House returns to face health-care puzzle
By Ben Pershing
House Democrats return to Washington Tuesday facing the same questions they did when Congress recessed last month: How much can they really demand from the Senate in health-reform negotiations, and when -- if ever -- will their political fortunes rebound?
With Democratic lawmakers nervous about bad poll numbers and a rising electoral tide against them, Politico says "White House and congressional leaders plan to beat back the temptation of 'no' with a hardball argument: Democrats already voted 'yes.' And it would be politically disastrous to flip-flop now. ... Spending a year on health care and coming up empty would be worse for Democrats than passing a sweeping overhaul in a politically hostile environment." House Democrats will hold a caucus meeting Tuesday evening to plot strategy, and CongressDaily notes "House leadership staffers have focused on the differences in how the two bills finance provisions, including House language that would ban insurers from antitrust exemptions, create a national exchange rather than state-based ones and move up by a year the implementation date of major changes to 2013."
The biggest sticking point between the two chambers continues to be the "Cadillac tax" on high-cost insurance plans, a concept the Senate backs but the House and -- more importantly -- organized labor oppose. President Obama has suggested that he supports the idea, and as a result, the Washington Post reports, "several key union leaders warned that the bill's final outlines could severely dampen their enthusiasm for the Democratic ticket in this year's elections." Obama met with union officals Monday afternoon, after AFL-CIO head Richard Trumka delivered a speech in which he "warned that Democrats risk catastrophic election defeats similar to 1994 if they fail to come up with a health bill labor likes," the Associated Press writes, adding that "the head of the International Association of Firefighters, Harold A. Schaitberger, made similarly threatening remarks in a statement Monday."
Is there a compromise in the offing? At Monday's White House meeting, the New York Times reports, Obama "signaled that he was willing to amend the proposal to 'make this work for working families,' a senior administration official said. ... This official, who said the tone of the meeting was friendly, said it was clear that there would be some sort of excise tax in the final bill, but that the president 'threw out some new concepts' in how it might be designed." The Los Angeles Times says that "Democratic negotiators are exploring a possibility that would not eliminate the tax entirely, but raise the threshold at which it applies in order to ensure that more middle-income Americans are spared. To make up the lost revenue, Democrats might boost the Medicare payroll tax on high-income Americans." And the Wall Street Journal reports "negotiators are considering applying for the first time the Medicare payroll tax to investment income" to pay for the bill. (Listen closely this morning, and you can hear K Street revving up to beat this.) Defenders of the Cadillac tax say it's one of the reform measure's best tools for reducing health-care costs, but USA Today writes that Democrats "are coming under renewed pressure from independent analysts who question whether long-term savings called for in the bill are realistic."
On the scheduling front, it remains unclear when exactly Obama will deliver the State of the Union address? Crucially, we already know the speech won't conflict with the Feb. 2 premiere of "Lost," but beyond that the timing is fuzzy. "With Democrats hoping for a health care bill in hand first, the affair could be pushed until the first week in February or later -- marking the latest date for a standard address in modern history," the Washington Times writes. Will health care really be done before Obama gives the address? "Maybe, maybe not," Politico writes. "Senate Democrats are more optimistic than their House colleagues." A new CBS News poll finds "Obama's approval rating on handling health care is at an all-time low ... something that is helping to drag down his overall approval rating."
Perhaps a populist broadside against the banking industry is just what Obama needs to boost his numbers, and erase some red ink in the process. The administration "will try to recoup for taxpayers as much as $120 billion of the money spent to bail out the financial system, most likely through a tax on large banks," the New York Times reports, adding: "The general idea is to devise a levy that would help reduce the budget deficit, which is now at a level not seen since World War II, and would also discourage the kinds of excessive risk-taking among financial institutions that led to a near collapse of Wall Street in 2008, the officials said." (Again, K Street is happy this morning.) The Wall Street Journal says "the White House hopes the fee will soothe the public's anger at financial firms," but "much remains uncertain about how such a fee would work. The administration is wrestling with who should pay, when it should be implemented and what would happen if banks pay more than the government-bailout program ultimately loses." The administration reportedly will account for money from the new fee in its coming budget submission to Congress, even if the details haven't been worked out yet. Experts say "any new tax on the financial services industry of the kind being considered by President Barack Obama will be difficult to impose effectively and filled with 'unintended consequences,'" Bloomberg reports.
Harry Reid, meanwhile, is now one more day removed from the controversy surrounding his racial remarks about Obama, and thus one day closer to weathering the storm. "Despite GOP demands that [Reid] follow the 2002 example of then-Majority Leader Trent Lott ...and resign his leadership post, observers said key differences in the two Senators' responses to their respective scandals mean Reid will remain the chamber's top Democrat," Roll Call writes. Russ Feingold may be wavering, but other Democrats appear to be sticking by Reid. Politico purports to go "Inside the Eruption" and finds that "Reid wasn't on guard" for his interview with authors Mark Halperin and John Heilemann, "perhaps because he'd been told by his staff that the meeting would be 'off the record,' according to a person with knowledge of the exchange." The two authors have said that all of their interviews occurred on "deep background," and it's hard to devise a definition of that term that would allow a reporter to quote a source by name, regardless of how juicy the statement is.
The Washington Post looks at Harry and Rory Reid, and the odd dynamic wherein neither is particularly popular: "So far, this double bill is not going so great. Each candidate is dragging down the other, to look at the polls and listen to the Silver State's political oddsmakers. And neither is mentioning the other's campaign." This from The Hill could be either fortunate or unfortunate scheduling, depending on your perspective: "The Senate's embattled majority leader is moving ahead with an 'African Americans for Harry Reid' event this week. ... The timing of the launch ... which is scheduled for Thursday in Las Vegas, is coincidental."
January 12, 2010; 8:00 AM ET
Categories: Health Care , The Rundown
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