Senate Passes Healthcare Reform But Negotiations With House Will Be Tough

Senators took to the floor to pass healthcare reform legislation today, marking the first time the body has conducted business on Christmas Eve since 1963 (before that, it was 1895). But even as the votes tallied along the expected party lines, with the final count 60 to 39, it was clear that hard work remains. Democrats are steeling themselves for the contentious process of melding the Senate and House versions of the bill, with liberal lawmakers warning that they are ready to bargain hard and push back in the wake of a process that left many feeling steamrolled by their more conservative colleagues.

The conventional wisdom has been that whatever healthcare bill was given the nod by the Senate, where only one defector would sink the legislation, would form the basis for conference committee negotiations with House Democrats. But there is a growing sense that "this is going to be a lot more difficult than people realize," says Mike Lux, a Democratic political strategist. True, when Howard Dean, the former chairman of the Democratic National Committee, blasted his party for bowing to conservative and centrist Democrat demands and urged Senate lawmakers to "kill" their bill rather than push through legislation without a public option, few seemed fazed. "This is a small part of a large healthcare reform," said the president's senior adviser, David Axelrod. "Let's not overemphasize it."

But the public option remains a point of contention—and there are others, including rules regarding federal funding for abortion and the "Cadillac tax" on premium health plans. The crux of the complaints coming from liberals is that though the president supported the public option and a number of other reform measures, he did not fight for them. If the Senate bill was brought to the House today, it would be short "at least 25 to 30 votes," by Lux's estimates. "The votes just aren't there right now," he says. "I don't even think they're particularly close. They have a lot of negotiating left to go." There is a liberal contingent with considerable presence in both houses that feels that it has had little voice in the proceedings, up until now. "I think the question now is: Do some of the liberal lawmakers say, 'I've had it up to here?' " says Peter Fenn, a Democratic political strategist. " 'I've compromised, I've taken it on this and this—and I'm done.' "

This is much the approach that Rep. Raúl Grijalva, an Arizona Democrat and cochairman of the 83-member House Progressive Caucus, is contemplating. He said that the final healthcare bill "will be very difficult, if not impossible, to support" if it does not include "some semblance of the public option." Lynn Woolsey, a California Democrat who is the other caucus cochair, sounded an ominous warning as well. The president "promised the country healthcare reform," she said, "and this is not healthcare reform."

Yesterday, New York Rep. Louise Slaughter, who chairs the powerful House Rules Committee, became the highest-profile House Democrat to publicly oppose the Senate version. "Supporters of the weak Senate bill say, 'Just pass it—any bill is better than no bill.' I strongly disagree," she wrote on CNN.com. "It's time to draw the line on this weak bill and ask the Senate to go back to the drawing board."

Specifically, House Speaker Nancy Pelosi is going to have a tough time corralling votes around abortion provisions. The House bill is more stringent, prohibiting coverage of abortion by any federally subsidized health plan. The Senate version, negotiated with Nebraska Democratic Sen. Ben Nelson, would allow health plans to cover abortion, but only by "segregating" funds and requiring people to pay a separate premium for abortion coverage. Critics point out that most people do not plan pregnancy terminations ahead of time. California Democratic Sen. Barbara Boxer, who supports abortion rights, did not seem particularly troubled by these points of contention in the debate, saying, "When you have both extremes saying they're unhappy, I think it's a fair compromise."

But Slaughter and Democratic Rep. Diana DeGette of Colorado, who cochair the 190-member Congressional Pro-Choice Caucus, said in a widely circulated statement that the Senate approach is "not only offensive to people who believe in choice" but also "possibly unconstitutional." They argue that the healthcare reform should not be "misused" to take away access to healthcare. This has drawn the liberal congresswomen into an unlikely alliance with colleagues like Rep. Bart Stupak, a Michigan Democrat, who said Monday that it would be "extremely difficult" for him to vote for compromise legislation that takes the Senate approach to abortion. Stupak was the author of the more restrictive House antiabortion provision that bans federal funding for any plan that offers abortion coverage, including the federal subsidies offered to low-income people to buy into healthcare. Sixty-four House Democrats voted for the restrictions. Of those, 41 ultimately voted in favor of the bill, creating a crucial margin of victory in the House.

These issues promise to be particularly contentious because con­serva­tive and centrist Democrats do not seem likely to cede ground. Sen. Joseph Lieberman, the Connecticut independent who earned Democrats' ire for killing the public option, warned that the standard approach of "splitting the difference" between House and Senate bills "means you won't have 60 votes in the Senate."

On other points, compromise is expected to come more easily. Labor unions are lobbying hard to fight taxes on "Cadillac" health plans, particularly after a Congressional Budget Office study found that the Senate plan would raise taxes on 22 million households earning less than $200,000. Most House Democrats are resolutely opposed to this, invoking Obama's promise not to pass along a tax hike to households earning less than $250,000. "Obviously, raising that tax so that it only affects the top 10 percent of health plans, instead of the top 40 or 50 percent, would be a reasonable compromise," says Lux.

Privately, some Democratic congressional staffers say that Dean had a point last week when he blasted Democrats as "not tough enough." But while the negotiations will be thorny, the political will is there to get them finished, says Brookings Institute political analyst Thomas Mann. "Democrats understand that the way for the party to avoid an electoral debacle in 2010 is not to fail on these initiatives," he says. "They aren't going to save themselves by voting against it."