Schumer promises public option in healthcare bill

The healthcare reform bill that emerges from Congress this year will include a government-run public health insurance option, regardless of the bipartisan negotiations seeking a compromise in the Senate, Sen. Chuck Schumer (D-N.Y.) said Sunday.

"Make no mistake about it, the president is for this strongly. There will be a public option in the final bill," Schumer said on CBS News's "Face the Nation."

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Schumer made his prediction just days before the Senate returned to the work of getting a bill passed by the first week of August amid significant disagreement between Democrats and Republicans -- and among Democrats themselves -- over controversial issues such as the public option.

Moreover, key members of Finance Committee, on which Schumer has a seat, have been engaged for months in a delicate process of bipartisan negotiations on the contents of the healthcare reform bill, which is expected to require new spending around $1 trillion to extend insurance coverage to nearly all Americans, though Obama and congressional Democrats vow they will offset all new spending with cuts and tax increases.

The major sticking point between Democrats and Republicans on the Finance Committee -- and throughout Congress -- has been the public option. Democrats maintain that a not-for-profit, nationwide alternative to private insurance must be made available to "keep the insurance companies honest," Schumer said. "We don't trust the private insurance companies left to their own devices and neither do the American people."

Republicans counter that any government-run plan could not be a fair competitor and predict that the public option would eventually squeeze private companies out of the market. "The federal government is in the process of nationalizing banks, nationalizing General Motors. I'm going to make sure we don't nationalize health insurance and [the] public option is the first step to doing that," Finance Committee ranking member Chuck Grassley (R-Iowa) said on "Face the Nation."

Despite the bipartisan negotiations going on behind the scenes on the Finance Committee, Schumer pointedly noted that the House and the Senate Health, Education, Labor and Pensions (HELP) Committee have written a public option into their bills. Combined with Obama's continued support for the proposal, Schumer suggested, that bodes well for the prospects of the public option making into the final legislation the president wants on his desk this Autumn.

"The House has proposed its plan, has a strong public option. The HELP Committee, the other committee in the Senate doing this, has proposed a strong public option," Schumer said.

Finance Committee Chairman Max Baucus (D-Mont.) and six other committee members, including Grassley, have been meeting behind closed doors to draft a bipartisan bill. At the urging of Sen. Kent Conrad (D-N.D.), the senators are leaning toward setting aside a true public option in favor of establishing not-for-profit, member-owned health insurance cooperatives to compete with traditional insurance companies. Though the notion appeals to Republicans and some centrist Democrats, supporters of the public option do not view it as an acceptable compromise.

Schumer emerged earlier this year as a vocal proponent of the public option and offered a model for the plan that he positioned as a compromise itself. Under Schumer's proposal, which closely resembles what the House and the HELP Committee are considering, the public option would receive no federal funding, be financed entirely by premiums and have to abide by the same insurance regulations as private firms.

House Majority Leader Steny Hoyer (D-Md.) reiterated on Fox News Sunday that the lower chamber's bill will include a strong public option. "We think there's going to be a public option. Yes, we think we need that. We need to make sure that there is an option available for public that can't get through at the private insurance. We think that's essential if you're going to have access," Hoyer said.

House Minority Leader John Boehner (R-Ohio) indicated that a public option would be a deal-breaker for Republicans. "I think having the government have a plan to compete with the private sector is unfair, because the government has no cost of capital," Boehner said.

Hoyer also defended proposals to require most employers to provide health insurance to their workers or pay the a fee to the government. "We believe that if the employers don't participate, then they need to -- by having their employees covered by their own insurance, then they need to participate in helping to pay for the system," Hoyer said. Grassley said an employer mandate would be lethal to small companies. "Such an employer mandate would put a lot of small businesses out of business," he said.

The House bill and the HELP Committee bill also include a provision requiring individuals to obtain coverage; the Finance Committee is expected to adopt the same policy in its legislation. Boehner rejected this proposal, as well. "There's an individual mandate that you must buy health insurance, and if you don't, we're going to fine you," he said.

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Hoyer indicated that the House will not consider taxing workplace health benefits to help cover the cost of the reform bill. Obama opposes such a tax but the Finance Committee is seriously considering it. Not so in the House, Hoyer said. "That's a proposal on the table in the Senate, not in the House," he said.

In an interview with The New York Times aboard Air Force Two in the skies over Iraq Saturday, Vice President Biden said Obama and his top aides would escalate their involvement in the healthcare negotiations after the House and Senate pass their respective bills. "The place where we will appropriately get engaged is when this gets to conference," Biden said, according to a White House press pool report.

Though Obama has been using the bully pulpit more and more to promote healthcare reform via press events at the White House and town hall-style meetings, some Democrats and liberals outside Congress have called on Obama to become more directly involved in pressing congressional Democrats on major issues in the reform debate, such as the public option. Biden rejected the notion that Obama is not engaged in the process. "Oh, he’s engaged," Biden said. "I promise you, he’s engaged."

Biden said that Obama has laid out his principles for what should be in the healthcare reform legislation and how it should be financed but is going to let the current stage of the legislative process play out. "We have made absolutely clear in detail what we think is the best healthcare plan and how to finance it, who to cover and the need for a public plan. We have not a this point twisted arms in the House or the Senate on our plan," Biden said.

"Then it goes to conference and some of all of the elements of what we are proposing are in each of the bills, and that’s when we will fight very hard to try to produce a bill out of that conference that is consistent with what we believe is the way to fund it, the way to make sure there’s competition with the insurance industry, through a public plan, to cover the vast majority of the American people," Biden said.

The administration expects Congress to keep to its timetable and have legislation passed by both chambers before the August recess, Biden said. "I’m betting we will get a bill."

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