House-Senate health talks: A difficult final act

WASHINGTON Thu Dec 24, 2009 11:54am EST

U.S. Senate Majority Leader Harry Reid (D-NV) (L) and Senator Max Baucus (D-MT) (R) listen to Senator Christopher Dodd (D-CT) after the U.S. Senate approved President Barack Obama's healthcare overhaul on Capitol Hill in Washington December 24, 2009. REUTERS/Jim Young

U.S. Senate Majority Leader Harry Reid (D-NV) (L) and Senator Max Baucus (D-MT) (R) listen to Senator Christopher Dodd (D-CT) after the U.S. Senate approved President Barack Obama's healthcare overhaul on Capitol Hill in Washington December 24, 2009.

Credit: Reuters/Jim Young

WASHINGTON (Reuters) - After months of political brawling in the Congress, the final act of the healthcare fight -- negotiations between the House of Representatives and Senate -- could be the most contentious stage of all.

When Congress returns to work in January, feuds between moderate and liberal Democrats on major elements of President Barack Obama's healthcare overhaul will threaten the carefully calibrated accords that led to narrow passage in the Senate and House.

The focus will be disputes between Democrats in the two chambers over the use of federal funds for abortion, new taxes to pay for the plans, a government-run insurance option and the level of subsidies and penalties for the uninsured.

"This is very precarious. Anybody who thinks this is done hasn't been around here very long," Democratic Senator Chris Dodd said of the negotiations. "There are large differences between the House and the Senate."

Democrats will try to work out those differences and agree on a single bill that can be passed again by the House and Senate and sent to Obama for his signature.

Most of the negotiating will be handled by Senate Democratic leader Harry Reid and House Speaker Nancy Pelosi, with the White House expected to take an active role in finding common ground.

Democrats need to keep all 60 caucus members on board to muscle a final bill through the Senate, meaning the compromise is likely to hew closely to the Senate version. But House Democrats also have little margin for error -- the bill passed with only two votes to spare there even though Democrats hold a 257-178 majority.

"A lot of the conference is going to be dominated by the speaker and by the majority leader trying to figure out how we get the votes," Democratic Senator Tom Harkin said, referring to the House-Senate negotiations.

Senators Joe Lieberman, an independent who backed the bill, and Ben Nelson, a conservative Democrat, say they will vote against the final product if it includes a government-run insurance option included in the House version but dropped from the Senate plan at their insistence.

NOT MUCH 'WIGGLE ROOM'

That has angered House liberals who want a public plan to compete with private insurers, but it also leaves the House with little chance of restoring it in the negotiations.

Nelson also threatened to oppose the House-Senate merger if it changes the Senate restriction on the use of federal funds for abortions that he negotiated with Reid. The House bill includes a more restrictive version backed by a bloc of Democrats who also vowed to withhold support if it is changed.

Republican Senate leader Mitch McConnell, who has openly reveled in the Democratic infighting, taunted House Democrats and challenged them to stand up to the Senate.

"The House of Representatives will have to basically back down on virtually everything they passed for this to become law. It will be interesting to see whether there's any institutional pride over there," McConnell said.

An even tougher problem for Democrats could be the tax approaches of the two bills. The Senate raises money for the changes with a tax on high-cost "Cadillac" insurance plans that was opposed by labor unions and a big bloc of House Democrats.

The House bill raises money for the overhaul with a tax on the wealthiest Americans who make more than $500,000 and families who make more than $1 million.

Obama said in an interview with National Public Radio on Wednesday the final tax formula would feature "a little bit of both" but he liked the Senate's tax on high-cost plans.

The House bill covers more uninsured -- an estimated 36 million rather than the Senate's 31 million -- and costs more because it includes a higher level of subsidies to help people buy insurance and stiffer penalties if they fail to do so.

The Senate could appeal to House liberals by expanding insurance coverage provisions in the final bill, but that would be expensive -- the House bill costs more than $1 trillion over 10 years compared to $871 billion for the Senate bill.

"There is only a limited amount of wiggle room and I'm not sure where it is," said Democratic Senator John Rockefeller.

The White House has played down suggestions the bill would be finished by Obama's State of the Union address in late January or early February. Staff members in both chambers have been talking for weeks on the easier details, and Reid plans to talk to Pelosi next week, Reid spokesman Jim Manley said.

In the Senate, the appointment of negotiators to a traditional House-Senate conference committee can be blocked by Republicans, creating another 60-vote procedural hurdle. The Democrats could bypass a conference and hammer out a compromise among the key players in both Houses.

The House does not return until January 12, with the Senate scheduled back one week later. A final bill also needs a cost estimate from the non-partisan Congressional Budget Office before the House and Senate vote on it -- a process that has proven to be slow and unpredictable.

But Harkin said he was optimistic Democrats would find a way to quickly complete the merger. "We've gotten this far. We're not about to let a conference end this thing," he said.