- The Washington Times - Friday, March 19, 2010

In the final push to pass a health care overhaul, Democratic leaders on Thursday sought to sway anxious party members with a new $940 billion plan that cuts the deficit, raises Medicare revenue with a new tax on the investment income on wealthier Americans and placates unions by slashing the tax on high-end insurance plans.

The concept, backed by President Obama, is designed to build positive momentum ahead of a Sunday vote on the landmark health care overhaul, which would extend insurance coverage to more than 30 million Americans, fill the Medicare prescription drug “doughnut” hole of limited coverage and curb insurance industry abuses.

It swung two former “no” votes to the “yes” column.

Majority Leader Steny H. Hoyer called the plan “the biggest deficit reduction bill that any member of Congress is going to have an opportunity to vote on” with hopes of swaying fiscally minded Democrats to support it.

Republicans remain steadfastly opposed to the plan, leaving Democrats to come up with all of the support themselves.

“The reason House Democrats don’t have the votes is because the American people know this is a government takeover of health care,” said Rep. Mike Pence of Indiana.

The 153-page bill released Thursday represents repairs that Mr. Obama and House leaders requested in exchange for voting for the Senate’s health care plan. If passed, the “repair” bill would also have to pass the Senate through complicated reconciliation procedures that can circumvent a Republican filibuster.

Critics of the plan already spotted two provisions that they say are tightly focused on specific states, possibly in exchange for support of the legislation similar to the now infamous “Cornhusker Kickback.” They plan to rally against the bill as the final vote nears.

White House spokesman Robert Gibbs said Thursday that Mr. Obama would postpone his Asia trip, originally scheduled to start Sunday, to help corral votes for his chief domestic agenda item.

The Congressional Budget Office analysis found that the plan would reduce the deficit by $138 billion over the next 10 years - $20 billion more than the House’s original plan - and continue to drive down the deficit in later years.

The reconciliation bill imposes a 3.8 percent tax on unearned income, such as from dividends and interest from investments, for couples making over $250,000 or individuals making over $200,000. It also delays implementation of a tax on the most expensive insurance plans and raise only $32 billion over 10 years, a slice of what the Senate originally planned.

Labor unions lobbied hard to get the tax removed over concern it would hit their middle-class members. The AFL-CIO seemed pleased with the changes and endorsed the plan Thursday.

It also includes changes to the student loan system that essentially eliminates private banks from the loan market. The loan reforms, which House leaders say was necessary under complicated reconciliation rules, would make the federal government the sole lender of student loans and raise $61 billion over 10 years, $10 billion of which go toward reducing the deficit.

The reconciliation plan also sends $100 million to low-income hospitals in Tennessee, a carve-out that Republicans have dubbed the “Rocky Top Vote Swap,” noting that retiring Rep. Bart Gordon came out in support of the bill on the day it was released. While most other states get similar federal funding, Tennessee lost it in the 1990s when it established a state health program.

North Dakota appears to have special funding as well. It’s the only state in the country that would qualify for a new carveout allowing its state-owned banks to continue to be able to issue student loans. Home-state Rep. Earl Pomeroy has been on the fence and Sen. Kent Conrad, as chairman of the Budget Committee, plays a pivotal role in reconciliation proceedings.

But fearing backlash that lawmakers from other states have faced, Mr. Conrad on Thursday asked for the carveout to be removed.

“The fact is the Bank of North Dakota is a unique entity - it is the only state-owned bank in the nation,” he said in a statement, citing the bank’s low default average compared to the rest of the country. “But often, facts are the first victim in an overly heated partisan environment. And rather than see the excellent reputation of the Bank of North Dakota damaged, I have asked to have the provision removed.”

But top House Democrats say they expect the reconciliation bill to help push fence-sitting rank-and-file members into the “aye” column.

“I think Democrats, particularly some of the conservative Democrats concerned about the cost of this bill, are pleasantly surprised at the CBO estimates,” said Rep. Henry A. Waxman of California, chairman of the Energy and Commerce Committee.

Others have concerns that the bill would allow for federal funding of abortions. Rep. Marcy Kaptur, Ohio Democrat, said she is trying to talk leaders into holding a separate vote to prevent federal funding of abortions in the bill. Leadership says the bill wouldn’t allow it.

But not even all the liberal members are on board yet. Rep. Stephen F. Lynch, Massachusetts Democrat, said Thursday that he’s not entirely sold on the plan, which he said doesn’t do nearly enough to change the health system.

“I just think it’s a very poor bill,” he told reporters.

It’s unclear how close Democrats are to the 216 they need as several members who previously voted for the House’s bill are now calling themselves undecided. Three of the 39 Democrats who voted against the House bill - Mr. Gordon, Ohio Rep. Dennis J. Kucinich and Colorado Rep. Betsy Markey - said publicly this week that they plan to vote for the Senate bill.

“If I and each of my 534 colleagues in Congress had been able to write our own health reform packages, we would be looking at 535 different bills today,” Mr. Gordon, who is retiring at the end of this term, said in a statement Thursday. “In the end, the question I’m faced with is this: will this reform be better for Middle Tennessee than the status quo? I think it will.”

The House is expected to vote Sunday on the bills. On Saturday, a House committee is expected to decide whether or not to essentially tie the Senate bill and the reconciliation bill together, allowing members to vote only indirectly on the Senate plan that few of them like.

House Democrats crafted the reconciliation bill with hopes that it survives the complicated reconciliation process in the Senate. Each provision of the bill must be related to the budget or risk being deleted by the Senate’s parliamentarian and Democrats don’t have enough members to override those decisions.

Mr. Obama had hoped to create a new regulatory authority to oversee insurance premiums in the reconciliation bill but it wasn’t included over concern that it would be taken out.

Also left out was a Republican proposal to establish undercover Medicare investigators to combat fraud. The idea came from Sen. Tom Coburn of Oklahoma and held up by Mr. Obama as a sign that he was open to Republican ideas.

If the reconciliation bill changes at all, it has to be voted upon in the House again, which is likely to be difficult.

Senate Republicans plan to challenge as many provisions as they can and are already eyeing changes to the tax on high-cost insurance plans that they say would impact Social Security, a violation of the reconciliation rules.

If the House passes the bills Sunday, the reconciliation process is expected to start in the Senate early next week.

• Jennifer Haberkorn can be reached at jhaberkorn@washingtontimes.com.old.

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