As my colleauge Jonathan Chait notes over on the Plank, Senate Majority Harry Reid sent a message to Finance Chairman Max Baucus on Tuesday: Enough with the playing nice.
Baucus has been trying for weeks to craft a version of health care reform that could attract Republican support, but the prospects for that have looked increasingly shaky. Ranking minority member Charles Grassley has made it pretty clear he won't support a bill with a price tag above $1 trillion. But at that level, it'd be awfully difficult to come up with a program that promises enough in benefits, subsidies, and regulations to make insurance affordable for all.
What's more, Grassley--who's been under intense pressure from the right wing and his own party's leadership--has indicated he won't support a bill if he's the only Republican on board. So in order to get a bipartisan bill, Baucus would have to get at least one, probably more than one, additional Republican. That'd likely mean gutting the bill even further and, of course, ditching the public insurance option.
As Baucus has strained to accommodate the Republicans, some Democrats on Capitol Hill and at least a few in the administration have gotten increasingly anxious. And it was that anxiety--actually, it as as much frustration as anxiety--that Reid was channeling on Tuesday. He let Baucus know that a bill with too many compromises would lose ten to fifteen Democratic votes. Translation: Don't give the Republicans anything more. If we have to pass this on a purely party-line vote, we will.
Which, as far as I'm concerned, is just fine. Bipartisanship is good but a sound health reform bill is better. If winning over just one or even a handful of Republicans means gutting the bill, it's not worth it. Among other things, as Matthew Yglesias has noted, it's not clear a bipartisan bill would actually be more representative of the country's sentiments than a partisan one.
As it happens, Reid's tough talk could (that's "could," not "will") end up making a bipartisan bill more likely. The more that Republicans believe Democrats are wliling to pass reform on their own--either by maintaining enough party discipline to break a filibuster or by trying to use the budget reconciliation process, in which legislation can pass with a simple majority vote--the more likely Republicans are to compromise. It's possible Reid's show of pique could actually strengthen Baucus's hand for dealing with Grassley, while also strengthening the hand of those on the right--be they individual lawmakers or special interest groups--who would prefer a modestly unacceptable bill to one they really hate.
Democratic opposition to modifying the exclusion is an old story; unions hate the idea, since some of their older and better paid members would find themselves paying higher taxes on health benefits. But it's not just union power spooking the Democrats. Poll numbers show the idea is highly unpopular and Democrats are scared to touch that.
Trouble is, the exclusion also happens to be one of the best ways to raise money for health reform. It can generate a ton of revenue in a way that is highly progressive and hits middle class workers--if at all--very modestly. Even a modest cap, which hit only upper-income workers, could generate $200 to $300 billion over ten years, money that would make a real differece. (Remember, the reason the Finance Commitee was hacking away at benefits and subisdies was an inability to pay for more generosity.)
There are, to be sure, alternatives. Just this week, Citizens for Tax Justice relased a paper outlining how change to the Medicare payroll tax could help pay for reform. Or there's President Obama's proposal, to reduce itemized deductions for upper-income taxpayers.
Either of those ideas could work. But can Reid muster up the votes to support them? If not, then there's no way to pay for expanding coverage.
--Jonathan Cohn