Finance Panel Looks to Produce Health Reform That Can Endure Scrutiny

President Obama delivered remarks on health-care reform on Tuesday in the Rose Garden. The president also met with Blue Dog Coalition members to negotiate fixes, but members said afterward that some issues are still unsolved. Obama will hold a televised news conference Wednesday to make his case.
President Obama delivered remarks on health-care reform on Tuesday in the Rose Garden. The president also met with Blue Dog Coalition members to negotiate fixes, but members said afterward that some issues are still unsolved. Obama will hold a televised news conference Wednesday to make his case. (By Marvin Joseph -- The Washington Post)
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By Shailagh Murray and Ceci Connolly
Washington Post Staff Writers
Wednesday, July 22, 2009

While the issue of health-care reform has divided Democrats in the House and stirred relentless GOP attacks, members of the Senate Finance Committee have seemingly ignored the hubbub, and a presidential deadline, as they huddle daily in pursuit of a breakthrough bill.

Committee members say they are trying to resolve potential controversies behind closed doors, to produce a bill that can withstand the close scrutiny. And on Tuesday, senior panel members expressed confidence that they could complete committee action on such a bill before President Obama's Aug. 7 deadline -- and, in the process, attract significant bipartisan support.

The measure would meet Obama's goal of expanding coverage while lowering long-term health costs, without relying on a surtax on wealthy households as the House's bill would impose.

"The Finance Committee is the only place left where a bipartisan bill that also gets on top of the spiraling health-care costs can be achieved," Sen. Charles E. Grassley (Iowa), the panel's top GOP negotiator, told Iowa reporters Tuesday. "And that's what we're trying to do. We may fail, but I feel very positive and optimistic that we won't."

House Democratic leaders are closely monitoring the marathon huddles held daily in the office of Finance Committee Chairman Max Baucus (D-Mont.). Rank-and-file Democrats have recoiled at the surtax idea, and Rep. Mike Ross (D-Ark.), a leader of the rebellious Blue Dog Coalition, was unequivocal that the group wants a House bill that is "more closely aligned with what the Senate Finance Committee is going to do."

Obama brought the conservative Blue Dogs to the White House on Tuesday afternoon to negotiate a series of fixes with the aim of winning their support in the Energy and Commerce Committee, where the House bill has stalled. The president declared from the Rose Garden before the meeting that reform was "closer than ever." But after the session, Ross and other House lawmakers said numerous issues remain unresolved.

As negotiations intensify, and Obama prepares for a televised news conference Wednesday night to make his case to the public, a striking contrast has developed between the two chambers of Congress. The House still aims to meet Obama's timetable of completing committee action before the August recess, while the Senate is taking a far more deliberative approach.

"There are certain fundamental questions that have to be addressed, because at the end of the day, people are going to be asking those questions," Sen. Olympia J. Snowe (Maine), another Republican negotiator.

Baucus said: "We want to make sure that whatever we come up with is defensible. This is complicated."

A critical objective for both chambers is to "bend the curve" on skyrocketing health-care costs. White House budget chief Peter Orszag delivered a new round of savings proposals to Finance negotiators over the weekend, and he defended the administration against Republican attacks that it has not vigorously pursued both long- and short-term savings.

Already, Orszag said, Obama has outlined $650 billion in Medicare and Medicaid cuts that could be used to finance coverage for nearly 50 million people. And the White House has gained support among Blue Dogs and Senate Finance members for creating an independent panel to oversee Medicare reimbursement rates and broader reforms -- authority that now lies with Congress.

On Monday, Obama met with Douglas Elmendorf, director of the Congressional Budget Office, and a handful of economists to "make sure we had exhausted all the possibilities that could help on the long-term deficit picture," Orszag said. Elmendorf delivered a serious blow last week to the House effort, along with a separate Senate health committee bill, when he testified that the measures could raise long-term health costs.

Orszag also said the White House is open to a proposal by Sen. John F. Kerry (D-Mass.), a Finance Committee member, to tax insurers for very generous health policies. The idea is a variation on a provision that Baucus, Grassley and others on the committee had pushed: to tax beneficiaries who receive generous policies through their employers.

Obama staunchly opposed taxing beneficiaries as a candidate, and on Monday he threatened to veto a bill that targets individuals. But Orszag said that the White House is open to the Kerry alternative, noting that a fee on high-value policies would "create an incentive for companies to create more efficient plans."

A senior House leadership aide said Democratic lawmakers there are keenly interested in the Kerry provision, along with other revenue measures with consensus support in the Finance Committee, to replace the wealth surtax that Baucus and others have already declared dead on arrival. "Our guys want to see some movement there," the aide said. "They're loath to vote on a tax increase if it is not going anywhere in the Senate."

House Speaker Nancy Pelosi (D-Calif.) defended the surtax at a meeting of House Democrats on Tuesday, but she assured lawmakers that she would look for alternatives. One option Pelosi floated Monday would raise the income at which the surtax begins to take effect to $500,000 for individuals and $1 million for households, up from $280,000 for individuals and $350,000 for households. But some Democrats complained that small businesses would still be ensnared.

Finance members said the committee was leaning against requiring employers to provide health coverage, although it would impose a fee on individuals who do not purchase insurance. They also said the panel had rejected the government health plan that Obama wants to create and would instead adopt a cooperative model, similar to rural electricity providers.

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