A House leadership deal with Blue Dogs and an aggressive marketing push by Sen. Max Baucus (D-Mont.) shifted the healthcare debate sharply toward centrist positions Wednesday, sparking threats of rebellion from the left.
The day's events left the Senate Finance Committee's emergent bill as the most viable vehicle on Capitol Hill, but also made clear that House Democrats are still riven by bitter disagreements. Democrats postponed a floor vote until after the August recess, meeting a top demand of centrist Blue Dogs.
The Blue Dogs' deal, which cut $100 billion from the healthcare reform price tag, was instantly denounced by Rep. Lynn Woolsey (D-Calif.), co-chairwoman of the Congressional Progressive Caucus, who said, "It's unacceptable. We're not going to vote for anything that doesn't have a robust public plan."
Liberals aimed to win 50 signatures on a letter to their leaders opposing the deal to make it clear they could defeat the healthcare bill on the floor.
"Fifty is our threshold," said Rep. Raúl Grijalva (D-Ariz.), a co-chairman of the caucus. "That'll kill anything."
The White House and Democratic leaders moved quickly to try to quell the liberal insurrection. Speaker Nancy Pelosi (D-Calif.) called a group of liberals to her office in the mid-afternoon, and Democrats postponed plans to continue a stalled markup of the bill by the Energy and Commerce Committee until Friday. Instead, they held a caucus meeting to answer member questions.
"It's more important to let members ask questions, raise concerns," said Rep. Henry Waxman (D-Calif.), the chairman of Energy and Commerce.
Within hours of the liberal complaints, Obama was on the phone with Rep. Jan Schakowsky, a fellow Illinois Democrat and Energy and Commerce member who is in charge of the healthcare issue for the Progressive Caucus.
He told her the bill should go forward, Schakowsky said.
The White House also released a statement from Obama that singled out "some" Blue Dogs on Energy and Commerce for striving to find "common ground."
"Those efforts are extraordinarily constructive in strengthening this legislation and bringing down its cost," he said.
Baucus, the chairman of the Finance panel, moved to aggressively sell the draft legislation he is negotiating with Republicans and Democrats on his committee as a cost-effective way of expanding health insurance coverage to 95 percent of U.S. residents.
Baucus said he and the five other senators working on the bill are not ready to announce a deal, but described a preliminary Congressional Budget Office (CBO) analysis of their work as a piece of "good news" that could reframe the debate over healthcare reform on Capitol Hill.
"The current draft of the bill scores below $900 billion over 10 years, covers 95 percent of all Americans by 2015 and is fully offset," said Baucus. "In fact, according to the preliminary CBO report, the bill would actually reduce the federal deficit in the 10th year by several billion dollars."
Those points could draw support to the bill from centrist Democrats in both chambers, and possibly even Republicans.
But Sen. Mike Enzi (R-Wyo.), one of the senators negotiating with Baucus, warned a deal is not yet at hand. "We still have several areas where we haven't been able to come to a consensus," Enzi said in a statement.
With liberal Democrats on and off the Finance Committee already angling to pull the measure to the left when it is combined with a rival passed by the Health Committee, Enzi indicated his support is contingent on Democratic leaders leaving any Finance Committee agreement intact.
"I also need commitments from Sen. [Harry] Reid [D-Nev.] and Speaker Pelosi, as well as the administration, that the bipartisan agreements reached in the Finance Committee will survive in a final bill that goes to the president," Enzi said.
That's a problem, since the draft bill already promises to be a tough sell for liberals. It eschews two central Democratic priorities: the creation of a government-run public insurance plan option and a requirement that most employers provide health benefits.
The other Finance Committee members involved in the talks are ranking member Chuck Grassley (R-Iowa), Democratic Sens. Kent Conrad (N.D.) and Jeff Bingaman (N.M.) and Republican Sen. Olympia Snowe (Maine).
Delaying a House vote was a key demand of Blue Dogs', who wanted time to sell the bill to their constituents, particularly after some were beat up for supporting a controversial climate change bill approved by the House in June.
"We've achieved the victory of not having a vote on the House floor, [which] will give every member a chance to digest what's in the bill, whether it's in a markup that occurs in Energy and Commerce or whether it's as the bill exists right now," Rep. Stephanie Herseth Sandlin (D-S.D.) said.
Leaders also agreed to allow states to create health "co-ops" that would compete with the government-run "public option" and private insurers, which deals a blow to liberals.
To lower the bill's cost, Waxman agreed to loosen the employer mandate so that it covers businesses with payrolls of $500,000 or more, instead of $400,000. Rates on the "public option" will not be tied to Medicare, but negotiated separately, as private insurers do.
The House deal split the seven Blue Dogs who had been threatening to block the bill, and it's unclear how many of the 52-member coalition will sign onto it. Waxman struck the deal with only four: Reps. Mike Ross (Ark.), Bart Gordon (Tenn.), Baron Hill (Ind.) and Zack Space (Ohio). The three who did not agree to the deal are Reps. John Barrow (Ga.), Charlie Melancon (La.) and Jim Matheson (Utah).
Democrats now hope to have the House Energy and Commerce Committee conclude its markup of legislation before the chamber adjourns on Friday.
Finance could still stage a markup before the Senate leaves on Aug. 7 for its recess, but negotiators seemed skeptical that would happen. "I think it's kind of difficult to get it there," Grassley said during a conference call with Iowa reporters Wednesday.