Baucus Bill Gets CBO Nod, Committee Vote Set for Next Week

Oct. 8, 2009— -- Senate Finance Committee Chairman Max Baucus' bill got a thumbs up from the Congressional Budget Office, clearing the way for a committee vote, but health care overhaul is still nowhere near the end of the road.

CBO's scoring provided a boost to the momentum, but Democrats still need to iron out key differences among the various bills. The CBO analysis concluded the Baucus measure would come in under budget at $829 billion, and would expand coverage to 94 percent of eligible Americans.

Senate Majority Leader Harry Reid, D-Nev., said today the Finance Committee will vote on Baucus' bill next Tuesday. If the bill passes, it would need to be interwoven with the bill passed by the Senate Health, Education, Labor and Pensions Committee, and that means legislation will likely not be on the Senate floor until the week after next, at the earliest.

Meanwhile, House Democrats are working to marry the three different pieces of legislation. Once they are complete, both Senate and House bills will have to be merged for a full vote.

House Democratic leaders want to wait for the Senate to act before bringing a bill to the floor. In the meantime, they have to bring on board fiscally conservative Blue Dog Democrats, who have expressed reservations about the cost of the bills, each of which is estimated to cost more than $1 trillion over the next 10 years.

Today, Speaker of the House Nancy Pelosi, D-Calif., expressed optimism about the direction of discussions but wouldn't comment on how the mechanics would play out once there was a single bill from House Democrats.

"This is not about whether you have the votes. This is about what does the job for the American people in the most fiscally sound way," Pelosi told reporters today.

One of issues under discussion is what provisions should be included in a government-run insurance option.

"There will be the votes for a public option and now it's a question of which one," Pelosi said.

But despite House Democrats' insistence that a public option be included, Senate Democrats are still divided on the idea. The Health, Education, Labor and Pensions Committee has included the provision in its bill, but Baucus' proposal instead calls for the creation of nonprofit health care insurance cooperatives as an alternative.

However, the CBO analysis, released Wednesday, suggested that co-ops aren't much of an alternative to what is currently being offered.

"The proposed co-ops had very little effect on the estimates," the CBO report said, because "they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments."

That analysis is likely to create rifts between Baucus and his colleagues, many of whom are insisting on a public option.

Another proposal being discussed in the House is a windfall profit tax on insurance companies. Some Democrats say such a tax might help pay for overhauling the system.

Pelosi said the idea is being discussed but that it's still "preliminary."

"They [insurance companies] are going to get 50 million new consumers, many of them subsidized by the taxpayers, and we think they can put more on the table," she told reporters.

Democrats Divided

Republicans downplayed the relative low cost and deficit neutrality of the Baucus bill as "irrelevant." Sen. Mitch McConnell, R-Ky., even suggested that "it'll never see the light of day."

"The real bill will be cobbled together in some secret room in the Capitol by a handful of Democratic senators and the White House," McConnell told reporters.

There's a good chance that the emphasis in what Democrats create will be on the Finance Committee bill, because it can draw centrist Democrats and maybe even centrist Republican Sen. Olympia Snowe. The Maine senator said Wednesday she needed time to review and evaluate CBO's estimates but has been open to supporting a Democratic bill if it is affordable and doesn't create new taxes.

However, some Blue Dog Democrats such as Sen. Ben Nelson, D-Neb., are playing hardball and have expressed uncertainty about passing a bill that only has Democratic support.

Republicans generally have assailed Democrats for introducing new taxes.

"All they want to do around here is tax something. And if you tax insurance companies, guess what? Their customers are going to pay higher premiums. There is no ifs, ands or buts about it," House Minority Leader John Boehner, R-Ohio, told reporters today. "It's not appropriate and its unnecessary."

CBO Scores Baucus' Bill

According to the Congressional Budget Office, the Senate Finance Committee's health care bill would cost $829 billion over 10 years and reduce the deficit by $81 billion in the same time period. If the bill were to become law, CBO estimates that 94 percent of Americans and legal residents would have health insurance and 91 percent if illegal immigrants are included.

The cost is less than the $900 billion mark set by President Obama, but it Baucus' bill hasn't escaped the scrutiny of Republicans, and even some Democrats.

The major costs in Baucus' bill would come from a $345 billion increase in Medicaid and the Children's Health Insurance Program, $461 billion in subsidies to help lower-income Americans buy health insurance and $23 billion in tax credits for small businesses that provide insurance to employees.

The bill would be paid for by a combination of new taxes and cuts in Medicare spending.

The Medicare cuts would likely continue to be an issue even if the bill passes. CBO's analysis projects $404 billion in cuts to Medicare -- and some Medicaid -- providers, including $117 billion in cuts from the popular Medicare Advantage program, which covers nearly a quarter of all older Americans.

Tax increases would also be an issue. A new tax on so-called high-value "Cadillac" health insurance plans would bring in $201 billion, but many Democrats say this unfairly hits unions that have negotiated generous health care plans in exchange for wage increases. Another $180 billion would be generated from taxes on medical devices and the penalty -- up to $1,900 -- paid by those who don't buy health insurance.