Democratic leaders are clinging to hope of progress on health care reform before Congress breaks for its August recess, but marathon negotiating sessions in the House yielded no breakthroughs Tuesday, and the list of open issues grew longer rather than shorter.
House Speaker Nancy Pelosi swatted away a report - put out by a Republican staffer - that there would be no floor vote before recess. The speaker said leaders haven't decided when to leave, and Majority Leader Steny Hoyer (D-Md.) said staying in session next week is still "an option."
But there were few signs of progress Tuesday. White House chief of staff Rahm Emanuel met for 3½ hours in the speaker's office with seven Blue Dog conservative Democrats and Energy and Commerce Chairman Henry Waxman (D-Calif.) - but the group emerged with no deal.
In fact, as the Blue Dogs returned to their extended negotiating sessions, Rep. Mike Ross (D-Ark.) said 12 issues remain unresolved - two more than Monday night - and suggested "it might be impossible to come to a conclusion on some because of ideological differences."
These moderates are still searching for more cost-cutting measures, but Ross said his colleagues were disappointed a plan to empower an outside commission wouldn't save more money after the Congressional Budget Office concluded that the proposal would save only $2 billion over the next 10 years.
"Obviously, there was a lot of disappointment," Ross said.
In the Senate, a Democratic fight over whether to include a public insurance option in the health reform bill erupted into the open Tuesday, as liberal members reacted with frustration, if not outright hostility, to the idea that the Senate Finance Committee would most likely scrap the idea in its compromise legislation.
Finance Committee Chairman Max Baucus (D-Mont.) has spent the past few months trying to craft a health care compromise that can win a few Republican votes - and is expected to leave out the public plan that Republicans don't like.
But left-leaning senators made clear Tuesday that they are preparing for a battle over the next phase of health reform in the Senate - merging vastly divergent bills from the Finance and Health committees. Or in the eyes of the liberals, restoring their No. 1 provision - a government option to compete with private issurers - to its proper place in the final Senate legislation.
Sen. Sherrod Brown (D-Ohio), a leading advocate for the public option, said 80 percent of Senate Democrats support establishing a government insurance plan - like the one included in the Senate Health Committee version of the bill, which would have to be merged with the Finance legislation.
And Brown said the majority shouldn't be cowed by the Republicans.
"So because we want three Republicans to come along on this, we are going to betray what the American people want? I don't think so," Brown said. "I think, in the end, Republicans vote for this because they want to be on the side of history. ... Just because Finance was slower doesn't mean they are stronger, that their way, that their plan will carry the day. I don't think it will."
House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) also said he believes the Senate must include the public option in the end. "We cannot pass a House bill without it," Rangel said flatly - an indication that House members want some political cover on the issue from the upper chamber.
One concern for progressives is that President Barack Obama - despite his strong statements in the past - could trade away the public plan. Obama hasn't talked it up as often lately, and the White House has sent broad signals that it could live with a health bill that doesn't include a public optio as long as its replacement lowered insurance costs and expanded access to coverage.
Senate Majority Leader Harry Reid said on Tuesday the Senate Finance Committee would wrap up its work on the health care reform bill before the end of next week. But Reid was vague on whether he supported the public option, saying only that he has a "responsibility" to get a bill to the Senate floor that can garner 60 votes.
And in fact, Baucus has been negotiating from the viewpoint that Democrats need Republican votes and must therefore write a bill from the outset that can clear the 60-vote filibuster-proof threshold. It looks as if he won't include a public plan - poison to many Republicans - but instead is expected to call for nonprofit insurance "cooperatives," which are owned and operated by the participants.
Baucus spoke at length Tuesday with reporters about aspects of the bill that would hearten Democrats: 84 percent of the bill's cost would help uninsured Americans buy coverage; those with insurance will no longer have to worry about losing coverage because of a pre-existing condition; and serious steps will be taken to reduce health care inflation. Baucus was also building Democratic consensus around a tax on insurance companies that offer high-end plans worth more than $25,000 a year, and an independent agency to rein in Medicare spending.
Baucus said he and Obama speak daily, and he keeps him informed about the direction of the talks. That direction includes moving toward the co-op and forgoing a broad employer mandate to provide insurance in favor of a "free-rider" provision that would force employers to pay for the coverage of workers that receive Medicaid or new government helpthrough an insurance exchange.
When asked whether the president specifically supports the co-op and free rider, Baucus said: "He knows what we are doing."
After weeks of silence, Sen. Kent Conrad (D-N.D.) offered specifics Tuesday on the co-op plan that could temper Democratic opposition.
Conrad, who first proposed the co-op plan, said that the federal government would provide $6 billion in start-up funds and that the Health and Human Services secretary would appoint an interim national board to set policy for the co-op network, which could form on the state, regional and national level. Actuaries estimate that it could attract 12 million people, making it the third-largest insurance provider in the country, Conrad said.
But liberals weren't swayed. Sen. Carl Levin (D-Mich.) said Baucus should continue the bipartisan talks but should also develop a backup bill with a strong public option "that will command a majority of Democrats."
Sen. Bernie Sanders (I-Vt.) said the Democratic leadership needs to persuade all 60 members of the caucus to stand together in defeating a Republican filibuster and then allow members to vote as they please on the final bill, which would require only a simple majority.
For his part, Hoyer said he wasn't concerned that the Senate Finance package would sidestep the government-sponsored health coverage or a requirement for businesses to cover their employees.
Hoyer said he just wants to see the Senate move a bill, whatever it includes, so the two sides can start reconciling their competing versions sooner rather than later.
"I don't think there is any one item that is essential," Hoyer said, provided the final bill vastly expands coverage and helps bring down the rapidly accelerating costs of health care in this country. "We need to get to conference."
By Carrie Budoff Brown and Patrick O'Connor