- The Washington Times - Friday, July 24, 2009

Senate Democrats defied President Obama on Thursday by scuttling plans to vote on health care reform by August, abandoning the president’s timeline amid trouble coming to consensus with the White House on how to pay for it.

The inescapable delay was announced as frustrations emerged among Democratic lawmakers left out of ongoing negotiations by a bipartisan group charged with finding ways to pay for the reform bill.

Mr. Obama shrugged it off, despite his oft-repeated refrain that there’s little chance of passing the reform unless it gets done before summer’s end.

“That’s OK,” Mr. Obama said. “I just want people to keep working. Just keep working. … I want it done this year. I want it done by the fall.”

Senate Majority Leader Harry Reid, Nevada Democrat, said speed should not prevail over quality and expressed confidence a bill would still pass.

Finding the money for the $1 trillion effort remains the quest on Capitol Hill, but Mr. Obama’s most recent suggestion for funds isn’t getting any traction.

Mr. Obama, in his press conference Wednesday, proposed helping fund the measure by limiting the tax deductions on charitable donations by wealthy Americans, an idea that’s been proposed before but was quickly shot down on Capitol Hill.

“It doesn’t relate to health care,” Sen. Kent Conrad, North Dakota Democrat and a member of the Finance Committee, said of the itemized-deduction proposal. “It doesn’t bend the cost curve for health care. I think we’re much better off focusing on things that do.”

The bipartisan group of negotiators on the Senate Finance Committee has largely agreed that the bill should be paid for within the health care realm. Many in the group, including committee Chairman Sen. Max Baucus, Montana Democrat, want to tax employer-provided health care benefits, an idea that Mr. Obama has shot down.

The itemized deduction proposal hasn’t acquired steam largely because charities and nonprofits fear that the number of contributions would tumble if the wealthy couldn’t write them off.

The Center on Philanthropy at Indiana University found in February that if the tax break had been eliminated for those who made more than $250,000 in 2006, contributions would have fallen by $3.87 billion, or 2.1 percent.

“Charities and the public need to understand that in the current economic environment, which is creating difficulty for some nonprofits and their constituents already, this public policy change is likely to have an additional negative effect,” said Patrick M. Rooney, interim executive director. “However, changes in personal income and wealth, both of which have declined in the past year, have a greater impact on charitable giving than do tax rate changes.”

As the August recess looms, frustrations are coming to the fore. Democrats on the Senate Finance Committee vented to Mr. Baucus in a closed-door meeting Wednesday.

“I think [Mr. Baucus] was a little bit surprised by the degree and the intensity of feelings by those who have not been included,” said Sen. John D. Rockefeller IV, West Virginia Democrat.

The group of six ended another day of negotiations, this time including the staff directors of the Congressional Budget Office, which has been critical of the long-term costs of the House bill and Senate proposals, and the Joint Committee on Taxation.

In the House, the reform bill has proposed a new tax on couples making more than $350,000. But Mr. Obama said he’d support a tax only on those making more than $1 million. House Speaker Nancy Pelosi, California Democrat, said she’d prefer a tax on those making more than $500,000.

The differences have forced the Senate to blow the August deadline, and it’s all but lost in the House.

The Senate Finance Committee is now expected to complete its version during the first week in August, before the chamber leaves for recess, Mr. Reid said. Doing so would postpone the full Senate vote until at least September.

Over the recess, Mr. Reid would lead the process of merging the Finance Committee bill with the Senate Health, Education, Labor and Pensions Committee bill. It could be a difficult process if the Finance Committee emerges with a bipartisan proposal that needs to be mixed with the more liberal health committee plan.

Mr. Reid tried to play down those concerns, saying he won’t take a “dictatorial” tone.

“We’ll do what we can to make sure their issues aren’t buried,” the Nevada Democrat said.

Mrs. Pelosi told reporters that the House still plans to complete its bill by the August break, which comes a week earlier in that chamber.

“I’m not afraid of August,” she said. “It’s just a month.”

She insisted that Democrats have the votes to pass the reform bill, despite a group of conservatives in the Energy and Commerce Committee who have held up the markup process there.

Christina Bellantoni contributed to this report.

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