Don't punt the public option debate to the states

Senate Democrats have not given up on passing health care reform through normal procedures requiring at least 60 votes to overcome a Republican filibuster. The problem is, several conservative Senate Democrats are on record opposing a public health insurance option. Meanwhile, a bill with no public option will have trouble passing the House of Representatives, where the overwhelming majority of the Democratic caucus supports a robust public option tied to Medicare rates.

The obvious political solution is to include some watered-down public option in the bill, giving cover to Progressive Democrats who insist on a public option while placating House Blue Dogs and Senate conservatives who want to protect private insurers' market share.

The "triggered" public option favored by many industry allies didn't fly, because most Democrats understand that the trigger would never be pulled. This past week, a new possible compromise emerged:

It was pulled out of an alternative idea, put forth by Sen. Tom Carper (D-Del.) and, prior to him, former Senate Majority Leader Tom Daschle, to give states the power to determine whether they want to implement a public insurance option.

But instead of starting with no national public option and giving state governments the right to develop their own, the newest compromise approaches the issue from the opposite direction: beginning with a national public option and giving state governments the right not to have one.

Chuck Schumer of New York confirmed that Senate Democrats are giving serious consideration to the opt-out idea. Senate HELP Committee Chairman Tom Harkin sounds open to the compromise. Former Governor Howard Dean, who has been railing against "fake" public options all year, told the Huffington Post he might support this compromise.

"If I were a member of the U.S Senate I wouldn't vote for the [Senate Finance Committee] bill but I would vote for this [opt-out plan]," Dean said, "not because it is necessarily the right thing to do but because it gets us to a better conversation about what we need to do. [...] if this passes I won't say it is not reform because it is reform. If this is what it takes to get 60 votes I say go for it."

Supporters of this compromise assume that very few states would opt out, because the public health insurance option is so popular. Alternatively, some people argue that even if a lot of red states opt out, blue states will reap economic benefits, while Republican politicians at the state and federal level are put in an awkward position.

There's no question that enacting some kind of nationwide public health insurance plan with an "opt-out" would give far more Americans access to the plan than Carper's "opt-in" proposal.

However, my concern is that quite a lot of states might ditch the public health insurance plan. Corporate interests have at least as much influence over state legislatures as they do over Congress--perhaps more. The public option would particularly benefit residents of states with little to no competition in the private health insurance market. But Representative Bruce Braley (IA-01) seems on target in warning that states with "strong political influence from one or two major health insurance companies" would be most likely to opt out, leaving "consumers in those states without a meaningful choice."

Daily Kos user eugene argues here, "Not only is this a bad idea because of the policy and political costs of throwing 'red states' overboard, it dramatically understates the very real risks that even so-called 'blue states' would choose the opt-out." Click through to read his case.

This Huffington Post piece points out another reason to be wary:

"One problem with the opt-out idea is that Republicans may seize on it in the future and turn it into a general opt-out for states to exempt themselves from the whole bill," said Paul Starr, health care expert at Princeton University. "Remember there will be four years and two elections before the reforms go into effect. This would be the easiest step for Republicans take during that period to ensure that the whole thing would unravel. And it would unravel because states that adopted the reform would become magnets for migration by the sick from states that opted out."

Punting the public option choice to the states might squeeze a few extra votes out of the Senate, but at what cost? Passing a more comprehensive bill with just 51 votes in the Senate, using the budget reconciliation process, seems more promising than obtaining 60 votes for an opt-out.

In related news, Senator Chris Dodd promised yesterday to "fight for a strong public option" when he works with Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus to merge the bills passed by the HELP and Finance committees. Senator Sherrod Brown of Ohio and 29 other Senate Democrats sent Reid a letter this week supporting a public option "available continuously in all parts of the country."

There's more...

Senate Finance Committee Rejects Public Option Amendments

As expected, both proposed public option amendments to the Baucus bill failed in the Senate Finance Committee today. Schumer's went down 13-10, and Rockefeller's 15-8.

Democrats voting against the Rockefeller amendment: Chairman Max Baucus, Blanche Lincoln, Tom Carper, Kent Conrad and Bill Nelson.

Democrats voting against the Schumer amendment: Baucus, Lincoln, and Conrad.

Salon quotes Baucus: "The public option would help hold insurance companies' feet to the fire. But my first job is to get this bill across the finish line."

I agree with that statement from Baucus - passing a bill without a public option is better than sticking with the status quo - but I'm still crossing my fingers that the final bill comes from HELP or the House, or that a public option amendment from the full floor passes. No reason to give up hope or cut the activism.

Still, the bottom line Tuesday was that the bill was still on track to move out of the committee. That would give Democratic leaders the chance to merge it with a more liberal version passed by the Senate Health, Education, Labor and Pensions Committee. Schumer, a key member of Senate leadership, sounded optimistic that some careful negotiations could still save a public plan. And Rockefeller was positively combative. "The public option is on the march," he said.

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Sen. Carper on public option - "day one" no, "trigger" yes

Delaware Liberal reports that Democratic Senator Tom Carper of Delaware - who reportedly "doesn't oppose" a public option - would not support a public option plan that is "available on day one." Instead, Carper supports Olympia Snowe's "trigger" plan, AKA the "fall back" plan - where a public option health plan would ONLY be created if health insurance companies fail to cut costs and expand coverage after a specified period of time - presumably after collecting millions in government subsidies and spending it all on more tea parties and re-electing Chuck Grassley. This is virtually the same as the GOP's Medicare-D drug bill from the Bush Administration.

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Bayh rolls out "Moderate Dems Working Group": Does it matter?

Senator Evan Bayh of Indiana announced plans in December to form an equivalent of the Blue Dog caucus in the Senate. Today his office rolled out the Moderate Dems Working Group:

WASHINGTON - A diverse group of 15 Senate Democrats today announced the formation of a new moderate coalition that will meet regularly to shape public policy. The group's goal is to work with the Senate leadership and the new administration to craft common-sense solutions to urgent national problems.

The Moderate Dems Working Group will meet every other Tuesday before the Democratic Caucus lunch to discuss legislative strategies and ideas. The Moderate Dems held their second meeting Tuesday to focus on the upcoming budget negotiations and the importance of passing a fiscally responsible spending plan in the Senate.

Leading the new group are Democratic Senators Evan Bayh of Indiana, Tom Carper of Delaware and Blanche Lincoln of Arkansas. Both Senators Bayh and Carper were successful governors before coming to the Senate. Senators Lincoln and Carper bring bicameral experience to the group as former members of the House of Representatives. All three leaders are honorary co-chairs of Third Way, a progressive Democratic policy group, and Senators Bayh and Carper have led the centrist Democratic Leadership Council.

At the working group meeting, Senator Bayh acknowledged that such a large group was unlikely to agree on all major issues before the Senate. Yet the Moderate Dems are joined by a shared commitment to pursue pragmatic, fiscally sustainable policies across a range of issues, such as deficit containment, health care reform, the housing crisis, educational reform, energy policy and climate change.

In addition to Senators Bayh, Carper and Lincoln, others joining the group are Senators Mark Udall and Michael Bennet of Colorado, Mark Begich of Alaska, Kay Hagan of North Carolina, Herb Kohl of Wisconsin, Mary Landrieu of Louisiana, Joe Lieberman of Connecticut, Claire McCaskill of Missouri, Ben Nelson of Nebraska, Bill Nelson of Florida, Jeanne Shaheen of New Hampshire, and Mark Warner of Virginia.

A few things jumped out at me:

15 members is a quarter of the Democratic Senate caucus. That's proportionally larger than the Blue Dog caucus in the House.

Look how many first-term senators have joined up with Bayh: McCaskill from the class of 2006 and Udall, Begich, Hagan, Shaheen and Warner from the class of 2008.

Of the Moderate Dems, only Bennet, Lincoln and Bayh are up for re-election in 2010. Lincoln and Bayh are not expected to face tough challenges.  

Of the Moderate Dems, only Lincoln, Landrieu, Begich and Ben Nelson represent states carried by John McCain. Why did the others rush to join a caucus that (based on Bayh's record) will try to water down President Barack Obama's agenda?

Back in December Matthew Yglesias advanced a very plausible hypothesis about Bayh's agenda:

With Republicans out of power, the GOP can't really block progressive change in exchange for large sums of special interest money. That creates an important market niche for Democrats willing to do the work. It was a good racket for the House Blue Dogs in 2007-2008 and there's no reason it couldn't work for Senate analogues over the next couple of years.

Bayh's press release includes a ludicrous quote from Harry Reid:

Of the working group's formation, Senate Majority Leader Harry Reid said, "If we are going to deliver the change Americans demanded and move our country forward, it will require the courage to get past our political differences and get to work. Established organizations like Third Way and new ventures like this group offer us a new opportunity to get things done, and I support every effort that puts real solutions above political posturing."

Raise your hand if you believe that Bayh's group is going to offer "a new opportunity to get things done."

The only good I can imagine coming of Bayh's venture is if the group gives some political cover to Democratic senators representing red or purple states, making it harder for Republicans to tie them to liberal bogeymen.

This optimistic scenario would pan out only if the Moderate Dems do not consistently vote as a bloc with Bayh. Earlier this month, David Waldman/Kagro X analyzed some Senate votes in which Bayh supported Republican amendments. If you click that link you'll see that various senators named in today's press release did not vote with the Bayh/Republican position.

For that reason, Waldman greeted today's news with a big yawn and doesn't seem worried that the Moderate Dems will do anything other than help Bayh show off how "moderate" he is.

The Russians say one should "hope for the best but prepare for the worst." As a Democrat who wants President Obama to succeed, I hope Waldman is right and the "Moderate Dems" are just using Bayh to bolster their "centrist" image.

On the other hand, if Bayh's group develops along the path envisioned by Yglesias, which I consider more likely, then Democrats really should prepare for the worst in 2010. The severe recession may make next year a tough environment for the president's party to begin with. If Democrats carrying water for corporate interests sink "the change we need," Democratic base turnout could drop significantly, as it did in 1994. Most of the Moderate Dems Working Group members will not face the voters until 2012 and 2014, but their obstruction could harm many other Congressional Democrats.

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