Rep. Rangel: Dems facing 'serious problems' on healthcare reform bill

Congressional Democrats face “serious problems” in getting a healthcare reform bill to the president’s desk, according to a House panel chairman.

“We’ve got to get a bill that’s more compatible to the House,” Ways and Means Committee Chairman Charles Rangel (D-N.Y.) said Tuesday. “Forget all the other questions. Two-hundred-eighteen [votes] is the most important issue we are dealing with… We have serious problems on both sides of the Capitol. Serious problems.”

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Rangel’s comments come a day after Sen. Chris Dodd (D-Conn.) said health reform is “hanging by a thread.”

While it is clear that Democrats in the House and Senate are jockeying for negotiating power, they also are openly acknowledging the daunting legislative obstacles in front of them.

The Senate bill attracted 60 votes while the House measure narrowly passed, 220-215.  Threading the needle to craft a conference bill that attracts enough backing in both chambers will be extremely challenging. Meanwhile, the Democratic Party and union officials are very worried that Republicans could win Sen. Edward Kennedy’s (D-Mass.) seat in a special election next week. A GOP upset could doom healthcare reform, Democrats fear.

House Speaker Nancy Pelosi (D-Calif.) said Tuesday that while President Barack ObamaBarack Hussein ObamaAll five living former presidents to attend hurricane relief concert Overnight Health Care: Schumer calls for tying ObamaCare fix to children's health insurance | Puerto Rico's water woes worsen | Dems plead for nursing home residents' right to sue Interior moves to delay Obama’s methane leak rule MORE wants an excise tax on so-called Cadillac health plans, she hasn’t yet given up on having a millionaire’s surtax in the final bill.

“I think it’s the best way forward,” Pelosi said of the House-passed millionaire’s tax as she was leaving a two-hour-plus meeting of members of her leadership team, various committee and subcommittee chairman, and members who are liaisons to a number or concerned sub-groups within the Democratic Caucus. “I think it’s the best pay-for that we have so far.”

Tuesday’s leadership meeting came minutes ahead of the first meeting of the entire Caucus, which has not met as a whole since the House adjourned in December.

Leadership aides were bracing for a potentially "very angry Caucus" meeting on Tuesday night.

Healthcare negotiations between the House, Senate and the White House have been taking place at the staff level and behind the scenes for days. The pace will pick up on Wednesday when six House Democrats (Reps. Pelosi, Rangel, Steny Hoyer (Md.), James Clyburn (S.C.), George Miller (Calif.), and Henry Waxman (Calif.)) join a group of five Democratic senators (Sens. Dodd, Harry ReidHarry ReidChris Murphy’s profile rises with gun tragedies Republicans are headed for a disappointing end to their year in power Obama's HHS secretary could testify in Menendez trial MORE (Nev.), Dick DurbinRichard (Dick) Joseph DurbinGun proposal picks up GOP support Durbin: I had 'nothing to do' with Curbelo snub Republicans jockey for position on immigration MORE (Ill.), Max BaucusMax Sieben BaucusBernie Sanders flexes power on single-payer ObamaCare architect supports single-payer system Trump has yet to travel west as president MORE (Mont.) and Tom HarkinTom HarkinThe Hill's 12:30 Report Distance education: Tumultuous today and yesterday Grassley challenger no stranger to defying odds MORE (Iowa)) at the White House.

Few of the many issues dividing the House and Senate remain resolved, and many House Democrats feel as though they are continuing to lose ground to the upper chamber.

Despite Pelosi’s comments, the Associated Press reported just minutes before the Speaker emerged from her leadership meeting that Democrats had agreed to drop the surtax on the wealthiest Americans. The White House quickly disputed the notion that final decisions had been made on the matter.

While making the case for their bill, House leaders stressed that any effort to steamroll the House with the Senate bill could be disastrous.

Financing the roughly $900 billon cost of the bill stands as possibly the biggest obstacle to final action given how far apart the House and Senate are. Labor unions and their allies among House Democrats remain strongly opposed to the excise tax on high-cost health insurance plans. Obama met with labor leaders Monday and Pelosi sat down with some of the same leaders on Tuesday before gathering her leadership team and her caucus together to seek a way forward.

Although the House bill eschewed the excise tax and liberals have decried it, the provisions in the Senate bill appeal to the centrist contingent of the Democratic caucus as an alternative to an income tax increase. Some health experts say the excise tax will lead to reduced spending on healthcare services.

"I definitely think there’s increasing support in the caucus for some kind of a tax on plans that executives and wealthy people have," said Rep. Jared Polis (D-Colo.). "This is one of the few cost-containment measures in the bill," he said, echoing the argument made by Obama and senior Senate Democrats. Polis last year successfully pushed for the surtax in the House bill to be lifted to the millionaire level.

Despite the dissatisfaction among many House Democrats with Obama's stance in favor of the excise tax, a solution could be emerging as the president attempts to work out a compromise with organized labor.

Raising the threshold, currently at $8,000 for individuals and $23,000 for families, could be a key component of a revised version of the policy. In addition, Democrats are looking at other modifications, such as exempting existing collective bargaining agreements negotiated by unions and other tweaks to prevent a revolt by labor groups and provide cover to pro-union House Democrats.

Those steps would be an improvement but would not quell all Democrats' concerns about the impact of the policy on middle-class workers, said Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus. "As much as it is an important gesture to labor, particularly the trades," exempting existing union agreements would not prevent the tax from applying to the health benefits on non-union workers and those from "Right to Work" states like Arizona.

But Grijalva did not completely close the door on supporting a bill that includes a scaled back excise tax. "Many of us would be more inclined" to vote for the bill if the burden for financing it fell more heavily on wealthy workers, he said.

Scaling back the excise tax, however, would require the White House and congressional Democratic leaders to come up with another revenue source, particularly since the millionaire's tax has scant appeal in the Senate.

The Senate-passed bill would increase the Medicare payroll tax on high-income earners. The final measure could further increase that tax or even apply it to non-wage income, such as investment earnings, for the first time. Polis noted that an increase in the size and scope of the Medicare tax also would not negatively affect small-business owners the way the millionaire's tax could.