Senate Finance Committee Rejects Public Option Proposal in Health Care Bill

The Senate Finance Committee voted against proposals that would create a government-run insurance plan in the committee's health care overhaul bill.

Sen. Jay Rockefeller, D-W.Va., proposed a public option plan designed along the lines of Medicare, where the government would decide unilaterally how much to pay doctors and hospitals for people who choose to enroll in the public plan. Sen. Chuck Schumer, D-N.Y. tweaked it by mandating that the government negotiate rates with health care providers, like a private insurer does, instead of simply mandating them. Schumer had touted this as middle ground that responds to market forces.

Video of the Senate Finance Committee debating the public option.

But after five hours of debate, both amendments lost. Most Democrats supported Rockefeller's proposal -- with the exception of five -- but the votes were not enough to pass either proposals out of the committee.

Today was the first day the Senate Finance Committee held a debate on the option of a government-run insurance program, which has been a key point of contention. It has pitted liberal Democrats not just against Republicans, but against moderate Democrats as well. When Montana Sen. Max Baucus, chairman of the finance committee, presented his version of a bill two weeks ago to a flat response, he left out the public option to the chagrin of many of his party members. Instead, Baucus proposed the creation of health care co-operatives, which are member-owned, non-profit insurance providers that would compete with private firms.

Video of ad from Americans United for Change calling out Republicans for using health care scare tactics.

Rockefeller and Schumer both offered measures as an alternative to Baucus' plan, but neither were expected to pass.

Baucus today said he didn't vote for the Rockefeller amendment because he wants to find a bill that would get all 60 votes on the Senate floor. He made the same argument for not voting for Schumer's amendment.

"My job is to put together a bill that becomes law," Baucus said. "I can count. Nobody has shown me a bill with a public option that gets to 60. So I am constrained to vote against the amendment."

GOP Criticism

Republicans, most of whom vehemently oppose a public option plan, have employed a new line of attack and are saying the Democratic health care bills would result in massive new tax increases.

The Republican National Committee launched a Web video Monday, using the new peg to attack President Barack Obama and the Democratic leadership. RNC Chairman Michael Steele amplified the attack in a news conference today.

"Just a few thoughts I have on this health care train that's moving somewhere, we don't know where, we don't know what's on it, we don't know how much it costs, but we do know that inside of it are a great deal of odorous economic pillories on businesses and families that will not hasten recovery but prolong recession," Steele told reporters.

He charged that the Democrats are shifting the burden to states to pay for health care costs, and said that making health coverage mandatory would make poor Americans suffer from excessive fines.

Medicare Debate

One of the most pointed exchanges of the debate today was whether public option would be like Medicare.

"Placing [health care] in the hands of a Washington, D.C. bureaucracy... I don't know many people in this country that think that is the way to solve the problem," said Utah Republican Sen. Orrin Hatch.

Or, as Sen. Charles Grassley, R-Iowa, put it, "A public insurance plan will ultimately put private insurers out of business."

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