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What's Next for Health Care Reform - Reconciliation?

The summit dramatically revealed that disagreements trump areas of agreement.

The clearest message of last week’s presidential health care summit may be just how intractable the differences are between Republicans and Democrats.

And that clarity may end up moving health care reform forward by convincing Democrats to push ahead without GOP support. President Obama will address the issue later in the week, and congressional leaders are meeting to work out the details.

Reconciliation may be used

But in the wake of Thursday’s summit of nearly seven hours between Obama and lawmakers of both parties, health care experts believe it’s likely Democrats will use a parliamentary maneuver called reconciliation to push the bill without GOP support.

“Some things got crystallized,” says Nancy-Ann DeParle, the top White House health care adviser. “Families and businesses are being crushed by rising costs . . . and by the practices of insurance companies.”

Differences emerge

But DeParle says the summit also laid bare stark differences between Republicans and Democrats on issues such as how far to go in covering people who have no insurance. Republicans said at the summit that Americans cannot afford the Democratic measure and don’t support it. The GOP’s main plan would extend health care coverage to only 3 million uninsured people; the Democratic plan would cover 31 million uninsured Americans, DeParle says.

“It’s kind of hard to see how you bridge those two things,” she adds. “It may be a fundamental disagreement between us.”

Another major divide is over what to do next. Republicans want to start over. Democrats say action is needed now and want to continue working with their plan.

What might happen

Democratic leaders are working out the details of the next step but are likely to use the reconciliation process because it allows an up-or-down vote by a simple majority in the Senate. The surprise election in January of Sen. Scott Brown, R-Mass, gives Republicans the votes needed to filibuster and to block the bill if it moves through the usual legislative process.

The House and Senate each passed different health bills last year. Lawmakers are talking about having the House vote to accept the Senate bill, then working out compromises in a separate reconciliation bill that would have to be voted on in both chambers but would need only a simple majority.

“Basically, using reconciliation is declaring war,” says Dani Doane, director of government relations at the Heritage Foundation, a conservative think tank. “It’s what we call here the nuclear option.”

Reconciliation is intended for budget-related items, so some portions of health reform could not be addressed in the new bill. And Republicans complained loudly at the summit that changing 17 percent of the nation’s economy—which health care represents—with a parliamentary maneuver was wrong. Craig Orfield, spokesman for Sen. Michael Enzi, R-Wyo., calls it “an end run around public opposition.”

Republicans used reconciliation

But DeParle notes Republicans used the method for health care bills when they were in the majority. “I’m just mystified by that [objection,]” she says.

Doane says Obama is overly optimistic if he thinks he can get the necessary Democratic support to pass the bill before the spring recess March 26. Differences remain among Democrats on issues of abortion, costs and a public insurance option. “This isn’t an easy fix, getting all that worked out by Easter,” she says.

But David Blank, spokesman for the Alliance for Retired Americans, a nonprofit group of retired trade union members and other older Americans, says some of the moderate Democrats who were hesitant to push the bill through with reconciliation may be convinced after the summit. “It showed they [Republicans] aren’t looking to do anything but be the party of no,” Blank says.

Blank says the reform bill would help seniors with prescription drug costs by closing the “doughnut hole” gap in coverage, offer affordable long-term care insurance, and stanch the rapidly rising cost of health care. Without reform, he says, one-third of the average Social Security check will soon go to Part B premiums medigap coverage and other out-of-pocket medical costs. “It has quantifiable benefits for seniors,” he says.

But Doane says a cost of the bill will be to slow down the economy. President Obama is pushing for a new Medicare tax on wealthy Americans (individuals earning more than $200,000, and families with more than $250,000.) The new 2.9 percent tax would apply to unearned income like dividends, interest, and rent.

Economic effects disputed

“That’s devastating to the economy,” says Doane of the Heritage Foundation, which estimated that the president’s proposed tax would cost 115,000 jobs a year by slowing investment and productivity.

DeParle says she doesn’t believe the tax on wealthy investors would have a negative effect on the economy. The tax already applies to earnings from jobs. “It’s a basic fairness issue,” she says. “We all have an obligation to contribute.”

Ed Howard, executive vice president of the Alliance for Health Reform, says the sharp differences between the parties on display at the summit may help educate the public. Republicans push for a free market-oriented solution, while Democrats argue for government regulation and subsidies for those who can’t afford insurance. “Maybe the country got educated a little bit over the substance of the bills,” he says.

Whatever happens to reform in the coming weeks, the public will be the ultimate arbiter.

Republican Sen. Lamar Alexander of Tennessee on Monday told Fox News that his party will campaign on repealing whatever health reform Democrats pass: The bill “is going to define every Democratic candidate for every public office in November, and Republicans are going to try to elect the majority who’ll come in here and try to provide a check and a balance to more taxes and more spending and more takeovers.”

Early in last week’s summit, Obama admonished his presidential campaign opponent, Sen. John McCain, R-Ariz.: “ We’re not campaigning anymore. The campaign is over.”

But by the end of the day, it was clear the campaign is not yet over—at least not the one in November that will determine whether Democrats hold onto their majorities in the House and Senate. Republican Whip Eric Cantor of Virginia has predicted Democrats will lose their House majority if they push the bill through under reconciliation rules.

And Obama closed the summit declaring that if the two parties can’t agree on reform, “that’s what elections are for.”

Tamara Lytle was Washington bureau chief and a correspondent for the Orlando Sentinel from 1997 to 2008.

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