Joe Lieberman « Main Street

Health Care Reform Must Not Follow Stimulus Path

After Senate Majority Leader Harry Reid announced that he would include a public option in the Senate health care bill, it didn’t take Sen. Joe Lieberman long to threaten to block the bill altogether.

In stating his opposition to a public health insurance option, Lieberman sounded familiar notes from reform’s opponents, calling it a “government entitlement program” that will cost the government more money. Neither assertion is true. The public health insurance plan would be paid into, not subsidized, and as the Congressional Budget Office has repeatedly stated, the plan would reduce both premiums and government costs.

Not only are these assertions false, they represent a major change in Sen. Lieberman’s own position on health care. During his reelection campaign in 2006, he highlighted his positions on health care, which included something similar to the public option.

What Lieberman’s objections may well signal now, however, is a potential threat to health care reform with a public option from a gang of Senate “centrists” despite overwhelming support for the public option in recent polls. And that is likely what Majority Leader Reid had in mind yesterday when he said “Joe Lieberman is the least of Harry Reid’s problems.”

Today’s Washington Post reports that the usual suspects of “centrists” in the Senate are “unsure about Reid’s public option”.

The New York Times reported:

Among the Senate Democrats who have not committed to supporting the bill are Evan Bayh of Indiana, Mary L. Landrieu of Louisiana, Blanche Lincoln and Mark Pryor, both of Arkansas, and Ben Nelson of Nebraska.

Including Lieberman, this new “Gang of Six” has the potential to significantly damage health care reform in insidious ways. For example, on the public insurance option, they could withhold support for a cloture vote on the entire bill unless it was further compromised into either an “opt-in” plan, separate state-based plans, or a bogus down-the-road-but-never-happening “trigger” plan.

But the Senate’s public insurance plan with the “opt-out” provision for states, agreed to by Reid, Dodd, Baucus and the White House, is already a compromise. In fact, it’s a compromise of a compromise of a compromise of a compromise of a compromise!

Enough! There can be no more compromises on the public insurance option.

But even if they lose on that key component of reform, the “centrist” gang could — if allowed — still severely undermine other features of the bill. Under the rubric of “deficit reduction” they could try to reduce the number of people helped through subsidies for insurance and reduce those actual subsidies as well. They could push to reduce employer payments for those not covered, putting more of the burden on the middle-class and working families. And they could try to build in additional safeguards to protect the markets and profits of the private insurers — all under the assertion of “reducing costs”.

The lesson for the Democratic leadership and the White House shouldn’t be too tough to have learned. One simply needs to recall the progression of events back in February as the final versions of the stimulus bill were taking shape. In a nutshell, a relatively small group of Senate “centrists” — then led by Senators Lieberman, Ben Nelson (D-NE), Olympia Snowe (R-ME) and Susan Collins (R-ME) — succeeded in cutting roughly $100 billion in actual economic stimulative funding from the bill, substituting a non-stimulative tax reduction for wealthier Americans, thereby significantly hampering the plan’s ability to generate a real recovery.

And all under the rubric of getting to 60 votes, meaning their votes.

Here’s how that brouhaha went down.

On February 5 The New York Times reported “There’s a new gang in town” and they were intent on impacting the pending Recovery Act.

The group was frustrating the Senate majority leader, Harry Reid of Nevada, who was trying to bring the debate over President Obama’s economic program and top legislative priority to a close.

“I have explained to people within that group, they cannot hold the president of the United States hostage,” said Mr. Reid, who added that he was willing to work with them if they intended to be constructive rather than obstructive.

Stimulus Talks Set to Continue After Centrists Push Cuts The Times then reported:

By early evening, aides said the group had drafted a list of nearly $90 billion in cuts, including $40 billion in aid for states, more than $14 billion for various education programs, $4.1 billion to make federal buildings energy efficient and $1.5 billion for broadband Internet service in rural areas. But they remained short of a deal, and talks were expected to resume Friday morning.

The next day’s report was Senators Reach Deal on Stimulus Plan as Jobs Vanish:

The fine print was not immediately available, and the numbers were shifting. But in essence, the Democratic leadership and two centrist Republicans announced they had struck a deal on about $110 billion in cuts to the roughly $900 billion legislation — a deal expected to provide at least the 60 votes needed to send the bill out of the Senate and into negotiations with the House, which has passed its own version.

On February 7 columnist Paul Krugman warned in “What the centrists have wrought”:

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

But that wasn’t the end of it, as the competing House and Senate versions of the stimulus still had to be merged into a single bill.

But the competing bills now reflect substantially different approaches. The House puts greater emphasis on helping states and localities avoid wide-scale cuts in services and layoffs of public employees. The Senate cut $40 billion of that aid from its bill, which is expected to be approved Tuesday.

The Senate plan, reached in an agreement late Friday between Democrats and three moderate Republicans, focuses somewhat more heavily on tax cuts, provides far less generous health care subsidies for the unemployed and lowers a proposed increase in food stamps.

When it was clear that the Senate, with their 60 vote fetish, would likely win out, Paul Krugman wrote of “The Destructive Center”:

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?
A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

On February 11 The New York Times reported the House-Senate “deal”:

The package of spending increases and tax relief, intended to spur an economic recovery and create jobs by putting money back in the pockets of consumers and companies, ended up smaller than either the House or Senate had proposed.

Even before final Congressional passage it had become clear that the stimulus package had been severely impacted by the Senate centrists, as The Times reported in “Details of a Trimmer Stimulus Emerge” on February 12:

Even before the last touches were put to the bill, some angry Democrats said that Mr. Obama and Congressional leaders had been too quick to give up on Democratic priorities. “I am not happy with it,” said Senator Tom Harkin, Democrat of Iowa. “You are not looking at a happy camper. I mean they took a lot of stuff out of education. They took it out of health, school construction and they put it more into tax issues.”

Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. “It’s about 9 percent of the whole bill,” he said, “Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery.”

But even as Congressional leaders and top White House officials went through the package with a carving knife, it was clear that the three Republicans who agreed to support the bill in the Senate wielded extraordinary power, and along with conservative Democrats, had put a firm stamp on the stimulus package.

The lessons from the stimulus legislative process are clear. The question now, in the context of the current battle for health care reform and the public option, is whether the Democratic leadership and the White House have learned those lessons. Or will they allow the perverse conceit of the centrists to win out over the interests of the American people?