Baucus-Grassley "jobs" bill going nowhere (updated)

Senate Finance Committee Chairman Max Baucus and ranking Republican Chuck Grassley released a draft jobs bill yesterday that would cost about $85 billion. It "would give employers a payroll tax exemption for hiring those who have been unemployed for at least 60 days. The bill would also provide a $1,000 income tax credit for new workers retained for 52 weeks." Click here to read a copy of the draft bill.

A bipartisan jobs bill would be great if that bill would create a significant number of new jobs. Unfortunately, analysts agree that many of the measures in the Baucus-Grassley bill would do little on that front. More details are after the jump.

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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.

I consider this idea’s pros and cons after the jump.  

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The way forward on a public health insurance option

As expected, the Senate Finance Committee rejected two amendments yesterday that would have added a public health insurance option to the health care reform bill Chairman Max Baucus drafted with a big assist from industry lobbyists. Five Democrats voted with all the committee Republicans against Senator Jay Rockefeller’s amendment, which would have created a national public option tied to Medicare rates. Three Democrats also joined Republicans to vote down Senator Chuck Schumer’s much weaker "national level playing field" public option. CA Berkeley WV liveblogged yesterday’s hearing for Congress Matters.

Senator Chuck Grassley sang the same old song about the “government run plan” forcing private insurance companies out of business. He got a little tripped up when Senator Chuck Schumer asked him for his views on Medicare, though.

“I think that Medicare is part of the social fabric of America just like Social Security is,” Mr. Grassley said. “To say that I support it is not to say that it’s the best system that it could be.”

“But it is a government-run plan,” Mr. Schumer shot back.

Mr. Grassley, a veteran Senate debater, insisted that Medicare did not pose a threat to the private insurance industry. “It’s not easy to undo a Medicare plan without also hurting a lot of private initiatives that are coupled with it,” he said.

Chairman Baucus scored highest on the chutzpah meter, praising the public option even as he refused to support it. Grassley also held out false hope that maybe someday some other bill will accomplish that goal.

Several Senate Democrats, including Tom Harkin, insisted yesterday that they will get some kind of public option into the bill that reaches the Senate floor. After the jump you’ll find lots of links on the battles to come.

I agree that the public option is not dead yet, but for it to survive, President Barack Obama and Senate Majority leader Harry Reid will need to do a lot more than they’ve done so far to lean on the Senate conservadems.  

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Grassley's case against health care reform

For months, White House officials and Senate leaders praised the "gang of six" negotiations toward a bipartisan deal on health care reform, even as other observers doubted the Republicans in that group were negotiating in good faith. At the beginning of the summer recess in August, Senator Jay Rockefeller (who was shut out of the deal-making) warned:

Changes to the bill have been frustrating, Sen. Jay Rockefeller (D-W.V.) told reporters at a press conference, particularly given that the Republicans — Mike Enzi of Wyoming, Chuck Grassley of Iowa and Olympia Snowe of Maine — are, in his opinion, just stalling for time.

“You just watch as the bill diminishes in its scope, in its coverage, in its ferocity to try to attack the problem. I don’t know where it will come out,” Rockefeller said. “My own personal view is that those three Republicans won’t be there to vote it out of committee when it comes right down to it, so that this all will have been a three-or-four-month delay game, which is exactly what the Republicans want.”

No Republicans stood with Senate Finance Committee Chairman Max Baucus last week as he finally unveiled what David Waldman described as “a plan that amounts to capitulating to every Republican demand, and then adding a heaping pile of political suicide on top of it.” The bill is in markup this week, and CA Berkeley WV has been blogging the Senate Finance Committee meetings for Congress Matters (day one, day two and day three).

Where does ranking Finance Committee member Grassley stand after Baucus bent over backwards to keep negotiating with him all summer? After the jump I’ve posted the relevant portion of a transcript from Grassley’s September 24 telephone news conference with Iowa reporters. The short version is, he’s against the bill because:

1. The individual mandate to buy health insurance amounts to “[q]uite a steep tax for people that maybe don’t pay a tax.”

2. Democrats supposedly were “not willing to go far enough” on enforcement to make sure illegal immigrants wouldn’t be covered.

3. Democrats supposedly “weren’t willing to go far enough to make sure that the subsidy through the tax credit was not used to finance abortions.”

4. You shouldn’t be “increasing taxes and cutting Medicare” when “we’re in depression.”

I told Iowa Republicans not to worry about Grassley voting for any health care reform bill. Senate Democrats should reject the concessions Baucus made to win GOP votes that are now off the table.

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Health insurance co-ops: Designed to fail

Senator Jay Rockefeller was excluded from the bipartisan group of Finance Committee members who worked on the bill Chairman Max Baucus unveiled on Wednesday, so he spent part of his summer vacation researching the fake public option favored by some "gang of six" members. He reported on his findings in an open letter to Baucus and ranking member Chuck Grassley. You should click through and read Rockefeller’s whole letter, but here are some excerpts:

“First, there has been no significant research into consumer co-ops as a model for the broad expansion of health insurance. What we do know, however, is that this model was tried in the early part of the 20th century and largely failed. As the USDA states in its response letter, ‘Government support for the cooperative approach to delivering universal health care was reduced during [World War II] and terminated afterward.’ This is a dying business model for health insurance. Moving forward with health insurance cooperatives would expose Americans, who are hoping for a better health care system, to a health care model that has already been tried and largely failed in the vast majority of the country.

“Second, there is a lack of consistent data about the total number of consumer health insurance cooperatives in existence today, and there have been no analyses of the impact of existing health insurance cooperatives on consumers.

“Third, all of the consumer health insurance cooperatives identified by the [U.S. Department of Agriculture] and [National Cooperative Business Association] operate and function just like private health insurance companies. Therefore, it is unclear how expanding consumer health insurance cooperatives would actually achieve greater affordability for consumers or bring about greater competition in the private market…

The Congressional Budget Office doesn’t expect the co-ops to affect the cost of the Baucus bill:

(The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.)

The failure of co-ops to provide competition in Iowa bears out the CBO’s expectations:

In the 1990s, Iowa adopted a law to encourage the development of health care co-ops. One was created, and it died within two years. Although the law is still on the books, the state does not have a co-op now, said Susan E. Voss, the Iowa insurance commissioner.

Wellmark Blue Cross and Blue Shield collects about 70 percent of the premiums paid in the private insurance market in Iowa and South Dakota.

It’s past time for President Obama to stop sending out White House staff and cabinet secretaries to signal that Obama might accept cooperatives as an alternative to a public health insurance option.

Here’s hoping that even in the absence of presidential leadership, Rockefeller can get strong amendments attached to the Baucus bill or make sure it never gets out of the Senate Finance Committee.

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