Economy & Budget

The real "gap" to be bridged in the debate over healthcare reform legislation isn't between centrist and liberal Democrats in the House -- it will be between House and Senate's different bills, one key Blue Dog Democrat said Tuesday.

Rep. Jim Cooper (D-Tenn.), a centrist Democrat and healthcare expert, said during an interview on CNN that, because of Senate rules, the upper chamber's bill will likely be more bipartisan and centrist than the House bill.

"We can...get a bipartisan bill. They're working on that in the Senate," Cooper said. "But unfortunately, the House has been reluctant to take that approach."

"The Senate will be the real gap here," the Tennessee Democrat continued. "They have to get 60 votes to pass anything. And that requires some form of bipartisanship."

Cooper said that after Blue Dogs' negotiations with leaders on the House Energy and Commerce committee, there were no "bright lines" proving barriers to compromises on a health bill in the House.

Senate leaders may need to "pull the plug" on bipartisan negotiations on healthcare reform legislation, Rep. Chris Van Hollen (D-Md.) said Monday.

Van Hollen, the head of the Democratic Congressional Campaign Committee (DCCC) and assistant to House Speaker Nancy Pelosi (D-Calif.), indicated that the still-unresolved negotiations before the Senate Finance Committee may have to be abandoned.

"What concerns me about what's happened in the Senate Finance Committee is that they've had a whole lot of time to work these things out, and just don't seem to be able to break the impasse," Van Hollen said in an interview on the liberal Bill Press Radio Show. "It doesn't seem to be as much about a disagreement over policy issues, and it seems more to be just the lack of the political will on behalf of some to get it done."

Van Hollen blamed the committee's slow work on Republicans, who he asserted were unwilling to make the needed "tough decisions" to craft a healthcare bill.

"At some point that's going to have to happen, and the question is when do you reach that breaking point," the Maryland Democrat said when asked if Senate Democrats should end negotiations. "At some point they're going to have to pull the plug on that process, and when they do that is something they're in a better position to know."

Van Hollen also blamed the Finance committee for House Democrats' difficulty in passing a preliminary healthcare reform bill.

"A lot of our members in the House want to see, not what the full Senate does, but at least what the Senate Finance Committee moves forward," he said. "The reality is, a lot of our members want them to at least show their hand a little bit before we ask them to make some very tough decisions."

The assistant to the Speaker said that he was hopeful the House would resolve differences between centrists and leaders on the House Energy and Commerce Committee in the next few days, adding that negotiations are "back on track" after Blue Dogs and committee leaders agreed to "ratchet down the heat."

He also signaled that Pelosi may make the House work through the August recess if the speaker thinks she can successfully bring a bill up for a floor vote.

Listen to the whole interview here.

Yesterday's estimate by the Congressional Budget Office (CBO) that a much touted healthcare cost-control measure would save next to nothing was a major blow to Democrats' hopes of passing healthcare reform soon.

The report follows a previous estimate by the CBO that the House Democrats' plan in general would do little to control costs.

The question now is, will Democrats start to actively push back against CBO estimates?

The CBO has long been considered a neutral umpire in legislative budget battles. But one has to wonder how long the CBO can publicly question the Democrats' number one legislative priority before the White House and its allies start to respond.

Here, for example, is Paul Krugman on ABC's This Week:

"I think I should say something about that CBO thing, which really surprised a lot of people...

Most of the healthcare economists I talk to think that the MedPac reform...would actullay be quite important, especially if you go into the long run. So they were really kind of surprised.

And there's a kind of sense that CBO, faced with--no one can put a hard number on this, but CBO ksort of said if we can't put a hard number on it, we're going to say it's zero. And that seems to be wrong. There's every reason to think that being more careful about what Medicare is willing to pay for can save a lot of money. And this was kind of a destructive comment by Doug Elmendorf at CBO."

Will elected Democrats start to echo that sentiment?

Centrist Democrats' concerns about a public (or "government-run") option for consumers won't be a hurdle to passing a healthcare reform bill in the House, Majority Leader Steny Hoyer (D-Md.) suggested Wednesday.

Hoyer maintained that the final bill will include a public option, suggesting the provision can survive Blue Dog Democrats' concerns.

"I think we will have a public option, yes," Hoyer said in an interview on CNBC.

"The Blue Dogs want to make sure the public option is not simply a transition to an all-public system," he explained. "They're not drawing a line in the sand in terms of the public option. They did indicate they wanted a trigger on the public option."

Hoyer also downplayed centrist and freshman Democrats' concerns about a surtax on high earners contained within the House bill to finance the $1 trillion reform package.

"I don't frankly think that that's going to be the final worry," Hoyer said.

The second-ranking House Democrat said that there was flexibility on where the surtax would kick in, though Hoyer stated his own preference for instituting the tax for couples making $350,000 or more. "I think that's an appropriate level," he said.

Hoyer still indicated Democrats are on track to finish a preliminary healthcare bill before the August recess, and said October is the "target date" for when he'd like to have it on President Obama's desk for signature.

House Democratic leaders must examine more cuts in the healthcare system before they resort to a new tax to finance reform legislation, the leader of the freshmen Democrats said Tuesday.

"Looking at a tax increase before we have run up every possible cost saving, I think, is a mistake," Rep. Gerry Connolly (D-Va.) told "Washington Unplugged" in an interview. "I'm not convinced there aren't more savings to be had."

Freshman Democrats had signaled to House Speaker Nancy Pelosi (D-Calif.) last week that they wouldn't be receptive to a provision in the House healthcare reform bill that would impose a surtax on high-income Americans to finance the roughly $1 trillion package.

Connolly said there were more cuts and concessions to be made before new taxes, which he called a "last resort," could be put on the table. He said, for example, that more could be saved through negotiations with insurance companies similar to those President Obama had conducted with pharmaceutical companies and healthcare providers.

"They need to put something on the table before we start talking about tax increases," said Connolly, the president of the 2009 class of Freshman Democrats in Congress.

He did reveal that constituents in his Northern Virginia district -- one of the wealthiest in the nation -- might be open to new taxes, but not before every effort was made to extract more savings.

"They're willing, I think within reason, to look at financing of healthcare reform, but they want to be convinced just as I do that we've wrung out every possible cost saving in of the system," Connolly explained. "And I'm not there yet, and I don't think my constituents are either."

Watch a video of the interview below:


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The cap-and-trade climate bill before Congress is the "worst piece of legislation" in recent years, one centrist Democratic lawmaker said Monday.

"The cap and trade bill is really the worst piece of legislation I've seen since I've been there," Rep. Dan Boren (D-Okla.) told the Tulsa Metro Chamber of Commerce. "It raises energy prices on businesses, raises electric bills on families, and it even raises gasoline prices in the middle of a recession. And, it makes America less competitive in the global economy."

Boren was one of 44 House Democrats to vote against the American Clean Energy and Security Act, crafted by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), in a razor-thin vote last month.

Now, Boren's vote is being courted in a bid to pass a preliminary healthcare reform package in the House. Some centrist Democrats have defected from party leadership in committee votes on the healthcare legislation, citing concerns over provisions that would impose a surtax on wealthy Americans and would create a public (or "government-run") insurance option for consumers.

Boren signaled that it may be tough for Democratic leaders to count on his vote for the health bill, their other signature piece of legislation aside the climate change bill.

"We have to be very careful," he said, as reported by the Oklahoman. "The current health insurance plan that's been released, in my opinion, will only exacerbate the problem."

The chairman of the Federal Reserve warned today that mounting deficits threaten the prospect of economic recovery.

In testimony before the House Financial Services Committee, Ben Bernanke urged lawmakers to address the deficit before the baby boomer retirement makes the situation even worse.

"Prompt attention to questions of fiscal sustainability is particularly critical because of the coming budgetary and economic challenges associated with the retirement of the baby-boom generation," Bernanke said.

"Unless we demonstrate a strong commitment to fiscal sustainability, we risk having neither financial stability nor durable economic growth," the chairman added.

For his part, Bernanke pledged to keep interest rates low---a "highly accommodative stance of monetary policy," as he put it--to help spur lending and economic growth.

"The [Federal Open Market Committee] anticipates that economic conditions are likely to warrant maintaining the federal funds rate at exceptionally low levels for an extended period," Bernanke said.

The Fed chairman forecast that while unemployment would max out within the year, rates would remain unacceptably high.

"Although the unemployment rate is projected to peak at the end of this year, the projected declines in 2010 and 2011 would still leave unemployment well above [Federal Open Market Committee] participants' views of the longer-run sustainable rate," he concluded.

Passing a second stimulus package into law is a pretty half-baked idea, Sen. John McCain (R-Ariz.) insinuated Tuesday.

"I wonder what they've been smoking," McCain cracked when asked whether a second stimulus was necessary during an interview on Bloomberg News.

Some lawmakers and political figures have suggested a second stimulus may be necessary to provide another jolt to the economy, while others have encouraged evaluating such a proposal this fall, once more of the initial stimulus money has been spent out.

"Only 10 percent of the stimulus has been distributed," McCain said. "People are shutting down their small businesses, and they say, 'How come I'm too small to save and these other guys are too big to fail?' I don't have a good answer for them."

President Obama will fail in his effort to convince Americans of the need for healthcare reform, Sen. Lindsey Graham (R-S.C.) asserted Monday.

Graham is wagering Obama will fall short in his bid for healthcare reform this year because it runs contrary to traditionally American values.

"Basically I think he'll fail, because he's trying to convince America to be something other than America," Graham said during an interview of Fox News Radio this morning. "I don't think he's going to be successful, because Americans really do not feel comfortable turning over healthcare to the government."

Lawmakers have been debating healthcare legislation intently in recent weeks, and are likely to focus even more on reform proposals as a self-imposed deadline to pass preliminary legislation before the August recess nears.

Graham saw that effort failing, as he alleged Democratic leaders struggle to get their own caucus in order.

"The untold story here is how many Democrats are defecting on climate change, on spending, budgets, how many Democrats are upset about the way they're going on healthcare," he said. "They're trying to beat their own people into submission; they've given up on bipartisanship."

"The one thing they never counted on was an effective Republican response, and the American people being concerned about where they want to take the country," Graham added.

House Minority Whip Eric Cantor's (R-Va.) claim that the Obama administration's stimulus was a failure is one of the dumbest statements from a politician Pennsylvania Gov. Ed Rendell (D-Pa.) said Monday that he's ever heard.

"The critics in Washington -- I heard Eric Cantor say the stimulus is a failure," Rendell said on the liberal Bill Press Radio Show podcast. "Well, that's probably in the top 10 dumbest statements I've ever heard from a politician."

Rendell's remarks represent a shot directly at the leading Republican, who, like many other GOP leaders, has taken shots at the $787 billion stimulus plan passed by Congress and signed into law by President Obama earlier this year.

"If we had gotten the money out any faster, the Republicans would have been saying, 'Oh my gosh, we're wasting money!'" Rendell added. "I think the Obama administration has set the right tone between balanced oversight and getting the money out quickly."

As economic indicators remain stagnant, Republicans have ramped up their criticism of the stimulus plan, as well as the Obama administration's overall management of the economy.

Rendell did say it was far too early to tell whether or not a discussed second stimulus is needed, adding that there wouldn't be an indication of whether or not it'd be needed until this fall at the earliest.

But, if one is passed, Rendell said that it should be trimmed of pork, and focus on tangible projects.

"If there is a second stimulus, it should be lean and mean, and it should have no programs other than infrastructure," he said.