Healthcare: Heat Is On

Published in The Nation.

As the healthcare reform fight unfolds in Washington, one can imagine that this summer will be remembered in one of three ways. In one account, healthcare reform marks the moment when Democrats learned to work with advocacy groups to enforce party unity and push for the most progressive legislation possible. Another version is a familiar caution to progressives who are told they are too idealistic: liberals are demanding more than the Senate can swallow, and that could prevent anything passing at all. The third is perhaps the most familiar–much is compromised in the name of pragmatism, and the bill that passes isn’t strong enough to get the job done.

That seemed to be the track that the Senate Finance Committee was on in early July. Chairman Max Baucus signaled that he was prepared to give up much in order to hang on to a few GOP votes. Moderate Democrats were also skittish, making it easier for Baucus to trade away a public health insurance option. In addition, he was covering a third of the bill’s $1 trillion cost by taxing employer-sponsored insurance, a change vigorously opposed by unions, whose members are 50 percent more likely than workers in nonunionized shops to get health benefits.
With the Senate leadership wavering, advocacy groups played bad cop to enforce party unity. The netroots organization Change Congress went after Nebraska Senator Ben Nelson online and in direct mail, alleging that he was swayed against the public option by the $2 million he received in campaign contributions from insurers. He recanted. North Carolina’s Senator Kay Hagan signed on to the public option–albeit the fairly weak version endorsed by the health committee on July 15–when threatened with a similar campaign. Unions had begun broadcasting ads back in May opposing a tax on benefits. By mid-July, Senate majority leader Harry Reid reportedly told Baucus to back off these concessions because he would lose as many as fifteen Democratic votes; the Finance Committee went back to the drawing board.

But if this activism has won some victories in the Senate, some party leaders–including President Obama–have suggested they may regard it as counterproductive. “We shouldn’t be focusing resources on each other,” Obama said during a conference call with Congressional leaders, according to the Washington Post. “We ought to be focused on winning this debate.”

But what does “win this debate” mean? I asked University of North Carolina political scientist Jonathan Oberlander, author of The Political Life of Medicare, to grade those involved in healthcare reform on how well they are doing to get a progressive bill, one that covers everyone and includes a public health insurance option.

Oberlander gave the White House high marks simply for creating a framework for negotiations that kept interest groups at the table and carried the process well beyond what any other administration had accomplished. While Baucus got low marks for overflexibility, he earned an A for effort–he’d kept healthcare reform at the top of the Finance Committee’s agenda for months and continued to push through difficult negotiations.

But the two entities that received the highest scores were the House and the advocacy groups, who have laid an impressive foundation to pull the debate leftward. The three House committee chairmen worked together with “extraordinary unity” to propose a single bill in order to “put down a liberal marker” for a reform proposal, says Oberlander. Their bill, released July 14, includes a strong public option tied to Medicare. (The version included in the Senate health committee’s bill, in contrast, does not guarantee it will have the market muscle needed to actually help control costs, though it is valuable for upcoming negotiations.) They are well poised to hold on to the public plan in negotiations with the Senate because the eighty-member Progressive Caucus has pledged to withhold a majority of its votes from a compromise bill that drops such a provision.

Many in Washington are surprised that the public option is still on the table–even many healthcare reform advocates aligned with the Democrats privately regarded it from the beginning as a bargaining chip to be traded away for more obtainable objectives. Oberlander credits the advocacy groups for making it a viable option. “I think they have done a wonderful job over the past two years of putting the public plan option on the table. Without [the reform coalition] Health Care for America Now and the labor unions, I don’t think it would have a chance.”

Still, a deal on the public option remains elusive for the Senate Finance Committee. Perhaps their even bigger problem is the roughly $350 billion shortfall left when Democratic leaders nixed the finance mechanism acceptable to Republicans, a tax on health benefits. (Many progressive economists also favor this as part of comprehensive reform, since those on the top half of the income ladder get three-quarters of this tax break’s value.)

Some Senate Democrats have already pronounced the House’s planned surtax on the income of those earning more than $280,000 dead on arrival. As it seems increasingly unlikely that Senate leaders will be able to secure any Republican votes, House moderates are worried that supporting their chamber’s progressive bill will make them vulnerable. House Blue Dogs bared their teeth July 9 in a letter to Speaker Nancy Pelosi, threatening to withhold their votes if the bill is not deficit neutral and the structure of the public plan is not weakened. Twenty-nine members of the New Democrat Coalition, another moderate caucus, sent a similar note days later. A group of nineteen conservative Democrats had already lobbed a bomb into the process by demanding in June that health plans not be required to cover abortion.

These Senate stumbles and House hiccups, however, are less worrisome because they come far later in the process than anyone expected. The Democratic leaders appear to have learned how to make their fractious coalition work together, though their hardest work is still ahead. That augurs well not only for healthcare reform but also for the many other difficult issues on the progressive agenda.

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