Monday, July 27, 2009

On Health Care, Congress Races Against Recess Deadlines

Congressional leaders this week are racing against the clock in hopes of making at least some progress in advancing major health care legislation before the summer recess.

A small group of bipartisan senators on the Senate Finance Committee, led by the chairman, Max Baucus, Democrat of Montana, hope finally to reach a deal on health care legislation that would let them issue a draft bill and begin committee sessions a week from Monday, with a goal of completing the bill before the Senate leaves town on Aug. 8.

But there are a number of complicated issues yet to be resolved, including final agreement on how to pay the roughly $1 trillion, 10-year cost of the legislation. This week, senators will be scrutinizing a proposal to tax high-end health plans. The idea has some support among White House officials and could raise $100 billion over a decade.

The House is scheduled to adjourn at the end of this week. And Democrats will push Monday to settle the outstanding reservations about the health care legislation among a group of fiscal conservatives in the Blue Dog Coalition – particularly seven Blue Dogs who have blocked work on the bill in the Energy and Commerce Committee.

The Energy and Commerce Committee chairman, Representative Henry Waxman, Democrat of California, has said that he hopes to resume the committee’s work on the bill by Tuesday. But after a tumultuous day on Friday during which Mr. Waxman and Blue Dog leaders traded recriminations, it is unclear how quickly the Blue Dogs’ concerns can be resolved.

Mr. Waxman said negotiators would be carefully looking at a few top issues, including how a proposed government insurance program would operate and whether the bill included sufficient provisions to help curb the steep rise in health care spending over the long term.

While the health care issue will dominate the agenda and the attention of Congressional leaders, the House also plans to take up its final appropriations bill, the annual military spending measure, which would allocate $636.3 billion, including $128.3 billion for war operations in Iraq and Afghanistan.

This is the first year that the full war costs are being included in the regular military budget and not in a separate emergency spending measure.

The Senate, which has been moving more slowly on the annual spending bills, is expected to begin work on the energy and water spending measure and perhaps also on a military construction and veterans affairs bill.

The majority leader, Senator Harry Reid of Nevada, has already said that the Senate will wait until after the recess to vote on the health care legislation. But lawmakers are eager to show forward motion by having the Finance Committee unveil its bill, which has the chance of being the one bipartisan health care proposal.

The Senate health committee approved a health care measure, but strictly along party lines with Republicans opposed.

Substantial differences remain. The House speaker, Nancy Pelosi, on Sunday affirmed her support and that of many Democrats, including President Obama, for a new government-run insurance program to compete with private insurers.

But the Senate Republican leader, Mitch McConnell, said that was a no-go for his members. “I think I can pretty safely say there aren’t any Senate Republicans who think a government plan is a good idea,” Mr. McConnell said on CNN’s “State of the Union.” “We have 1,300 health insurance companies now, robust competition among them. We know that if we create a government plan, there won’t be any more private health insurance companies and there won’t be any competition.”

The Finance Committee, as a compromise, is considering a plan to use private, nonprofit health care cooperatives instead of a government-run plan to compete with private insurers.

One big focus on the Finance Committee early this week will be a proposal put forward by Senator John Kerry, Democrat of Massachusetts, to tax high-end insurance plans.

Mr. Obama expressed a willingness to consider the latest version of the proposed tax on high-end insurance plans during his news conference about health care policy on Wednesday night.

David Axelrod, a senior adviser to the president, in an appearance on “Face the Nation” on CBS, said the proposal could meet Mr. Obama’s requirement that any new taxes to help pay for the health care legislation not fall on the shoulders of middle-class Americans.

“The president actually was asked this the other day by Jim Lehrer and what he said was that this was, you know, that this was an intriguing idea to put an excise tax on high end health care policies like the ones that the executives at Goldman Sachs have the $40,000 policies,” Mr. Axelrod said.

Mr. Kerry’s proposal would impose an excise tax on the insurers who issue such policies, with the expectation that the insurers would pass along most, if not all, of the cost to employers who purchase the plans – a potential point of conflict over who will actually pay the tax.

Leaders of the Finance Committee had long expressed interest in taxing some employer-provided benefits, a move that many budget experts say would help slow the steep rise in health care spending.

But a number of Democrats, including Mr. Reid, said they opposed the idea and urged Mr. Baucus to drop it. Negotiators began looking for other ways to cover the cost of the bill.

Senator Kent Conrad, Democrat of North Dakota and a key author of the Finance Committee’s health care bill, endorsed the idea of taxing rich plans during an appearance Sunday on the ABC program “This Week With George Stephanopoulos,” noting that the tax exemption for health benefits provided a government incentive for overspending on health care.

Asked if Congress would tax high-end plans, Mr. Conrad said: “I think we’ve got to. Again, virtually every economist that’s come before us has said you’ve got to reduce that tax subsidy as part of an overall strategy to really contain costs.”

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