The Political (as opposed to Procedural) Death of Health Reform

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Richard Evans

212.531.6101

richard@ssrllc.com

January 20, 2010

The Political (as opposed to Procedural) Death of Health Reform

  • In the wake of Scott Brown’s victory, immediate debate will turn to procedural options for passing health reform with a 59-vote Senate majority. This is a procedural analysis that tends to assume prior ‘yea’ votes will vote ‘yea’ once again.
  • After a little-known Republican state senator ascends to Ted Kennedy’s US Senate seat in Massachusetts on a platform that includes opposition to health reform — a state that Obama carried by 26 percent – we find it unreasonable to assume that prior ‘yea’ votes remain as such.
  • The parliamentary dynamics of moving legislation with 59 votes rather than 60 are a side-show – the political relevance of the Massachusetts Senate election is logarithmically more important.
  • Much effort will be made to tie Coakley’s loss to the glaring quality differences in the two campaigns, but this should not obscure the fact that the Massachusetts Senate race was a referendum on health reform – 92% of Coakley supporters were pro-reform, 95% of Brown supporters were anti-reform.
  • 39 House Democratic ‘yea’ votes hail from states that Obama carried by 10 percent or less. Of the 18 Democratic Senate seats up in 2010, only 8 are now considered solidly Democratic (as the Kennedy seat was two weeks ago), 6 are rated toss-ups, and 2 are rated as leaning Republican. Few if any of these 57 Democrats start the 2010 election year in a position any stronger than Coakley’s starting position was for the Massachusetts race.
  • To our minds health reform was dead in November[1] for any number of reasons – voter opposition, abortion, taxes on unions, immigration, and others. The only difference is that now we know who the killer is – voters.

Politics first …

Over the coming days we expect a great deal of focus on the procedural options available to Democrats for passage of health reforms; these options are of course important to consider, and are reviewed later in this call.

To our minds the politics of reform are far more important than procedure, and should be considered first. Politics are an essential frame to Democrats’ tactics in the coming days – any procedural path must recognize that many prior ‘yea’ votes — from either chamber – may no longer be secure.

We also expect a great deal of focus on why Coakley lost – she took victory for granted, ran a lackluster campaign, and at times appeared to be intentionally self-destructing. Brown took nothing for granted, ran a determined and disciplined campaign, and struck a fine balance between charisma and humility. Surely this accounts for some of Brown’s margin, but it shouldn’t distract from a deeper truth that’s far more relevant to the political fate of health reform – supporters of health reform preferred Coakley 92% to 5%; those opposing health reform favored Brown 95% to 4% (Exhibit 1). It is entirely reasonable to consider the Massachusetts senate election a referendum on health reform – and we do.

Surely we’re in good company; keeping in mind that President Obama had a 26 percent margin of victory in Massachusetts in 2008, 39 House Democratic health reform ‘yea’ votes hail from districts where Obama won by less than 10 percent (Exhibit 2). And bearing in mind that the Brown-Coakley race was rated solidly Democratic less than a month ago, of the 18 Democratic senate seats up for election in 2010, only 8 are now considered solidly Democratic by both Cook and Congressional Quarterly; 6 are rated as toss-ups by at least one of these publications, and 2 are rated as leaning Republican by at least one publication (Exhibit 3). Notably, the Senate Majority Leader’s seat is rated a toss-up by both Cook and CQ. If a Republican state senator and opponent of national health reform can win Ted Kennedy’s seat to represent Massachusetts in the US Senate in an election where opposition to health reform is an almost perfect predictor of having voted for the winning candidate, then any ‘yea’ vote on Exhibits 2 and 3 will certainly recognize that further support of reforms is going to work against them in the mid-term election. Thus as a practical matter, we consider many of these previous ‘yea’ votes as unreliable, whatever parliamentary path Democrats choose.

… then Procedure

Theoretically speaking Democrats have six distinct procedural options – 1) accelerate the process; 2) bypass the Senate, 3) find another Senate vote, 4) use reconciliation procedures to reduce the number of Senate votes needed to 51, 5) start over; or, 6) walk away. A seventh option exists, which combines 2 (bypass the Senate) and 4 (reconciliation).

Accelerating the process of merging House and Senate bills so that the present Senate can vote on whatever is agreed to presumes a great deal. Massachusetts town clerks have 10 days (Jan. 29) to send results to the Mass. Secretary of State, who has 5 days to certify the results (Feb 4). At this point Brown has the necessary credentials to be asked to be sworn in, and Majority Leader Reid has made it clear he has no intention of delaying. Success via this path presumes that Democrats – whose two separate chambers have passed two effectively irreconcilable bills – can after more than a year of (unsuccessful) effort reconcile these two very distinct versions and pass them in as one in 15 days. We’re convinced otherwise — notwithstanding the huge ideological differences between the two chambers’ bills, the post Massachusetts political reality is that the original House coalition of ‘yea’ votes has almost certainly fractured; and, that marginal / centrist Senate votes (Nelson, Lieberman) could well be looking for defensible reasons (abortion, immigration, excessive subsidies) to vote ‘nay’. Despite greater urgency, the post-Massachusetts politics of health reform are far too complex for a 15 day

plan. And, all of this assumes the 15 days are available at all; we expect Republicans to challenge the legitimacy of any vote passed by sitting Massachusetts Senator Paul Kirk after January 20th.

Bypassing the Senate (2) requires the House to pass the Senate bill as is. This means asking House Progressives to sacrifice ground on a woman’s right to choose (Nelson language) and union members’ financial interests (Cadillac Plan tax) to pass a health reform bill that they simply do not like (no single payor, no public option, weak restrictions on insurers, and such substantial reliance on private insurers that for-profit interests become a permanent structural feature of the health system). Progressives were never going to take that bargain, and there is no reason to believe they will take it now. There are 140 pro-choice (defined as a perfect 100/100 Planned Parenthood score, and a 0 / 100 National Right to Life Committee score) ‘yea’ votes behind the House health reform bill, and 69 pro-labor votes (defined as a perfect 100 / 100 AFL-CIO score and >= 18% union membership at home). The pro-choice pro-labor overlap by 60 votes, meaning 149 House supporters of health reform oppose provisions in the Senate bill. Separately, the Senate bill does not allow illegal immigrants to purchase coverage with their own money; the 20-vote Congressional Hispanic Caucus almost certainly would not support the Senate bill for this reason. The House almost certainly will not pass the Senate health reform bill as is.

Option 3 is to recruit another Senate vote. This would have to be a Republican. Presumably it wouldn’t be Senator Snowe; the Majority Leader may have burned that bridge last week when he characterized dealing with Senator Snowe to The New York Times as ‘a waste of time.’ We can’t imagine a Republican Senator breaking ranks at this point – the political battle over health reform hasn’t been about health care since at least August of last year; it’s been about the Republicans attempting to capitalize on their most obvious opportunity to deal a failure to, and potentially wrest a chamber from, a new Democratic president and his bicameral Democratic majority. It’s still about that; and, framed as such this makes clear that the stakes are far greater than any individual Republican Senator’s more parochial interests – thus we’re confident no Republican Senate votes can be switched with home-state bargains.

Option 4 is reconciliation – bringing a revised health reform bill to the Senate under budget reconciliation rules that offer the opportunity for passage with 51, rather than 60, votes. We covered this option in some detail in our September 8, 2009 research call. Legislation certainly can pass the Senate under reconciliation with fewer than 60 votes; this has happened in 7 of the 22 instances that legislation has passed under reconciliation rules since 1980 (Exhibit 4). The problem is that reconciliation is unsuitable for complex legislation – and health reform is exceedingly complex. Unless waived by 60 votes (which in this case are unavailable) the reconciliation process requires that all provisions under consideration be germane to the budget. This narrows the scope of reconciliation bills – anything extraneous has to be left off. Reconciliation rules also allow Senator to challenge individual provisions of the bill on the Senate floor. What is or is not a ‘provision’ is poorly defined; in practice, ‘provision’ can be interpreted as narrowly as a single phrase. Thus reconciliation poses a unique danger to a bills’ advocates — opponents can isolate very minor pieces of the bill, claim that they are irrelevant to the budget, and have them stricken from the bill – unless 60 votes are available to put the provision back in. These are known as ‘Byrd Rule’ challenges; of the 53 challenges made since the Rule went into effect, 43 succeeded (Exhibit 5). In other words, more often than not, the Rule allows the opposing minority to strike elements of the bill that the narrow majority is trying to pass. Thus complex bills – particularly those whose complexities are inter-related, as with health reform – are poor candidates for passage under reconciliation, as ‘keystone’ provisions face great risk of being eliminated in floor action, rendering the broader bill meaningless.

Option 5 is to start over – but there is no more appetite for the topic. Starting over means putting another health care attempt well down in the queue of Democratic priorities — so in effect Option 5 = Option 6 – walking away.

Option 7 combines 2 and 4. Pass the unaltered Senate bill in the House, and send it to the President for signature – all on the promise to the House that the law will be amended by a second bill that is passed under reconciliation procedures. This would appear to be Democrats’ strongest option in relative terms, in absolute terms the option is still very weak. Politically, as we argued from the outset, we don’t believe the Democrats have the votes to pass reform in the House, with or without the promise that the bill would be ‘corrected’ in a subsequent measure. Also, we’re not convinced that Progressive House members will trust the White House – which prefers the Senate bill — to pass the second corrective measure. And finally, this presumes that reconciliation offers enough bandwidth to ‘correct’ enough of the provisions that Progressives care strongly about – such as restrictions on insurers, the nature of exchanges, the presence of some form of public option, removal of Nelson language on abortion; and, particularly for the Congressional Hispanic Caucus, insertion of language allowing illegal immigrants to purchase care with their own money.

  1. Please see our November 16, 2009 call “Why Health Reform Legislation Won’t Pass…”
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