Baucus to ax $600B, GOP derides reform ‘joke’

President Obama’s push for a bipartisan healthcare overhaul suffered a double blow on Wednesday when Sen. Max Baucus (D-Mont.) announced he would cut $600 billion from his measure while Republicans derided a Democratic markup of an alternative bill as a “joke.”

Baucus, the chairman of the Senate Finance Committee, said he is looking to shrink the costs from $1.6 trillion to $1 trillion after reading an analysis of both Democratic bills by the Congressional Budget Office (CBO). He admitted that could delay his committee action, which was expected to begin next week.

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“When we are ready, we’re ready. We’re not there yet,” Baucus said after members of the Finance Committee decided to re-craft portions of the legislation based on the CBO estimate.

When asked if that means he might have to delay the markup until after the July 4 recess, Baucus said: “I hope not, but I can’t guarantee it.”

Meanwhile, Democratic members of the Senate Health, Education, Labor and Pensions (HELP) Committee should have been enjoying a red-letter day Wednesday with the first markup of the health reform legislation this Congress. Instead, they had to counter Republican complaints of being cut out of the bill-drafting altogether and having their ideas ignored.

“This is the most incredible markup I’ve ever seen in my entire time at the United States Senate and in Congress,” said Sen. John McCain (R-Ariz.). “It is a joke if we run through this stack of papers here.”

Sen. Chris Dodd (D-Conn.), who is overseeing the panel in the absence of ailing Chairman Edward Kennedy (D-Mass.), disputed the accusations, noting the number of bipartisan roundtables (14), committee hearings (13) and numerous hours walking GOP lawmakers through the proposals (20).

“You can always argue for more and more,” Dodd said.

Both Senate committees are working on comprehensive bills and leadership will need to determine how to merge them at a later date. And while the House is expected to unveil its version of the bill on Friday, Speaker Nancy Pelosi (D-Calif.) was beating back complaints from centrists in her party on Wednesday that the bill will reflect some of the more liberal ideas in the caucus.

The developments threaten the ambitious schedule Obama and congressional leaders have laid out for healthcare reform this year: bills passed by the House and Senate by the end of July, conference negotiations through the summer and a final package on Obama’s desk by Oct. 15.

The Obama administration has sensed the tide turning on Capitol Hill, the president’s point person on health indirectly acknowledged. But Health and Human Services Secretary Kathleen Sebelius downplayed the troubles as par for the course during a major legislative push.

“Now, I know that in Washington, it is easy to be distracted by the daily back-and-forth,” she said at an event Wednesday sponsored by the centrist Democratic Leadership Council. “There will be no shortage of rumors and status reports and pundits willing to declare victory or defeat at a moment’s notice. But the president and his team will not be distracted by the chatter.”

While Republican objections may be expected and, at worst, lead to passage of a bill that is not so bipartisan, Baucus’s announcement that he wants to return to the drawing board to pare down the costs could greatly threaten the process. Or it could shift the direction of the proposal away from what liberals want, and closer to a bill Republicans could embrace.

Baucus has kept much of the Senate, including members of his own committee, in the dark about the details and cost of the policy proposals he is considering. Several members of the Finance panel, for example, said they had not seen the CBO report that Baucus will use to scale down — or eliminate — proposals on the negotiating table.

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Baucus has received regular feedback from the CBO in recent weeks, and many of the policy options he is considering have been known since the beginning of the year. This raises questions among some observers whether the $1.6 trillion price tag is a true surprise. Baucus could be using the shocking number to justify shrinking the size of the package.

 However, Robert Reischauer, a former CBO director, said that chairmen have been surprised before by the costliness of CBO projections.

“As they say, the devil is in the details,” he said. “Any of these provisions can cost $50 billion or $100 billion depending on how the language is written.”

Baucus has used his position as chairman to limit the exposure of his healthcare package to attack.

“His ability to decide when to put the ball in play is a major advantage,” said a senior GOP aide in reference to Baucus.

The aide said that Baucus would lose leverage over colleagues and outside lobbying groups once he makes his proposals and their estimated costs public. If lawmakers and groups saw a menu of policy proposals along with projected costs, they would try to undercut Baucus and attempt to decide themselves what should go in the bill, the aide explained.

Members of the Finance Committee will review a range of policies, including the size of healthcare subsidies offered to low- and middle-income Americans. The CBO estimated that subsidies under consideration by the Finance Committee would have spurred a larger-than-expected flight of people away from employer-provided health insurance plans, increasing the plan’s projected cost, according to a member of the Senate panel.

Sen. Kent Conrad (D-N.D.), a senior member of Finance, applauded Baucus’s decision to slow things down and get the numbers right.

“When you’re dealing with something of this complexity, you send up a plan, see what it costs, and you know it’s got to be reduced and then you make changes and then it all has to go back and be re-scored, and a lot of people have to be in on the discussion, so it’s very time-consuming,” said Conrad.


Kiera McCaffrey and Mike Soraghan contributed to this article.