Hatch Says It's "Nuts" To Think Health Care Issue Resolved On Monday; House Majority Leader Says Bill Is Constitutional

A flurry of news reports abound as President Obama puts on a full court press to pass legislation no one really wants except the President and those who have been bribed. Let's take a look at a handful of articles.

Democrats About Six Votes Short on Health Care, Officials Say

March 19 (Bloomberg) -- Democrats need about six more votes from House members to pass a U.S. health-care overhaul, Obama administration officials said today.

White House and Democratic leaders aim to collect those votes from a pool of about 14 to 15 undecided lawmakers to get to the 216 votes needed to pass the measure, according to the officials, who spoke on condition of anonymity.

Obama has met or called about three dozen lawmakers in the last five days and has cleared his schedule today for more last- minute appeals, including a campaign-style rally in nearby Fairfax, Virginia.

Obama postponed a five-day foreign trip to Indonesia and Australia to remain at the White House this weekend to ensure passage of a $940 billion bill that is of �paramount importance� to his presidency, spokesman Robert Gibbs told reporters yesterday.

House Leaders Work to Alleviate 11th-Hour Medicare Concerns

March 19 (Bloomberg) -- House Democratic leaders worked to defuse an 11th-hour rebellion by more than a dozen lawmakers angry that hard-fought increases in Medicare reimbursements for local hospitals were removed from health-care legislation.

�My state is getting screwed,� said Representative Peter DeFazio, an Oregon Democrat. �They have to fix it. I�m a �no� vote unless they fix it.�

Lawmakers representing health-care providers in 17 states are affected by the change, he said. As House leaders corral votes in favor of the legislation, DeFazio said �there are a number of people who may be miscounted at this time.�

House leaders, trying to round up 216 votes to pass revisions to the Senate bill, are working to craft a provision on the Medicare payments that would survive parliamentary challenges by Republicans when the measure is debated in the Senate.

�Legitimate Concern�

Asked about the issue at a press conference, House Speaker Nancy Pelosi told reporters �we do want the language to be closer� to the House measure, which satisfied lawmakers �who have a legitimate concern about the reimbursement to their states being unfair.�

�We are working on that language,� the speaker said.

A provision to change the Senate version was removed from the legislation yesterday, shortly before House leaders unveiled changes, DeFazio said. It was deleted because Senate staff members told House leaders it might run afoul of parliamentary challenges by Senate Republicans, DeFazio said.

To pass muster, every provision must reduce the deficit under budget reconciliation procedures being deployed to enact the most comprehensive redesign of the health-care system in five decades.

Lawmakers are trying to rewrite the provision to win a favorable ruling from the Senate parliamentarian.

House Bill on Healthcare Is Constitutional, Hoyer Tells CNBC

March 19 (Bloomberg) -- The U.S. House bill on health care that is slated to come to a vote this Sunday is constitutional and should withstand legal challenges, Majority Leader Steny Hoyer told CNBC.

�There�s little doubt in my mind that this bill and its provisions are in fact constitutional,� Hoyer, a Maryland Democrat, said today.

Hoyer said with a �bill of this magnitude,� legal challenges are likely. �That�s the American system that people have an opportunity to say, �Look, what you did was not appropriate.��

The stakes are so high for President Barack Obama that he postponed until June a planned five-day trip to Guam, Indonesia and Australia to remain at the White House this weekend to lobby wavering lawmakers to support the 10-year, $940 billion bill in the last two days.

Obama Rallies Democrats Who Predict Health Passage

March 20 (Bloomberg)

President Barack Obama rallied House Democrats to back health-care legislation that he called �the toughest insurance reforms in history� as party leaders said they would have the votes to pass the overhaul tomorrow.

�We have been debating health care for decades,� Obama told lawmakers today at the U.S. Capitol. �It is time to pass health-care reform for Americans, and I am confident you are going to do it.�

The legislation requires Americans to get insurance, offering government aid and new purchasing exchanges to help. Insurers such as Indianapolis-based WellPoint Inc. would get millions of new policyholders, while being required to accept all customers, even with pre-existing conditions.

Representative Dan Lipinski, an Illinois Democrat, said he�s switching his vote to �no� because of the abortion issue. New York Representative Michael Arcuri, who voted for the original House bill, said he�s now a �no� because the new measure doesn�t do enough to control costs. Massachusetts Representative Stephen Lynch is also switching to �no,� the Boston Herald reported.

�Yes� Votes

On the other side, Democrats John Boccieri of Ohio, Allen Boyd of Florida, Bart Gordon of Tennessee, Dennis Kucinich of Ohio, Suzanne Kosmas of Florida, Betsy Markey of Colorado and Scott Murphy of New York all now plan to vote �yes� after voting �no� in November, according to statements from the lawmakers or their offices.

Hatch Says It�s �Nuts� to Think House Vote Ends Health Issue

March 20 (Bloomberg) -- Republican Senator Orrin Hatch said Democrats in the U.S. House of Representatives are �nuts� to think tomorrow�s vote on health-care legislation will resolve the issue.

If the measure passes, Senate Republicans have enough votes on at least two points of order to alter the measure and send it back to the House for a second round of votes, Hatch said in an interview on Bloomberg Television�s �Political Capital with Al Hunt,� airing this weekend.

�If those people think they�re only going to vote on this once, they�re nuts,� Hatch said as House Democratic leaders rounded up support before the scheduled vote on President Barack Obama�s top domestic priority.

The senator from Utah also said the approach Democrats are using to pass the legislation in the House may be unconstitutional because the House and Senate aren�t voting on �exactly the same language.�

Business Groups Press Lawmakers to Oppose Health-Care Measure

March 19 (Bloomberg) -- Business groups led by the U.S. Chamber of Commerce today urged lawmakers to oppose the Democratic-backed health-care legislation, as the House headed for a showdown vote this weekend.

The Chamber, the nation�s largest business group, the National Association of Manufacturers and the National Retail Federation told lawmakers in letters that their health-care votes will be highlighted in annual scorecards sent to members before the November election.

The bill is �fundamentally flawed� and would impose job- killing mandates and penalties on businesses and increase taxes, the Chamber said in a letter to members of the House of Representatives. The group said Congress must �start over.�

�The measure would drive up labor costs to the point of forcing job losses,� the National Retail Federation said in its letter. �A �transparent procedural ploy� for passing the package would harm Congress�s reputation.�

Caterpillar: Health Bill Would Cost Company $100 Million

Caterpillar Inc. said the proposed overhaul of the U.S. health-care system could increase its costs by $100 million, signaling disquiet in corporate America about the controversial plan.

In a letter Thursday to House Speaker Nancy Pelosi (D., Calif.) and House Republican Leader John Boehner (R., Ohio), Caterpillar urged lawmakers to vote against the plan "because of the substantial cost burdens it would place on our shareholders, employees and retirees."

The company said the potential extra costs would primarily come from provisions to tax the federal subsidies the company now receives for providing prescription-drug benefits to retirees and their spouses.

Since the Medicare drug program was enacted in 2003, Caterpillar and more than 3,500 companies that already provided drug benefits for retirees have received tax-free subsidies from the federal government as an incentive to maintain their drug programs.

The subsidies average $665 per person covered under a company-sponsored prescription program, according to benefits consultant Towers Watson, which recently completed a study on the health-care legislation's effects.

Watson Towers estimates federal taxes on the drug subsidies would amount to $233 per person receiving drug benefits under such programs.

McDevitt estimates that a company with 25,000 retirees on subsidized drug benefits could see its 2010 earnings reduced by $70 million.

Business executives have long complained that the options offered for covering 32 million uninsured would result in higher insurance costs and hinder economic growth. Opponents of the legislation have stepped up their attacks in recent days as the House moves closer toward a vote on the Senate version of the health-care legislation.

A letter Thursday to President Barack Obama and members of Congress signed by more than 130 economists predicted the legislation would discourage companies from hiring more workers and would cause reduced hours and wages for those already employed.

States Say We Don�t Need No Stinkin� Health Reform

If Democratic leaders ever get a health-care overhaul through Congress, they could find themselves only halfway through the slog.

While no arm is left untwisted, no parliamentary maneuver ignored on Capitol Hill, state legislatures have been busy themselves passing laws to defeat whatever package emerges.

Idaho wants no part of any overhaul dreamed up in Washington. Neither does Virginia or Arizona, their legislators say.

�The citizens of our state won�t be subject to another federal mandate or turn over another part of their life to government control,� Idaho Governor Butch Otter declared this week when he became the first governor to sign into law a so- called Health Freedom Act.

The Idaho law says every Idahoan is free �to choose any mode of securing health-care services without penalty.� It then instructs the attorney general to go to court to make that happen.

Already, the law has legal problems of its own. Idaho Attorney General Lawrence Wasden points out that the state constitution gives him the job of deciding whether to go to court and when. No mere statute can change that.

And Wasden isn�t ready to declare his position.

�If Congress does pass legislation, we will review it and determine at that point whether we can bring a lawsuit that has merit,� says Wasden spokesman Bob Cooper.

Virginia�s Route

Virginia�s legislature went a different route. Without telling the attorney general how to do his job, the lawmakers passed a bill that says no Virginia resident �shall be required to obtain or maintain a policy of individual insurance coverage.�

Even advocates say that amending the constitution is a legally preferable route to passing a mere statute.

The Arizona legislature has already gone the amendment route and passed a proposal that will appear on the ballot in November.

But that isn�t law yet. And if you put those three all together, they don�t add up to much of a roadblock at this point.

Gaining Momentum

So advocates point to their movement�s momentum. Beyond the three states, some 30 to 35 others have bills pending, they are quick to say.

There is a long road between dropping a bill in a hopper and attending a signing ceremony. And then, whatever state efforts get that far would have to survive a federal court fight.

�The ivory tower folks will tell you, �No, they�re not going anywhere,�� Otter told reporters. �But I�ll tell you what. You get 36 states, that�s a critical mass. That�s a constitutional mass.�

That number approaches the 38 states it takes to ratify an amendment to the U.S. Constitution. Otter is getting ahead of himself, given that his own attorney general, a fellow Republican, has already said he may or may not try to enforce the new law.

What A Mess

I am confident President Obama will buy the six votes he needs. That is the way the system works. I am less certain that the House reconciliation bill passes Senate challenges. If not, expect to see the bill back in the House at least once. Should that happen President Obama may need to convince 6 more representatives to sign on. Is that doable? At what cost?

There will not be a vote on Monday unless Pelosi thinks she has the votes. However "think" and "have" are likely but not necessarily the same thing. All it would take is a couple of representatives to decide to torpedo the legislation or simply get cold feet.

That said, the most likely outcome is President Obama will buy the votes he needs. It will be much more difficult the second time if the Senate sends it back because of procedural rules so the House better get it right the first time.

Next week, we will see who is "nuts" and who isn't. Meanwhile, a bill that 37 states and the majority of the US do not want is about to be rammed through Congress by a President willing to buy out anyone and everyone who is against it.

Payback time is November.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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