rep. Raul M. Grijalva, Arizona Democrat, shot off a letter to the president, saying he read Mr. Emanuel’s remarks “with alarm and dismay.” Mr. Obama quickly issued a statement in the midst of his overseas trip July 7 reaffirming his support for “a public option that will force the insurance companies to compete and keep them honest.”

• House Democratic leaders were getting ready to unveil their $1 trillion-plus health care bill Friday until the centrist Blue Dog Democrats sent their party’s leadership a letter raising their objections to its massive costs and its impact on small businesses hit hard by the recession. If the liberal bill were not changed, an “overwhelming majority” of the coalition’s 52 members would oppose it, said Rep. Mike Ross of Arkansas, which likely would the measure.

Democratic leaders promptly pulled the bill back and went into closed-door negotiations with Blue Dog leaders in an attempt to work out their differences.

• In a seeming split with the White House’s efforts to negotiate cost-containment deals with the health care industry, Rep. Henry A. Waxman of California, chairman of the House Energy and Commerce Committee, said last week that he was not bound by an agreement to cut an $80 billion deal with pharmaceutical companies to reduce Medicare prescription costs.

Mr. Waxman, suspicious of dealing with the drug companies that he said had gotten “a windfall” from government prescription programs, told reporters, “We’re certainly not bound by that agreement. The White House was involved, and we were not.”

House Ways and Means Committee Chairman Charles Rangel of New York was similarly testy that the White House was hammering out its own cost-cutting agreements without consulting leaders in Congress. Mr. Rangel said Thursday that he didn’t care what had been worked out by the White House. “All I know about the White House and deals are what I read in the paper. I can’t legislate that,” he told the Capitol Hill newspaper Roll Call.

But perhaps the biggest division among Democrats has been on their efforts to come up with the means to pay for their massive health care plans. The Senate Finance Committee, chaired by Max Baucus of Montana, was considering a tax on employee health benefits. The House appeared to be moving toward an income tax surcharge on wealthy Americans earning more than $200,000 a year.

“House and Senate Democrats appeared on Thursday to be on a collision course over how to pay for a sweeping overhaul of the nation’s health care system, with the House planning to propose an income tax increase on the wealthiest Americans, an idea that Senate negotiators have all but dismissed as unworkable,” The New York Times reported.

Mr. Obama’s vision of health care for the uninsured and significantly lower health care costs was difficult enough to achieve, but agreeing on the tax revenues to pay for it has become an almost insurmountable challenge, analysts said.

“The moment this health care debate morphed from being exclusively one about health issues to one that encompasses taxes, spending and life issues, we had a game of three-dimensional chess on our hands,” said Michael Franc, vice president of government relations at the Heritage Foundation.

But, then, Mr. Franc thought of yet another hurdle: How can Democrats find a “way to thread the needle on the public plan issue without alienating the hard-left purists who these days comprise a significant part of the Democratic party’s base?”

“Maybe it’s actually four-dimensional chess,” he said.

Even AARP, one of health care reform’s biggest boosters, is keeping a wary eye on what the current debate ends up doing to its membership’s most cherished health care program.

“We are watching very closely to guard against any provision that would make arbitrary cuts to Medicare or cuts that would hurt beneficiaries,” AARP’s Mr. Dau said.

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