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With Senate Finance Vote, Fate of Public Option Uncertain as Healthcare Reform Talks Move Behind Closed Doors

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The Senate Finance Committee has become the fifth and final congressional panel to approve legislation to reform the nation’s healthcare system, voting 14-to-9 to approve an $829 billion measure. Maine Senator Olympia Snowe was the only Republican to support the package, which omits a public option. Talks now move behind closed doors, where Senate leaders will craft final legislation. We get analysis from Jane Hamsher of Firedoglake. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

ANJALI KAMAT: The Senate Finance Committee on Tuesday became the fifth and final congressional panel to approve legislation to reform the nation’s healthcare system. The Finance Committee backed the measure on a vote of 14-to-9. Maine Senator Olympia Snowe was the only Republican to support the bill. She said she shared many of her Republican colleagues’ reservations about the legislation and warned Democrats that they could lose her support later in the legislative process.

    SEN. OLYMPIA SNOWE: So, is this bill all that I would want? Far from it. Is it all that it can be? No. But when history calls, history calls. And I happen to think that the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issues of our time.

    As I’ve said throughout this process and through the Group of Six, that there are many, many miles to go in this legislative journey. As one national story characterized it recently, people do have concerns about what we will do with reform. But at the same time, they want us to continue working. And that is what my vote to report this bill out of committee here today represents: to continue working the process. My vote today is my vote today. It doesn’t forecast what my vote will be tomorrow.

ANJALI KAMAT: The $829 billion proposal would require almost all Americans to buy insurance or pay a penalty and drops a mandate that all employers offer health coverage. The bill does not include a government-backed public option to compete with private insurers. Instead, it proposes funds to set up nonprofit cooperatives. The Congressional Budget Office said the bill would provide coverage to 29 million people, but still leave 25 million people uninsured in 2019. Speaking in the Rose Garden, President Obama described the committee’s vote as a, quote, “critical milestone.”

    PRESIDENT BARACK OBAMA: Today we reached a critical milestone in our effort to reform our healthcare system. After many months of thoughtful deliberation, the fifth and final committee responsible for healthcare reform has passed a proposal that has both Democratic and Republican support.

AMY GOODMAN: Healthcare talks now go back behind closed doors, as Senate Majority Leader Harry Reid will work with Senate leaders to merge the Finance Committee bill with a more generous bill passed by the Health, Education, Labor and Pensions Committee, which passed earlier this year. That bill calls for both a government-backed public option to compete with private insurers and a mandate that employers help cover their workers. Reid will work to blend the bills together into a new version that can get the sixty votes needed to avert a Republican filibuster and guarantee its passage.

For more, we go to Washington, DC. We’re joined by Jane Hamsher, the founder of Firedoglake. She has been closely following this story.

Jane, welcome to Democracy Now! What is your assessment of this bill that’s been passed by the Senate Finance Committee?

JANE HAMSHER: I don’t think there are any surprises in the bill that came out of the Finance Committee yesterday, Amy. I think the surprising thing is that White House Chief of Staff Rahm Emanuel was on the NewsHour last night trying to claim that the President still supports the public option. This bill was written by the White House. It was negotiated for months with Rahm Emanuel, with the Baucus staff, with all of the stakeholders. And it contains in it the things that the White House wants, and there is no public option. It taxes benefits for union workers. The AFL-CIO is opposing it very strongly because of that. And I hope that now at least we can have a frank conversation about what it is that the White House is backing.

AMY GOODMAN: Explain the issue of the unions, why the AFL-CIO doesn’t support this. What do you mean, taxing?

JANE HAMSHER: Well, one of the ways that — the President has declared that this bill has to be deficit-neutral. So whatever money is spent on subsidies or anything else has to be raised by taxes or revenues saved someplace else. So the House bills actually tax high-income people, people making over a million dollars, in order to pay for a chunk of it. But the Senate decided not to go that way. And what they did was tax what are known as Cadillac plans, which are the plans that offer very comprehensive coverage to many of the labor unions workers in the AFL-CIO.

It doesn’t hit as hard the union workers in the SEIU, who tend to be lower-wage workers, so it very much privileges one union over another. But it’s — you know, the workers in the AFL-CIO bargained for this, as opposed to getting contract, you know, salary negotiations for decades, and it’s trying to put the cost of the bill on their backs. And that’s why the AFL-CIO is opposing it very strongly this week, despite the fact that, according to Bloomberg, Rahm Emanuel called the head of the AFL-CIO and the head of AFSCME last week and asked them not to oppose the Baucus bill.

ANJALI KAMAT: And Jane Hamsher, the issue of bipartisanship? Many Democrats are hailing the support from Republican Senator Olympia Snowe.

JANE HAMSHER: Well, that gets into something that I think is actually bigger than the healthcare debate right now, because if you look at what’s happening, a few years ago, a filibuster was a really rare thing to have happen, and one party did it to another, and now what we’re being told is that members of the Democratic Party can filibuster the other party. Joe Lieberman has stepped out and said that he is a member of the Democratic Caucus, even if he is not a Democrat, and he has said that he may not vote for this bill. Therefore, in order to get the sixty votes needed to block a filibuster, everyone is saying that Olympia Snowe’s vote is needed.

What that does, what that threshold that is now established of sixty votes, with the members of the Democratic Caucus able to cross over and join with the Republicans to stop legislation from coming to the floor, means that every piece of legislation coming out of the Senate will, in effect, be controlled by its most conservative members of the Democratic Caucus or the Republicans willing to cross over, like Olympia Snowe. So now we’re in a situation where Olympia Snowe is going to be involved in all of the negotiations in combining the two bills, and she supports very, very regressive elements. She has been handed, basically, the ability to write this bill. And it certainly isn’t the change that I think a lot of people voted for last November.

ANJALI KAMAT: Jane Hamsher, the insurance industry recently intensified efforts to influence the congressional debate over healthcare reform. On Monday, the industry trade group, America’s Health Insurance Plans, or AHIP, released a study warning that the Senate Finance Committee’s health bill would result in sizable hikes in insurance premiums. Massachusetts Senator John Kerry criticized the study and said it shows why a public option is necessary.

    SEN. JOHN KERRY: Frankly, the insurance industry ought to be ashamed of this report. It was commissioned from PricewaterhouseCoopers, released on Monday, and it really says — it’s a powerful argument, frankly, for why we ought to have a public plan. It’s a powerful argument for the attitude of an industry towards this effort. There’s an old saying that if you’re not part of the solution, you’re part of the problem. The fact is, the Pricewaterhouse analysis is significantly flawed, and the results are simply not valid.

ANJALI KAMAT: Jane Hamsher, your response?

JANE HAMSHER: Well, PricewaterhouseCoopers themselves is distancing themselves from at least the conclusions that AHIP drew when it released the study. But we’re in a situation where the stakeholders, as they are known — the hospitals, the AMA, PhRMA, the device manufacturers — were in negotiations with the White House and with the Baucus committee all summer, and they reached secret deals. We know the details of the PhRMA deal, because they were leaked to the Huffington Post. We know some of the details of the hospital deals. We don’t know what the rest of these deals were, but we do know that most of them were probably memorialized in the Senate Finance Committee bill.

Now, there were supposed to be triggers in there, and Olympia Snowe was the vehicle for delivering them. Rahm Emanuel has been talking about them since January. And they essentially render any healthcare reform meaningless and are designed never to kick in. And I think the hospitals very much wanted to get them in there. I don’t think that they’re out yet. Olympia Snowe has — they thought that they might not be able to get them through the Finance Committee, so Snowe has said that she will bring them up on the floor. But, you know, AHIP wants its deals honored, and I think that they are going to kick up a fuss, start advertising, and we’ll be in Harry and Louise territory again, until they get what they want.

AMY GOODMAN: Jane Hamsher, what about states deciding whether they will offer a public option individually?

JANE HAMSHER: Do you mean the co-ops, the co-op plan that comes out of the Senate bill?

AMY GOODMAN: The idea that Kucinich has put forward.

JANE HAMSHER: Oh. Well, that would be a great thing, I think, to be able to allow the states to offer single payer, if they want to, but I don’t think it has the votes to pass the House, and I certainly don’t think it has the votes to pass the Senate, unfortunately.

AMY GOODMAN: And why do you believe the White House doesn’t want a public option?

JANE HAMSHER: Well, when they began these negotiations this last summer, the goal of Rahm Emanuel, the White House Chief of Staff, was to keep the “stakeholders”, quote-unquote, their money out of Republican coffers for the 2010 election. We saw a very angry letter written by John Boehner to Billy Tauzin, the head of PhRMA, saying, “Why are you supporting the Democrats here? Why aren’t you joining us to basically have a Republican resurgence in 2010 to make sure that there is no healthcare reform that doesn’t substantially benefit you?” So, that was the goal. That was the number one purpose that the White House really set itself to in negotiating these deals.

If you’ll recall, in 1994, there was a huge swing after health reform failed during the Clinton administration from Democrats to Republicans in the House, a fifty-four-seat swing, and control of the House went to Republicans. The conclusion that was drawn from that is that we can’t do anything that will put the, quote-unquote, “more conservative” members of the House in danger by having them vote for this socialist public plan. They seem to selectively forget that NAFTA had been passed just before the 1994 election, which suppressed the Democratic base. And during a midterm election in the first term of a president, there are always going to be seats lost, and people just aren’t going to show up as much on the Democratic side.

But what they are — what they did then and what they’re anticipating doing now is doing something that is very, very affecting to the Democratic base. And I think that they’ve made a serious miscalculation electorally, as well as morally, but that seems to be where they’re at. And they have whipped Blue Dog votes, conservative Democratic votes, in the House by saying that there will be no public option, so they’ve got to deliver on that now.

AMY GOODMAN: And the power of Harry Reid, the role, the next steps that you see?

JANE HAMSHER: Well, that is actually kind of interesting this morning, because there are two bills coming out of the Senate. One of them is the Senate Finance Committee bill, which, as we know, passed yesterday without a public plan. And the next — and the other bill came out of the HELP Committee, Chris Dodd’s HELP Committee, earlier this year, and the HELP Committee bill does have a public option. So Harry Reid gets to decide whether the bill that goes to the Senate floor has one or doesn’t.

Now, he has been saying that there weren’t the sixty votes. Again, this is back to this silent filibuster that the conservative Democrats, members of the Democratic Caucus, Joe Lieberman, are conducting, and they won’t come out in public and say that they will join with the Republicans in an unprecedented filibuster to keep this legislation from getting an up or down vote. But they seem to be whispering this in the Senate cloakrooms. Therefore, Harry Reid has concluded that this bill must make everybody, including Olympia Snowe, happy, and that means no public option.

But we know that there are fifty-one votes for Chuck Schumer’s level playing field public option. And last night, Chuck Schumer went on The Rachel Maddow Show and said that it’s up to Harry Reid, and if he brings a public option to the floor in a final combined bill, that there will be one coming out of the Senate. So he’s put it all on Reid, and that’s where it belongs.

Harry Reid’s decision — he can’t pass it off to anybody else, though he has tried to the White House and to other members of the Senate. It’s Harry Reid’s and Harry Reid’s decision alone as to whether he takes the Senate Finance Committee health bill, which has co-ops, or the Senate HELP Committee bill, which has a public plan, when he merges them into the bill that goes to the floor.

ANJALI KAMAT: And Jane Hamsher, can you talk about what you expect from the House? There’s much more support there for the public option. And what do you expect the final shape of the legislation will look like?

JANE HAMSHER: Well, they’re in a debate right now as to what the final bill will look like. There are three committees that delivered bills in the House. The third, the Energy and Commerce Committee bill is much more Blue Dog friendly. They held it hostage for ten days, as Mike Ross likes to say. And they took out the ability for a public plan to be based on Medicare rates. And Medicare rates very much keep the cost of the bill down. I believe that the CBO told Nancy Pelosi that $85 billion would be saved over the next ten years if the public plan were based on Medicare rates.

Now, they’re not talking about that anymore, but they are talking about Medicare plus five percent, which would still be a very powerful cost control measure. And the problem we get into is that if you start raising the rates that get paid, as we believe was negotiated in the deals with the hospitals and the AMA, you start — in a bill that has to raise the revenue and be deficit-neutral for anything you spend, you start cutting the amount of money that’s available for subsidies, and you start cutting the number of people who will actually see healthcare coverage for themselves with this bill. So the House — the progressive members of the House are fighting very hard to keep Medicare plus five percent in. But again, President Lieberman and President Snowe have said that they don’t support this, and we’re now just assuming that they get to say what goes in the Senate bill.

AMY GOODMAN: Well, Jane Hamsher, I want to thank you very much for being with us. Jane Hamsher is founder of Firedoglake, speaking to us from Washington, DC. Of course, we’ll continue to cover this issue every day.

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