“The Most Transparent Administration Ever” Fights To Keep It’s Shady Backroom Dealings

Feb 4, 2010 11 Comments ›› Erik Wong

Politico:

The health care bill is in trouble, but a series of narrow deals — each designed to win over a wavering senator or key interest group — is alive and well, despite voter anger over the parochial horse-trading that marked the rush toward passage before Christmas.

With the exception of Nebraska Democratic Sen. Ben Nelson’s “Cornhusker Kickback,” which alienated independent voters and came to symbolize an out-of-touch Washington, none of the other narrow provisions that Senate Majority Leader Harry Reid inserted into the bill appear to be in any kind of danger as Democrats try to figure out the way ahead.

Not only that, House liberals want to reopen the labor deal struck just days before Democrats lost their 60-vote majority — not to dial it back but to provide more generous protections from the tax on Cadillac insurance plans.

“For those of us who, in principle, are opposed to it, this gives us another chance to push for our basic principle,” said Rep. Sander Levin, a Michigan Democrat with strong ties to organized labor who sits on the tax-writing Ways and Means Committee. “It remains unsatisfactory.”

The flurry of last-minute deals helped sour Americans on the entire process, and the Massachusetts Senate election altered the trajectory of reform.

But Washington being Washington, none of that has cooled the appetite of senators and House members to tailor the bill to their specific needs — even though some Democrats worry that it could help destroy any chances of resurrecting reform, if lawmakers seem oblivious to voters’ concerns.

Nelson sacrificed his agreement with Reid to have the federal government forever pick up Nebraska’s share of a proposed Medicaid expansion, bowing to critics that included some in the Senate Democratic Caucus. Even House Speaker Nancy Pelosi (D-Calif.) has singled it out, saying her members will not consider the bill unless the Nebraska deal is removed.

But there is no visible movement to erase a Medicaid deal with Sen. Mary Landrieu (D-La.) that she has said is worth $300 million, three times the amount of Nelson’s agreement.

Or to strike a line item that exempts Blue Cross Blue Shield of Michigan from a 40 percent tax on insurers that provide expensive health plans. Or to remove a provision that sends an extra $500 million in Medicaid funding to Massachusetts and $600 million to Vermont for being leaders in providing health insurance to their residents.

“It is very clear from the process that took place in the final days of the bill that Americans are disturbed about the process,” said Sen. John Kerry (D-Mass.). “I believe it would be important for us to take out the egregious items.”

Does that mean he might forfeit the money for Massachusetts?

Not at all. Kerry argued the funding was completely legitimate because Massachusetts has already used significant state resources to extend benefits beyond what the current federal Medicaid rules require.

“I don’t think adjusting for Medicaid costs for states that have already done some things is inappropriate,” Kerry said. “I’m not for a single-state fix. I’m for every state in the country that has taken action, to have that reflected somehow, and that should be part of the fix.”

Kerry’s remark highlights an axiom of Washington: Every deal is egregious except your own.

On the labor deal, Levin said he signed off on it initially “in the context of trying to get the bill passed.”

But now that party leaders have gone back to the drawing board, he said critics want another chance to eliminate the tax completely. Barring that, he said they would like to raise the threshold on plans that would be taxed and exempt additional benefits — under the terms of the labor deal, only basic coverage would be taxed, exempting things like dental and vision coverage.

Democratic aides acknowledged this push in the House to get rid of the tax completely, but they suggested it could cause parliamentary problems moving forward. So most lawmakers are trying to shield more plans from the tax. Such a move would further undermine President Barack Obama’s goal of using the tax to discourage people from buying expensive plans that boost that growth rate in health care spending.

Pelosi and her leadership team have asked Reid to make changes that his own members favor, like stripping the Nebraska deal, according to an aide. House leaders are now waiting to see what Reid can pass with 50 votes.

Renegotiating the labor deal promises to slow things down at a critical time for party leaders.

“Reconciliation would be a tough enough lift,” said a senior Senate Democratic aide, referring to the procedural maneuver that leaders are considering using to pass a bill. “Reopening the House-Senate deal to make it more expensive or jerk it further to the left would be playing with fire.”

Jim Manley, Reid’s spokesman, declined to comment on the labor deal or the removal of state-specific provisions.

The senior Senate Democratic aide acknowledged that the state-specific provisions were likely safe simply because none had taken on the symbolic weight of the Nebraska deal.

But if that is the case, Democrats may face criticism from within their own party. Missouri Sen. Claire McCaskill told POLITICO that all of the narrow provisions should be removed.

“That would be my hope,” she said.

Aaron Saunders, a spokesman for Landrieu, said the senator has not been approached about giving up the money that she secured while deciding whether to support the bill in November. Saunders pointed to Landrieu’s backing of the provision in a Dec. 22 floor speech, during which she defended it as necessary to dealing with the effects of Hurricane Katrina and supported by the entire congressional delegation and Republican Gov. Bobby Jindal.

California Democratic Rep. Dennis Cardoza said he sought assurances from administration officials that the $500 million he secured in the House health care bill to educate doctors in rural communities would remain intact.

“I’ve had some conversations,” Cardoza said about keeping that money in a final bill. “The White House has already acknowledged the need to fund education programs for doctors in these communities.”

While some lawmakers make no excuses, others have betrayed annoyance at being included in the wave of stories outlining the deal making involved in the Senate bill. The attention surprised longtime Washington hands who realize such horse-trading is a basic ingredient in legislating.

“People lied about this,” said Sen. Bernie Sanders (I-Vt.), who had been undecided on the bill before steering $10 billion to fund community health centers. He took pains to point out it would benefit all 50 states — not just Vermont.

Sen. Carl Levin (D-Mich.) said he sought an exemption from the insurance tax for all “legitimate” nonprofit insurance companies, but the leaders ended up inserting a more specific provision that narrowly benefitted Blue Cross Blue Shield of Michigan.

“I think they wanted to accommodate me,” said Levin, who now wants the leaders to replace it with the general provision he initially pursued.

Senate Finance Committee Chairman Max Baucus (D-Mont.) inserted an item that allows people who have been exposed to asbestos from a vermiculite mine in Libby, Mont., to receive Medicare assistance. It fulfilled the government’s responsibility, first codified in a 1980 law, to provide health care to victims of public health emergencies, said Erin Shields, a Baucus spokeswoman.

But it was also a bid to speed up the bureaucracy. Without the Libby language, the secretary of health and human services would need to write a regulation that requires a comment period that could take up to a year.

“The public health emergency provision is not a deal, so it’s certainly not on the chopping block,” Shields said.