Senate Democrats are going to have to move forward on healthcare without a single Republican supporter after Sen. Olympia Snowe said Tuesday she could not back the Finance Committee’s bill.
Chairman Max Baucus (D-Mont.) failed to win any Republican backer despite weeks of intense negotiations behind closed doors to strike a deal.
Snowe (Maine), who was one of three Republicans who backed the $787 billion economic stimulus package, was being lobbied heavily by the White House, and some centrists view her refusal to strike a deal with Baucus as troubling. But concerns about how the plan would be paid for prompted her to back away in the hours before its release.
“I do have concerns and I’m not sure they can be addressed before he issues [legislation] tomorrow,” Snowe said.
Faced with the prospect of having to pass legislation without Republican votes, Obama’s chief political adviser David Axelrod met with Senate and House Democrats on Tuesday to stress the importance of party unity on healthcare reform — a message most directly aimed at centrists who now are critical to its passage.
Democrats control 59 seats in the Senate. Without a single Republican vote, they would be forced to advance healthcare using a budgetary maneuver that requires only a simple majority.
Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that Democrats are prepared to use budget reconciliation as a last resort.
Megan McArdle responds:
As I thought might happen, the fact that Baucus wants to pay for his bill by taxing high cost health plans has alienated Snowe, since she comes from a state with some of the highest premiums in the country. Baucus has added a provision to scale the tax to local cost–but of course, when you do that, you don’t raise so much money with it.
I’m reliably informed that the Democrats think they’re better off doing this alone than not doing it at all, and so it has to pass. If so, it will be the first time in history that I can think of that a single party passed anything of this size–certainly not a major new entitlement. Medicare and Social Security both had considerable Republican votes, something I don’t see this time around.
At the very least, this changes the tenor of the debate. I’m willing to bet that the Democrats start throwing the less popular provisions out of the bill. If you’re going to pass a $1 trillion bill all by your lonesome, you don’t want to, say, piss off 25% of seniors who like their Medicare Advantage, even if you and all of your fellow party members hate the program. Unfortunately, the popular bits are the expensive things. The unpopular parts are where you pay for them.
Not making Senate Democrats’ plans any easier comes this admission from Democrat Senator Jay Rockefeller (W.VA):
The Baucus proposal would impose, starting in 2013, a 35 percent excise tax on insurance companies for “high-cost plans” — defined as those above $8,000 for individuals and $21,000 for family plans.
Health economists believe a tax on high-priced benefits could help slow the growth of health costs by making consumers more sensitive to prices.
The tax contemplated by Baucus is also a big revenue raiser. It is expected to raise $200 billion, money that Baucus is hoping to use to pay for subsidies for the uninsured.
Given how much money this kind of tax can raise, Rockefeller says he understands why it is “tempting.”
The West Virginia Democrat worries, however, that a lot of middle class workers, like the coal miners in his state, will end up facing “a big, big tax” under the Baucus bill because they currently enjoy generous employer-provided health care benefits which they receive tax free.
Referring to Baucus, Rockefeller said, “He should understand that (his proposal) means that virtually every single coal miner is going to have a big, big tax put on them because the tax will be put on the company and the company will immediately pass it down and lower benefits because they are self insured, most of them, because they are larger. They will pass it down, lower benefits, and probably this will mean higher premiums for coal miners who are getting very good health care benefits for a very good reason. That is, like steelworkers and others, they are doing about the most dangerous job that can be done in America.”
Rockefeller, who sits on the Finance Committee, said that he cannot support the Baucus bill unless it receives major improvements during the amendment process.
One interesting thing here is that the WH via Axelrod and Emanuel has been focusing on the moderate Democrats in the Senate who have expressed reluctance to come on board with this plan. Rockefeller is not a moderate. I have to wonder how many more Rockefeller liberals in the Senate feel the same way about Baucus’ bill.
Oh, and here’s a message to all you “under 30” voters who were so crucial to Obama’s victory last year: Did you know that the party of the guy you supported plans on using you as well to help pay for their bloated healthcare bill? They’ll do it via either forcing you to sign up for “minimal coverage” or facing a fine if you don’t. What’s that? You thought the Dems were only going to “tax the rich” to pay for their champagne agenda? Here’s your wake-up call.