By Alex Wayne, CQ Staff

November 7, 2009 -- The most ambitious overhaul of the U.S. health care system in 40 years squeaked through the House late Saturday, allowing President Obama to win a preliminary round in what could still be a long battle for his top domestic priority.

The 220–215 vote for the trillion-dollar effort to extend health coverage to millions of Americans who currently lack it capped a long debate during which a soporific tone belied the tension within the majority Democratic caucus.

Democratic supporters of the legislation counted down the seconds as time expired on the final roll call vote. But despite the best efforts of the president and party leaders, 39 Democrats voted against the bill.

Things could have been worse for the Democrats, who had expected Republicans to offer a motion to add more restrictive immigration language to the bill—perhaps making it unacceptable to members of the Democrats' Hispanic Caucus.

The only Republican to back the measure was freshman Anh "Joseph" Cao of Louisiana, who won cheers from House Democrats when he cast his "yea" vote despite a last-minute plea at the back of the chamber from Minority Whip Eric Cantor, R-Va.

Passage of the measure (HR 3962) proved far more difficult than Obama and House leaders expected following the Democratic election sweep of 2008. It took months longer than they had hoped, making it increasingly doubtful Congress will send a final bill to the White House by year's end. Indeed, it is not clear the Senate will be able to pass its version before the first session comes to an end shortly before Christmas—let alone reach agreement with the House in conference.

Senate Majority Leader Harry Reid, D-Nev., said after the House vote that he looks forward to Senate floor action as soon as possible.

Democrats hailed the House vote as historic, with Speaker Nancy Pelosi, D-Calif., likening the achievement to the creation of Medicare in 1965. "For generations, the American people have called for affordable, quality health care for their families. Today that call will be answered," she said.

The bill, she declared, "improves quality, lowers costs and expands coverage to 36 million more people."

When Obama first called for enactment of a health care overhaul, he called for bipartisanship. The White House reached out to multiple elements of the health care industry, striking deals with many of them on key provisions of the bill.

But Republicans complained they were never given a voice in drafting the legislation. Minority Leader John A. Boehner, R-Ohio, and his allies repeatedly denounced the Democrats' legislation as a "jobs killer" and the prelude to a government takeover of the U.S. health care system.

"The American people have spoken and they've made it perfectly clear that the health care bill that's on the floor today, they want no part of," Boehner said. "We're going to do everything we can to try to stop this from becoming law and urge the Speaker to work with us in a bipartisan way to enact common sense, step-by-step reform to make health insurance more affordable for more Americans."

Pelosi was frequently targeted by Republicans during the heated debate on the legislation. But Democrats credited the Speaker with quarterbacking them to victory.

Majority Leader Steny H. Hoyer, D-Md., jokingly hailed a "bipartisan victory" and touted the work of Majority Whip James E. Clyburn, D-S.C., whose job it is to keep the diverse Democratic caucus moving in one direction. Clyburn said he believes the health care debate brought Democratic factions closer together.

"For all of those who have been assaulting me in the hallway and asking me if we had the votes. the answer is 'yes,' " Hoyer said.

Pelosi paid special tribute to John D. Dingell, D-Mich., who like his father before him has championed universal health care throughout his 54-year House career. Dingell presided as the House debated the rule governing consideration of the bill, just as he wielded the gavel 40 years ago when the House considered the Medicare bill.

Pelosi also hailed the late Sen. Edward M. Kennedy, D-Mass., whose drive to achieve health coverage for all Americans equaled Dingell's.

Getting to 'Yes'
Obama went to Capitol Hill late Saturday morning to make a final pitch for the bill. He warned Democrats that their election opponents next year would assail them no matter how they voted, and he urged them to support the bill.

Hoyer acknowledged that the measure doesn't please everyone. "It isn't a simple bill. It isn't a perfect bill. But it is the product of months and months of careful debate, sometimes animated debate, yes, even angry debate, careful scrutiny, hard work and citizen input. It's the right response to this time of economic insecurity in which we have been called to lead," he said.

Many of those who voted against the legislation, despite the appeals of the White House and their leadership, represent conservative districts whose voters are deeply suspicious of government activism.

Among them were freshmen such as Frank Kratovil Jr. of Maryland and John Adler of New Jersey. Kratovil captured a GOP seat in a district that gave Arizona Republican Sen. John McCain a double-digit lead over Barack Obama in 2008, making him one of the Republicans' top targets in next year's midterm elections. Adler also is counted as a vulnerable Democrat, after his narrow win last year in a longtime Republican district.

To cobble together the 218 Democratic votes they needed to pass the bill, Pelosi and her leadership team were forced to permit lawmakers opposed to abortion rights led by Bart Stupak, D-Mich., to offer an amendment that essentially would extend an existing ban on federal funding for abortion to the health care bill.

Stupak's amendment was adopted by 240-194, as 64 Democrats joined 176 Republicans. If the provision becomes law, insurers selling plans through a new "exchange," or marketplace, including a government-run public option, could not offer policies covering elective abortion to people who receive federal subsidies for their premiums.

Abortion-rights supporters were distinctly unhappy about that development and but ultimately swallowed hard and many voted for the amended bill. "We've got a lot of work to do. We hope the conferees will do something about it," said abortion rights supporter Lois Capps, D-Calif.

The Democrats were unified in rejecting a Republican substitute amendment to their bill that was offered by Boehner. That measure, which failed on a 176 to 258 vote, would have made only minimal changes to the current health care system, potentially extending coverage to only about3 million of the 54 million people who would be uninsured by 2019, according to Congressional Budget Office estimates.

Republicans made a more targeted effort to sink the Democratic bill with a motion to recommit the package and amend it to change the medical malpractice liability system, including caps on damages in lawsuits. The $54 billion the motion is estimated to save over 10 years would be used to increase spending on the Medicare Advantage program that would see cuts under the Democrat's measure.

But that effort was easily turned aside, 187-247, with only 13 Democrats voting for the GOP motion.

Key Provisions
The bill would require most individuals to buy health insurance if they don't get it through their jobs, beginning in 2013. Families with incomes up to 400 percent of the federal poverty level could qualify for financial assistance. Employers with annual payrolls over $500,000 would be required to provide coverage or contribute to a fund for such coverage. It would create an "exchange" in each state where individuals and certain small businesses could shop for insurance policies, and it would create a public insurance plan to compete with offerings from private companies.

Insurance companies could no longer refuse to cover customers with pre-existing medical conditions, impose annual or lifetime benefit limits or cancel a policy when someone files expensive claims.

The measure also would expand eligibility for Medicaid to individuals and families with incomes up to 150 percent of the poverty level.

Payments under the Medicare Advantage program would be reduced and the Medicare prescription drug program would be enhanced by phasing out a coverage gap.

The bill would impose a tax surcharge of 5.4 percent on couples with gross incomes of more than $1 million and individuals with incomes of more than $500,000, and a 2.5 percent excise tax on the sale or lease of medical devices.

The Congressional Budget Office estimates that the gross cost of the bill would be almost $1.1 trillion through fiscal 2019, but the net cost, after taxes, fees and penalties are taken into account, would be $894 billion. As a result of tax provisions and spending reductions in the bill, it would actually reduce the deficit by $104 billion, CBO estimates.

Leah Nylen contributed to this story.

By Alex Wayne, CQ Staff

November 7, 2009 -- The House voted Saturday to prohibit federal funding for abortion in new insurance programs created by a Democratic health overhaul, in one of the biggest showdown votes on the issue in a dozen years.

The amendment, sponsored by Rep. Bart Stupak, D-Mich., along with Brad Ellsworth, D-Ind., and Joe Pitts, R-Pa., was adopted 240–194. One member, John Shadegg, R-Ariz., voted "present." Sixty-four Democrats supported the amendment and no Republicans voted against it.

The vote showed that abortion opponents still hold sway in the House despite big Democratic gains in the last two elections. Interest groups and congressional caucuses on both sides of the issue spent Saturday furiously lobbying for support. The National Right to Life Committee, an anti-abortion group, called the Stupak amendment the most important abortion vote since Congress voted in 1997 to uphold existing prohibitions on federal funding for abortion.

But the amendment only came to a vote, Stupak said, because House Speaker Nancy Pelosi, D-Calif., could not convince abortion-rights supporters in her caucus to accept an agreement to include less restrictive abortion language in the bill.

"By going to the floor we're actually getting stronger language than we had in the agreement," Stupak said. "I think . . . the other side overreached and we get our amendment."

Abortion issues had riven House Democrats over the past week as they made final preparations to bring their health bill (HR 3962) to a vote.

In the deal struck Friday night between Pelosi, Stupak and Ellsworth, Pelosi agreed to allow a vote on an amendment that would essentially extend prohibitions on federal funding for abortion—so called "Hyde amendment" language—to the health bill. The Hyde amendment is named after former Rep. Henry J. Hyde, R-Ill. (1975-2007), who first attached it to an appropriations measure in 1976.

The result of the Stupak amendment would be that insurers selling plans through a new government-run "exchange"—including a government-run plan, the public option—could not offer policies covering elective abortion to people who receive federal subsidies for their premiums.

Instead, women with subsidized policies who also want abortion coverage would have to purchase separate abortion-only "riders" for their plans, using their own money.

Insurers would be allowed to cover abortions that result from rape or incest or when a pregnancy threatens a mother's life. And people who do not receive federal subsidies would be able to buy policies on the exchange that cover elective abortion, though abortion rights supporters are skeptical there will be any available.

"The Stupak-Pitts amendment pretty much makes a legal medical procedure unavailable to women buying insurance on the exchange," said Rep. Diana DeGette, D-Colo.,

DeGette and other opponents argued that the Stupak amendment was thus an extension of the Hyde amendment language to the private market and an intrusion of government into a woman's decision to have an abortion.

"It attempts an unprecedented overreach on women's basic rights and freedoms in this country," said Rep. Rosa DeLauro, D-Conn., during the floor debate on the Stupak amendment.

Stupak particularly alienated some Democratic women with his amendment. When the Rules Committee approved a rule for the health bill early Saturday morning that allowed debate on Stupak's measure, chairwoman Louise B. Slaughter, D-N.Y., and the committee's two other female Democrats, Doris Matsui, D-Calif., and Chellie Pingree, D-Maine, were absent and did not vote.

Slaughter is co-chairwoman, with DeGette, of the Pro Choice Caucus. A spokesman for the committee confirmed that their absences were intended as a statement on the amendment.

How the Deal Was Done
Democrats who support abortion rights were furious over the deal Saturday morning, but Stupak said they brought it on themselves by rejecting the earlier deal.

"It's my understanding . . . that they said we can't agree to this, let's put it to a vote because we've all got to vote our conscience on this," Stupak said before the vote. "I'm comfortable doing that, because I think we have the votes."

DeGette described the events differently. She said Stupak had first threatened simply to vote against the rule on the bill—not the bill itself—if he didn't get his language added. So DeGette and her allies, she said, rounded up enough votes to pass the rule without the abortion opponents.

"We had the votes for the rule," DeGette said. But Stupak, she charged, "moved the goalposts" by then threatening that he and his allies would vote against the bill, too.

Stupak said he remained consistent.

"I still believe, going into that last night, we still had enough to block the rule," he said.

Regardless, Pelosi's hand was forced, and late Friday she directed the Rules Committee to put Stupak's amendment in order.

Abortion rights supporters didn't surrender. "We're not convinced at this point that we can't defeat it," said Rep. Jan Schakowsky, D-Ill. Members of the congressional Pro Choice Caucus began calling their colleagues to see if they were committed to support the Stupak amendment. If they weren't, Schakowsky said, "we want to talk to them about how this is a vast expansion of limits on women's reproductive rights."

The amendment's adoption made the health bill a difficult vote for abortion rights supporters. DeGette predicted that "there is a risk" the bill might fail.

"But people like me don't want to see this health care bill go down," she said.

Stupak said Pelosi probably won about 10 additional votes for the health bill just by allowing a vote on his amendment. He figures that of his 40 allies, 10 or 15 would have voted for the bill regardless, and about 15 would never vote for it. Half would have supported the bill even if the amendment had failed, and about five more supported the bill because of the amendment, he said.

Stupak said he himself was undecided on the bill: He is upset over a change, included in the manager's amendment, that would no longer offer a tax credit to paper mills that produce an alternative fuel known as "black liquor."

By Alex Wayne, CQ Staff

November 6, 2009 -- Rep. Anthony Weiner has decided not to offer legislation to create a single-payer health system as a substitute for House Democrats' health care overhaul.

Weiner, a New York Democrat, won a promise from party leaders for a vote on his amendment in July, while the House Energy and Commerce Committee was debating the health bill. His amendment would have replaced the bill's expansions of private and public insurance coverage, instead of simply expanding Medicare to cover all Americans.

But he said in a statement Friday that he was worried the proposal might harm passage of the health bill, which he also supports. Democratic leaders are still working to assemble a majority in favor of the overhaul (HR 3962).

"Given how fluid the negotiations are on the final push to get comprehensive health care reform that covers millions of Americans and contains costs through a public option, I became concerned that my amendment might undermine that important goal," Weiner said.

Democratic leaders, who met late Thursday trying to figure out how to handle Weiner's amendment, applauded him for dropping it.

"His decision not to offer a single-payer amendment during consideration of HR 3962 is a correct one, and helps advance the passage of important health reforms by this Congress," said Speaker Nancy Pelosi, D-Calif.

Weiner said in an interview that some Democrats from relatively conservative districts—but with "rabid progressive" bases—had indicated the single-payer amendment would cause them difficulty. They would have trouble explaining a vote against the amendment to their most active supporters, but a vote for the amendment might jeopardize their re-elections.

"It came down to when we were whip counting on the bigger bill; there were not a lot—but enough that made a difference—of people who said the single payer vote made it harder for them to vote for the bigger bill," Weiner said.

Many single-payer advocates outside Congress have been irate this year that Democrats have not seriously considered the idea. President Obama ruled out a single-payer system early in the health debate, as did Democratic congressional leaders.

Weiner apparently crossed longtime Democratic supporters of a single-payer system by negotiating to bring his amendment to a vote without consulting them. Dennis J. Kucinich, D-Ohio, and John Conyers Jr., D-Mich., sent a message to single-payer supporters Thursday saying they did not want to see a vote on Weiner's proposal because it would fail and would be perceived as a defeat for the idea of a single-payer system.

Conyers is the sponsor of a "Medicare for all" bill (HR 676) that has 87 cosponsors, including Kucinich, and is widely supported among single-payer activists.

"We are now asking you to join us in suggesting to congressional leaders that this is not the right time to call the roll on a stand-alone single-payer bill," Conyers and Kucinich said in their message. "That time will come."

Weiner dismissed the message from Kucinich and Conyers, calling it a "temper tantrum by Kucinich" over the Conyers bill's inability to advance.

"That really didn't contribute very much to this decision because, frankly, just about every progressive member of Congress was prepared to vote yes on the amendment," Weiner said. "I heard a lot of complaints from members of the Progressive Caucus that that was kind of a rogue operation."

By Alan K. Ota, CQ Staff

November 3, 2009 -- Senate Democrats' hopes of finishing a comprehensive health care overhaul by year's end are slipping due to Republican opposition, the crowded legislative calendar and questions about the cost of the bill, says the Senate's No. 2 Democrat.

Majority Whip Richard J. Durbin said Tuesday that the future of the legislation partly rests on when leaders receive a cost estimate from the Congressional Budget Office (CBO). Majority Leader Harry Reid, D-Nev., sent the complete legislative language of the bill to the CBO for scoring on Oct. 26.

"Are we going to finish by the end of the year? I'm going to have to answer a question with a question as any good politician. How soon will CBO get finished? . . . Our fate is in their hands," Durbin, D-Ill., said.

Unresolved questions—such as how to pay for the overhaul, how the plan's costs will be tallied and what kind of subsidies should be provided to low-income uninsured Americans—are only part of the Democrats' problems, Durbin said. He blamed Republicans for stalling action and pointed to several other legislative matters that he said must be resolved.

"If health care were the only issue this year, there's precious little time to do anything of that complexity," Durbin said. "But it's not the only thing we face: the omnibus appropriation bills, nominations, highway trust fund, debt ceiling, quite a few things."

However, Durbin brushed off speculation that Republican delays alone could push the health care debate into the 2010 election year, saying Reid would be able to press forward when he has a reliable cost estimate.

"He's waiting on a CBO report. . . . The Republican strategy is to eat up as much of the calendar as possible," Durbin said.

Reid said he was continuing to discuss the bill with CBO Director Douglas Elmendorf, but the majority leader expressed uncertainty about when CBO would send the Senate a report. Reid said he had no timeline for bringing he bill to the floor.

Reid's attempts to blend health care bills from the Finance (S 1796) and Health, Education, Labor and Pensions (S 1679) committees have raised concerns about what miscellaneous provisions will be slipped into a final agreement. And moderates such as Ben Nelson, D-Neb., and Mary L. Landrieu, D-La., remain concerned about the inclusion of a government-run insurance plan to complete with private health plans.

By Alex Wayne, CQ Staff

November 6, 2009 -- House Democratic leaders intend to approve a rule today that would govern debate on legislation to change the way doctors are paid under Medicare, but Majority Leader Steny H. Hoyer, D-Md., said the bill would not be considered until the week of Nov. 16.

The Rules Committee already has a busy afternoon in store: It is expected to also approve a rule governing debate for a $1.1 trillion overhaul of the health system (HR 3962). The committee added the physician-pay bill to its agenda early Friday, calling it an "emergency" action.

Without congressional action, doctors would see their Medicare payment rates cut about 21 percent on Jan. 1, thanks to a budget formula called the "sustainable growth rate," or SGR. The formula has called for cuts in doctors' pay in many of the last nine years, but under heavy pressure from doctors' associations, Congress has reversed the cuts most years.

Now, however, Democrats would like to scrap the SGR and replace it with a formula that would promise doctors regular, inflationary increases in their pay. The American Medical Association, the strongest doctors' lobby, has supported Democrats' health overhaul effort in part because of the promise that the SGR will be repealed.

But a permanent SGR repeal has run into trouble in the Senate, where moderate Democrats demand that its cost—most recently estimated at $210 billion over 10 years—must be offset. That could be difficult, because Democrats have already included steep reductions in the growth of spending in Medicare—the likeliest source of money for the SGR repeal—in their health care overhaul bills, in order to offset the cost of that legislation.

In the House, Democrats who are members of the fiscally conservative Blue Dog Coalition say they will accept a permanent SGR repeal that is not paid for, but only if Congress enacts a law that would codify rules known as "pay as you go," which require most legislation that would increase the deficit to be offset with spending decreases or revenue increases.

That bill is known as "statutory PAYGO," and it has already been passed by the House (HR 2920).

In the Senate, Budget Chairman Kent Conrad, D-N.D., has said he supports the idea of statutory "pay as you go" rules, but he opposes the exemptions to it included in the House bill, such as the Medicare payment fix, arguing they add too much to the debt. Conrad also argues the statutory rule should be part of a larger debate over how to deal with the government long-term budget problems rather than be enacted now.

David Clarke contributed to this story.

By David Clarke, CQ Staff

November 3, 2009 -- House Democrats hope to use the health care overhaul bill moving through Congress to address another issue on their agenda: helping states deal with their budget shortfalls.

The legislation (HR 3962) extends for six months a provision included in February's stimulus package that puts the federal government on the hook for more of Medicaid's costs, through what is known as Federal Medical Assistance Percentages (FMAP), so that states pay less.

But beyond that, there is a broader debate over whether the states should get a bigger infusion of federal aid. Some Democrats are looking for opportunities to provide other assistance, while keeping a wary eye on the deficit and a GOP opposition that has hammered the economic recovery efforts undertaken thus far.

State governments are warning that the pressure on their budgets may get worse next year, possibly leading to layoffs and cuts in services. All states, with the exception of Vermont, have some sort of balanced budget requirement, meaning that unlike the federal government, they can't borrow to fill the gap between the amount they raise and the amount they want to spend.

States are already nervous that an overhaul of the health care system will push up their Medicaid costs, and including the extension of the FMAP boost in the overhaul could ease some of those worries.

The program was originally scheduled to expire at the end of 2010, but under the House bill it would run through the end of June 2011. The estimated cost of this extension is about $23.5 billion.

The February stimulus provided states with a sizeable amount of assistance, including $86.6 billion for Medicaid and a $53.6 billion "fiscal stabilization fund" meant mostly for education programs, but advocates of state aid are warning more will be needed.

The executive director of the National Governors Association, Raymond C. Scheppach, argued that if unemployment remains high, it will take awhile for states to stop losing revenue and for Medicaid rolls to return to pre-recession levels.

"What we've found out from the last two or three downturns is that the year after and the year after that had the most impact on state budgets," he said.

The left-leaning Center on Budget and Policy Priorities, which closely follows state fiscal policies, estimates that the shortfall in state budgets could go from $178 billion in 2010 to $180 billion in fiscal 2011 and $120 billion in fiscal 2012.

Partisan Split on Aid
Some prominent Democrats, like House Appropriations Chairman David R. Obey of Wisconsin, are supportive of the states' position and believe Congress should act soon. "We are going to have a very serious problem with states facing even deeper budget holes than they did last year," he said. "Adults would respond to a problem."

The argument for state aid is that if states lay off workers or cut back services, it will counter whatever stimulus policies are put in place by the federal government. But aid for states will be expensive, and Republicans have been keeping up a steady drumbeat that Democrats are racking up too much debt.

"FMAP didn't do anything to stimulate the economy when it was included in the stimulus, and there's no reason to think that it will be of any help in HR 3962, beyond putting the federal government on the hook for hundreds of billions of dollars well into the future," said a Republican aide on the Energy and Commerce Committee, which has oversight of Medicaid.

It's not clear how much, if any, state aid will be enacted this year. Beyond such things as extending current unemployment and health insurance benefits set to expire at year's end, the White House would prefer to wait until next year before deciding on what new stimulus or job creation policies should be moved and how big they should be, according to House Democratic aides.

But waiting too long could be problematic, because states will begin working on their fiscal 2011 budgets early next year, said Jon Shure, who studies state fiscal issues at the Center on Budget and Policy Priorities. Those budgets will mostly go into effect by the middle of 2010, when most state fiscal years begin. That means decisions on what cuts to make are not far in the future.

A chief concern among Democrats as they consider how much state aid to provide is the impact on the growing federal budget deficit at a time when Republicans believe the amount of red ink on the government's books could be a winning issue for them in the 2010 midterm elections.

"It just goes back to, in the world of a big deficit, what's the most cost-effective place to do it," Christina Romer, chairwoman of President Obama's Council of Economic Advisers, said of additional state aid.

While acknowledging that most economists view state aid as among the effective things Congress can do for the economy during a recession, Romer also noted that any policy that creates jobs or improves the economy will help states by boosting their tax revenues and lessening the demand for some of their services.

"That's why it's not obvious if all you care about is jobs where you spend the money," she said. "If you spend it where it has the biggest bang for the buck, then that will feed through to state budgets, it will feed through to other things."

Congressional Democrats and the White House were buoyed by last week's announcement that the economy began to grow in the third quarter. But the unemployment rate appears headed to 10 percent, meaning jobs and the economy are still very much on the minds of voters and members of Congress.

"I think this recession is going to have a job hangover problem for several years to come," Obey said. "If the president wants to do something next year in the State of the Union message, that's fine, but I think there are other things we need to do as well if we want to have an impact next year, if we don't want to have a drop-off in the simulative effect in the economy."