Gang of Six healthcare reform negotiations on verge of collapse

Democrats say the Gang of Six negotiations are all but dead and they are ready to move ahead with only Sen. Olympia Snowe (R-Maine) when the Finance Committee hits a deadline at the end of next week.

Senate Finance Committee Chairman Max Baucus (D-Mont.) has assured Democratic leaders that he will stick to a Sept. 15 deadline for talks among the Gang of Six, which includes Snowe and GOP Sens. Chuck Grassley (Iowa) and Mike Enzi (Wyo.), say Democratic aides.

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Members of the gang, who all sit on the Finance Committee, have negotiated for months to reach a bipartisan agreement, delaying healthcare reform in the Senate beyond a deadline set by President Barack Obama.

The Gang of Six will hold a teleconference at 10:30 Friday morning in a last-minute effort to reach a deal. It is only the second time during the August recess all members of the group, which also includes Sens. Kent Conrad (N.D.) and Jeff Bingaman (N.M.), have met. Members have spoken one on one during the break and staffs have met regularly.

Sources close to the negotiation say that members of the group recognize they have only days left to work out a deal and that next week presents them with their last, best chance to reach an agreement.

Democratic sources say that Republicans have been given the extra time they requested and now have to make a decision. If an agreement is reached, Baucus, Obama and Senate Majority Leader Harry Reid (D-Nev.) are prepared to give up on the Gang of Six and forge a deal with Snowe alone or pass legislation out of the Finance Committee with only Democratic votes.

After weeks of assuring reporters that the Gang of Six has made good progress, Baucus has sounded a different tone in recent days and begun to acknowledge the talks might fail because of political pressure on GOP negotiators from their colleagues and conservative activists.

“I talked to them and they all want to do healthcare reform,” Baucus told The Associated Press earlier this week. “But the sad part is a lot of politics have crept in. They’re being told by the Republican Party not to participate.”

A Democratic aide said that Baucus has begun sounding the death knell for the Gang of Six.

“If you look at Sen. Baucus’s public comments in recent weeks, he appears to be getting closer to acknowledging that this bipartisan process may not work out after all,” said the aide. “He’s done a great job conducting the negotiation, but Sens. Enzi and Grassley aren’t helping very much.”

Enzi released a statement Thursday calling for bipartisan talks to continue.

“I haven’t walked away from our shared goal of healthcare reform or compromised the original principles I outlined as essential to any plan for reform,” Enzi said.

Enzi said Gang of Six negotiations have been productive, adding that “this truly bipartisan approach is the best way to solve the real healthcare problems facing our nation because both parties are at the table and working on solutions without being rushed by arbitrary deadlines.”

But Democrats have given up on Enzi. White House press secretary Robert Gibbs said this week that Enzi had “turned over his cards on bipartisanship and decided that it’s time to walk away from the table.”

It appeared at the beginning of the recess that Democratic negotiators would push back against the Sept. 15 deadline, but that is no longer the case.

Conrad said in a television interview last month that “we will not be bound by any deadline.”

But a senior Democratic aide said Thursday that Baucus supports the deadline and that Reid and other Democratic leaders will not have to step in to enforce it.

Without Grassley and Enzi, Democrats will focus their efforts on Snowe, hoping she can be persuaded to vote for a reform bill produced by the Finance panel later this month. Snowe was the only Republican on Finance to vote for the Democrats' economic stimulus package earlier this year.

Obama and White House officials have focused their efforts on the Maine lawmaker, speaking to her frequently over the recess. They have been working on a side deal with her for weeks.

Snowe favors setting a trigger for a broad government-run health insurance program known as the public option. The proposal would delay government entry into the insurance market until private insurance companies failed to meet requirements for delivering affordable, quality healthcare.

Democratic sources say that Baucus and Conrad, who represent traditionally conservative states, believe it is very important to persuade at least one Republican on Finance to vote for the panel’s healthcare bill, giving centrist Democrats such as Sen. Blanche Lincoln (Ark.) — and themselves — political cover. Lincoln, a member of the committee, faces a difficult reelection next year.

Selling a plan to delay implementation of the public option to liberal Democrats, however, would be a tricky task for Obama and Baucus.

Obama will begin the next phase of the healthcare debate when he delivers a highly anticipated speech before a joint session of Congress on Wednesday, Sept. 9. Democratic aides say that Obama intends to reset the terms of a discussion that has threatened to veer out of control as Republicans and conservatives have criticized and distorted Democratic proposals.

Obama will meet with Reid and House Speaker Nancy Pelosi (D-Calif.) at the White House on Tuesday to discuss strategy over the next few weeks.