Speaker Pelosi in battle to close health deal

House Democratic leaders could decide the basic outlines of their healthcare bill by Friday after a sharply divided rank and file spent Thursday evening hashing out the shape of the legislation.

Centrist and liberal Democrats have been warring over whether to include a government-run “public option” to compete with private insurance companies, and other factions are debating whether to pay the cost of the plan with an income surtax on the wealthy.

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The fight leaves Speaker Nancy Pelosi (D-Calif.) with a difficult choice.

If she chooses a public option, she could lose the votes of many Blue Dogs and other centrist lawmakers. If she scraps the public option, she could lose the votes of liberals. Even with the sizable majority of Democrats, either decision might cost enough votes to kill the bill, as Republicans appear united against it.

“The vast majority of the caucus wants a public option, but we have to get the votes of a majority of the Congress,” said Rep. Jim Moran (D-Va.) after leaving a closed-door caucus meeting.

He said he was surprised by how many freshmen and New Democrats oppose the public option, in addition to Blue Dogs, who have been more vocal in their opposition. Still, he expects Pelosi to include a public option.

“My guess is that leadership will prevail,” Moran said.

Pelosi clearly favors a public option. On Thursday she ruled out a “trigger” mechanism that would leave a government-run healthcare plan as a fallback option, enacted only if other reforms didn’t make healthcare more accessible.

And like her fellow liberals in the party, she wants reimbursement rates tied to Medicare. Blue Dog Democrats and other centrists are skeptical of any public plan and especially don’t want one linked to Medicare.

Blue Dogs say that if Pelosi follows through on including a public plan, it won’t have enough votes on the floor. Rep. Allen Boyd (D-Fla.), a prominent Blue Dog, said there probably isn’t enough support for any one approach within the Democratic Caucus to get the needed 218 votes. He said Pelosi should take a sharp turn to the center and see if she can pull together centrist Democrats and centrist Republicans.

“Somebody’s got to find a way to convince Republicans they’re not the party of ‘no,’ ” Boyd said.

Blue Dogs, whose uniting theme is fiscal responsibility, have demanded more cost savings, saying the bill is too expensive.

But the Congressional Budget Office has determined that the Medicare-linked public option would actually save $85 billion more than the Blue Dogs’ “negotiated rates” approach, according to Democratic aides.

Boyd said there are other concerns, such as the fear that a public option would eventually drive the private insurance industry out of business.

“Lowering the cost is not the only thing we need to accomplish,” Boyd said. “If the public option competes unfairly with the private sector, the private sector plans go away.”

Pelosi has indicated that those who want to take out the public option will have to find another way to find a savings to keep the bill under President Barack Obama's threshold cost of $900 billion.

“It saves the most money, but, again, this is a discussion that our Caucus will have,” Pelosi told reporters. “Where else would we go to bend the curve and to pay for the legislation?”

House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) said Thursday the basic outlines of the bill could be determined by Friday. A leadership meeting is scheduled for Friday. A written version wouldn’t come out until next week, and might not go to the floor for some time after that.

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But that timetable indicates that Pelosi is not waiting for the Senate, as many centrists in her caucus would like.

Pelosi’s decision to shoot down the trigger option risks further alienating Blue Dog Democrats. It is also favored by Sen. Olympia Snowe (R-Maine), who is being courted by the Obama administration as the best hope for getting a Republican to sign on to the president’s healthcare initiative.

“I don’t even want to talk about a trigger,” Pelosi said at her weekly press conference. She said the “attitude” of her fellow Democrats is that “a trigger is an excuse for not doing anything.”

Pelosi also said she supported a measure that would require a bill to be posted online for three days before it can be voted on in the House. Republicans have filed a “discharge petition” to move a Democratic bill with that requirement to the floor. Asked if she supported the measure, Pelosi said, “Absolutely.”