Progressive Breakfast: Reid Opts For The Option

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Reid Puts Public Option In Senate Bill

The Treatment's Jonathan Cohn counts votes: [1] "The buzz is that Reid has between fifty-six and fifty-eight votes. And getting those last few won't be easy. Senators Mary Landrieu (Louisana), Blanche Lincoln (Arkansas), and Ben Nelson (Nebraska) haven't ruled out voting for a bill with an opt-out. But they've made very clear it's not anywhere near their first choice."

Ezra Klein deems the "opt-out" proposals a major concession by the Left: [2] "In many ways, this is a fundamentally conservative approach to a liberal policy experiment. It's only offered to individuals eligible for the insurance exchanges, which is a small minority of the population. The majority of Americans who rely on employer-based insurance would not be allowed to choose the exchanges. From there, it is only one of many options on the exchange, and only in states that choose to have it. In other words, it has been designed to preserve the status quo and be decided on the state level. Philosophically, these are major compromises liberals have made on this plan. They should get credit for that."

Wonk Room's Igor Volsky suggests ways to improve the "opt-out" framework [3]: "...combine the opt-out public option with a trigger — ensuring that states could only opt out of the public option if the private market offers meaningful and affordable coverage. Any opt-out proposal should also provide for a simple ‘opt-back-in process’ (mandating that state legislatures vote on the opt out every year, for instance.)"

Time notes: [4] "...in practice, it is difficult to see why any state would actually make the decision to opt out, considering that no one would be forced to buy into the public option, and it would not cost states any additional money."

The Treatment's Suzy Khimm reports' Rep. Woolsey wants the House to toughen its bill in response: [5] "Woosley acknowledged that conference committee negotiations will inevitably pull the House bill back to the right. But she suggested that the hybrid that conference negotiations produce could still have more liberal features--it could be, for example, a national plan with Medicare-plus-5 rates from states could opt out. So why not be pushing left?"

Reid tweaked Baucus insurance tax, employer mandate. The Hill: [6] "Legislation approved by the Finance Committee would impose the excise tax on family healthcare plans costing more than $21,000 ... Reid has increased the threshold for high-cost insurance plans that would be subject to a 40 percent tax to $23,000, according to a source familiar with the legislation. The taxable threshold would increase each year by the rate of the Consumer Price Index plus 1 percent ... Reid has also increased the penalty for employers who fail to provide health insurance for their employees. The Senate Finance Committee’s bill requires companies with more than 50 employees to pay the full cost of the federal health subsidy for each employee or $400 a person. Reid has raised that fee to more than $700 ... While the concessions made the bill more palatable to unions, they didn’t stop [AFL-CIO President Richard] Trumka from attacking the provisions hours before Reid’s news conference."

But AFL-CIO might support higher threshold on insurance tax. The Hill: [7] "'It’s bad policy, it’s bad politics, and it’s totally unacceptable to put the costs of healthcare reform on the backs of working families,' AFL-CIO President Richard Trumka said on a conference call with reporters Monday. Trumka left the door open to taxing even higher-cost plans, however: 'If you wanted to tax the Goldman Sachs plans, I’d say that’s fine.'"

WH budget director calls out W. Post editor Fred Hiatt for pretending the Senate bill does not have the insurance tax. Paul Krugman blogs: [8] "Peter Orszag is disingenuous. In a good way. He slaps Fred Hiatt [9] of the Washington Post hard, and he’s right to do so: Hiatt attacks the Senate Finance health bill for failing to include cost-control measures that, um, are very much in the legislation ... people like Hiatt, Robert Samuelson, and many others won’t accept any version of fiscal responsibility that doesn’t involve gutting Social Security and Medicare."

Senate Climate Bill Hearings Begin Today

Sen. Boxer's hearings on the clean energy jobs and climate protection bill begin today, reports AP: [10] "Democratic Sen. John Kerry, the leading sponsor of the Democrats' climate bill, said the United Nation's secretary-general, Ban Ki-moon, called Senate Majority Leader Harry Reid on Monday and said it was urgent for the United States to show 'some movement in the Senate' on restricting greenhouse gases ahead of the [December] talks in Copenhagen on international efforts to combat global warming."

New CNN poll shows 60% support for a carbon cap, with strong backing from independents: [11] "The survey indicates a generational divide, with 68 percent of Americans under age 50 supporting 'cap and trade' but those 50 and older split on the issue ... The poll also suggests a partisan divide, with three in four Democrats backing the proposal and nearly six in 10 independents on board as well, but only four in 10 Republicans supporting 'cap and trade.'"

Some coal-state Dems praise Boxer for compromising. Politico: [12] "Boxer 'has been very good in terms of reaching out to members on the committee and folks off the committee, asking what our concerns and needs are and trying to be responsive to those,' said Sen. Tom Carper (D-Del.), the leader of a group of coal state Democrats working on the bill. 'With respect to coal, Sen. Boxer has been fair, Sen. Kerry has been fair, and my hope is we’ve gotten closer to what people need.'"

Bloomberg reports some coal Dems still complaining, despite compromises: [13] "In a draft of a letter to the climate legislation’s sponsors, Senator Tom Harkin, an Iowa Democrat, said the House and Senate bills put coal at a disadvantage and that he wants to revise how free pollution permits would be distributed."

CQ reports Reid is meeting with other committee chairs to find consensus: [14] "Kerry said Reid intends to schedule a meeting soon with Finance Chairman Max Baucus of Montana; Commerce, Science and Transportation Chairman John D. Rockefeller IV of West Virginia; Agriculture, Nutrition and Forestry Chairwoman Blanche Lincoln of Arkansas; Energy and Natural Resources Chairman Jeff Bingaman of New Mexico; and Kerry himself, who heads up the Foreign Relations panel. The aim would be to set a timetable for the committees to act on the bill. Meanwhile, Kerry is also scheduled to meet this week with Republican Lindsey Graham of South Carolina, who has said he could back a climate bill that includes expansion of nuclear power and offshore drilling."

President Obama to lay out stimulus spending for the smart electric grid. LA Times: [15] "White House officials said the projects would create tens of thousands of jobs in the near term and lay the groundwork for changing how Americans use and pay for energy."

Showdown In Chicago

Last day of anti-banker Showdown In Chicago protests [16] today.

HuffPost's Dean Baker reports from Chicago: [17] "The Showdown in Chicago is tapping into this same sense of popular outrage. It is very important first step. There will have to be many other showdowns in other parts of the country to win a victory over the big banks (and hopefully making them much less big), but this Showdown has gotten their attention."

Dodd proposes freeze on credit card rate and fee hikes. NYT: [18] "[Dodd] said his bill was necessary because banks were raising rates 'to squeeze customers' before the remaining provisions of [the credit card reform] law took effect in February."

HuffPost's Shahien Nasiripour digs up two weakening amendments to financial reform: [19] "Two House Democrats are planning to introduce amendments Tuesday to exempt small- and medium-sized companies from a key post-Enron reform ... [Rep. John] Adler's provision calls for "less stringent requirements" for these firms, and would require the Securities and Exchange Commission -- the federal watchdog overseeing the capital markets -- to develop rules that would ease the "burden" on these firms. But until the SEC developed those rules, firms worth less than $700 million would be completely exempt from mandated external audits ... [Rep. Carolyn] Maloney's amendment, co-sponsored with Rep. Scott Garrett, a New Jersey Republican, would exempt from the independent audit requirement entirely those publicly-traded firms with market capitalization less than $75 million. But it's just those firms that need the extra set of eyes checking their numbers, investors argue."

Is Homebuyer Tax Credit Stimulus?

NYT edit board backs more stimulus: [20] "The Senate could take a step in the right direction by extending unemployment benefits without further delay. That is the single most effective way to boost consumption ... Next, Congress and the administration should agree on ways to ease the dire financial condition of the states. Most important is continued aid for state Medicaid programs ... Other measures being floated are less effective ... Many of the $250 checks to Social Security beneficiaries will not be spent quickly ... Proposals by some lawmakers to extend and expand the $8,000 tax credit for first-time homebuyers are even less well targeted ... It’s not stimulus when you pay people to do something they would have done anyway."

Bloomberg reports homebuyer tax credit may be extended, but reduced: [21] "Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said."

W. Post Simon Johnson and James Kwak deride credit: [22] "Even if you want to encourage homeownership, it hardly follows that the solution is to make houses more expensive."

Student Loan Update

WH telling colleges to prepare for direct government lending, reports NYT, [23] even though Senate has yet to act on the bill to end private lender subsidies.