CHIMPS: Making a Monkey out of You and Me

CHIMPS, as in "changes in mandatory program spending." In order to reach the FY 2011 budget accord to avert the government shutdown on Friday night, Democrats came up with $17 billion worth of CHIMPS—cuts in things such as agricultural subsidies or certain banking and justice programs that fall under the umbrella of "mandatory government spending."  

Details are now emerging as to what precisely these CHIMPS cuts entail. From the Committee for a Responsible Federal Budget:

As Senator Schumer (D-NY) and other Democrats had called for, the package includes "changes in mandatory programs" (CHIMPs) which essentially allows some mandatory cuts to be counted as discretionary. In fact, almost half the savings -- $17.8 billion of the $38 billion -- comes from cuts to mandatory programs.

This does include two changes to the health care reform law that will affect mandatory spending. These changes would cut $2 billion from the budget for non-profit health insurance co-operatives (the CO-OP program, which is intended to function as a weaker version of the public option) and it would eliminate a part of the law that would allow low-income earners to opt out of employer-sponsored health insurance to purchase insurance on the new exchanges.

Other details about the CHIMPs are unknown at this point.

So just like that gone are the herculean efforts of Vermont Senator Bernie Sanders and Oregon Senator Ron Wyden to win two key ideas on health care cost containment in the Affordable Care Act of 2010. Senator Wyden, who was the architect of the opt-out provision, lamented its demise.

“Publicly,” Mr. Wyden said, “both parties say they are champions of choice and competition and making health insurance more affordable for everyone. But then behind closed doors they kill a program that does exactly that. This seems like a victory for special interests.”

Many employers had objected to the Wyden provision, saying it would increase their costs by allowing younger and healthier entry-level employees to opt out of employer-sponsored plans. Still it is the loss of funding for the non-profit health insurance co-operatives, the most progressive idea in the corporate give away that is Affordable Care Act,  that is just simply devastating. These were fought for tooth and nail by Senator Sanders. They were seen as a consolation prize on the lack of a public option. For the insurance industry and the GOP however, these non-profit health insurance co-operatives were considered as laying the framework for some future public option.

Indeed at the time of this debate, progressive voices warned that "a non-profit public co-op instead of a government run public option is not the solution.  It leaves for-profit insurers a legislative means for tearing them down.  It is their Trojan Horse.  It is their means for eventually tearing down the co-ops or buying them outright and stripping away any pretense of public benefit." That day has come to pass. The most progressive feature, the one that does the most to reign in health care costs, of the Affordable Care Act of 2010 has been gutted.

We have not only been defeated, we have been betrayed.

Senator Schumer: "There Will Be a Public Option"

Today on CBS' Face the Nation, two senior Senators, one a Democrat and the other a Republican, on the  Senate Finance Committee offered widely different assessments on how the final health care reform package would look. Not surprising, the object of their discord was the public option in the US health care reform proposals now working their way through the Senate.

Senator Chuck Schumer, the New York Democrat, was emphatic. "Make no mistake about it, the president is for this strongly. There will be a public option in the final bill." Naturally, Iowa's Republican Senator Chuck Grassley begged to differ. "The federal government is in the process of nationalizing banks, nationalizing General Motors. I'm going to make sure we don't nationalize health insurance and [the] public option is the first step to doing that," countered Senator Grassley.

More from The Hill:

Despite the bipartisan negotiations going on behind the scenes on the Finance Committee, Schumer pointedly noted that the House and the Senate Health, Education, Labor and Pensions (HELP) Committee have written a public option into their bills. Combined with Obama's continued support for the proposal, Schumer suggested, that bodes well for the prospects of the public option making into the final legislation the president wants on his desk this Autumn.

"The House has proposed its plan, has a strong public option. The HELP Committee, the other committee in the Senate doing this, has proposed a strong public option," Schumer said.

Finance Committee Chairman Max Baucus (D-Mont.) and six other committee members, including Grassley, have been meeting behind closed doors to draft a bipartisan bill. At the urging of Sen. Kent Conrad (D-N.D.), the senators are leaning toward setting aside a true public option in favor of establishing not-for-profit, member-owned health insurance cooperatives to compete with traditional insurance companies. Though the notion appeals to Republicans and some centrist Democrats, supporters of the public option do not view it as an acceptable compromise.

Schumer emerged earlier this year as a vocal proponent of the public option and offered a model for the plan that he positioned as a compromise itself. Under Schumer's proposal, which closely resembles what the House and the HELP Committee are considering, the public option would receive no federal funding, be financed entirely by premiums and have to abide by the same insurance regulations as private firms.

House Majority Leader Steny Hoyer (D-Md.) reiterated on Fox News Sunday that the lower chamber's bill will include a strong public option. "We think there's going to be a public option. Yes, we think we need that. We need to make sure that there is an option available for public that can't get through at the private insurance. We think that's essential if you're going to have access," Hoyer said.

House Minority Leader John Boehner (R-Ohio) indicated that a public option would be a deal-breaker for Republicans. "I think having the government have a plan to compete with the private sector is unfair, because the government has no cost of capital," Boehner said.

On the other hand, the public option is our line in the sand. It's non-negotiable.

There's more...

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