The ITUP Spotlight on Health Reform

All signs point to the reconciliation process in order to pass a companion bill that allows for House majority support of the Senate version. Here are the major changes that are expected to be in the companion (which look quite similar to those compromises reached during the conference committee process):

- Raising the Medicare payroll and unearned income tax on families making more than $250,000 to 2.35 percent, which could raise up to $125 billion.

- $50 billion more in subsidies to help lower and middle-income people afford insurance. Democrats had said earlier this month they hoped to increase the number by $100 billion.

- About $150 billion in cuts to privately administered Medicare Advantage programs. The Senate bill proposes $120 billion in cuts while the House comes in with a $170 billion reduction.

- A deal with labor unions to delay a tax on expensive insurance plans until 2018 for state and local government workers and those with collective bargaining agreements The threshold at which the 40 percent tax would kick into effect was raised from $23,000 for a family to $24,000.

- Removing the so-called “Cornhusker Kickback” that ensured Nebraska would never have to pay for reform’s Medicaid expansion with state money.

- Closing the gap in seniors’ prescription drug coverage.

- A package to extend a number of non-controversial tax credits for things like research and development. Most of the credits expired at the end of the last year and one source saw their inclusion more as legislative housekeeping than a move to sweeten the bill to win moderate votes.

The bill will most likely be created in the House (with significant Senate and White House input) before it is voted on and goes to the Senate. Democratic Senators Evan Bayh, Blanche Lincoln, and Ben Nelson have already proclaimed they will vote 'No' on any health bill that goes through reconciliation, but thats a-ok since it would only need 51 'Yes' votes.

The reconciliation bill can only contain provisions that effect the federal budget and not increase the deficit, and the one person who decides what qualifies as a 'budgetary issue' is the Senate Parliamentarian, the soon-to-be power-monger celebrity named Alan Frumin. The former Parliamentarian Robert Dove recently commented on the process, and added an interesting tidbit on this authority:

"Vice President Biden is the ultimate decider. But no vice president has tried to play that role in reconciliation. We haven’t had vice presidents that have tried to play important procedural roles for a very long time. The last one was Nelson Rockefeller, in 1975, and before him Hubert Humphrey, in the 1960’s. But no vice president has ever tried to play a role in reconciliation....If he were to show up, and he wants to make these decisions, yes. He has the authority to do that. He is the president of the Senate."

Also head to a recent CBPP article for an overview of the history and use of reconciliation, where 19 bills have utilized the process since 1980 including:

1985 Continuation of Employer-Sponsored Coverage (COBRA)
1996 Welfare Reform
1997 Children's Health Insurance Program (CHIP)
1997 Medicare Advantage Program
2001 Tax Cuts
2003 Tax Cuts

CBPP Conclusion: Since rising health costs are the single largest reason for projected long-run deficits, it is appropriate that health reform be considered through the reconciliation process.