Senate Finance Committee Releases Long-Awaited Health Care Plan

by Julianne LaJeunesse- University of New Mexico

Sen. Max Baucus (D-Mont.) released the Senate Finance Committee's highly-anticipated version of a health care reform proposal Wednesday, which he says has a strong chance of passing the Senate despite having no public Republican backing at this time.

In a statement, Baucus said "the $865 billion dollar package will not add to the Federal deficit" and will instead begin to decrease the deficit by the ninth year of its first 10-year implementation.

According to Baucus, under the proposal the Federal government would be responsible for most of the costs of insuring people. However, states would also have to come up with some of the money.

Under the plan, states would see about an .89 per cent net increase in Medicaid costs, which Baucus says has already been discussed with some state governors.

"I frankly think that this is pretty much resolved... that is the Medicaid expansion," Baucus said Wednesday. "We, our "Group of Six," have had several conversations with governors, several conference calls, one yesterday... with maybe a dozen governors, bipartisan, [and] explained what the net result would be to governors under expansion of Medicaid."

The Congressional Budget Office estimates the $865 billion dollar gross price tag for "The America's Healthy Future Act" includes about $300 billion for Medicaid; $400 billion to Exchange Tax Credits (which are proposed credits for people purchasing plans on the individual market and not through employers); about $100 billion to Medicaid, Medicare and Doc Fix changes (which could include changes to health care insurance providers); and about $24 billion to small businesses for tax credits.

Sen. Baucus admitted that while he believes the Committee plan is good, more adjustments need to be made. He said he is relying heavily on changes to the proposal before it can best serve Americans.

The Senate Finance Committee will vote on the proposal next week.

Senate Democrats Accuse Republicans Of Stalling Health Care Reform

By Mariko Lamb-Talk Radio News Service

A number of Democratic Senators said during a press conference Wednesday that the Senate Finance Committee will have a bipartisan health care bill passed by the end of this year, but accused Republicans and health insurance companies of hindering the bill's progress.

“Republicans’ role in this is all about ‘slow down, stop, and no’... that’s what the Republican leadership has been all about,” said Sen. Sherrod Brown (D-OH).

Republicans are implementing their “irresolution resolution,” said fellow HELP Committee member Sen. Sheldon Whitehouse (D-R.I.). “Despite all the stories of real Americans: their heartache, their frustration, their anger, ultimately even their disgust with the health care system they're trapped in, [Republicans continue to] turn the most desperate domestic policy crisis in our country into political theater.”

In response to recent town hall protests against health care reform, Sen. Jay Rockefeller (W.V) said these protests disrupt the message. “The story becomes the disruption, not the message,” he said. “We’re utterly, desperately serious about it and we’re trying to interpret it to the people we represent who in our states desperately need it. We’re precluded from doing so by these types of tactics.”

“We’re still struggling in the Finance Committee, and that’s okay, because one thing that I’m very certain about is that we’re going to have a health care bill...and we’re going to have it by the end of this year,” he added.

GAO Gives Three Options For Cap-And-Trade Legislation

By Mariko Lamb-Talk Radio News Service

In a hearing with the Senate Finance Committee Tuesday, John Stephenson, Director of the Government Accountability Office (GAO) Environmental Protection Issues, Natural Resources and Environmental Team, outlined three options for the distribution of emission allowances for companies under a cap-and-trade program: auctioning revenue allowances, allocating free allowances to covered entities, or a combination of the two.

According to a preliminary report by the GAO, auctioning revenue allowances would enable the government to collect substantial revenues, create incentives for companies to lower emissions before the program starts, and level the playing field for covered entities. However, “auctioning does not by itself offer compensation to covered entities that could feel the greatest economic impact of the program,” Stephenson said.

The second option, allocating free allowances to covered entities, could “help build support for the program and ease the transition," he said, but added that it may also potentially dampen incentives to decrease electricity use by businesses and households.

The third option, a combination of auctioning and free allocation, “may help compensate energy intensive industries,” noted Stephenson. A study by the Congressional Budget Office suggests that a 6% and 21% free allocation of allowances would fully compensate these industries.

According to the American Clean Energy and Security Act, passed by the House in June, 85% of emission allowances would be allocated by the government for free. Chairman of the Senate Finance Committee Max Baucus said, “whatever the approach, we need to devise a system that both meets environmental goals and passes political muster. That won’t be easy. The close vote in the House tells us that.”

“Let’s see if we can figure out how to distribute emission allowances in a way that one might call ‘just.’ Let’s see if we can figure out how to give all Americans what they deserve,” Chairman Baucus said.

The GAO will release a final report to the Senate Finance Committee later this year in preparation for a markup on a climate change bill later this year.

No Single Payer System For Healthcare

Coffee Brown, University of New Mexico, Talk Radio News


In what Chairman of the Senate Finance Committee Max Baucus (D-Mont.) called "an historic moment," the full Committee hearing on Comprehensive Health Care Reform held the first of several planned meetings Tuesday. Their task will be to figure out how to pay for universal access.

Sen. Jeff Bingaman (D-N.M.) wanted the Employer Exclusion of Contributions for Medical Insurance Premiums and Medical Care from employee income taxes on the table.

James Klein, president of the American Benefits Council, described it the Exclusion as progressive and too complex to tamper with.

Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology, Cambridge, Mass., described the Exclusion as unequivocally regressive, amenable to modification, and a key revenue point.

John Sheils, senior vice president of the The Lewin Group, Falls Church, Va., believes that the Exclusion should be modified, but only after protections are put into place to prevent discrimination against the elderly and those with pre-existing conditions.

All of the panelists agreed that there was an enormous amount of potential revenue there. The Urban Institute calls it "the single largest tax expenditure in the federal budget ... worth $112 Billion.”
Gerald Shea, assistant to the president for governmental affairs at the AFL-CIO said, "That would be a radical change. If you're going to go that far, you might as well go to a single payer system. I'm flabbergasted that you would even consider it."

Baucus was clear that "We're not going to repeal the Employer Exclusion or go to universal single payer healthcare. We have to work with what we have. We can't turn on a dime. It's the devil you know vs the devil you don't know."

After Baucus finished speaking, protesters stood up and recited in favor of the single payer system. As each protestor was escorted out by Capitol Police,another stood including at least one physician.
Sen. Jim Bunning (R-Ky.) was concerned about a proposal to partially fund healthcare reform by raising taxes on alcohol. He said that thousands of jobs had been lost in the hospitality industry already, and that the last such hike had been followed by a drop in revenue. He asked whether lifestyle taxes couldn't be considered regressive.

Robert Greenstein, executive director of the Center on Budget and Policy Priorities responded that all industries have lost jobs, losses in the hospitality industry are not attributable to alcohol taxes, and
whether the tax put more money into healthcare, or resulted in diminished alcohol consumption, it would be a win-win strategy.
Other lifestyle taxes discussed included sugary soft drinks, tobacco and trans-fats.

Stuart Altman, professor of national health policy at the Heller School for Social Policy and Management, Brandeis University, Waltham, Mass., held that end-of-life care was a significant driver of cost in America vs. peer nations.

Gail Wilensky, Senior Fellow for Project HOPE, Bethesda, said that such costs have held at about 28 percent of lifetime healthcare expenses for 30 years.

Altman said, yes, but that's 28 percent for a growing demographic, as Americans age, and of a much larger absolute cost, as Healthcare costs have inflated much faster than the general economy.

Baucus concluded by saying, "I have a feeling this is not the last discussion on this we're all going to have on this."

Small business was big business in Geithner hearing

by Christina Lovato, University of New Mexico-Talk Radio News Service


“This is a very good budget, because it’s an honest budget...Now just because this is an honest budget does not mean that this is an easy budget. The budget presents some difficult realities, and it presents some hard choices.” said Senate Finance Committee Chairman, Max Baucus (D-Mont).

Today in the Senate Finance Committee meeting, U.S. Treasury Secretary Timothy Geithner testified and expressed why President Obama’s budget plan will work. "We are absolutely committed to working with you on how to produce a package of reforms that meets the President's broad principles in a way that is fiscally responsible for the country...We wanted to put on the table, to improve the credibility of our commitment to do this, concrete proposals that would achieve that.” Geithner stated. 

Senator Chuck Grassley (R-IA) said that in 2007 small business created 74% of new jobs. “I don’t understand why you would charge small business operators more than you would charge corporations...I want to emphasize for the Secretary over half are between 20 and 500 employees. Those larger small businesses are also businesses most likely to expand or contract depending on business conditions.” he stated.

In addition to discussions about small business, taxes, and health care reform, Geithner expressed two critical functions that the government must accomplish to get the economy back on track. “We need to make sure that banks have the resources needed to provide credit to the economy...The basic machinery necessary for credit to work in our country is broken in some respects, the pipes are clogged...So a critical second part of our program is to act directly to get credit flowing again to get those markets to start opening up. The entire small business lending market, the auto finance market, the student loan market, the consumer credit markets depend on that machinery.” Geithner concluded.