Obama Battles the Political Gauntlet of Health Care

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The Obama administration is discovering what the Clinton administration learned 16 years ago: the politics of health care reform are treacherous.

Just a few months ago, President Obama seemed uniquely positioned to get Congress to pass comprehensive health care reform, something that has eluded every Democratic president since Harry Truman.

On March 5, the president convened a health care "summit" at the White House that brought together Democrats, Republicans, unions, businesses and health industry leaders. One by one, the key players -- many of whom had opposed reform efforts in the past -- assembled in the East Room of the White House, vowing to work together.

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"First of all I want to compliment the president on the process," Rep. Joe Barton, R-Texas, declared at the time. "I'm one of the ones that worked very hard to kill Hillary care, but this is a different time and this is a different approach."

The optimistic note was echoed by top business and health industry leaders, including Karen Ignagni, president of America's Health Insurance Plans (HIP), which created the famous "Harry and Louise" ads that helped kill President Clinton's health care bill in 1993.

"You have our commitment to play, to contribute and to help pass health care reform this year," Ignagni told Obama.

"Thank you, Karen, that's good news," the president responded, pointedly noting that she was with the country's largest health insurance association.

But since then, it's been a bumpy road.

Barton, for example, has gone from a possible supporter of the president's efforts to an all-out opponent. Despite the president's promise to work with Republicans, Barton says Congressional Democrats have gone their own way.

"The Democrats didn't include us, didn't want our input, had apparently a pre-conceived notion that they wanted to nationalize health care and spend trillions of dollars that we don't have," Barton told ABC News.

He added that Democrats have drafted a bill that has "very little chance to ultimately succeed."

Public Option Ignites Controversy In Health Care Debate

Ignagni says her organization still hopes to be able to support a bill but is adamantly opposed to a central feature of the president's proposal: the creation of a government-run health insurance program -- what the White House calls a "public option" -- to compete with private insurance companies.

In an interview with ABC News, Ignagni said the public option would have disastrous consequences and be a "roadmap to bankrupting hospitals."

It appears the broad coalition Obama had hoped to assemble is fracturing.

Even among Democrats in Congress who are committed to health reform, there is no real agreement on how to pay for it.

The Senate Finance Committee was expected to come out with its version of the bill -- including the way to pay for it -- last week, but has now delayed action until after July 4.

The biggest problem: costs are even higher than expected. An initial estimate by the nonpartisan Congressional Budget Office (CBO) put the cost of the finance committee's draft bill at $1.6 trillion. That's far more than the $1 trillion Obama had anticipated.

A CBO estimate of another version of the bill written by the Senate Health, Education, Labor and Pensions committee put the cost at $1 trillion, but the bill would only cover one-third of those without health insurance -- a far cry from the president's vision of universal coverage.

Regardless of what the final price tag is, Democrats have yet to agree on how to pay for it.

Senate Finance Committee Chairman Max Baucus, D-Mont., has proposed taxing health care benefits, an idea Sen. John McCain, R-Ariz., also proposed during the 2008 presidential campaign. But Obama opposed that idea as a candidate and remains cool to it now. Instead, the White House has suggested reducing tax breaks for charitable contributions by households with more than $200,000 in income, an idea Baucus opposes.

Despite the snags, Democrats on Capitol Hill remain optimistic that they can get a plan passed this year, although they acknowledge it may be a less ambitious plan than they had hoped for.

And there is reason for optimism.

Despite the big disagreements over financing and the creation of a government-run insurance program, there is broad agreement -- even among health industry leaders and many Republicans -- on the key elements of reform, including mandating coverage for all Americans, helping the poor pay for insurance, making it illegal to deny coverage to those with pre-existing conditions, and putting more emphasis on preventive medicine.

All that means there is far more agreement on the key elements of health care reform today than there was in 1993. But with record budget deficits, there's also less money to pay for it.