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Political Complexity of Public Option

There is a very good analiysis in Talking Points Memo of  the Public Option initiative in the Senate. I am copying it here for convenience:

 As Senate leaders begin work on a Democrat-only health care bill, they’re finding themselves confronted with an unexpected irony: Though the caucus has reached an uneasy consensus around a public option that’s modeled in many ways after a private insurer, it may be necessary to make the public option more liberal, and thus, more politically radioactive, if it’s to overcome a number of unique procedural hurdles.

This is the needle Democrats may have to thread if they want a public option, and at the same time, want to bypass a Republican filibuster. And the key for them will be keeping conservative Democrats on board.

“A very robust public option that scores significant savings would presumably be easy to justify doing through reconciliation,” says a Senate Democratic aide. “But it is still being studied whether other, more moderate versions of a public option could pass parliamentary muster.”

According to Martin Paone, a legislative expert who’s helping Democrats map out legislative strategy, a more robust public option–one that sets low prices, and provides cheap, subsidized insurance to low- and middle-class consumers–would have an easier time surviving the procedural demands of the so-called reconciliation process. However, he cautions that the cost of subsidies “will have to be offset and if [the health care plan] loses money beyond 2014…it will have to be sunsetted.”

And there the irony continues: Some experts, including on Capitol Hill, believe that a more robust public option will generate crucial savings needed to keep health care reform in the black–and thus prevent it from expiring. But though that may solve the procedural problems, conservative Democrats have balked at the idea creating such a momentous government program, and if they defected in great numbers, they could imperil the entire reform package

It’s a very technical conundrum with huge policy ramifications. So it’s not surprising that Republicans are on to it, and preparing for war.

Sen. Judd Gregg (R-NH)–ranking member on the Budget Committee–says the only way for the public option to survive the process is for it to be “very aggressive in setting rates, price controls and rationing,” a fact which may cost Democrats a number of conservative votes within their own party. However, if it’s too weak, and doesn’t meet the procedural demands of the reconciliation process, Gregg says the Republicans are preparing myriad objections to it and other aspects of the Democrats’ reform plan.

Each year, Congress passes a budget, but sometimes it has to enact a separate bill to raise or reroute funds in order to meet the budget’s demands. That’s the reconciliation bill–and it’s so important that Senate rules exempt it from a filibuster. But they also prevent it from being a vessel for any old provision that the majority party wants enacted. The specifics of these limits (enshrined in the so-called Byrd rule) are complex, but the overarching rule of thumb is that provisions passed through this process must have a significant budgetary component (i.e. involve the moving around of federal money) and that the legislation should not, in the long run, increase the federal deficit. (A recent historical example: the 2001 Bush tax cuts were passed via the reconciliation process. They survived the Byrd rule because they had a huge budgetary impact, but since they vastly increased the federal deficit, they sunsetted, and had to be renewed after five years.)

As Gregg and Paone and the Democratic source indicate, a more liberal public option might be easier to push past these procedural hurdles than the public option that’s currently on the table. But That doesn’t mean some of the less robust options are completely off the table. According to Paone, “sufficient funds would probably be needed from the general revenue to subsidize the public option or to provide “seed” money for a coop plan,” if either of them were to survive, indicating that creating private co-operative in lieu of a public option may still be feasible under the reconciliation process.

But that doesn’t change the underlying dilemma. The path of least political resistance is beset by procedural obstacles; and the path of least procedural resistance is beset by political ones.

Stay tuned…

Gil

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September 1, 2009 - Posted by | Uncategorized

1 Comment »

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    Comment by Desaree | September 5, 2009 | Reply


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