Progressive Breakfast: Senate Flinches on Public Plan Option

Baucus Draft Dumps Public Plan Option

W. Post's Ezra Klein assesses new health care draft from Senate Finance Cmte: [1]

The numbers tell the story. In that plan, subsidies reached 400 percent of poverty. In this plan, they've been cut to 300 percent. In that plan, Medicaid eligibility was as high as 150 percent of the poverty line. In this plan, it's 133 percent for pregnant women and children, and 100 percent for childless adults. In that plan, the "gold" coverage was 93 percent of a person's estimated expenses, and "bronze" coverage was 68 percent. In this plan, those numbers are 90 percent and 65 percent, respectively. That means people with a low-cost plan might be covered for only 65 percent of what they're likely to need...

...this is what I'd term 'comprehensive incrementalism.' It makes everything a bit better. It is not radical. It is not root-and-branch reform. For all the concerns about cost, there is no strong public plan able to negotiate low rates and implement aggressive reforms. The health insurance exchanges are a step forward, but they're state-based, and there's even room for multiple competing exchanges in a single state. They could be made substantially stronger.

The Walker Report is harsher: [2] "the most part Baucus's proposal is almost identical to that of the AHIP lobby. Both do not include a public option and would offer a bare bones insurance plan. Both have an individual mandates, a form of community rating, and some type of health insurance exchange. Both would also limit out-of-pocket cost based on the current HSA standard. In the few places the proposals differ, Baucus's proposal is in fact less generous than the AHIP."

Health Care Blog's Matthew Holt says it may be worse than nothing: [3] "This one is barely worth passing. We might be better off leaving the system and having a proper collapse before we start again in the next recession (which at the rate we’re going might be this one)."

Bloomberg quotes criticism from health expert Harold Pollack: [4] "'I’m taken aback by the extent to which they have pulled back,' said Harold Pollack, faculty chair at the University of Chicago Center for Health Administration Studies. 'The drive for bipartisanship for its own sake really will produce a less efficient, less well-crafted, less effective piece of legislation in the end.'"

Wonk Room's Igor Volsky stresses public plan option would be the best way to lower costs: [5] "The great irony, of course, is that a robust public option that uses Medicare-like rates would actually lower premiums and health care costs. But Democratic legislators seem unwilling or unable to stand behind a strong public option. Should they also sacrifice affordability of care in an effort to please conservatives concerned about the budget deficits, they would be placing themselves in between you and any kind of doctor."

WH Press Sec Robert Gibbs doesn't back off public plan option. [6] "We’re a strong supporter of including that option because, as I said, it provides choice and competition and it drives down costs."

HCAN rounds up results of grassroots push to get Senators on record [7] to support public plan option.

Change.org's Tim Foley notes CBO gave other instructions how to reduce costs [8] "...CBO lists a number of options that score very high, from moving away from fee-for-service and towards 'account care organizations' where providers would get a bonus if the demonstrate they’re delivering high-quality care and holding down costs; bundle payments to hospitals for episodes of care; conduct and disseminate comparative effectiveness research; expand the use of prevention, wellness and primary care; and, of course, remove the tax exclusion on employer-provided benefits. All sensible ideas worth doubling down on. And with people losing their coverage every day, coverage and cost are worth standing and fighting for."

Time's Karen Tumulty cautions: [9] "[The Senate Finance draft] gives a clue to their direction, although it is certain to change--perhaps substantially--between now and the time the committee begins formally drafting the bill after the July Fourth recess."

W. Post gets WH reaction: [10] "White House Chief of Staff Rahm Emanuel acknowledged that $1.6 trillion 'is a big number' that forced administration aides and congressional staff to rework the plan. 'Everybody now is going to take these bills back and come in below $1 trillion,' he said yesterday. But Emanuel described haggling over cost estimates as a routine part of lawmaking. 'Since it's the first inning, I wouldn't call the game,' he said.

House version to be introduced today [11], according to CQ.

House cmte will propose funding sources for health care reform shortly. Reuters: [12] "Rangel, the chairman of one of three committees working on healthcare legislation in the House, said the [Ways & Means] panel will come up with revenue raisers for the bill 'soon, very soon.'"

Reuters: "Healthcare costs for U.S. businesses are seen rising by 9 percent in 2010 [13], according to a PricewaterhouseCoopers survey, which showed that employers will expect workers to pay more of the bill."

Climate Deal With Rural Dems Close

ClimateWire: "House Democrats are within sight of agreement on a comprehensive energy and global warming bill, but it is still unclear if they have satisfied enough rural and fiscal conservative lawmakers to guarantee the votes for floor passage by next week [14] ... Waxman described a 'conceptual understanding that we're now looking at in more detail' with Peterson, adding that the work now rests on staff to come up with legislative language that could be unveiled as soon as today or Monday ... Waxman, for example, offered to give additional emission allowances to rural electric cooperatives..."

CQ adds: "House Democrats are working the aisles to try to build support for an energy bill, but a floor vote may slip until after the July Fourth recess. [15] Energy and Commerce Chairman Henry A. Waxman, D-Calif., said Thursday afternoon that revisions in the bill’s language could be finished as early as June 22 ... But he and House Speaker Nancy Pelosi, D-Calif., were less confident that the bill could come to the floor next week before Congress adjourns for a weeklong break. They pointed to delays on the floor Thursday after Republicans raised procedural objections to force an entire day of votes on the Commerce-Justice-Science spending bill."

TNR's Brad Plumer details [16] what rural Dems are asking for.

Climate Progress on new reports showing big job gains in climate bill: [17] "As clean energy and climate legislation moves through Congress, new data show that a $150 billion investment in clean energy — which the bill would achieve in its first 10 years — could create a net increase of 1.7 million American jobs and significantly lower the national unemployment rate. According to the analysis, shifting to a clean-energy economy will help millions of low-income Americans by creating more accessible job opportunities ─ with the potential for advancement ─ and by lowering utility bills and transportation costs."

Politico on Pelosi effort to attract GOP votes: [18] "'I would be surprised if they need our votes,' [Rep.] Ehlers said. 'If they do, they’re in more trouble than we thought."

Grist on clumsy smear effort from GOP & Big Coal: [19] "It’s no secret that the fossil-fuel industry produces many of the talking points Republicans use to scare voters about energy legislation. Usually, though, dirty energy execs don’t literally sign on as authors. House Republicans are circulating a PowerPoint document that purports to show the regional breakdown of costs for energy consumers under the Waxman-Markey climate and energy bill. The header: 'Most States Lose Under the Pending Climate Bill.' The catch? It appears to have been authored by the coal giant Peabody Energy."

Congress Skeptical on Increasing Fed Power

NYT reports several Senators reluctant to expand Fed reg power: [20] "One senator after another said his or her will to act was in no danger of subsiding. But they also signaled an unwillingness to accept the White House recommendations intact, particularly the idea of expanding the powers of the Federal Reserve to enable it to regulate risk across the financial system."

Politico adds: [21] "[Rep. Tammy] Baldwin is a bellwether, one of 66 Democrats — and 232 members overall — to co-sponsor a bill mandating audits of the Federal Reserve System for the first time in its nearly 100-year history. That push comes amid rising skepticism in the Senate over President Barack Obama’s plan to give the Fed sweeping new powers as part of its revamped financial regulatory plan"

New Deal 2.0's Jeff Madrick criticizes: "Securitization is at the heart of the problem. [22] The Obama team will require that originators own five percent of their mortgages—the famous 'skin in the game'–when they sell it off to packagers. This is not enough. European regulators suggested 20 percent. But even that is not the point. These bankers already owned a lot of these mortgages that they wrote in their hedge funds and Structured Investment Vehicles, and it did not make them more cautious. Once speculative fever rose to a profitable pitch, even the potential to lose money did not deter foolish investment. The fact is that institutions that take federally insured savers’ deposits should probably not be allowed to make any old risky investment it wants to. This is the key missing part of the Obama plan."

Baseline Scenario's James Kwak: "The real issue behind this reshuffling of agencies and responsibilities is how you can get better regulators [23] – people with the skills, motivation, and stomach to stand up to both banks and politicians who are screaming at them to get out of the way of progress and prosperity. And here I don’t think the administration’s plan gives us anything. What could it have done? Here’s one idea: it could have spun the regulatory agencies off into semi-independent bodies, so their heads aren’t replaceable at will by political figures (as is currently true of the Fed); established a long prohibition (5 years?) on making any money from the financial sector after leaving the agency; and then doubled the salaries of every single regulator."

Terrance Heath contributed to the making of this Breakfast