Health Care Reform Faces Senate Setbacks

This story was written by Alex Insenstadt and Carrie Budoff Brown.

After weeks of relative calm on the issue, over the last 72 hours, the process hit its roughest stretch all year.

It started Monday when the Congressional Budget Office returned a $1.3 trillion pricetag on Sen. Ted Kennedy's bill - a number that far exceeds what most lawmakers are willing to pay.

And it continued Wednesday, when the Senate Finance Committee - long viewed as the best hope for producing a bill that could draw bipartisan support - signaled it was unable to produce a package in the coming days. The committee said it might put off its markup of the bill until after the July 4 recess, almost a month from Chairman Max Baucus' original start date.

"We will have a mark when we are ready and we are not yet ready," Baucus (D-Mont.) said.

At the same time Finance Committee members were meeting behind closed doors, the Senate Health, Education, Labor and Pensions Committee opened its mark-up on Kennedy's bill - only to see Republicans turning increasingly feisty.

"The bill we have been presented with is so flawed that it cannot be fixed and we need to start over," Sen. Lamar Alexander (R-Tenn.) said.

And the trouble spilled over to powerful interest groups that have been muting their concern in hopes of keeping a seat at the table. Now they're no longer staying quiet, issuing critical public statements and strategizing privately with allies.

The series of problems served as a reminder of the difficulty of passing legislation overhauling the American health care system in record time, as Obama proposed. He had set a goal of getting a bill passed in both houses before the August recess - a goal that is now seen as slipping.

For months, the unusual harmony among interest groups, lawmakers and the White House made the task seem almost easy. But in last few days, the cold reality of piecing together the most complex bill in decades has begun to sink in.

"We have tried to say let's slow the process down," said Sen. Pat Roberts (R-Kan.), a Finance Committee member. "One of the things you are dealing with is, you were just sort of out there and now the CBO has come in and of sort reined us in, saying 'Here is the real world, here is the reality.'"

To be sure, people involved in the negotiations say the potential to deliver a bill at some point this year remains a realistic goal. And the White House also expressed confidence in the process Wednesday.

"The President, I think, has laid out a timeline to get this done this year, and thinks that we're on course to do it," Press Secretary Robert Gibbs said.

Unlike in the Senate HELP Committee, where Republicans and Democrats have been sniping at each other for days, the Finance Committee negotiations remain productive, according to staff and lawmakers. Baucus still anticipates authoring a bipartisan bill with Sen. Chuck Grassley (R-Iowa), the ranking Republican.

Senate sources said the Finance Committee delay was the right thing to do because if Baucus pushed ahead with an incomplete and expensive bill - as the Senate HELP committee has done - they would get mired in the same partisan sniping.

But they still have a far way to go on three major issues: the public insurance option, the employer mandate and the financing for the $1 trillion, 10-year plan.

Their job has been complicated by the nonpartisan Congressional Budget Office, which evaluates the costs of proposed legislation. It emerged this week as the kind of legislative kingmaker that Baucus andothers had feared.

On Monday, the congressional budget analysts released a report on an incomplete bill from Kennedy's HELP committee, saying it would cost more than $1 trillion and still leave 37 million people uninsured. Health care insiders have been wringing their hands over the committee's handling of its bill. Republicans have used it in repeated attacks against Democrats, and interest groups such as the U.S. Chamber of Commerce are becoming increasingly outspoken.

On Tuesday, the CBO issued an analysis of the mega-hyped $2 trillion in industry savings offered to Obama by six major health care groups. The CBO's bottom line: The proposals were too vague to make a comprehensive judgment.

Also on Tuesday, the CBO told Senate budget leaders in a letter that the president's plan to expand coverage would add to the federal deficit unless lawmakers can muster the political will to enact meaningful controls on health spending, such as cutting payments to doctors, hospitals and other health care providers.

The Finance Committee also received a cost estimate on its bill this week - and the bottom line was shocking to members, topping $1.5 trillion.

"On all sides, there was an understanding yesterday that we've got to slow down," said Sen. Kent Conrad (D-N.D.), a Finance Committee member and chairman of the Senate Budget Committee. "Given the score from CBO, we need more time to evaluate options and alternatives."

Conrad said the committee is looking at reducing the amount of federal subsidies for lower-income individuals to purchase insurance, but other Democrats are pressing for different cost-cutting alternatives and finding revenue sources outside of the health care arena, as Obama has proposed.

Amid the recriminations, humor hasn't been completely lost.

Sen. Chris Dodd (D-Conn.), who is shepherding the HELP committee legislation in Kennedy's absence, started the afternoon markup with a history lesson. The committee was working in a room that hosted some of the most important hearings in American history, include those on Watergate, he said.

"I was going to mention the Titanic," Dodd said, "but I thought that would be a bad analogy."