Healthcare Reform Cost Estimates Have Democrats on Defensive

Obama insists that healthcare reform must include a public option.

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Around 7 a.m. last Wednesday, Sen. Chris Dodd got a call from Sen. Ted Kennedy. Dodd, a Connecticut Democrat, was scheduled to kick off debate in the Senate health committee on Kennedy's healthcare overhaul bill, and the Massachusetts Democrat was phoning to wish him luck. "He's dedicated virtually all of his public life to this issue," Dodd said of Kennedy, who is battling brain cancer. "He wanted to warn all of us that he's watching" on TV.

Kennedy couldn't have been pleased with what he saw later that morning. Dodd had barely begun opening remarks when a peeved Sen. John McCain interrupted and denounced the bill as incomplete. "How can we possibly, reasonably address the trillions of dollars of spending associated with this bill without accounting for some way to pay for it?" the Arizona Republican queried.

McCain was not the only one in Washington asking that question last week. New government figures on the potential costs of healthcare legislation put Democrats on the defensive, having to rethink not only their proposals but also their hope of having a bill ready for President Obama's signature by October.

The inciting spark was the Congressional Budget Office's released of preliminary estimates on the costs of the two main Senate bills. Kennedy's was tagged at $1 trillion. The other, being developed by Finance Committee Chairman Max Baucus, would cost $1.6 trillion.

Those numbers—especially the latter figure—thundered through Washington, partly because of their sheer magnitude and partly because of the CBO's nonpartisan reputation. In response, Baucus, a Montana Democrat, announced that he would not unveil his bill last week as planned but will "slow things down" and look for ways to cut more than $600 billion from the cost.

The White House has tried not to flinch. Kathleen Sebelius, the secretary of health and human services, said late last week that the president would not be "distracted by the chatter" and asked Congress to ignore day-to-day reports of impending defeat or failure.

President Obama himself is now talking. In a news conference Tuesday, he insisted that reform must include a government-run insurance option. His position has been buoyed by a new poll this week, conducted by CBS and the New York Times, showing that 72 percent of Americans support a public option. "Reform is not a luxury, it's a necessity," Obama said.

But Baucus's move will have real consequences. Senate Democrats plan to weave the Baucus and Kennedy bills together into a single text. Delaying Baucus's bill could slow the whole process. (In the House, Rep. Charles Rangel, who chairs the Ways and Means Committee, released draft bill last Friday.)

Amid all the caterwauling, there was some good news for Obama. His remarks to the American Medical Association last week apparently scored points, because the group rejected a resolution officially opposing his public insurance plan. On the other hand, that's far from an endorsement.

Senators from both parties have hailed a new report from former Sens. Bob Dole and Tom Daschle, founders of the Bipartisan Policy Center, as offering a "road map" for healthcare reform. But limited bipartisanship has been in evidence in the marble-walled Senate hearing room that is now overflowing with paper drafts of proposed amendments. Dodd says he hopes to fill in the gaps in Kennedy's bill, including costs, by the end of this week. Republicans warn those moves could add another trillion in red ink.