House Progressive Caucus Co-Chair Says Bill “Unacceptable” Without Government Plan

Rep. Raúl M. Grijalva, co-chairman of the House Progessive Caucus, reiterated through a representative Tuesday evening that any health care bill that does not include a government plan will be “unacceptable.”

I emailed the congressman’s office earlier to get a reaction to news that the Senate Finance Committee rejected two proposals for a “public option.”

“The Congressman feels that any legislation without a public option is unacceptable and he will not support such a plan,” spokeswoman Natalie Luna Rose wrote in an email.

Baucus: Health Care Bill Can Grow Over Time, Just Like Social Security

Earlier today, I noted that Sen. Max Baucus inadvertently confirmed an argument that conservatives have been trying to make throughout this health care debate — that it’s important to pay attention not just to what is written in the legislation, but the infastructure it puts in place. As I’ve written from the beginning of this debate, none of the major Democratic proposals would represent a government takeover of health care immediately, but all of them would help make that happen over time, assuming action by future lawmakers. This has been the case with every government program.

I now have Baucus’s exact remarks, with video. The context is, he’s trying to get liberals to understand why he opposes a “public option” and believes that they should accept the best deal that they can get:

“It’s also important to remind ourselves that Rome wasn’t built in a day. And only few major pieces of legislation were totally complete upon enactment. For example, in 1935 this is what President Roosevelt said about Social Security. He said, and I quote, “This law too represents a cornerstone in the structure which is being built but is by no means complete.” That’s what he said. And we could also say that about this bill. We hope that it will be the cornerstone of meaningful reform. I think that it will be. But it is by no means a complete rewriting of the American health care system. We very much hope and expect this bill will work but if there are things that do not work about it we will revisit it. We will amend it just as we did with Social Security. The point is that today this year we need to start to lay that foundation and I fear that if this provision is in this bill as it comes out of this committee, it will jeopardize meaningful real health care reform. It will jeopardize laying that cornerstone this year.”

Now, if I were trying to make the argument that Baucus’s health care bill will lead to far more government intrusion than he is currently letting on, I don’t think I could come up with a better example than Social Security. When originally created, Social Security was supposed to be a modest safety net, it was supposed to have a trust fund that kept the program solvent, and the payroll tax was just 1 percent each on employees and employers, or 2 percent total. But it evolved into key source of income for seniors whose life expectancy has swelled by 15 years since legislation was enacted, the illusionary trust fund has been raided to finance other government programs, and the payroll tax has been raised 20 times, bringing it to 6.2 percent each for employee and employer, or 12.4 percent total. The program is now insolvent, and along with those other government behomeoths that grew beyond their original intentions — Medicare and Medicaid — Social Security is bankrupting our country. Yet it remains politically untouchable.

So, keep this in mind when you hear all of Baucus’s arguments and reassurances as to why his plan isn’t a government takeover of health care. As it stands, the bill forces individuals to purchase insurance or pay a tax; it drastically expands Medicaid; it provides subsidies to individuals to purchase insurance; it creates government-run exchanges on which people would purchase government-designed insurance plans; it taxes medical device makers, clinical laboratories, and pharmaceutical companies; and it creates a new tax-exempt status for non-profit health care plans that would have access to federal dollars to fund start up costs. But as Baucus himself says, this is merely a “cornerstone.” Over time, there’s no reason why lawmakers couldn’t add a mandate forcing employers to provide coverage or pay a tax; raise the penalties for not owning insurance; increase the subsidies to purchase insurance; add more regulations on top of the myriad of regulations already included in the bill; force more people to get their insurance through the government-run exchanges; and yes, even add a government-run plan to the  exchanges. And don’t forget, the Baucus plan is financed primarily through “savings” generated by cutting Medicare — but future lawmakers may simply decide not to make those cuts, thus creating massive new deficits on top of our already perilous mountain of debt. 

Conservatives understand that even without a government plan, Democrats can move the ball well down the field and toward the goal of government-run health care. Baucus has now acknowledged it. It’s time to make sure the rest of the country realizes what’s at stake.

It’s Official: Finance Committee Bill Will Not Include “Public Option”

The Senate Finance Committee just killed an amendment proposed by Sen. Chuck Schumer to create a new government-run health insurance plan by a vote of 13 to 10. Coupled with the failure of another version of the so-called “public option” introduced by Sen. Jay Rockefeller earlier in the day, this officially means that the Finance Committee’s health care bill will not include a government-run plan favored by liberals.

The defeat of the government plan in the Finance Committee sets the stage for a brawl among Democrats that will help determine whether or not they’re able to pass health care legislation. Other Democratic health care bills, including the ones from three House committees as well as the Senate Health, Education, Labor and Pensions Committee all include a government plan. Eventually, Democrats will have to find a way to merge all the bills together, which won’t be an easy task.

On the House side, liberal members have insisted that they would not support a bill that did not include what they consider to be a “strong” government plan, meaning tying reimbursement rates to Medicare.

The problem is that when Rockefeller proposed something similar today in committee, five Democratic Senators voted against it. Even when Schumer removed the tie to Medicare rates, three Democrats voted against it: Sens. Max Baucus, Kent Conrad, and Blanche Lincoln. And that’s just the Finance Committee. Other Senate Democrats including Ben Nelson, Mary Landrieu, and Joe Lieberman have publicly opposed a government plan. Taken together, that means at least 8 Democratic Senators oppose what liberals would consider a “strong” government plan, and at least 6 would oppose even a milder version. Schumer himself admitted today that they did not currently have 60 votes to pass the government plan in the Senate.

Thus, the whole health care fight may hinge on whether the White House will be able to get liberal lawmakers to drop their demands for a government plan. This is problematic. The reason is that one of the most obvious ways to win over liberals would be to increase the level of subsidies to individuals seeking to purchase health insurance, yet doing so would substantially drive up the cost of legislation. President Obama has boxed himself into a corner on that front by declaring that his plan would cost $900 billion, and by vowing to veto any bill that adds to the deficit.

Baucus’s Cornerstone

“Rome wasn’t built in a day,” Senate Finance Committee Chairman Max Baucus said Tuesday afternoon. He made the statement over the course of arguing that he could not support the creation of a government-run plan, because it could not get 60 votes in the Senate.

“My top priority is getting this across the finish line,” Baucus said.

He encouraged liberals to recognize that the important thing was to get something passed now, to lay a “cornerstone”  that could be built on. As a historical example, he noted that when Social Security was first passed Franklin D. Roosevelt in 1935 he argued that the legislation was just a start.

Now, if liberals refuse to back any proposal that does not include a government plan, Baucus said, they would fail to lay a cornerstone.

Thus Baucus unintentionally made the argument that conservatives have been trying to make repeatedly — that is, what we have to consider is not only what is in legislation as it is currently written, but also the infastructure that it would put in place, allowing future lawmakers to expand the role of government further.

Even with the so-called “moderate” proposal of Sen. Baucus, we’ll end up with a bill that significantly expands Medicaid, forces individuals to purchase insurance or pay a tax, makes people purchase government-designed insurance policies on a government-run exchange, and creates a new tax-exempt class of insurers that would have access to government money to finance start up costs. That’s quite a cornerstone to build on.

Rockefeller: “The Public Option is On the March”

Sen. Jay Rockefeller declared Tuesday afternoon that, “the public option is on the march.” Moments later, the Senate Finance Committee defeated his proposal for a government-run plan by a 15-8 vote, with five Democrats joining all 10 Republicans on the committee in voting against it.

The five Democrats voting “no” were: Sens. Max Baucus, Kent Conrad, Blanche Lincoln, Bill Nelson, and Thomas Carper.

The committee is now considering a different version of a government plan introduced by Sen. Chuck Schumer, which would not have the government directly set reimbursement rates at Medicare levels.

Based on statements to date, this amendment is likely to be defeated also, but by a narrower margin than Rockefeller’s.

What’s In a Name?

Several years ago, liberals made the decision to refer to a the idea of a government-run plan as a “public option,” because “public” tests better with people than “government,” and the term “option” emphasizes choice. Evidently, Sen. Jay Rockefeller doesn’t think the term “public option” is very effective, either. Instead, he calls his version of the government plan a “consumer choice plan.” But a government-run plan by any other name, would still be a health insurance plan run by the federal government and designed with the objective to drive private insurers out of business over time.

Conrad: Government Plan Would Bankrupt Hospitals

The Finance Committee hearings are starting to display the Democrats’ intra-party rift over the creation of a government-run plan.

Sen. Kent Conrad argued that an amendment proposed by Jay Rockefeller that would create a government-run plan that would set reimbursement rates at Medicare levels would bankrupt every hospital in his home state of North Dakota. Instead, Conrad favors creating tax exempt non-profit insurers, or co-ops.

Rockefeller called Conrad’s claim about the threat to hospitals “nonsense.”

The Rockefeller amendment would force any doctor who accepts Medicare to also accept the new government plan for the first two years, after which point the doctors and hospitals could opt out of the government plan, and the Department of Health and Human Services would negotiate rates with doctors and hospitals.

By making it optional after two years, Rockefeller tried to argue that it isn’t coercive. And he also strained to make the argument that even though the plan would be administered by the federal government, that it wouldn’t be government-run.

Judging by the debate so far, it seems that the Rockefeller amendment will be defeated easily. After that, the committee will consider an amendment by Sen. Chuck Schumer that would create a government plan that would not set payment levels at Medicare rates.

Rockefeller: Adam Smith Would Have Supported Government-Run Health Care

Sen. Jay Rockefeller, arguing this morning in favor of amending the Senate Finance Committee bill to include a government-run health care plan, claimed that his approach would have been supported by the intellectual father of capitalism, Adam Smith.

Rockefeller blasted the current draft of the bill, authored by committee Chairman Max Baucus, for being a massive handout to insurers. Insurers would get a half a billion dollars in subsidies, he said, and though the bill imposes a raft of new regulations on the industry, they’d easily be able to get around them if there weren’t a government-run plan to keep them in check. 

While liberals have long appropriated free market terms such as “choice” and “competition” to promote the creation of a new government-run plan, Rockefeller went even further, explicitly claiming that it was a “free market” idea.

“I think Adam Smith would have cooked up this amendment,” he added.

I wrote about how to get real competition in the health insurance market here.

Obama’s Media Blitz Doesn’t Help Approval Rating

Last Friday’s Gallup daily tracking poll showed that 51 percent of Americans approved of President Obama, and 42 percent disapproved. Starting last weekend, he launched a full-scale media blitz, which included interviews with five Sunday talk shows and an appearance on David Letterman’s show. So how has all of this exposure worked out for him? Not too well, as it turns out. Today’s Gallup has Obama at a 50 percent approval rating, with 42 percent disapproving. That actually is tied for the lowest Gallup approval rating of his presidency.

Finance Committee to Vote On Government Plan on Tuesday

Senate Finance Committee Chairman Max Baucus said this morning that the committee would vote on Tuesday on an amendment to include a government plan in its version of the health care legislation.

The Finance Committee bill is the only Democratic bill in the House or Senate that does not include a government plan, a key provision for liberals.

At least three Democrats on the committee have expressed opposition to a government plan: Baucus himself, as well as Sens. Kent Conrad and Blanche Lincoln. Should the amendment get defeated as expected, we’ll have to see if any liberal Democrats still vote the plan out of committee. That may be an early indication of whether liberals will ultimately cave on the idea when it comes up for a vote in the Senate as a whole — i.e. if they literally face the choice between abandoning the government plan, or getting no health care bill at all.

Yesterday, Sen. Chuck Schumer, who is on the Finance Committee, insisted that the final legislation would include a “robust public option,” but his thinking was that it could be added on down the road, even if it doesn’t get passed at the committee level. Last week, Sen. Jay Rockefeller said he would vote against the bill at the committee level if it was not changed substantially from the original draft, and the lack of a government plan was his leading criticism of the legislation.

The Finance Committee will be debating amendments today until noon, and then recess until Tuesday. Monday is the Yom Kippur holiday.