Health Reform Can Be Enacted with Democrats Only

Around 6:45 p.m. tonight, House Democratic leaders will emerge from the White House, smile for the cameras and vow to pass health reform before President Obama’s late January State of the Union Address to Congress. Sometimes leadership pronouncements are more statements of intention than statements of fact, but, this time, there’s no doubt in my mind that health reform can be enacted with only Democratic support in Congress. Leadership staff let it be known yesterday that there will be no conference committee because that would involve Republicans. From now on, the health reform bill is in Democratic hands. The two houses of Congress will play “Ping Pong” until a compromise bill passes both and goes to President Obama.

Resolving the substantial differences between the House and Senate versions of health reform won’t be easy. You don’t have to be inside Speaker Pelosi’s office to hear the screams from House Democrats about caving to the Senate. Topping the list of House Democratic demands would be to restore a public insurance option, but any compromise including that would fail to pass the Senate. Establishing a national insurance exchange is a high priority for the House, instead of the Senate’s state insurance exchanges. The House also wants its version of abortion language, another non-starter in the Senate. The House will push for tougher mandates on individuals and employers to buy health insurance and for more generous subsidies to cover 36 million uninsured Americans instead of the Senate’s 31 million. The House also wants to pay for a large portion of the bill with a high income tax surcharge instead of with a tax on Cadillac health insurance plans that is strongly opposed by the unions. Clearly, the House is going to have to give way to the Senate on the public option and on abortion, and the Senate is going to give way on other issues.

The bottom line is that too much political capital has been invested by Democrats from President Obama on down to allow it to slip away in disagreements among Democrats. Having passed both Houses already, there’s no turning back. The only thing that could derail health reform now is if Senator Byrd or any other Democrat (including Senators Lieberman and Sanders, who are technically independents) is physically unable to vote in late January.

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About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

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