Wednesday, September 16, 2009

The Baucus Plan Will Cover the Uninsured AND Reduce the Deficit - So Why is it DOA?

What a great and awful day to be Max Baucus. He has delivered his long negotiated health reform bill and even though it represents a tremendous bipartisan effort it was introduced with no Republican support and a great deal of Democratic opposition. Simply put, many Democrats feel that the bill gave away too much and Republicans argue that it costs too much - an argument that lost all credibility today courtesy of the CBO. The CBO's preliminary scoring determined that the Baucus plan would reduce the deficit by $49 billion between 2009 and 2019 - It would REDUCE the deficit. Translation: The bill would pay for itself. Cover everyone AND reduce costs. But the CBO score gets better in the next 10 years, from 2020 to 2030 - over that period the rate of deficit reduction would equal about 0.5% of GDP. In real dollars that translates into an average of $93 billion per year or about $1 trillion between 2020 and 2030. None of the other proposals realize such deficit reductions.

So what's the bad news? With no Republican votes Senate Democrats will likely abandon Baucus and and push for a more (liberal) partisan bill (public option and all) that will only require 51 votes to pass using the reconciliation process (an abuse of process). This will set the stage for a showdown with the Blue Dog Democrats in the House - and with more than 50 members in the Blue Dog caucus they have the votes to block a liberal bill and the political motivation to oppose such a measure. In the end, we could see no reform.

Baucus needs a Republican - he needs to get to 60 votes. If he can get to 60 votes the pressure on Democrats would be too great, they would need to vote for the bill.

Baucus has introduced a bill that covers 94% of the uninsured and reduces the deficit. It also has the distinct honor of being hated by the Left and Right - as a general rule, that usually means that it's a damn good piece of legislation and the best hope we have for meaningful reform.

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