Shortly after the November 4, 2008, Presidential election, Senator Max Baucus, Chairman of the Senate Finance Committee, released his proposal to overhaul the health-care system. This proposal closely mirrored President-elect Obama’s desired plan. Then on December 11, 2008, Obama presented former Senator Tom Daschle as his choice to become secretary of Health and Human Services.
This early plan included a national insurance exchange for private policies that would compete with a public option managed by the government and modeled after Medicare. Lower-income workers would get subsidies and businesses that didn’t cover their employees would pay a tax. The last cog was an “individual mandate,” which Obama strongly opposed during his campaign.
Even before taking the reins of government, Obama, Baucus, and Daschle were planning on how this massive bill would get passed. In the 1990s, Congressional Budget Office (CBO) director Robert Reishcauer knee-capped HillaryCare by pointing out its true costs and giving little credit to claims it would generate savings.
In President Obama’s first address to congress on February 24, 2009, he said, “Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week.” During this address he did not specifically propose an individual mandate, however, he did make it clear that Congress could propose a mandate and he would support it. Obama now supports what he ridiculed Hillary for supporting.
In March, on the heels of nominating Kansas Gov. Kathleen Sebelius to head the health and human services agency, Obama held his first health care summit with lawmakers, doctors, hospital groups, pharmaceutical firms and consumer organizations. Obama borrowed an idea from Gene Sperling of the Treasury Department and set aside $634 billion in a health-care reserve fund over the next 10 years.
As early as May, 2009, the Democrats were threatening the use of “budget reconciliation,” the method they eventually used in February 2010 to pass Obamacare. By doing so they hoped they could threaten the GOP into rubberstamping a multitrillion-dollar liability. The political game was to peel off a handful of GOP Senators before the bill came to the floor in June. To short-circuit the debate before it began.
Obama hoped to gain Conrad’s support as only his committee could determine what legislative measures will fall under reconciliation guidelines. To court Conrad he sent Peter Orszag as emissary and showered presents on Conrad’s dog, a white bichon fries named “Dakota. Conrad brought up a local issue demanding more Medicare spending to some of North Dakota’s hospitals. This was included in the final bill.
Weeks after the 2008 election Billy Tauzin, former congressman who became head of the Pharmaceutical Research and Manufacturers of America (PhRMA), approached Obama. While in 1994 the drug industry helped bankroll the campaign to kill Clintoncare, now they thought they were better off shaping legislation than fighting it. PhRMA agreed to $80 billion in savings, partly as reduced government spending on public insurance programs. PhRMA also pledged to openly support reform by financing pro-reform ads. In return, the White House agreed to not further cut into drug industry revenues including the agreement not to allow reimportation of drugs from Canada.
The real public push began on June 15, 2009, with Obama’s speech to the AMA, “So let me begin by saying this: I know that there are millions of Americans who are content with their health care coverage – they like their plan and they value their relationship with their doctor. And that means that no matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.” He also said, “we should end overpayments to Medicare Advantage.” This would save $177 billion. And he made other proposals to save another $313 billion in Medicare and Medicaid spending.
July 14, 2009: House Democrats unveil their 1,000-page plan – HR 3200 “America’s Affordable Health Choices Act of 2009”. This was a Tri-Committee draft proposal from The House Ways & Means Committee, The House Energy & Commerce Committee, and The House Committee on Education & Labor. This was introduced as one big bill, but each committee still had to separately pass their own versions out of committee, merge them into one bill, then have a vote on the floor.
July 15, 2009: Senate Health, Education, Labor and Pensions (HELP), Chairman Dodd, is the first congressional panel to pass a preliminary version. “Affordable Health Choices Act” with a 13-10 vote.
The Kennedy-Dodd plan above still needed to be merged with the Senate Finance Committee Bill before going to the floor for vote.
July 16: The House Ways and Means committee passed their version, 23-18.
July 17: The House Education and Labor passed their version, 26-22.
On July 27: John Conyers, the democratic congressman from Michigan, reflected the opinion of many members during a speech to the National Press Club. Conyers mocked members of Congress who were urging their colleagues to actually read the bill being proposed, “I love these members, they get up and say, ‘Read the bill,’” said Conyers. “What good is reading the bill if it’s a thousand pages and you don’t have two days and two lawyers to find out what it means after you read the bill?”
July 31: The House Energy and Commerce Committee votes 31-28 to approve its version that also contains a public option. This committee was delayed secondary to the Blue Dog caucus, three democrats and two others, Stupak and Boucher.
Meanwhile, Baucus, Chairman of the Senate Finance Committee was having a difficult time getting a bill out of his committee. He wanted to have a bipartisan bill and actively tried to recruit republicans to his cause. His one success was Sen. Olympia Snowe and he also spent a large amount of time with Chuck Grassley, who never converted. At one point Baucus was called to the Oval office where the President, Harry Reid, and Pelosi confronted him about his slow progress and wasting time on Republicans.
Baucus was still trying to be bipartisan and reached out to Mike Enzi. Enzi was willing to talk and so Baucus convened what became known as the “Gang of Six” – Enzi, Grassley and Snowe for the Republicans, Baucus, Jeff Bingaman and Kent Conrad for the Democrats. Enzi quickly let it be known he was not willing to compromise. Grassley came under pressure not only from the senate, but Iowa conservatives began threatening to back a primary challenge if Grassley voted for health reform.
The summer of 2009 revealed the distaste the public really had against Obamacare. Democratic lawmakers holding community meetings were berated. The polls in August showed 47% of Americans opposed the public plan versus 43% in favor. A drop from July when 46% backed it and 44% opposed. And 40% felt it would make their health care worse, up from 24% in April. Obama’s personal approval dropped from 53% to 51%. So, on September 9, Obama decided to get aggressive – a lot more aggressive – starting with a televised address to Congress on Health Care. It was during that speech that the Republican congressman, Joe Wilson of South Carolina, shouted, “you lie!”
Before the speech, something more significant happened. Obama announced that the administration had prepared its own proposal, just to make clear what provisions it supported. The administration was actually writing an entire bill in case Baucus didn’t. Reid also told Baucus that if he didn’t get a bill out of his committee soon he would introduce a bill on the floor.
Baucus held the second of two conference calls with the Gang of Six and explained that if they didn’t start moving now Finance could end up out of the picture. One major problem was financing the bill. Baucus wanted to finance it by eliminating tax deductions for health insurance. Obama, in his September speech, endorsed an idea of John Kerry, tax insurers for the provision of expensive plans. During this struggle the insurance companies shot themselves in the foot. They released a study by PricewaterhouseCoopers that reform would hike premiums. This solidified the Democrats.
By September 14 the Gang of Six had completed 31 meetings to discuss the bill and on Sept. 16 Baucus released his Chairman’s Mark of the Finance Committee health care reform bill, The America’s Healthy Future Act, for review. After several debates, the bill was finally approved by The Finance Committee on Oct. 13 by a 14 to 9 vote.
October 29. The House unveil its merged health care bill. It included the public plan option. Had a tax surcharge on the wealthy. The House Democratic leadership gave its members 72 hours to read it before voting.
Nancy Pelosi famously stated on October 29, “The bill is fiscally sound, will not add one dime to the deficit.”
Now the House needed to get the merged bill passed on the floor and needed 218 votes.
November 7: the House approves its version of health care reform, H.R. 3962, in a 220-215 vote. A last minute compromise limiting federal funding for abortion cleared the way.
November 19: The Senate finally merges its two plans into one bill. November 21. The Senate voted 60-39 to open debate on the bill and on November 30 debate began.
Dec 21: It was discovered that Harry Reid introduced an amendment in the bill that changes the rules of the Senate. Legally, to change the rules of the Senate there must be 67 votes. Senator Jim DeMint pointed out astounding language in the Senate health care bill. Section 3403, page 1020, it states that the independent Medicare Advisory Board cannot be repealed or amended by future congresses. The Boards function is to slow the rate of growth of Medicare by changing payment rates. This language survived into the final bill on page 415. “Vice President Biden overruled DeMint stating it was a procedure change, not a rule change.”
Dec 24: After 25 days of debate the Senate passes the Senate’s version of health care, H.R. 3590. [Note, all bills raising revenue must originate in the House. The Senate took a military housing bill, HR 3590, stripped it and inserted the healthcare language as an amendment.]
At this point the Senate and House needed to reconcile their plans and combine them into one bill. Then this single bill would have to go back-and-forth between the House and Senate until both chambers approve the bill without any further amendments. At that point it would go to the president for signature.
Problems are developing.• The Teamsters Union and AFL-CIO and the Screen Actors Guild are upset over the Cadillac tax. The unions are large Pelosi contributors.
• In the House Bart Stupak and his band of 10 pro-life Democrats would not accept the Senate’s language on funding abortions. Pelosi needs to deal with them to obtain passage.
• Republican Scott Brown won the special election for the late Sen. Edward Kennedy’s Senate seat. This broke the Democrats’ supermajority and their ability to break a GOP filibuster of any final version.
The biggest problem was that the Senate lost their supermajority and could not stop a filibuster over the final version. The Democrats had only three options:
1) Negotiate with Scott Brown, Susan Collins, and/or Olympia Snowe to find a 60th vote.
a. Olympia Snowe, a moderate, no longer supports Obamacare. Along with 38 House Democrats who defected from the party line in November.
2) Prevail on the House to agree to the Senate bill without amendment.
a. House liberals will not sign on without special treatment for favored interest groups – labor unions. Nancy Pelosi cannot muster the votes. The best vote Pelosi could hope to get at that time was 216-216. Not enough to pass.
3) Prevail upon the House to pass the original Senate bill, with both chambers passing a reconciliation bill resolving inter-chamber differences.
Option #3 was the obvious choice; however, it has a major hurdle – the “Byrd Rule”. Reconciliation is only supposed to be used for budgetary items – spending, revenues, and the debt limit. There is also the restraint that it cannot increase the deficit. In the 1980s the Senate had used reconciliation to pass items not related to the budget and so a rule was introduced, named after Senator Byrd, requiring that every provision in the reconciliation bill have an impact on the budget. It must be germane. Because of this rule, it was believed that a large healthcare bill could never be passed by reconciliation.
For option #3 to work, the Senates bill must be accepted as written without amendment. Then a second bill satisfying all the rules for reconciliation would be drafted that essentially amends the Senate Bill that resolves the differences between the Senate and the House.
What makes this method especially ironic is when you read the Audacity of Hope written by Obama. In it Obama screams about the strong-arming and the assault on minority (democrat/republican) rights by Bush 43. On the campaign trail the President hawked his moral superiority as a sure-fire tonic to cure partisan division.
In order for Pelosi to pass anything in the House she needs Stupak and his followers on board. That means she needs to eliminate the abortion language. Another problem for Pelosi is the public option. The final bill will have to resemble the Senate version which means less spending. This nominal price tag – as assigned by the CBO – essentially eliminates the public option.
Pelosi, on January 28, said, “You go through the gate. If the gate’s closed, you go over the fence. If the fence is too high, we’ll pole vault in. If that doesn’t work, we’ll parachute in. but we’re going to get health care reform passed for the American people.”
On January 29, Obama went to a Republican retreat in Baltimore and held a question and answer that was televised. It was so successful that he had another debate at Blair House in late February. But, all this was stalling time. Pelosi used to the time to work on her members and the House staff coordinated with their White House and Senate counterparts. Reid worked his caucus to make sure he had 51 votes to approve the reconciliation bill.
On March 11, Reid sent a letter to Minority Leader Mitch McConnell declaring that he will be using reconciliation. On March 17 John Spratt introduced into the House H.R. 4872, “Health Care and Education Reconciliation Act of 2010”. This was passed in the House and sent to the Senate on March 25. According to Alcee Hastings of the House Rules Committee during the process: “We’re making up the rules as we go along.”
The role of Biden as VP. The VP is the president of the Senate. The parliamentarian can only advise, the VP rules. As the legislative amendments are offered, the parliamentarian will make a ruling as to whether they satisfy the conditions for reconciliation’s use. Biden then can choose whether or not to accept the decision. He can also decide if more or fewer amendments can be passed. The ruling is subject to appeal, but the appeal is decided by majority vote. Biden can also put an end to the endless amendments by ruling that the amendments are not germane. This was exactly what happened. Biden ruled no more amendments and the bill was passed.
On March 21 the House passed the Senate bill 219-212. The Senate passed the House reconciliation bill.
To obtain the Votes of Stupak in the House in order to get the bill passed, Obama promised to issue an executive order limiting abortions. He did that the day after signing the health care bill. As far as the Unions? They opposed the Cadillac tax, Obama told them “too bad.”
ObamaCare became law. The costs?
• Ben Nelson, Nebraska, got a permanent exemption from the state share of Medicaid expansion.
• Bernie Sanders, Vt., obtained $10 billion in new funding for community health centers.
• Nelson and Carl Levin (Mich) carved out exemptions for non-profit insurers in their states from a excise tax.
• Max Baucus to treat Libby, Montana different than any other town. The entire community is eligible for Medicare. Any age, immediate coverage, no buy-in (its free), no income tests.
• Vermont and Massachusetts were given additional Medicaid funding, another plus for Sanders and Patrick Leahy.
• Pennsylvania, New York, and Florida won protections for their Medicare Advantage while other states are facing cuts.
• Chris Dodd - $100 million medical center in Connecticut.
• Mary Landrieu in Louisiana obtained a $300 million increase for Medicaid.