Even though Paul Krugman thinks it’s possible to pass an ambitious healthcare plan, it is looking more and more unlikely.
Democrats are struggling to reach agreement on a range of issues. The public plan will almost surely be eliminated, and countless other problems will impede passage before August. According to Roll Call:
Senate Democratic leaders’ hopes of approving health care reform before adjourning for the August recess appear all but dead, with the prospect of meeting President Barack Obama’s demand for a bill on his desk by Oct. 15 looking increasingly difficult.
Logistical hurdles in the Senate, while significant, are only part of the problem. A major political battle looms over the key components of health care reform — particularly over the role of the federal government — that could stall Democrats even after they gained a filibuster-proof majority with the addition of Sen.-elect Al Franken (D-Minn.).
A must-read article in today’s Washington Post explains the policy battles to come.
Final versions of legislation rarely live up to the lofty expectations set by drafts — as many on the left might say of the weakened climate-change bill that passed the House last month. The health-care debate may follow a similar trajectory, as policy ideals meet political and fiscal realities, and wholesale reform gives way to a more limited, if still ambitious, bill.
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One moving target: who receives insurance subsidies. The Senate Finance Committee is considering an income threshold of 300 percent of the poverty level, or $54,930 in gross annual income for a family of three, to keep the legislation’s 10-year cost at $1 trillion.
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The committee also is considering provisions that could lead to higher insurance rates for adults in the 55-to-64 age category and higher out-of-pocket costs for certain people who buy their own insurance.
Meanwhile, the House is considering a national value-added tax (sometimes called a national sales tax), a tax on sodas and other sugary drinks, and an increase in alcohol taxes — all measures that would break President Obama’s campaign pledge not to raise taxes on households with annual incomes below $250,000.
The good news here–reconciliation looks unlikely.
But the disadvantages would be considerable and could result in a much-diminished final bill. For instance, reconciliation measures are permitted to include only provisions that affect the federal budget. That means opponents could move to strike any language with no budgetary impact, such as the coverage mandates or a new rule barring private insurance companies from turning away people with preexisting conditions — “anything that’s regulatory,” said G. William Hoagland, a former senior Senate Republican budget aide who is now a health policy specialist for Cigna.
Reconciliation also would require the measure to reduce the deficit by at least $1 billion, according to instructions included in the budget resolution. And it would have to balance over five years instead of 10 — a requirement few believe could be met.