Christmas Eve Vote on Obamacare Showed Washington Still Has Shame

A decade ago this morning, 60 Senate Democrats cast their final votes approving the legislation that became Obamacare. The bill took a circuitous route to enactment after Scott Brown’s surprise victory in the Massachusetts Senate contest, which occurred a few weeks after the Senate vote, in January 2010.

Brown’s election meant Republicans gained a 41st Senate seat, giving them the necessary votes to filibuster a House-Senate conference report on Obamacare. Because Democrats lacked the 60 votes to overcome a filibuster, they eventually agreed to a process amending certain budgetary and fiscal elements of the Senate bill through the reconciliation process on a 51-vote threshold.

The grubby process leading up to Obamacare’s enactment, full of parochial politics and special interest pork, cost Democrats politically. But many Americans do not realize that such machinations occur all the time in Washington—indeed, occurred just last week. When one party participates in a corrupt process, it becomes a scandal; when both parties partake, few outside the Beltway bother to notice.

Backroom Deals

The process among Democrats leading up to the final health vote resembled an open market, with each Senator making “asks” of Majority Leader Harry Reid (D-NV). Reid needed all 60 Democrats to vote for Obamacare to break a Republican filibuster, and the parochial provisions included in the legislation showed the lengths he would go to enact it:

Cornhusker Kickback:” The most notorious of the backroom deals came after Sen. Ben Nelson (D-NE) requested a 100 percent Medicaid match rate for his home state of Nebraska. The final manager’s amendment introduced by Reid included this earmark—Nebraska would have its entire costs of Medicaid expansion paid for by the federal government forever. But the blowback from constituents and the press became so great that Nelson asked to have the provision removed; the reconciliation measure enacted in March 2010 gave Nebraska the same treatment as all other states.

Gator Aid:” This provision, inserted at the behest of Sen. Bill Nelson (D-FL), and later removed in the reconciliation bill, sought to exempt Florida seniors from much of the effects of the law’s Medicare Advantage cuts.

Louisiana Purchase:” This provision, included due to a request from Sen. Mary Landrieu (D-LA), adjusted the state’s Medicaid matching formula. Landrieu publicly defended the provision—which she said reflected the state’s circumstances after Hurricane Katrina—and it remained in law for several years, but was eventually phased out in legislation enacted February 2012.

While these three provisions captivated the public’s attention, other earmarks and pork provisions abounded inside Obamacare too—a Medicaid funding provision that helped Massachusetts; exemptions from the insurer tax for two Blue Cross carriers; a $100 million earmark for a Connecticut hospital, and health benefits for miners in Libby, Montana, courtesy of then-Senate Finance Committee Chairman Max Baucus (D-MT).

Not only did senators try to keep these corrupt deals in the legislation—notwithstanding the public outrage they engendered—but Reid defended both the earmarks and the horse-trading process that led to their inclusion:

I don’t know if there’s a senator who doesn’t have something in this bill that’s important to them. And if they don’t have something in it that’s important to them, then it doesn’t speak well for them.

It was a far cry from Barack Obama’s 2008 (broken) campaign promise to have all his health care negotiations televised on C-SPAN, “so we will know who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies.” And it looked like Democrats didn’t really believe in the merits of the underlying legislation, but instead voted to restructure nearly one-fifth of the American economy because they got some comparatively minor pork project for their district back home.

Déjà Vu All Over Again

Democrats lost control of the House in the 2010 elections, and political scientists have attributed much of the loss to the impact of the Obamacare vote. One study found that Obamacare cost Democrats 6 percentage points of support in the 2010 midterm elections, and at least 13 seats in Congress.

But did the rebuke Democrats received for their behavior prompt them to change their ways? Only to the extent that, when they want to ram through a massive piece of legislation no one has bothered to read, they include Republicans in the taxpayer-funded largesse.

Consider last week’s $1.4 trillion spending package: Two bills totaling more than 2,300 pages, which lawmakers introduced on Monday and voted on in the House 24 hours later. Democrats wanted to repeal one set of Obamacare taxes—and in exchange, they agreed to repeal another set of taxes that Republicans (and their K Street lobbying friends) wanted gone. The Obamacare taxes went away, but the Obamacare spending remained, thus increasing the deficit by nearly $400 billion.

And both sides agreed to increase spending in defense and non-defense categories alike. Therein lies the true definition of bipartisanship in Washington: An agreement in which both sides get what they want—courtesy of taxpayers in the next generation, who get stuck with the bill.

It remains a sad commentary on the state of affairs in the nation’s capital that the Obamacare debacle remains an anomaly—the one time when the glare of the spotlight so seared Members seeking pork projects that they dared consider forsaking their ill-gotten gains. To paraphrase the axiom about casinos, in Washington, The Swamp (almost) always wins.

“Cadillac Tax” Repeal “Deal” Is What’s Wrong with Washington

News articles over the weekend reported that Congress later this week may repeal would Obamacare taxes—the “Cadillac tax” on high-cost health plans, and the medical device tax—as part of a larger spending bill. In reality, however, Democrats eventually agreed to repeal not one but two Obamacare industry taxes—the health insurer tax, which costs approximately $150 billion over a decade, along with the medical device tax—in exchange for repeal of the Cadillac tax, which labor unions want because of their cushy health insurance offerings.

According to The Hill:

On a separate front on ObamaCare, the spending deal repeals three major taxes that had helped fund the law’s coverage expansion. The deal will repeal a 40 percent tax on generous “Cadillac” health plans, the 2.3 percent medical device tax and the health insurance tax.

Those are major wins for the health insurance and medical device industries, which had long lobbied to lift those taxes. The Cadillac tax, in addition to providing about $200 billion in funding over 10 years, had been intended to help lower health care spending by incentivizing employers to lower costs to avoid hitting the tax.

On its face, the news sounds like a win for conservatives. Far from it. The way Congress has addressed these issues illustrates all the problems with politics, both procedural and substantive, in the nation’s capital.

Problem 1: Awful Process

Obvious considerations first: Congressional leaders in both parties want to enact the annual spending bills—which run thousands of pages, and spend trillions of dollars—before breaking for the Christmas holidays at week’s end. But congressional leaders only released text of the two bills publicly on Monday night, so there’s no way American citizens, let alone rank-and-file lawmakers, can digest it before Congress decides. As one lawmaker famously said:

The spending bills are 1,773 pages and 540 pages, respectively. (The health care provisions are in the larger of the two bills.) According to the Joint Committee on Taxation, the repeal of the three health care taxes will cost the federal government $387 billion over ten years.

Nearly ten years after a Democratic-controlled Senate passed the massive Obamacare statute on Christmas Eve—laden with pork-barrel provisions like the “Cornhusker Kickback,” the “Louisiana Purchase,” and the “Gator Aid”—a Senate run by Republicans wants to pass a similarly pork-laden spending bill. It brings to mind the old adage attributed to former House Speaker Sam Rayburn: “There is no education in the second kick of a mule.”

President Trump has likewise confronted the problem of Congress passing huge spending bills on short notice before. When presented with a similarly massive—and pork-laden—omnibus bill in March 2018, he famously proclaimed “I will never sign another bill like this again.” Time will tell if he follows through on his promise, but Congress sure isn’t acting like they think he will.

Problem 2: Raising Health Care Costs

The “Cadillac tax” in particular represents one way to address the problem of ever-increasing health costs. Current law allows employers to offer tax-free health benefits to their workers without limit. This dynamic encourages firms to provide overly generous benefits to their employees, leading to the over-consumption of health care.

By encouraging employers and employees to consume health insurance, and thus health care, more wisely, the “Cadillac tax,” despite its flaws, should work to moderate the growth in health care costs. That is, if Congress ever allows it to take effect as scheduled.

As I noted earlier this year, the left has an easy “solution” to the problem of rising health care costs: Regulations and price controls designed to bring down costs through government fiat. These price controls will lead to consequences for our health system, of course—rationing of care most notably—but they do “work,” insofar as they will arbitrarily reduce health spending.

Conservatives who oppose government price controls should embrace solutions like the “Cadillac tax” (or something like it) as one way to slow the growth in health care spending—not least because Democrats enacted the tax as part of Obamacare. Instead, many conservative lawmakers appear poised to endorse its repeal, without an alternative strategy to control health costs instead, because they find it easier to pursue the path of least resistance.

Problem 3: Lack of Discipline

The Congressional Budget Office previously estimated that repealing the “Cadillac tax” would cost the government nearly $200 billion in revenue over a decade, and larger sums in the decades after that. How does Congress propose to replace that revenue? By repealing the medical device and health insurer taxes, of course!

Therein lies the problem in Congress: The current definition of a bipartisan “deal” occurs when both sides get what they want—at the expense of taxpayers, or more specifically future generations. One article notes that “in general medical device tax repeal is more of a priority of Republicans and ‘Cadillac tax’ repeal for Democrats.” That makes this agreement combining repeal of both taxes like an episode of “Oprah’s Favorite Things,” where everyone wins a car.

Except for one minor detail: Our country already faces $23 trillion in debt, and trillion-dollar deficits as far as the eye can see. The “deal” on these two taxes alone will increase that debt by another quarter-trillion dollars (give or take). That number doesn’t include the increased spending arising from Congress’ agreement to bust its spending caps, or all the other ancillary provisions (like a bailout for coal miners) hitching a ride on the “Christmas tree” omnibus.

At some point soon, Congress’ lack of discipline—its inability to say no to spending pledges our country cannot afford—will harm our economic growth and fiscal stability. At that point, the American people will realize that, by constantly trying to play Santa Claus, lawmakers have left a multi-trillion-dollar lump of coal to the next generation, in the form of our rapidly skyrocketing debt.

UPDATE: This post was edited after publication to reflect late-breaking developments concerning the omnibus spending bills.

This post was originally published at The Federalist.

What Exactly Is in the Obamacare “Stability” Deal?

Memo to Rand Paul: It’s time to fire up the copier again.

On Tuesday, the simmering controversy over Obamacare “stability” legislation came to the boil, as conservatives increasingly voiced objections at bailing out Obamacare and giving tens of billions of taxpayer dollars to fund abortion coverage in the process. But the controversy centers around a “deal” of which the precise contents remain a closely guarded secret.

But at least Democrats (eventually) made the text of the Cornhusker Kickback, Louisiana Purchase, Gator Aid, and other provisions public. For the Obamacare “stability” bill, Senate Republican leaders have yet to indicate exactly what legislation they wish to pass.

Substance and Process Unclear

As I noted last week, while Sen. Lamar Alexander (R-TN) recently claimed in an op-ed that the “stability” legislation would appropriate $10 billion in reinsurance funds for insurers, the public version of legislation to which he referred—a bill introduced by Sens. Susan Collins (R-ME) and Bill Nelson (D-FL)—appropriated “only” $4.5 billion in funds to health insurers. Collins and Alexander are apparently engaging in a bidding war with themselves about how many billions worth of taxpayer dollars they wish to spend on corporate welfare payments to insurance companies.

On the policy substance, Senate leadership has refused to disclose exactly what provisions comprise the “deal” Collins supposedly cut with Senate leadership. Did they promise $4.5 billion in reinsurance funding, $10 billion, or more than $10 billion? What other promises did they make in exchange for Collins’ support for repealing the individual mandate in the tax bill?

Did Republican leaders pledge merely to support an open process and a vote on the “stability” measure—as Senate Republican Conference Chairman John Thune (R-SD) implied on Tuesday—or its enactment into law? How exactly could they promise the latter, when any such bill would require 60 votes to break a potential Senate filibuster—a number that Senate Republican leaders do not have, even if they could persuade their entire conference to support bailing out Obamacare?

Then and Now

As noted above, we’ve seen this play before, when Democrats rammed through Obamacare through a series of backroom deals cobbled together behind closed doors, notwithstanding then-candidate Obama’s pledge to televise all health-care negotiations on C-SPAN. Here’s what McConnell had to say about that lack of transparency in a December 2009 floor speech:

Americans are right to be stunned because this bill is a mess. And so was the process that was used to get it over the finish line.

Americans are outraged by the last-minute, closed-door, sweetheart deals that were made to gain the slimmest margin for passage of a bill that is all about their health care. Once the Sun came up, Americans could see all the deals that were tucked inside this grab bag, and they do not like what they are finding. After all, common sense dictates that anytime Congress rushes, Congress stumbles. It is whether Senator so-and-so got a sweet enough deal to sign off on it. Well, Senator so-and-so might have gotten his deal, but the American people have not signed off.

Public opinion is clear. What have we become as a body if we are not even listening to the people we serve? What have we become if we are more concerned about a political victory or some hollow call to history than we are about actually solving the problems the American people sent us here to address?

Some may argue that passing “stability” legislation bears little comparison to home-state earmarks like the Cornhusker Kickback that plagued the Obamacare bill the Senate passed on Christmas Eve 2009. But when Alexander remains adamant about passing “stability” legislation about which senators of both parties now seem ambivalent at best, one must ask whether his insistence stems from the fact that it would provide a significant financial windfall to his biggest campaign contributor—making it a “sweet enough deal” for him too.

The fact that no Senate leaders will dare explain publicly what they have promised privately should tell the public everything they need to know about the merits of this secretive backroom deal. As McConnell might say, it’s “kind of [a] smelly proposition.”

This post was originally published at The Federalist.

Paul Ryan and “Regular Order”

Last week, Politico published an article talking about how the Republican House of Representatives under Paul Ryan’s speakership set a new record for the number of bills approved under closed rules—which prohibit members of Congress from offering amendments. Although the Politico story didn’t use the term, it echoes the complaints of Sen. John McCain (R-AZ) surrounding Obamacare “repeal-and-replace” legislation this past summer: “I want the regular order.”

McCain’s comment invites a question: What exactly constitutes “the regular order” in Congress? Why do people keep calling for it? And if so many people keep calling for it, why doesn’t Congress just restore “the regular order” already?

‘Deem-and-Pass’

Politico quoted House Rules Committee Ranking Member Louise Slaughter (D-NY): “Under Speaker Ryan’s leadership, this session of Congress has now become the most closed Congress in history.” To call Slaughter’s complaints about a closed process ironic would put it mildly.

Seven years ago, when she chaired the Rules Committee, Slaughter proposed having the Democratic House enact Obamacare into law without voting on it. The House could merely “deem” Obamacare approved as a result of passing some other measure.

While the House has repeatedly used this “deem-and-pass” strategy under both Republican and Democratic majorities, the optics of passing such a massive and prominent piece of legislation using such dodgy procedural shortcuts led Democrats to abandon the gambit, but not before conservative bloggers noted that Slaughter, Rep. Steny Hoyer (D-MD), and others attacked the “deem-and-pass” maneuver when Republicans controlled the House in the 2000s.

Republican Manipulation

In proposing the “deem-and-pass” strategy, Slaughter looked to protect House Democrats from taking a tough vote on the unpopular health-care bill Senate Democrats approved on Christmas Eve 2009—the one with the “Cornhusker Kickback,” “Gator Aid,” “Louisiana Purchase,” and the other backroom deals that made the legislation toxic in the minds of many. When in the majority themselves, Republicans have used the same tactics, using procedural blocks to avoid politically difficult votes.

In 2015, the appropriations process ground to a halt in mid-summer, when Democrats offered an amendment preventing federal funds from being used to display the Confederate flag in national cemeteries. The amendment, offered by Rep. Jared Huffman (D-CA), originally passed by voice vote, but some Republicans pledged to vote against the bill if the amendment remained in it.

Republican leaders didn’t have the votes to strip out the amendment, and didn’t have the votes to pass the bill with the amendment in, so the Interior appropriations bill got shelved—as did the entire appropriations process, because Republicans feared Democrats would offer Confederate flag-related amendments to any spending bill that came to the House floor.

House Freedom Caucus

Yet on several occasions over the past few years—including the Confederate flag flap—conservatives and HFC members have looked to leadership to squelch debate on amendments. Earlier this year, moderate Republicans and Democrats combined to defeat an amendment that would have prohibited federal funding of soldiers’ gender-reassignment surgery. Conservatives responded a few weeks later by demanding that leadership insert such a funding prohibition into the defense spending bill—without a direct vote, via the “deem-and-pass” strategy—even though the provision would have violated the will of the House as expressed in a vote weeks before.

While the executive ultimately decided the transgender issue—at conservatives’ behest, President Trump issued an executive order prohibiting transgender troops from serving, making the House procedural dispute moot—it illustrates the problems inherent with a move to “regular order.” As with Slaughter and Democrats, conservatives support an open process in the House only up until the point when it detracts from their desired policy outcomes, at which point the legislative process quickly devolves into a game of ends justifying means.

If it wanted to, HFC could easily demand a more open floor process out of Ryan. It could vote down the rules governing floor debate on individual bills unless and until the Republican leadership allowed an open process and more amendment votes, at which point the Republican leadership would have no choice but to acquiesce to pass legislation through the House. However, a more open process would require conservatives to accept policy outcomes they might not like—federal funds being spent on gender-reassignment surgeries, for instance.

These strictures require leadership to use all manner of procedural shortcuts and chicanery to cobble together legislation that can command a majority of votes. It’s no way to run a railroad. But until members’ desires for “the regular order” are strong enough that they will vote down bills on process grounds alone, it will remain the way Washington works—or, in many cases, doesn’t.

This post was originally published at The Federalist.

Donald Berwick’s Rationed Transparency

Dr. Donald Berwick is back in the public eye. The former administrator of the Centers for Medicare and Medicaid Services (CMS) has announced he will run for governor in Massachusetts.

Berwick first entered the public spotlight in April 2010, when President Obama nominated him for the CMS post. But Berwick never went through the regular confirmation process. Instead, the president granted him a surprise recess appointment that July.

The president renominated him in January 2011, but it became apparent that he could not garner enough votes for Senate confirmation. That December, Berwick resigned. Now, he is pursuing office as an elected, rather than an appointed, official.

Berwick’s short tenure at CMS was defined by a series of controversial statements he made before his appointment. He defended both Britain’s National Health Service and government rationing of health care. Most famously, in a June 2009 interview, he stated that “the decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open.”

After leaving CMS, Berwick said his comments were merely an attempt to argue for greater transparency in decision-making. “Someone, like your health-insurance company, is going to limit what you can get. That’s the way it’s set up,” he told the New York Times. “The government, unlike many private health-insurance plans, is working in the daylight,” he insisted. “That’s a strength.”

Unfortunately, Berwick himself, while head of CMS, went to great lengths to avoid transparency. He ducked reporters, in one instance even “exit[ing] behind a stage” to avoid press queries. Another time he went so far as to request a “security escort” to avoid questions.

Today, Berwick concedes his lack of transparency. According to a Politico report, he now “regrets listening to White House orders to avoid reaching out to congressional Republicans.”

The lack of transparency is endemic in the Obama administration. Case in point: the enactment of Obamacare. During his 2008 campaign, Barack Obama promised health-care negotiations televised on C-SPAN. Instead, we got a series of notorious backroom deals: the Cornhusker Kickback, the Louisiana Purchase, the Gator Aid.

“It’s an ugly process, and it looks like there are a bunch of backroom deals,” Obama feebly admitted in January 2010 — only to retreat again to the smoke-filled rooms two months later, where he cut the final deals to ram the legislation through Congress.

Obamacare is premised on the belief that government knows best. And those who share that belief all too often regard transparency and public accountability as inconveniences.

Consider the administration’s approach to regulating the proposed health-insurance “exchanges.” Obamacare requires state-based exchanges to “hold public meetings and input sessions,” but it fails to apply these same transparency standards to the federally run exchanges Washington will create in 33 states. The result: Many key questions remain unanswered.

Thus a law written in secret is being implemented in secret, with a maximum of opacity and a minimum of accountability from the administration.

This post was originally published at National Review.

Big Hospitals’ Obamacare Deal Betrays Seniors and the Poor

A backroom deal made during the writing of Obamacare will harm seniors and the poor, according to The Wall Street Journal (WSJ).

During their closed-room dealings with the Obama Administration, the hospital industry’s lobbyists agreed to support Obamacare—provided that the law placed restrictions on physician-owned “specialty” hospitals, noted WSJ. These innovative specialty hospitals frequently have quality outcomes better than most traditional facilities, but no matter—the big hospital lobbyists wanted to eliminate a source of competition. So Obamacare prohibits new physician-owned hospitals from receiving Medicare payments — and prohibits most existing facilities from expanding if they wish to keep treating Medicare patients.

WSJ highlighted the actions specialty hospitals have been forced to take in response to these Obamacare restrictions:

Forest Park Medical Center in Dallas has stopped accepting Medicare patients, allowing it to escape the law’s restrictions entirely…. Rejecting Medicare ‘was a big leap, but we felt like the law gave us no choice,’ said J. Robert Wyatt, a Forest Park founder….

Other doctor-owned facilities are asking the federal government to let them duck the law’s restrictions altogether. Doctors Hospital at Renaissance near McAllen, Texas, is trying to get a waiver allowing it to expand as more than 53% of its payments come through the Medicaid federal-state insurance program for the poor.

In other words, because hospital lobbyists cut a backroom deal to support Obamacare, seniors and low-income patients have fewer health care options. Think that these examples of Americans losing access to care would prompt the hospital-industrial complex to reconsider its backroom deal? Not a chance:

Any effort to undo the expansion limits faces an uphill battle with Democrats, because the restrictions were a deal-breaker for hospitals when the White House sought their support for the law in 2009, industry lobbyists say.

Obamacare’s backroom deals (the “Louisiana Purchase,” the “Gator Aid,” and the “Cornhusker Kickback”) represented the worst in politics—well-heeled lobbyists seeking to obtain government largesse through pork-barrel spending and regulatory loopholes. The Wall Street Journal story reminds us how those backroom deals have real-world consequences when it comes to medical access—another example of how Obamacare has harmed patient care.

This post was originally published at The Daily Signal.

A Reading Guide to Obamacare’s Backroom Deals

“I think the health care debate as it unfolded legitimately raised concerns not just among my opponents, but also amongst supporters that we just don’t know what’s going on. And it’s an ugly process and it looks like there are a bunch of back room deals.”

— President Obama, interview with ABC’s Diane Sawyer, January 25, 2010[i]

 

The White House recently enacted its health “reform” agenda by signing the 2,733 page legislation (H.R. 3590) that passed the Senate in December.[ii] While the Administration touts its removal of the “Nebraska FMAP provision” that saw 49 other states funding Nebraska’s Medicaid largesse (known as the “Cornhusker Kickback”), it did not address other deals negotiated by Democrats in the Senate legislation. Many other backroom agreements are included in the legislation the President has now enacted into law:

Page 428—Section 2006, known as the “Louisiana Purchase,” provides an extra $300 million in Medicaid funding to Louisiana.[iii]

Page 2132—Section 10201(e)(1) provides an increase in Medicaid Disproportionate Share Hospital (DSH) payments for Hawaii, meaning 49 other states will pay more in taxes so that Hawaii can receive this special benefit.

Page 2203—Section 10317 amends provisions in Medicare so that hospitals in Michigan and Connecticut can receive higher payments.

Page 2222—Section 10323 makes certain individuals exposed to environmental hazards eligible for Medicare coverage. The definition used in the bill ensures the only individuals eligible will be those living in Libby, Montana.

Page 2237—Section 10324 increases Medicare payments by $2 billion in “frontier states.”[iv]

Page 2354— Section 10502 spends $100 million on “debt service of, or direct construction of, a health care facility,” language which the sponsors intended to benefit Connecticut.[v]

Page 2395—Section 10905(d) exempts Medigap supplemental insurance plans from the new tax on health insurance companies; press reports indicate this provision was inserted to benefit an insurer headquartered in Nebraska.[vi]

Even after the public outrage from the “Cornhusker Kickback,” Democrats used separate legislation designed to “fix” this particular provision (H.R. 4872) to add yet more deals behind closed doors.[vii] For instance, page 71 (Section 1203(b)) of the “fixer” bill provided an increase in Medicaid disproportionate share hospital payments just for Tennessee. And Section 2213 (page 145) of the original version of the “fixer” bill[viii] included a sweetheart deal making the Bank of North Dakota the only financial facility in the country exempted from Democrats’ government takeover of student loans—a backroom deal so egregious that it was removed within hours once the bill was finally revealed to the American public.[ix]

These specific agreements and provisions also do not display the full scope of the White House’s legislative deal-making. For instance, the head of the pharmaceutical industry said the Administration approached him to negotiate a deal with his industry: “We were assured, ‘We need somebody to come in first.  If you come in first, you will have a rock-solid deal.’”[x] And former Democratic National Committee Chairman Howard Dean publicly admitted at a town hall forum that “The reason that tort reform is not in the [health care] bill is because the [Democrat Members] who wrote it did not want to take on the trial lawyers.”[xi]

The many pages of backroom deals included in the health care takeover legislation raise several questions: If the bill itself was so compelling, why did Democrats need billions of dollars in “sweeteners” negotiated in secret in order to vote for it? If President Obama was so concerned about the public perceptions created by the backroom dealing, why did he not propose to strike all the special agreements? Does he believe that this pork-barrel spending is the only reason why Democrats voted to pass his government takeover of health care in the first place?

 

[i] Full interview transcript available at http://abcnews.go.com/print?id=9659064.

[ii] Senate-passed bill text available at http://www.opencongress.org/bill/111-h3590/text.

[iii] “Dems Protect Backroom Deals,” Politico February 4, 2010, http://www.politico.com/news/stories/0210/32499.html.

[iv] Congressional Budget Office, score of H.R. 3590 including Manager’s Amendment, December 19, 2009, http://cbo.gov/ftpdocs/108xx/doc10868/12-19-Reid_Letter_Managers_Correction_Noted.pdf.

[v] “Dodd Primes Pump in Bid to Survive,” Politico December 22, 2009, http://www.politico.com/news/stories/1209/30881.html.

[vi] “How Nebraska’s Insurance Companies Stand to Profit from Ben Nelson’s Compromises in Health Care Bill,” Huffington Post 21 December 2009, http://www.huffingtonpost.com/2009/12/21/how-nebraskas-insurance-c_n_400080.html.

[vii] Senate-passed bill (H.R. 3590) text available at http://www.opencongress.org/bill/111-h3590/text; reconciliation bill (H.R. 4872) text available at http://www.opencongress.org/bill/111-h4872/text.

[viii] House Rules Committee amendment in the nature of a substitute, http://docs.house.gov/rules/hr4872/111_hr4872_amndsub.pdf.

[ix] “Conrad Wants Controversial Carve-Out Axed,” Roll Call March 18, 2010, http://www.rollcall.com/news/44368-1.html. The provision was stripped by the Rules Committee prior to full House consideration of H.R. 4872.

[x] Quoted in “White House Affirms Deal on Drug Cost,” New York Times August 5, 2009, http://www.nytimes.com/2009/08/06/health/policy/06insure.html?_r=3&scp=8&sq=kirkpatrick&st=cse.

[xi] Exchange at Town Hall forum in Reston, VA, August 25, 2009, available online at http://www.youtube.com/watch?v=IdpVY-cONnM.

Making a Bad Bill Worse: Executive Summary of Reconciliation Legislation

The reconciliation bill recently released by Democrats[i] would not mitigate the effects of the Senate-passed health care bill, but in fact make them worse:

More Tax Increases: The reconciliation bill raises taxes by an additional $50 billion when compared to the Senate bill, for an overall tax increase of $569.2 billion. The bill specifically expands the Medicare payroll tax—for the first time in history—to all investment income for individuals with incomes over $200,000 and families with incomes over $250,000. Because the underlying Senate bill does NOT index this new tax for inflation, more and more middle-class American families will be hit by this tax over time, just like the Alternative Minimum Tax (AMT).

Higher Premiums: The reconciliation bill nearly doubles the tax on health insurers beginning in 2014, and also raises taxes and fees on drug makers and medical devices. The Congressional Budget Office has specifically stated that these taxes will be passed on to all Americans in the form of higher health costs and rising insurance premiums.[ii]

Budget Gimmicks Galore: The reconciliation bill includes a physician payment “cliff” in Medicaid, whereby payments for primary care physicians are increased for 2013 and 2014 only—a provision designed to mask the long-term cost of such a change. The bill also hides the cost of filling in the “doughnut hole” by not fully phasing in the provision until 2020. Health insurance subsidy levels would be increased in the short-term—but would grow more slowly in the years after 2019. And the threshold at which health insurance plans would be hit by the “Cadillac tax” would grow more slowly after 2020—resulting in a major and growing tax increase on the middle class if actually implemented.

Phony Deficit Reduction: The reconciliation bill and the Senate-passed measure combined do not reduce the deficit after excluding the more than $120 billion in revenue generated by the Social Security program and the CLASS Act long-term care entitlement. Since this revenue will eventually be used to pay out benefits to these two programs, the bill does NOT reduce the deficit in the near-term—or the long term.

More Lost Jobs: The reconciliation bill nearly triples the penalty—from $750 to $2,000—on businesses that cannot afford to provide their workers with health coverage, and applies these taxes to part-time as well as full-time workers. As if these higher taxes were not enough of a disincentive to prevent firms from hiring workers, the reconciliation bill also includes an unprecedented extension of the Medicare tax to all non-wage income. These tax increases will raise the top marginal rate on small business owners by 20%, and the top tax rate on investment income by 60%–discouraging the activity needed to grow the economy and create new jobs.

More Medicare Cuts: The reconciliation bill raises another $66.1 billion from Medicare Advantage, cutting a total of $202.3 billion from the program in order to fund new entitlements for other Americans. The total Medicare cuts in the bill now add up to $523 billion.

Sweetheart Deals: The reconciliation bill retains unpopular provisions in the Senate-passed measure—the “Louisiana Purchase,” Medicare coverage for individuals in Libby, Montana, and $100 million for a Connecticut hospital—while adding yet more backroom deals: Increased disproportionate share hospital payments for Tennessee, and other hospital payments to targeted areas. Many may wonder why citizens in other states should see their taxpayer dollars fund special deals in places like Tennessee and Louisiana.

Empty Promises: The reconciliation bill forces an additional 1 million individuals into Medicaid on top of the 15 million already forced into Medicaid in the Senate bill. That means that 16 million of the 32 million newly insured individuals would obtain that coverage through Medicaid—a program which President Obama admitted at the recent health care summit suffers from serious access problems already.[iii] The Congressional Budget Office estimates that 2 million fewer individuals will have a choice of plans on the Exchange, and 23 million individuals would remain uninsured.

Federal Funding of Abortion: The reconciliation bill fails to prohibit federal funds from flowing to plans that cover elective abortion, and also increases funding for community health centers by $2.5 billion—and neither the reconciliation bill nor the Senate-passed measure include ANY prohibition on community health centers using these federal funds to offer elective abortion.

[i] Text available at http://docs.house.gov/rules/hr4872/111_hr4872_amndsub.pdf.

[ii] Congressional Budget Office, Letter to the Honorable Evan Bayh, November 30, 2009, http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf.

[iii] Letter from the President to Congressional Leaders, March 2, 2010.

The “Slaughter Solution:” Democrats’ Latest Backroom Deal to Pass a Government Takeover of Health Care

“I believe that Congress owes the American people a final up or down vote on health care reform.”

—President Obama, March 10, 2010[I]

 

What is the “Slaughter Solution?”

Recent press reports indicate that Speaker Pelosi and House Rules Committee Chairwoman Louise Slaughter will attempt a procedural ploy—the Slaughter Solution—to shield wary House Democrats from having to take an up-or-down vote on the widely unpopular health legislation that passed the Senate in December.[ii] Such an initiative would result in the House “deeming” the Senate bill passed, without taking a separate vote on whether or not Members actually want to enact the Senate bill into law.

Would the “Slaughter Solution” be consistent with President Obama’s call for an up-or-down vote on health care legislation?

It would not. In fact, it would expressly deny the House of Representatives the opportunity to cast such an up-or-down vote on the Senate-passed bill.

Why are House Democrats so afraid to cast an up-or-down vote on a bill written by Senate Democrats?

It’s worth noting that House Democrats could have ended the health care debate months ago by voting to pass the legislation (H.R. 3590) cleared by the Senate on December 24. However, that Senate bill contains numerous backroom deals—the Cornhusker Kickback, the Louisiana Purchase, and others—that have become unpopular among Democrats and the general public. The Senate bill also contains a Cadillac tax on high-cost health plans that Democrats’ union constituencies find unacceptable, and provisions permitting federal funding of insurance plans covering abortion to which some pro-life Democrats object.

Would the Slaughter Solution be an unprecedented act by the House of Representatives?

The Washington Post wrote that, deeming a 2,733-page health care bill enacted into law without ever taking an up-or-down vote on the measure would be an act unprecedented in its scope, as deeming has never been used “to pass legislation as momentous as the $875 billion health care bill.”[iii] Democrats also appear to be increasing their reliance on the procedure as a way to avoid taking votes on unpopular issues. For instance, just last month the House “deemed” an unprecedented $1.9 trillion increase in the federal debt limit (P.L. 111-139) passed without taking an up-or-down vote on the measure[iv]—a move that some may view as particularly fitting, since Speaker Pelosi and House Democrats are now attempting to enact $2.3 trillion in new spending into law through exactly the same parliamentary tactic.[v]

Is the Slaughter Solution the only unprecedented tactic Democrats are prepared to use to enact their health care agenda?

No. Both House and Senate Democrats are working to pass a budget reconciliation package to “fix” the unpopular provisions in the Senate-passed health care bill. While reconciliation has been used in the past for various fiscal matters, it has not been used to re-orient the entire health care sector, comprising more than one-sixth of the American economy. Moreover, it is impossible to view Democrats’ recent decision to utilize the reconciliation process for health care as anything but an attempt to circumvent the effects brought by the election of Scott Brown to the Senate and the will of Americans as consistently expressed in national polling.[vi]

Could the reconciliation process contain further unprecedented acts by Democrats to stifle debate?

Yes. Specifically, Senate Democrats have promised that they will move to limit the number of amendments that Republicans can offer to the reconciliation package—even though neither the Congressional Budget Act nor Senate rules impose any limit on the amendments the majority and minority can offer to reconciliation legislation.[vii]

Given the backroom deals and controversial provisions included in the Senate bill, it is not surprising that Democrats would go to such lengths as enacting the Senate bill without the House ever voting on it.

 

[i] http://www.whitehouse.gov/the-press-office/remarks-president-health-insurance-reform-st-charles-mo

[ii] “Slaughter Preps Rule to Avoid Direct Vote on Senate Bill,” CongressDailyAM March 10, 2010, available at http://gopleader.gov/UploadedFiles/CD_03-10-10_Slaughter_Preps_Rule_To_Avoid_Direct_Vote_On_Senate_Bill.pdf.

[iii] Lori Montgomery and Paul Kane, “House May Try to Pass Senate Health Care Bill Without Voting on It,” Washington Post March 16, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/03/15/AR2010031503742_pf.html.

[iv] H.Res. 1065 “deemed” the debt limit passed upon the House passage of statutory PAYGO provisions.

[v] Senate Budget Committee Republican staff estimate of the 10-year cost of H.R. 3590 when fully implemented.

[vi] Martin Gold, “Reconciliation and Health Care,” Federalist Society paper, March 10, 2010, http://www.fed-soc.org/doclib/20100310_ReconciliationFINAL.pdf.

[vii] Robert Pear, “Democrats Struggle to Finish Health Bill,” New York Times March 11, 2010, http://www.nytimes.com/2010/03/12/health/policy/12health.html.

David Axelrod’s Sunday Show Flip-Flops

Appearing on “This Week” yesterday, White House advisor David Axelrod attempted to claim both sides of two critical issues in the health care debate.  On the process used to enact health care legislation, he said that “we don’t want to see procedural gimmicks used to try and prevent an up or down vote” on a health bill.  However, when pressed about Democrats’ “Slaughter Solution” to enact the Senate bill into law without the House ever voting on it, Axelrod claimed that such issues really “don’t matter.”  In other words, the Administration opposes Senate Republicans using “procedural gimmicks” to prevent the passage of a Senate bill they oppose, but supports House Democrats’ “procedural gimmicks” to prevent them from voting on a Senate bill they similarly dislike.

Likewise, when questioned about the widely unpopular backroom deals included in the Senate bill, Axelrod attempted to distinguish the “Cornhusker Kickback” from the “Louisiana Purchase” and other unsavory agreements, claiming that the latter provision is not “state-specific” and that other states could qualify under “certain sets of circumstances.”  This waffling comes even as Senate Democrats attempt to preserve their backroom deals, despite the public outrage that came as a result of their inclusion in the Senate bill.  And it raises additional questions: Would the “Cornhusker Kickback” be permitted by the Administration if the language was written in a way that all states could theoretically qualify for the money, even in reality only one state could do so? (i.e. “the nation’s leading corn producer will have its Medicaid fully paid for by the federal government” – a standard any state could in theory meet, even though a state like Alaska is highly unlikely to do so).  And how desperate are Democrats to enact their government takeover of health care that they would even attempt to justify these backroom deals through such questionable posturing?

 

TAPPER: If it does not work this week, is that the last chance for health care reform?

AXELROD: Well, I believe it is going to happen this week. I think we’re going to have a vote, and the American people are entitled to an up or down vote. We don’t want to see procedural gimmicks used to try and prevent an up or down vote on this issue. We’ve had a long debate, Jake. It’s gone on for a year. The plan the president has embraced and has put forward is one that takes ideas, the best thinking from both the Republican and Democratic sides. This marketplace where people can buy insurance who don’t have it today, a competitive marketplace — that’s an idea that both sides embrace. The place where we don’t agree is on whether there should be some restraint on insurance companies and whether they should be allowed to run wild. We believe there should be some restraint, some on the other side don’t think so. …

TAPPER: House Democrats are talking about using a procedural maneuver to pass the Senate bill in the House and then the fixes without ever actually having a vote on the Senate bill. Here is Congresswoman Lynn Woolsey, a Democrat of California.

(BEGIN VIDEO CLIP)

WOOLSEY: I don’t need to see my colleagues vote for the Senate bill in the House. We don’t like the Senate bill. Why should we be forced to do that?

(END VIDEO CLIP)

TAPPER: Can the president support a procedure where members of the House pass the Senate bill without ever voting for the Senate bill?

AXELROD: Well, look, I think everybody is going to be on the record by the end of this week on these matters, and of course in answer to Congresswoman Woolsey, the president’s proposal is not the Senate proposal. With the corrections that have been made, with the improvements that have been made, some including Republican ideas, some including Democratic ideas, this is — this is a different proposal, and I think it addresses some of the concerns that people have had.

TAPPER: But when pushing reconciliation in the Senate, the president has talked about how the Senate bill deserves an up or down vote. Shouldn’t-

AXELROD: Health care, Jake, health care deserves an up or down vote, and health care will get an up or down vote. Remember, we already had up or down votes in the House and Senate, 60 votes in the Senate, the bill passed the House as well. Now the question is do we pass the requisite improvements to this bill, corrections to this bill to make it even stronger, and I think we will.

TAPPER: So the parliamentary stuff doesn’t matter. It’s just a question of whether or not the overall package–

AXELROD: What does matter is that people cast or are allowed to cast an up or down vote on the future of health insurance reform in this country. We have had a year. Enough game playing, enough maneuvering. Let’s have the up or down vote and give the American people the future they deserve. …

 

TAPPER: One of the things that the president has acknowledged the American people don’t like about the bill as it exists right now, the Senate bill with all the special deals that are in there for individual senators to win their vote. The president has directed the House and Senate to remove those from the fixes that you guys are creating, but some members of the Senate and the House are pushing back. They want those deals. Are you ready to pledge that none of those deals or any other deal that other members may be trying to get as this is being pushed through the House, that none of them will be in this final bill?

AXELROD: Well, the president does believe that state-only carveouts should not be in the bill. There are things in the bill that apply to groupings of states who satisfy — for example, in Louisiana, the — what has been portrayed as a provision relating to Louisiana says that if a state, if every county in a state is declared a disaster area, they get some extra Medicaid funds. Well, that would apply to any state that–

(CROSSTALK)

TAPPER: — talking about Montana, talking about $100 million for a hospital in Connecticut–

AXELROD: The principle should be, the principle should be, do those provisions apply to everyone? In other words, are there things that pertain, that if a state satisfies a certain set of circumstances, they would — they would qualify. And I think that is different than a special state-specific thing. In the case of Nebraska, what everyone was outraged about was that it seemed to be a special deal just for one state. That is not going to be in this bill.

TAPPER: So none of the things that are state-specific to win the votes of individual senators. Louisiana not counting as that, but none of the others will be in the final bill.

AXELROD: The principle that we want to apply is that are these — are these applicable to all states? Even if they do not qualify now, would they qualify under certain sets of circumstances. …