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Senate Health Care Bill Clears Major Hurdle

2009-12-21T07:15:48Z

The United States took a major step closer to the rest of the industrialized world shortly after 1:00 a.m. on Monday morning, voting 60-40 to move forward on far-reaching health care reform that will provide subsidies to million of Americans to purchase health care -- and require all citizens to purchase health insurance or prove that they can not afford to do so. (More on the details of the bill here.)

The vote, which was taken in an unusual fashion, with senators seated and voting from their desks, split along party lines, with all 40 Republicans voting no. Sen. Olympia Snowe (R-Maine) rose and announced her nay vote with an affect of regret in her voice.

The bill does not include a public health insurance option that would compete with private insurers in order to keep them honest. The proposal does include tighter regulations on the insurance industry than currently exist, but the law would not create any new regulatory agencies and would leave policing the new rules to individual states, which have shown an inability to combat the major insurers. Those companies will have billions more in resources if the Senate bill becomes law.

The Senate still faces two more procedural votes, but Monday morning's vote indicates that the bill is headed for negotiations with the House of Representatives. The House bill includes a public option and more generous subsidies, among other major differences, but Sen. Ben Nelson (D-Neb.) and Sen. Joe Lieberman (I-Conn.) both said Monday morning that if the bill that emerges from the conference committee contains significant alterations, they may again decide to filibuster it.

Senate rules currently allow a minority of senators to hold up legislation unless 60 members vote to break a filibuster. Those rules, however, have evolved over the chamber's history, and pressure is building to abolish the provision that now essentially gives individual members veto power.

"While the process to get to 60 and the willingness of individual senators to use the Senate's rules to distort democracy for their own interest was disappointing, make no mistake about it: for working Americans this vote signals progress," Andy Stern, president of the Service Employees International Union, said after the vote.

Snowe, meanwhile, said that she told the president recently that while she would be voting no on Monday, she was still open to supporting a final bill coming out of conference. Snowe said she first suggested to the president in March that he pursue a "trigger" mechanism for implementation of a public option. Lieberman, meanwhile, is opposed to a trigger and any other form of a public option.

Snowe spoke with Obama and "he hoped that there was something that could be worked through in the House-Senate compromise and I said I would continue to offer ideas," Snowe said.

Health and Human Services Secretary Kathleen Sebelius, in a brief interview with HuffPost following the vote, was upbeat.

"I think it has all the elements that we've been talking about from the beginning," she said. "It insures almost all Americans. It lowers costs. It provides a huge opportunity to begin to pay for quality and not just quantity of care. It includes lots of investments in health and wellness and preventive medicine. I mean, I'm not sure most people understand what's underlying all of this and I think it's very exciting. It's a big day."

Earlier that day, however, progressive Democratic Sen. Russ Feingold (Wisc.) said in a statement that the White House was to blame for on the major elements not surviving. "Unfortunately, the lack of support from the administration made keeping the public option in the bill an uphill struggle," he said.

Sebelius, asked about Feingold's charge, said that the bill does what it needs to do.

"I think we are where we are," she said. "I think we'll have cost and competition -- cost control and competition in the exchange and that's what we need."

Lieberman also said that he was pleased.

"I regret that it broke along party lines, but it's the moment we're in in our politics. Overall, I think it's a good bill," he said. "I'm glad that some of the provisions that I was worried would increase the debt or increase taxes were taken out -- the so-called government public option."

Franken: Dems Unified Behind 'Historic' Health Reform Legislation

2009-12-19T20:46:01Z

The Senate Democratic caucus is unified following a Saturday meeting and poised to pass a much-weakened health care reform proposal before Christmas day.

"The mood was great," said Sen. Al Franken (D-Minn.) of the party gathering earlier Saturday. "It was a very, very good mood, even [among] those of us who have disappointments about what is and isn't in."

Though it's far from what progressives and, according to surveys, most voters wanted in a final bill, Franken, in an interview with the Huffington Post, said that it's "an enormous step forward."

"I'm convinced this will pass. I believe we have the 60 votes," he said. Franken was encouraged that he and Sen. Jay Rockefeller (D-W.Va.) were able to insert into the final bill a provision that would require insurers, for individual and small group plans, to spend 80 percent of the money they take in on health care. Large plans would be required to spend 85 percent.

"This is something that a lot of states have tried unsuccessfully to put on medical loss rations and insurance companies fight them and they fight this for a reason. So I'm very, very happy with this. I think it's a big, big way to keep them in check," said Franken. "I think it's one of the biggest tools."

Insurers refer to spending on health care as a "medical loss." The medical loss ratio currently averages 70 percent across the nation. Minnesota law sets it at 91 percent.

The Congressional Budget Office, however, determined that the 90 percent requirement that Franken and Rockefeller had pushed for amounted to nationalization of the industry. The CBO didn't explain how it came to the seemingly arbitrary figure of 90 percent. Franken said he and Rockefeller met with the CBO chief Doug Elmendorf about his determination and came away uncertain of the reasoning. Elmendorf, who is not an elected official, deemed that 80 percent for small groups and 85 for large didn't amount to nationalization. In the American system of government, what Elmendorf says, goes, so regardless of the rationale, the bill includes the figures he dictated.

Beyond Elmendorf's weakening of the provision, it also includes a potentially gaping loophole.

The Health and Human Services Secretary, according to the bill's language, "may adjust the rates...if the Secretary determines appropriate on account of the volatility of the individual market due to the establishment of State Exchanges."

Franken said that the language was intended to created stability in the market so that if there are major fluctuations, insurers would have flexibility. An HHS secretary sympathetic to the industry, however, would have unilateral authority to effectively repeal the provision.

Overall, Franken said, his colleagues are happy with the bill. "All of us believe that we need to make basic reforms and that this does that," he said of the product. "It's an enormous step forward. It's something we can build on. Social Security passage was just widows and orphans." Social Security gradually expanded over time.

"I think it's a really important, really historic bill, but I'm just worried that we don't over-promise but at the same time we do tell them all the great things the bill has," said Franken.

The bill, as expected, does not include a public health insurance option or allow people aged 55-64 to buy into Medicare.

In order to win the vote of Nebraska Democrat Ben Nelson, the bill includes extreme restrictions on which private health insurance plans can cover abortion. It also picks up Nebraska's tab for expanded Medicaid coverage forever.

After moving in a more conservative direction for several days, the bill reverses course, ever so slightly, in some areas.

Reid's original bill had allowed for a cap, in some cases, in annual coverage by insurers. The new bill removes that allowance, meaning that insurers can not place limits on the amount of coverage they provide, either over the course of one year or over a person's lifetime.

The bill raises revenue by taxing indoor tanning salons, which are associated with health risks. It also increases the Medicare payroll tax by 0.9 points for individuals making more than $200,000 per year and married couples earning above $250,000.

A mandate that all Americans without coverage purchase health insurance remained in the bill and the fine for those who don't do so was increased. There is an exemption for folks who can prove they can't afford to buy insurance. As a candidate, Obama attacked his rival Hillary Clinton for proposing such a mandate.

Obama also attacked his general election opponent, Sen. John McCain (R-Ariz.), for proposing a tax on high-cost insurance plans. The Senate bill includes just such a tax, with Obama's endorsement.

According to the CBO, the new version will provide coverage to 94 percent of Americans - though many of them will have it "provided" to them by force of a mandate. It'll also reduce the deficit by $132 billion over 10 years and 1.3 trillion over 20 years.

In place of a public option, people will have access to two national private plans, one of them nonprofit, overseen by the Office of Personnel Management, which is in charge of federal employee plans.

The bill includes strong insurance reforms that prevent companies from denying coverage due to pre-existing conditions or from dropping people simply because they get sick - a practice known as rescission. But serious questions remain as to how enforceable those provisions will be.

California recently dropped an attempt to enforce its anti-rescission law against a major insurer, saying that it was financially outgunned by the insurer's legal team.

The rescission law, according to the legislation, "shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage."

Insurers today routinely claim that patients engaged in "fraud" or "intentional misrepresentation" when dropping them from coverage. Much depends on who defines the terms in the bill.

It won't be the federal government. There will be no federal agency tasked with overseeing the enforcement of the bill's rules. Rather, a Senate leadership aide told reporters in a briefing Saturday, individual states will police the new system.

That's a task the California Department of Managed Health Care was unable to perform when battling Anthem Blue Cross, which has rescinded 1,770 policies since 2004.

"In each and every one of those rescissions, [Blue Cross has] the right to contest each, and that could tie us up in court forever," the department's director, Cindy Ehnes, told The Associated Press. A million-dollar fine was announced in March 2007, but has not been enforced.

WATCH: Wielding Gavel, Franken Shuts Lieberman Up

2009-12-17T22:25:29Z

Joe Lieberman must be wondering if his colleagues' respect for him went out the same window that he tossed the public option and the Medicare buy-in compromise that was to replace it.

He got an answer of sorts Thursday afternoon as he came to the end of a floor speech, and ran out of time.

"I'm sorry. The senator has spoken for ten minutes," Sen. Al Franken (D-Minn.), as the chamber's presiding officer, told Lieberman. Customarily, when senators ask unanimous consent for a bit more time, consent is always given.

"I wonder if I could ask unanimous consent for just an additional moment," Lieberman said.

"In my capacity as the senator from Minnesota, I object," said Franken, in what appeared to be a dramatic departure from the long and stifling tradition of Senate collegiality.

"Really?" responded a stunned Lieberman. "Okay. Don't take it personally. I will ask unanimous consent that the remainder of my remarks be included in the record as if read."

Franken was okay with that. "Without objection," he said.

Sen. John McCain (R-Ariz.) rose to his friend Lieberman's defense.

"I must say that I don't know what's happening here in this body, but I think it's wrong. And so I -- it's fine with me that it be 10 minutes, but I'll tell you, I have never seen a member denied an extra minute or so, as the chair just did," said McCain, whose presidential campaign Lieberman backed in 2008.

Franken spokeswoman Jess McIntosh told HuffPost that nothing personal was meant and that Democratic leadership is asking every presiding officer to enforce the 10-minute rule for both sides.

WATCH:

UPDATE: Lieberman and Franken don't seem to be feuding. HuffPost's Jeff Muskus spotted the two senators laughing together on the floor less than an hour after the exchange, as they huddled looking at the phone of Franken's fellow Minnesota Democratic Sen. Amy Klobuchar -- presumably sharing a laugh about media reports of the exchange.

yet McCain can't seem to stop talking about what damage Franken has done to Senate decorum, however. At a press conference Friday, McCain interjected the following after a question about defense appropriations:

"Can I mention one other aspect of this debate that's really unfortunate? I've been around here for more than 20 years. Yesterday, on the floor of the Senate, the senator from Connecticut was finishing up his remarks, and as we always do -- ever since I've been here -- as we always do, he said I'd like an extra minute to finish up my remarks, and was objected to by the newest member of the United States Senate. And in a most brusque way. That's how the comity of this body has deteriorated. We've got to stop, we've got to stop this kind of behavior. I've never seen anything like that, and I hope that I don't see it again," said McCain, even though he's done the same thing himself.

Any further delay would suit the GOP just fine, Senate Minority Leader Mitch McConnell (R-Ky.) said at Friday's press conference. "We don't think this bill ought to pass," McConnell said. "We're not in a hurry to finish."

Treasury Official Blames Fed For Citigroup Fiasco

2009-12-17T20:49:51Z

A top Treasury official blamed the Federal Reserve on Thursday for Citigroup's botched attempt to raise funds to pay back its federal bailout. The finger-pointing comes a day after the market rejected the government and the Fed's assertions about the health of Citigroup, turning back the bank's effort to raise $17 billion by selling common stock.

The rebuke is a blow to the administration's effort to withdraw itself from its ownership stake in major financial institutions and a reminder that many Wall Street banks, despite planning to pay sky-high bonuses this year, have yet to turn things around.

Major Wall Street banks are rushing to refund TARP money, in part so that they can get out from under compensation restrictions that come along with the assistance. Despite analysts' warnings that Citigroup still wasn't healthy enough, Treasury and the bank went ahead with the attempted payback.

When Citi failed to raise the money it needed from the market, Treasury backed away from selling its shares. "Based on today's offering price, Treasury has decided not to participate in the equity offering," a Treasury official told HuffPost in a statement. "We expect to divest the government's ownership stake in Citi shares over the next 12 months, and have agreed to extend the lock-up period to 90 days."

But why did they think it was a swell idea in the first place? How did they so badly misread the market?

Ask Time's man of the year, said Assistant Treasury Secretary Herb Allison at a House hearing today.

"We don't make the determination of when Citi can repay the Treasury for our investment in the company. That decision is made by the regulator," said Allison.

The hearing's chairman, Rep. Dennis Kucinich (D-Ohio), asked him to clarify what he meant by the regulator.

"The regulator meaning the Federal Reserve in this case. Also in consultation with the FDIC," Allison said.

Though Federal Reserve chairman Ben Bernanke may have lost the confidence of the market regarding Citi's health, he got some good news today -- he was approved by the Senate Banking Committee today by a vote of 16-7 and his renomination now heads to the Senate floor.

But did Treasury have a choice? The shares, of course, are owned by the Treasury Department, which can decide not to sell them, as they demonstrated the day before.

Allison is assistant secretary for financial stability and oversees the Troubled Asset Relief Program. He was testifying before Kucinich's Oversight and Government Reform Domestic Policy Subcommittee.

Kucinich continued to press Allison about how much of a say the department has over its own shares, resulting in the following exchange:

Kucinich: "So it's the Federal Reserve that decides when to exit the TARP and the Federal Reserve does it at their choosing, or who chooses? How do we know who makes the choice whether to exit the TARP? How do we know if it's the banks that are deciding or the Federal Reserve? Do you know?"

Allison: "The regulators decide, Mr. Chairman, on when it's appropriate for a bank to repay the Treasury."

Kucinich: "Is that a transparent process, Mr. Allison, or is that pretty much done over at the Fed without any report to you?"

Allison: "That's a matter for the regulator, that's--"

Kucinich: "Well, they're the regulator, but we're the shareholder. When do we find out? When do you find out? Do you find out when you read about it in the newspaper?"

Allison: "When the regulator informs us that it is--"

Kucinich: "Fed. When the Fed informs you."

Allison: "Yes sir, in this particular case, or it could be another one of the--"

Kucinich: "But it's like what, the Fed informs you?"

Allison: "Yes."

Kucinich: "The Fed doesn't ask you if you have any position on this, they just tell you they're doing it. Is that what you're saying?"

Allison: "We don't exercise regulatory oversight over the banks. That's a matter for the regulatory agencies."

Kucinich: "But we are holding all these billions in shares. Shouldn't the government have any ability to decide when the banks would exit from TARP?"

Allison: "We're following the laws enacted by Congress, Mr. Chairman, as to how we will dispose of the shares, and that is with the approval of the regulator."

Kucinich: "Do you have to agree with the banks whether they're healthy or not, or does the Fed agree with the banks whether they're healthy, and you don't talk to the Fed, you just go along with whatever they tell you?"

Allison: "We have conversations with the regulatory agencies, but we do not make the decision as to when a bank is able and ready to repay us."

Kucinich was left with the impression of an investor holding billions of dollars worth of shares with no say over what the company does or when those shares are sold. "This is a strange system we've set up here," he said. "We're not only talking about passive shareholders, we're talking about shareholders who don't know nothin'."

A Fed spokeswoman didn't immediately respond to a request for comment.

The failure of the Citigroup stock sale raises a range of uncomfortable questions for the administration. How rigorous were the "stress tests" which claimed that the banks would be just fine if the market says otherwise? Have the accounting changes that the administration has allowed puffed up the banks' books to the point where the market doesn't believe in them? What kind of investment does the Fed have in Citigroup and is it really, as they claim, risk free?

Rep. Pete Stark (D-Calif.), with a background in banking himself, had a more basic question.

"Why did the president put all these Wall Street guys in his cabinet?" he wondered in response to the failure. "They can't even save their buddies, much less poor working people."

Rep. Alan Grayson (D-Fla.), a longtime opponent of allowing banks to change mark-to-market accounting rules, said that the failed stock offering is the flip side of the benefit the banks get when they make up numbers.

"The chickens have come home to roost regarding the accounting fictions that they've employed. The price that you pay for cooking the books is you reach a point where nobody believes what you say on your books. The market manifestation is that you can't sell equity or debt because nobody believes what you're saying," he told HuffPost.

Grayson also argued that the failure of Citi to raise capital shows that the earlier investment the Fed made in it was not risk-free, as it is required to be by law.

"They undertook these transactions under a specific statutory authority that required them to conclude that these transactions had no risk. Clearly that's not the case. If you have an asset you can't sell, then clearly that's a risky asset," he said. "The fiction that these were transactions that represented no risk to the Fed has now been exposed."

Joshua Rosner is managing director at the independent research consultancy Graham Fisher & Co. He told HuffPost that the failure of the stock offering raising a host of questions - and provides a few answers.

First of all, Treasury failed investing 101 by announcing that it would sell a large share of its holding now and another large share down the road. "They created a huge overhang," he said.

Treasury also sent mixed signals, said Rosner, by asking to extend TARP until October while at the same time claiming that the banks are doing fine.

Perhaps more importantly, said Rosner, the failed sale indicates that Citi is not worth what the government has said it's worth. "If the market is supposed to be a place where assets can price in some semblance of their value, the markets just told you that with 50 percent of Citi for sale it's not worth what Treasury seems to think it is. Moreover, the markets are telling you that they are not confident that Citi should've been let out of TARP yet," he said.

Jobs Bill Squeaks Through Despite Dem Defections

2009-12-17T01:04:43Z

Speaker Nancy Pelosi (D-Calif.) muscled a $154 billion jobs bill through the House on Wednesday evening just before Congress departed for a holiday recess. With the vote in serious doubt until seconds before it was gaveled to a close, Pelosi worked the floor furiously, imploring her caucus to stick with her and move the measure through.

The bill passed 217-212, but when the time on the clock expired, it was losing 208-212. A few minutes later, when it hit 214-213 and then 215-213, someone shouted "gavel it!" from the Democratic side. A bill doesn't need the full 218 to pass -- only a simple majority of those voting. The presiding officer took the suggestion and closed the vote.

Not a single Republican approved of the bill.

The slim margin is strong evidence that deficit hawks have momentum in the ideological battle between one camp that demands more spending on job creation and another, dominated by the GOP and Blue Dog Democrats, calling for immediate reductions in the deficit. Even the fact that the money was being redirected from Wall Street couldn't sway 38 Democrats, who voted with the Republicans.

A vote moments earlier Wednesday showed much the same thing: 39 Democrats split with their leadership on a measure to raise the debt ceiling. Lifting the debt limit is a politically un-fun vote for any member of Congress -- and one that has a habit of popping up on TV ads during campaign season -- but is necessary to continue the functioning of the government. It barely passed, 218-214.

The jobs bill would use $75 billion in money earmarked for the Wall Street bailout and redirect it to infrastructure investment and aid to states. The bill also extends the duration of the COBRA subsidy from nine months to 15 months, extends the deadline for eligibility from December 31, 2009 to June 30, 2010, extends by six months unemployment benefits that would have expired at the end of the year, and expands a child tax credit to 16 million families.

Rep. David Obey (D-Wisc.), chairman of the Appropriations Committee, worked the floor on behalf of the bill, aggressively pressuring newly elected Rep. Mike Quigley (D-Ill.), who took White House Chief of Staff Rahm Emanuel's seat. Obey's legendary temper wasn't enough to sway Quigley, who voted against the bill.

Rep. Gerry Connolly (D-Va.), president of the freshman class, was worked over hard on the House floor by a red-faced George Miller (D-Calif.), chairman of the Education and Labor Committee and a close Pelosi ally. At one point, Connolly tossed his hand in the air, dismissing a Miller argument. Miller pressed Connolly, arguing that if the House doesn't preserve the unspent bailout funds now, they'll be lost for good, Connolly said later.

Pelosi tried Connolly next, energetically making her case. But he leaned forward, put his right hand on her left arm, and told her he couldn't give her his vote.

He then stepped out in to the Speaker's Lobby just off the House floor and spoke to a few reporters.

"I'm sure she's not happy," he said in an understatement. Freshman defections, as he spoke, were threatening to defeat the bill.

"I wrote the Speaker several weeks ago, along with [thirteen] other freshman, saying that at least half of the TARP money should be reserved for deficit reduction, and then we can address jobs."

Pelosi argued back that all of the bailout money that is repaid by banks goes to reduce the deficit, a point Connollly conceded but wasn't swayed by.

"Tonight, obviously a decision was made that what we're going to do is address jobs. Maybe some day we'll address the deficit. And I don't think that's the right sequence," he said, saying that both are important (a point of agreement on all sides).

HuffPost asked if Democratic freshmen are more concerned about the deficit than the jobless situation. Connolly said that the way people voted would answer the question.

Eight of the fourteen freshman who joined the Connolly letter rejected the jobs bill, along with a sizable number of other new members and Blue Dogs.

The sight of Democrats standing in opposition to spending on job creation with unemployment over 10 percent struck an angry Rep. Charlie Rangel (D-N.Y.), chairman of the Ways and Means Committee, as reason to ask where the party stands. "We may have to take a reevaluation," Rangel said, "of Democrats."

Rep. Stephen Lynch (D-Mass.), who voted for the jobs bill, summed up the mood. "People are worried," he said.

If anybody has a right to be worried, it's Rep. Chris Van Hollen, the chairman of the Democratic Congressional Campaign Committee, who will take the lead in fending off a wave of angry voters, many intent on tossing his members out of office. "Clearly, taking the TARP money that would have gone to Wall Street and spending it on infrastructure for Main Street I think is an important move, but obviously we need to get right back to work when we get back here focusing on long-term debt deficit and debt reduction. That will be a priority," he told HuffPost.

The key word Van Hollen's analysis is "long-term." House leaders are pushing for more spending now, along with efforts to structure the budget so that future deficits are reduced. The GOP and vulnerable Democrats, meanwhile, want to cut spending yesterday. "You can't accomplish the fiscal stability goal if the economy doesn't turn around," Van Hollen said.

Rep. Brad Miller (D-N.C.) echoed Van Hollen's argument. He noted that for every one-point reduction in the unemployment rate, the federal deficit is reduced by more than $200 billion due to increased tax revenue. "If we want to close the deficit, we've got to grow the economy and put people to work. And if we don't do that, nothing else we do is going to work," he said.

Connolly, the freshman leader, said that passing the bill would give fodder to political opponents -- even as it is uncertain the Senate will move on it. "Why do we want to pass a bill that seems to lend credence to critics who say, well, maybe the stimulus really isn't succeeding?" he argued.

Connolly's opposition to the spending, however, is particularly striking, because many of his Northern Virginia constituents are employed by or through the federal government itself.

"I have to represent my district. My district has five percent unemployment. My district is right here in the shadow of the nation's capital and it's filled with federal employees and people who work for federal contractors and lots of other people. And within reason they are absolutely sympathetic to the need for jobs for people in other districts who aren't so fortunate. But, remember, they're the ones being asked to foot the bill," he said -- though his constituents are also being paid from the proceeds of that bill.

"And they want to know that if we're going to be doing that, that it's balanced with prudent fiscal stewardship and with some attention to the red ink we inherited. And given the fact that that's not in tonight's bill and I asked for it two or three weeks ago, I cannot bring myself to vote for this bill. Reluctantly," he said.

Peering back into the chamber, Connolly noticed Pelosi and several aides watching him. "They're looking at me. I've gotta go."

Bank Lobbyists Launch 'Call To Action' To Crush Financial Reform (MEMO)

2009-12-16T19:39:06Z

The American Bankers Association issued a "Call to Action" on Wednesday, urging its lobbyists and member banks to make an all-out effort to crush regulatory reform in Senate. As part of that campaign, it lashed out at its community-bank rival, charging it with being too soft on bank reform efforts.

In an unusually frank memo from ABA Chairman Art Johnson, the lobby group congratulates bankers for sending some 300,000 letters to Congress opposing reform, crediting the effort with killing several significant provisions.

And it takes aim at the Independent Community Bankers Association, which endorsed the final bank-reform bill to make its way through the House last Friday.

"To be successful in the Senate, we must have a united message. And that is why I am truly saddened by what I am about to report to you. I do this not to cast blame, but in the hope we can fix this and be united as we go to the Senate," said Johnson.

"Last week, I was on the daily conference call of the ABA lobbying team and the state associations when it was announced that ICBA was supporting the House bill going to the floor. I must say there was shock and disbelief because all the states had just reported that their bankers remained strongly opposed to the bill. All of ABA's officers are community bankers, as are many members of the ABA Board, which voted unanimously to oppose the bill. Many of the states had recently had similar formal votes. A number of the state associations are jointly affiliated with ABA and ICBA, and they all oppose the bill, as apparently do some of the ICBA state associations... ABA will reach out to ICBA; we will work for unity."

ICBA Senior Vice President Steve Verdier's response: Thanks, but no thanks.

"It was fascinating to read," Verdier told HuffPost of the ABA memo. "I don't think we need help from anyone else to tell us how to represent community banks. They didn't consult me when they wrote it up. It's hard to tell what exactly their motivation is."

The ABA represents both large and small banks and is competing for the lucrative privilege of lobbying against financial industry reform. Some of the trade association's massive clients, however, have different interests than the smaller ones.

"We may be the only financial services representative which unambiguously wants a strong bill. Our approach on this bill is: we very much want strong legs to deal with the Wall Street crowd, the non-bank financial providers," said Verdier. "All the other folks out there who do financial services representation" -- that means bank lobbying -- "they all have some of the larger banks in their membership and the larger banks don't truly want a real bill because it will require higher capital, tougher regulations, make them pay into an insurance fund and maybe even downsize. They may pay lip service to having a strong or effective bill, but I just don't think their heart is in it."

The ABA, in the memo and in conversations with members of Congress, attempts to portray itself as fundamentally a small-bank organization. But no matter how many small banks belong to the group, just one or two giants like JPMorgan Chase make a big difference.

"They certainly have community banks involved in their membership and to some extent in their leadership," said Verdier. "With ICBA, not only do community banks have a seat at the table, they have the only seat."

Financial Services Committee Chairman Barney Frank (D-Mass.) often argues that community banks have more power in Congress now than big banks, due to their influence in members' home districts and the diminished respect for Wall Street. Frank, indeed, credits community banks with helping kill cramdown -- a provision that would have allowed bankruptcy judges to renegotiate home mortgages.

That's one area where the ABA agrees. "An amendment to add mortgage bankruptcy cramdown to the bill was defeated on the floor by a strong majority. Given that this amendment had passed the House earlier this year, our win is a strong reflection of the hard work of the state associations and grassroots bankers last week. Since the cramdown concept has now been defeated in both the House and Senate this year, hopefully it will not be brought up again," reads the memo.

The missive contains additional praise for provisions that either made it into the final House bill or were knocked out.

Johnson speaks favorably of several developments, "including an exemption (although not a complete one) for banks under $10 billion from examinations by the Consumer Financial Protection Agency (CFPA) and an amendment requiring that the powerful new systemic oversight agency review FASB's proposed rules. We were able to protect charter choice through the retention of the thrift charter, although we have clean-up work to do there."

The FASB amendment is the second provision mentioned by the ABA, indicating that it is of very high importance. The radical measure effectively allows bank regulators to ignore accounting rules if applying them could be dangerous to the banking system. It was largely ignored in the media.

Rep. Melissa Bean (D-Ill.), a leading New Democrat, is singled out for praise by the bankers. "On the House floor, we also had some positive results. One important change adopted on the floor was the ABA-supported Melissa Bean (D-Ill.) amendment that restored, for the most part, federal preemption for national banks and federally chartered thrifts. Your state association executive will tell you that preemption is important for all banks; if it is removed, as the Administration wants, it will set off an avalanche of state and local laws and regulations that will apply to all banks," writes Johnson.

From here, the ABA promises, the battle moves to the Senate: "Throughout this year, ABA and all the state associations have been united in our opposition to this bill and in our strategy on it. We worked night and day to improve it and to block bad amendments, with the help of grassroots bankers across the country, who we estimate have sent 300,000 letters to Congress this year. After this bruising House battle, we are ready for the Senate, where our positions seem to have stronger support, as we had thought they would."

The full memo is worth a read:

CEO Alert

December 15, 2009

TO:

Bank CEOs

FROM:

Art Johnson, ABA Chairman

RE:

Regulatory Reform - An Update and a Call to Action

On December 7, I sent you a "Halftime Report" in which I said ABA thought the House would pass narrowly the financial regulatory reform bill. That is what happened last Friday, when the bill passed 223-202, with all Republicans and 27 Democrats voting against it. However, there were some important developments I wanted all of you to be aware of. More important, we need all bankers to commit to contacting your Senators early and often about this legislation, which now moves to the Senate.

The House: Where We Stand

ABA was one of the first to support much needed reform. For example, we support the creation of a systemic oversight council and the closing of regulatory gaps, such as in the case of derivatives and hedge funds. We support a strong resolution system for failed institutions that ends too-big-to-fail. However, we have consistently opposed the House bill, and for good reason.

As I previously reported, during the committee process we were able to block some negative amendments and add some good ones, including an exemption (although not a complete one) for banks under $10 billion from examinations by the Consumer Financial Protection Agency (CFPA) and an amendment requiring that the powerful new systemic oversight agency review FASB's proposed rules. We were able to protect charter choice through the retention of the thrift charter, although we have clean-up work to do there.

On the House floor, we also had some positive results. One important change adopted on the floor was the ABA-supported Melissa Bean (D-Ill.) amendment that restored, for the most part, federal preemption for national banks and federally chartered thrifts. Your state association executive will tell you that preemption is important for all banks; if it is removed, as the Administration wants, it will set off an avalanche of state and local laws and regulations that will apply to all banks.

An amendment to add mortgage bankruptcy cramdown to the bill was defeated on the floor by a strong majority. Given that this amendment had passed the House earlier this year, our win is a strong reflection of the hard work of the state associations and grassroots bankers last week. Since the cramdown concept has now been defeated in both the House and Senate this year, hopefully it will not be brought up again.

Also defeated was an amendment that would have removed the ABA-supported provision that exempted publicly traded firms of less that $75 million in market capitalization from the infamous Section 404 of Sarbanes-Oxley. Therefore the exemption from 404 remains in the bill.

An ABA-supported amendment on the CFPA narrowly failed, 223-208, in the face of strong lobbying by the House Democratic Leadership and the Administration. This amendment, offered by Rep. Walt Minnick (D-Idaho), would have changed the CFPA's structure to a council of existing regulators and removed its unprecedented powers to control bank products and the way they are offered. While we are disappointed it was defeated, the narrowness of the vote sends a strong signal to the Senate that the CFPA is a bad idea.

Although there are positive provisions in this bill -- some that will help the bottom line of community banks, at least in the short term, and some that will set up a better and fairer regulatory system -- overall it is a negative bill for our industry. It will increase our regulatory costs dramatically, make it much more difficult to compete, and undermine institutions that are critical to our financial system. While we made important improvements, the CFPA is still a huge problem -- an agency that seems set up to turn banks into utilities, with massive power to write regulations over our products, the manner in which we offer them, and even how we compensate our employees. As I outlined in my last report, the bill also undermines the role of the FDIC as an insurer of bank deposits, weakens the FHLB System, and runs the risk of destroying the independence of the Fed. And don't underestimate the unintended consequences of this truly massive bill.

Throughout this year, ABA and all the state associations have been united in our opposition to this bill and in our strategy on it. We worked night and day to improve it and to block bad amendments, with the help of grassroots bankers across the country, who we estimate have sent 300,000 letters to Congress this year. After this bruising House battle, we are ready for the Senate, where our positions seem to have stronger support, as we had thought they would.

The Senate: What's Ahead and What You Can Do

To be successful in the Senate, we must have a united message. And that is why I am truly saddened by what I am about to report to you. I do this not to cast blame, but in the hope we can fix this and be united as we go to the Senate.

Last week, I was on the daily conference call of the ABA lobbying team and the state associations when it was announced that ICBA was supporting the House bill going to the floor. I must say there was shock and disbelief because all the states had just reported that their bankers remained strongly opposed to the bill. All of ABA's officers are community bankers, as are many members of the ABA Board, which voted unanimously to oppose the bill. Many of the states had recently had similar formal votes. A number of the state associations are jointly affiliated with ABA and ICBA, and they all oppose the bill, as apparently do some of the ICBA state associations.

Others were surprised as well. Roll Call, the Capitol Hill newspaper, said the Republican leadership "specifically called the Independent Community Bankers of America on the rug for supporting the regulatory reform legislation." The same newspaper then quoted a top ICBA lobbyist as saying about the bill: "It's got the balance we're looking for, regulating the unregulated and leaving community banks more or less alone."

This split message, with ICBA indicating support for the bill and ABA opposing, hurt us in the House. We had several close votes we lost, such as the one on the Minnick Amendment. Had the message been unified, we could well have had a better bill. I am hopeful we can be united in the Senate. Right now, Republicans are firm in their opposition to the Dodd draft bill, which is much worse than the House-passed bill, and contains the full CFPA. A number of Senate Democrats are also raising questions about the CFPA and other provisions. We reached out to ICBA, and we sent a joint letter opposing the single regulator concept in the Dodd draft, a concept that could eventually kill the dual banking system. We are optimistic the single regulator will be defeated. But if we have a conflicting message in the Senate -- a message that says some in the industry can support a bill like the House bill -- we will lose our ability to achieve much more workable regulatory reform, and we will invite the enactment of a bill that will truly hurt us badly for years to come.

ABA will reach out to ICBA; we will work for unity. Joined by our state association colleagues who have done so much, we will work tirelessly for the future of our industry. But we will need all of you to help. So as one of your New Year's resolutions, please vow to do everything in your power to show, and to have your colleagues in your bank show, your Senators the right path to true reform.

Thank you for your support.

Tom Coburn Demands 12-Hour Reading Of Single-Payer Amendment On Senate Floor

2009-12-16T17:38:49Z

The GOP mantra, repeated at Tea Parties all summer, was that lawmakers and voters ought to "read the bill" in order to truly understand the many ills of health care reform.

Sen. Tom Coburn (R-Okla.), on Wednesday, did his part to help out those who can't read legislation themselves, and asked the Senate clerk to read a single-payer amendment from Sen. Bernie Sanders out loud on the Senate floor. The reading of the 767-page amendment is expected to take about 12 hours. [UPDATE: Several hours into the reading, Sanders took the Senate floor and withdrew his amendment.]

Sanders, an independent from Vermont, first filed his amendment on December 2, so the GOP has indeed had two weeks to read it.

By jamming up Senate business, Coburn's move prevents a vote on a funding bill for the Department of Defense. The current funding provision expires at midnight on Friday.

Coburn said he was doing Americans a favor. "I admire Senator Sanders for his willingness to fight for publically [sic] what many advocate only privately -- a single payer health care system funded and controlled by bureaucrats and politicians in Washington. Every American should listen to the reading of this amendment and pay careful attention to its vote tally," Coburn said in a statement.

"The American people deserve to understand the competing approaches to reform in the U.S. Senate. It's unfortunate that Senator Reid waited until the last minute to introduce his bill and now wants to rush it through the Senate. This reading will provide a dose of transparency that has been lacking in this debate."

The group, "Senate Doctors," a Republican coalition of lawmakers with medical backgrounds, re-tweeted that Coburn was "a rockstar."

Senate Democrats are powerless to prevent the full reading of the amendment due to parliamentary rules. And they don't appreciate the favor. "The only thing that Sen. Coburn's stunt achieves is to stop us from moving to the DoD appropriations bill that funds our troops -- not exactly the kind of Christmas gift that our troops were expecting from Dr. No," said Jim Manley, senior communications adviser to Senate Majority Leader Harry Reid (D-Nev.).

Coburn has a long and unapologetic career of standing in the way of Senate business.

Sanders provided a summary of his amendment to colleagues: "This amendment would establish a single payer health insurance system that would cover every person legally residing in the United States. The single payer system would be regulated and funded by the federal government through a payroll tax and an income tax, but it would be administered by the states. It would replace the coverage and revenue titles of the current bill, but it would leave in place most of the provisions in the quality, prevention, and workforce titles of the bill. This amendment starts from the premise that health care is a human right, and that every citizen, rich or poor, should have access to health care, just as every citizen has access to the fire department, the police, or public schools."

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Doughnuts For Dorgan: Drug Reimportation Killed In Deal That Might Get Cheaper Drugs For Seniors

2009-12-16T01:22:22Z

President Obama and the Senate leadership can't whip up the votes necessary to pass a public option or even a Medicare buy-in compromise, but they didn't have any trouble persuading 30 Democrats to vote against prescription drug reimportation Tuesday night -- thus preserving the deal cut between the Senate Finance Committee, the White House and Big Pharma.

The amendment's sponsor, Sen. Byron Dorgan (D-N.D.), was asked after the vote if Democratic leadership opposed his amendment in order to preserve the deal.

"Well, and they apparently did," said Dorgan. "The last seven days, we've seen a lot of votes stripped away. What did we get, 51 votes tonight for my amendment? I believe seven days ago we had sufficient votes to pass it, but I think what is happening in the intervening period is other things developed. It's a great disappointment because it seems to me very hard to do health care reform without doing something about the escalating prices for prescription drugs."

The amendment had been scheduled to come up for a vote last week, but was held up amid much speculation that Dorgan had the votes. The vote Tuesday was 51-48, or nine shy of the 60 needed to overcome a filibuster. A total of 30 Democrats and independent Joe Lieberman of Connecticut voted against it.

One of those things that developed in the intervening period: a deal to kill the Dorgan amendment in exchange for closing the so-called doughnut hole -- the period of time when Medicare recipients must pay the full cost of drugs.

HuffPost asked Sen. Sheldon Whitehouse (D-R.I.), who is generally supportive of reimportation but voted against, why he did so.

"The colloquy yesterday, between Leader [Harry] Reid and Chairman [Max] Baucus and Chairman [Chris] Dodd, did not happen in a vacuum," said Whitehouse, carefully choosing his words. A colloquy is a public conversation on the Senate floor that often is used to ratify a deal struck in private.

What was the subject of the colloquy?

"Closing the doughnut hole," said Whitehouse. A senate Democratic aide confirmed that the doughnut-hole move was largely made in exchange for votes to kill Dorgan's amendment. "That was more or less the arrangement," he said. (The White House did not immediately respond to a request for comment.)

Dorgan was asked if he was aware of the deal. "You'll have to ask others that," he said.

HuffPost asked Sen. Kent Conrad (D-Neb.), a longtime supporter of reimportation, if he was aware of the deal. "I don't know that firsthand, but I've heard that," he said. Conrad, regardless, voted for Dorgan's amendment.

The commitment to close the doughnut hole was quickly applauded by AARP. "Thank you for your commitment -- and that of Chairmen Baucus and Dodd -- to closing the Medicare Part D coverage gap or 'doughnut hole' by 2019 during the upcoming House-Senate conference committee on health reform legislation. We understand, given Senate constraints, that this action must wait until conference," AARP CEO A. Barry Rand said in a letter to Reid Tuesday.

Dodd's vote on Dorgan's amendment only makes sense in the context of the doughnut-hole deal. Dodd is facing an increasingly difficult reelection race and a vote against reimportation is a political loser in Connecticut, where he has no room for error.

When the roll was called and Dodd's name was announced in the nay column, Sen. Bernie Sanders (I-Vt.), betrayed his surprise loudly enough to be heard in the press gallery. "Dodd?!" said Sanders, in a rising stage-whisper that indicated disbelief.

Ken Johnson, senior vice president for the Pharmaceutical Research and Manufacturers of America (PhRMA), said that if Congress or the White House wants to close the doughnut hole, they haven't talked to him about it. He did, however, leave the door open for further negotiations.

"We have had absolutely no discussions with anyone in the Senate or the White House about how they plan to pay for closing the doughnut hole. It's a laudable goal, but we are already committed to providing a huge amount of money to help seniors who hit the coverage gap, and no one has asked us to date to provide any additional funding," he said in an e-mail to HuffPost.

"Will that change moving forward? Who knows? Who could have predicted that the so-called Medicare buy-in would be in and out of the mix in a blink of an eye? We made an $80 billion iron-clad commitment to help make health care reform a reality back in June, and we have never, at any time, retrenched from that position. That said, we will continue to keep an open mind as the Senate moves toward a final vote."

The defenders of the PhRMA deal were forced to round up so many Democratic votes because the GOP decided to make mischief on the Senate floor. Twenty-three Republicans -- more than half their total -- broke with their traditional opposition to reimportation and voted with Dorgan, many of them smiling as they watched nervous Democratic leaders huddled around the table in front of the Senate president's desk. When it was clear it would fail, two of them -= Sens. Jim Bunning (R-Ky.) and John Ensign (R-Nev.) =- switched their votes back to no. Ensign was rewarded for his flip-flop by a sharp Senate-floor tongue-lashing from Sen. John McCain (R-Ariz.), a longtime and serious supporter of reimportation.

Sen. John Cornyn (R-Texas), acknowledged to reporters that his yes vote had something to do with causing trouble for the overall bill. "It did occur to me that this could be for the greater good," he said.

Here's the full roll call:

YEAS -- 51

Alexander (R-TN)
Begich (D-AK)
Bennet (D-CO)
Bingaman (D-NM)
Bond (R-MO)
Boxer (D-CA)
Brown (D-OH)
Coburn (R-OK)
Collins (R-ME)
Conrad (D-ND)
Corker (R-TN)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Dorgan (D-ND)
Feingold (D-WI)
Feinstein (D-CA)
Franken (D-MN)
Graham (R-SC)
Grassley (R-IA)
Harkin (D-IA)
Hutchison (R-TX)
Johanns (R-NE)
Johnson (D-SD)
Klobuchar (D-MN)
Kohl (D-WI)
LeMieux (R-FL)
Leahy (D-VT)
Lincoln (D-AR)
McCain (R-AZ)
McCaskill (D-MO)
McConnell (R-KY)
Merkley (D-OR)
Murkowski (R-AK)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Risch (R-ID)
Sanders (I-VT)
Sessions (R-AL)
Shaheen (D-NH)
Shelby (R-AL)
Snowe (R-ME)
Specter (D-PA)
Stabenow (D-MI)
Thune (R-SD)
Udall (D-NM)
Vitter (R-LA)
Webb (D-VA)
Wicker (R-MS)
Wyden (D-OR)

NAYS -- 48

Akaka (D-HI)
Barrasso (R-WY)
Baucus (D-MT)
Bayh (D-IN)
Bennett (R-UT)
Brownback (R-KS)
Bunning (R-KY)
Burr (R-NC)
Burris (D-IL)
Cantwell (D-WA)
Cardin (D-MD)
Carper (D-DE)
Casey (D-PA)
Chambliss (R-GA)
Cochran (R-MS)
Dodd (D-CT)
Durbin (D-IL)
Ensign (R-NV)
Enzi (R-WY)
Gillibrand (D-NY)
Gregg (R-NH)
Hagan (D-NC)
Hatch (R-UT)
Inhofe (R-OK)
Inouye (D-HI)
Isakson (R-GA)
Kaufman (D-DE)
Kerry (D-MA)
Kirk (D-MA)
Kyl (R-AZ)
Landrieu (D-LA)
Lautenberg (D-NJ)
Levin (D-MI)
Lieberman (ID-CT)
Lugar (R-IN)
Menendez (D-NJ)
Mikulski (D-MD)
Murray (D-WA)
Reed (D-RI)
Reid (D-NV)
Roberts (R-KS)
Rockefeller (D-WV)
Schumer (D-NY)
Tester (D-MT)
Udall (D-CO)
Voinovich (R-OH)
Warner (D-VA)
Whitehouse (D-RI)

NOT VOTING -- 1
Byrd (D-WV)

With reporting by Jeff Muskus

Rep. Capuano Tells Fellow Dems: 'You're Screwed'

2009-12-15T17:03:05Z

When House Democrats gathered on Friday for their end-of-the week caucus meeting in the basement of the Capitol, caucus chairman John Larson (D-Conn.) told the group he wanted them to hear first from Rep. Michael Capuano, who'd just returned from a primary campaign for the Senate seat in Massachusetts vacated by the death of Ted Kennedy.

Larson asked Capuano, who finished in second place, to share the wisdom he learned on the campaign trail.

Capuano took to the microphone, looked out at his colleagues and condensed what he'd learned into two words. "You're screwed," he told his friends in the House, according to one attendee. The room's silence was broken only by soft, nervous laughter.

Capuano confirmed the gist of the message -- "I'm not sure of the exact wording," he told HuffPost, chuckling -- and said that he doubted his wisdom was anything they didn't already know.

"I think I was just confirming stuff they already knew," he said. "I focused on two things: the war in Afghanistan and jobs."

Everywhere Capuano went in his state, he said, he was bombarded with demands that the government do more to create jobs. He was also greeted by deep skepticism about Obama's escalation of the eight-year-old war in Afghanistan.

Capuano said he told the caucus that opponents of the war need to be given a chance to vote against funding for it on the House floor.

"If we do anything [on the war], we need to have a separate vote on it. People who can vote for it, can vote for it. But those of us who want to vote against it, [should] be given that opportunity, too," he said. "But I focused mostly on jobs. People are tired of the promises of jobs. They need them now."

He said voters were less interested in tax credits than they were in direct money for jobs. He asked one crowd if it thought that a town could start hiring people within a month if it was given a million dollars on the condition it begin employing people -- the crowd was certain it could.

After the event, a top finance official from the town approached him. "Not only could I do it in 30 days, I could do it in a week," she said.

Democratic leadership in the House is still working on a jobs bill. Larson told a handful of reporters on Monday that it would likely include roughly $70 billion and focus on infrastructure, aid to state and local governments, and extending unemployment and COBRA health insurance subsidies for the jobless.

The bill, however, is likely to be tied to a defense appropriations bill that is scheduled to be taken up before year's end. "That's the last train leaving Clarksville" said Larson, reasoning that attaching it to money for war was the only way to get it done before the end of the year.

Rep. George Miller (D-Calif.), chairman of the Education and Labor Committee, told reporters Tuesday that short-term extensions of unemployment and COBRA will be attached to the defense bill.

In effect, that requires members of Congress to back a war they oppose in order to get funding for jobs, a bargain many are loath to make, but one they've made over and over since Democrats rook control of Congress following the 2006 midterm elections -- which were decided largely by voters fed up with the war in Iraq.

Miller said that the larger jobs package will be decoupled from the war bill and voted on before the House recesses on Wednesday. No figure for the total spending has been finalized, he said. It'll then be sent to the Senate. "Obviously, we believe it has to be addressed. It'll be there. They can take it up. I hope they will," he said. "Speculating on the Senate is a very bad profession."

Majority Leader Steny Hoyer (D-Md.), in an interview with two reporters in his office late last week, argued that Democrats were better prepared to withstand a Republican wave than they were in 1994, because they see this one coming.

"Unlike '94, nobody's having anything sneak up on them. Nobody in this House believes this next election is a slam dunk, which means they're out raising money, they're out in their districts -- working hard, communicating on jobs and getting the economy moving," he said. "And all of that, in my opinion, augurs well for a Democratic Party."

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Lieberman Wins: Medicare Compromise On Chopping Block

2009-12-15T01:04:22Z

Joe Lieberman has forced his will on the Senate Democratic caucus and the nation as a whole. After the party reached a compromise last week to effectively drop the public option in exchange for allowing 55- to 64-year-olds to buy into Medicare, that compromise is now in doubt.

Lieberman, an independent from Connecticut, told Majority Leader Harry Reid (D-Nev.) on Sunday that he will block any bill that includes the buy-in. As the 60th vote needed to overcome a Republican filibuster, he can do that.

Following a caucus-wide meeting Monday evening, the measure was all but scuttled.

"It's looking like that's the case. I can't guarantee it. At this point, at this stage, that seemed to be the case," acknowledged Finance Committee Chairman Max Baucus (D-Mont.). Asked why it had been dropped, he said, "I didn't confirm that now. It's just a matter of getting support from 60 senators."

No. 60 himself emerged from the meeting looking at ease and spoke with reporters at length. He was asked if he'd been given a specific assurance from Reid that the Medicare provision was out. "Not an explicit assurance, no," he said.

"The more I understood about what they were trying to do, the less I liked it," he said. Lieberman's opposition to the Medicare compromise is not rooted in principle; he is a longtime supporter of just such an expansion and spoke in favor of it just three months ago. "This alternative was being constructed in a way that [created a] self-sustaining pool, separate from Medicare. It would have been extremely expensive," Lieberman said, although his opposition to the proposal came before the Congressional Budget Office could estimate its costs.

"I think it would have been more expensive than the subsidies would be, and that's the key," he said. The bill already offers "very generous" subsidies, Lieberman said, adding, "I thought I made myself clear all along."

Lieberman claimed to have company. "I wasn't the only one in the Democratic Caucus who was either concerned or opposed to the Medicare buy-in. There were many," he said. "Trust me, it's not just me."

A reporter noted that Lieberman is the only one who said he would filibuster. "Well, I'm more outspoken, for some reason, than the rest," he said. "I want to be for the bill, I want to be for health care reform. I've worked for it for years here."

Reid told reporters the bill would be "pro-consumer, pro-reform," but didn't mention the Medicare buy-in.

Sen. Chris Dodd (D-Conn.), who shepherded the bill through the health committee earlier this year in the stead of an ailing Ted Kennedy, emphasized the positive, as well. "It's always easier to envision the legislation that you want, than to pass the legislation that you need," said Dodd.

"Whatever differences exist within the Unites States Senate, those differences will pale by comparison to the differences we can make to the American public by the passage of major health care reform," he said.

Dodd predicted the bill would pass quickly. "I will tell you this tonight, without going in to the details: Before we leave here, in the next couple of weeks or less, we are going to pass national health insurance reform for all Americans," he said.

Dragging the party away from the core principles of its base carries with it the risk losing votes from the progressive end of the caucus. But several of those members emerged from the meeting open to supporting Lieberman's bill.

"There's going to be a good bill," said Sen. Sherrod Brown (D-Ohio). "I want to see health care reform. I want to see health care reform."

Sen. Jay Rockefeller (D-W.Va.) has been an outspoken supporter of the public option and a strong backer of the Medicare compromise, which Lieberman unilaterally rejected. Rockefeller, however, said he is open to the new bill.

"It's a question of 'can you govern?' Can you just simply fail to govern because you couldn't get everything you wanted so you just opt out of it. And then there's no bill. And that is not why we're here. We're here to make progress," he said.

Baucus was upbeat about the bill. "This is exciting. I hope you feel as excited as I do. This is a big deal. I mean, really, we all tend to focus on process and we tend to focus on individual provisions, which is really very important," he said. "But it's just huge for our country. This is going to be the biggest legislative effort that I've ever been involved in. And it's going to mean more to more people, I think, than anything I've been involved in."

A reporter asked whether the public option had been ditched. "What you read is not too far from the truth. What you've been reporting is not to far from the truth," he said.

Several senators said that a Medicaid expansion to up to 150 percent of the federal poverty line is still on the table, but will depend on the CBO.

And, of course, on Joe Lieberman.

The man who dictates legislation in the United States said he may have a few more things to object to in the bill before it's all said and done.

"I want to take a look at these proposals before I sign on," he said.

One thing he wouldn't tolerate were questions about his wife's longtime connection to the health care industry, and whether she should keep her position with a breast-cancer advocacy organization.

"I just think that's over the edge and offensive to me. My wife is a private citizen and she's working for a movement that aims at reducing or finding a cure for breast cancer," he said. "It's just deeply offensive to me."

With reporting by Jeff Muskus

Rahm Emanuel Personally Pressed Reid To Cut Deal With Lieberman: Sources

2009-12-14T21:58:58Z

Rahm Emanuel visited Senate Majority Leader Harry Reid in his Capitol office on Sunday evening and personally urged him to cut a deal with recalcitrant Sen. Joe Lieberman, two Democratic sources familiar with the situation told the Huffington Post.

Emanuel, President Obama's chief of staff, has long been identified as leading a faction of White House advisers who have been pushing the Senate simply to pass any health care bill, no matter how weak.

His direct message to Reid (D-Nev.), according to a source close to the negotiations: "Get it done. Just get it done."

Politico reported Monday morning that the White House had pressed Reid to cut the deal after Lieberman (I-Conn) insisted the Senate drop a provision, which Lieberman himself has long favored, to allow those 55-64 to buy in to Medicare. Lieberman is threatening to join a Republican filibuster of the bill if the provision isn't dropped.

The White House denied the report. "The report is inaccurate. The White House is not pushing Senator Reid in any direction. We are working hand in hand with the Senate Leadership to work through the various issues and pass health reform as soon as possible," White House spokesman Dan Pfeiffer wrote in an e-mail to the Plum Line.

The report, however, according to the two sources, was entirely accurate. "We're long past time for these kinds of games," one source said. White House spokesman Reid Cherlin stuck to the denial: "Our statement is true," he said.

Senate Democrats plan to meet Monday evening to see if it is still possible to hash out their differences.

This story was updated to make clear that the sources spoke to the Huffington Post. They may or may not have been the same sources who spoke to Politico.

Big Pharma: We're Not Renegotiating Deal (Yet)

2009-12-14T19:57:05Z

While the Senate wonders just what it is that Joe Lieberman wants in a health care bill, the standoff over pharmaceutical provisions continues. Sen. Byron Dorgan (D-N.D.) is pressing forward with his demand for a vote on his amendment to allow cheaper drugs to be re-imported from Canada; meanwhile, other Democratic senators hope they can use the battle to squeeze Big Pharma for a greater contribution to reform.

"I think that it's good that the Dorgan Amendment has reengaged PhRMA, and I hope that what it leads to is improvements in Part D that are sound and lasting," said Sen. Sheldon Whitehouse (D-R.I.) at a press briefing on Friday. Whitehouse was referring to the Medicare prescription drug program that is beset with a "doughnut hole" -- a time period during which seniors' drugs aren't covered.

Asked after the briefing if reimportation was being used as leverage over the Pharmaceutical Research and Manufacturers of America (PhRMA), Whitehouse told Huffington Post:

"I wouldn't call it a bargaining chip. I think that for a lot of the people and most particularly for Senator Dorgan, this is something he believes in passionately. But I think the fact that it's out there now I think has everybody want to come to an end on this, and if the end is a solution to Part D I could not be happier," he said.

On Monday, Inside Health Policy reported, citing "Washington lobbyists," that the standoff had indeed inspired PhRMA to come back to the negotiating table.

PhRMA Senior Vice President Ken Johnson told HuffPost that if those negotiations are ongoing, he's not aware of them.

"To the best of my knowledge, there are no such negotiations taking place. Obviously, as the Senate moves closer to a final vote on health care reform, there are a lot of proposals flying around right now. We have been a committed partner in this process from the beginning, and so we are keeping an open mind. But at the end of the day, for health care reform to be successful, it must recognize the importance of medical progress to America," said Johnson.

Sen. Charles Schumer (D-N.Y.), the third-ranking Democrat, said that any number of concessions from PhRMA could break the logjam. After the briefing, Schumer was asked if he genuinely believed PhRMA would withdraw its support for the bill if Dorgan's amendment passed.

"I don't know," said Schumer. "That's not -- the issue is, what is the best possible outcome with all the different things we need to do? Some of them were mentioned: filling the doughnut hole; some mentioned getting prices lower; some mentioned safety. You have to just sort of put it all together... I think it'll be resolved in the next little while. I certainly don't think it'll stand in the way of getting a bill."

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Pharma Deal Shuts Down Senate Health Care Debate

2009-12-11T18:48:45Z

The White House, aided by Sen. Tom Carper (D-Del.), is working hard to crush an amendment being pushed by Sen. Byron Dorgan (D-N.D.) to allow for the reimportation of pharmaceutical drugs from Canada, Senate sources tell the Huffington Post.

As a result, the Senate health care debate has come to a standstill: Carper has placed a "hold" on Dorgan's amendment and in response, Dorgan tells HuffPost, he'll object to any other amendments being considered before he gets a vote on his.

Sen. Olympia Snowe (R-Maine) is a lead co-sponsor of Dorgan's amendment. She said she's confident that, as of now, they have the votes they need. "I think that's why we're not having this vote," she said, smiling. The amendment has the support of a number of other Republicans, including Sens. John McCain (Ariz.), Charles Grassley (Iowa), John Thune (S.D.) and David Vitter (La.).

Opponents of the amendment worry that many more Republicans may join the amendment not because they agree with it, but because they want to put the health care bill in jeopardy.

So the White House and the drug makers are trying to persuade as many Democrats as they can to oppose the amendment despite their previous support for it.

"I don't think that's going to get my vote," Sen. Jay Rockefeller (D-W.Va.) said when HuffPost asked about the reimportation amendment. He said that even though he is a supporter of reimportation, he is concerned that if it passes it could blow everything up.

"I'm not messing around with anything without 60 votes. Nothing," he said. "And I'm a co-sponsor of the amendment."

The dispute within the Democratic caucus is becoming personal. "Of course, with Dorgan, it's all about Dorgan," a senior Democratic aide told HuffPost, complaining that Dorgan was willing to blow up health care reform for his own glory.

Within a decade, reimportation would save consumers roughly $80 billion and the federal government $19 billion, according to the Congressional Budget Office. But that would mean $100 billion more in lost revenue than the powerful Pharmaceutical Research and Manufacturers of America (PhRMA) lobby agreed to bear-- in exchange for being supportive of the overall health reform effort.

Earlier this year, the administration struck a deal with PhRMA and the Senate Finance Committee limiting the industry's hit to $80 billion over ten years. The deal has never been officially confirmed, but the Huffington Post reported at the time that the White House agreed to oppose re-importation. The Senate Finance Committee bill, as well as the merged bill sent to the floor by Majority Leader Harry Reid (D-Nev.), stuck to that deal.

Along with its pledge of support, PhRMA offered to spend $150 million on ads backing reform. Most of that money stands ready to be used to kill reform, should it come to that. A Democratic aide said that the threat of PhRMA ads is being used by opponents of Dorgan's amendment as a reason to sink it.

Similarly, if Republicans end up providing the winning margin for the importation amendment, a source involved in the negotiations said the drug makers will come after the GOP "with a vengeance -- and not just on health care."

Grassley, a longtime supporter of reimportation, said that the amendment is running into trouble "[b]ecause of the PhRMA agreement with the White House. This thing can pass and they don't want egg on their face with PhRMA. And I understand there's going to be a side-by-side [alternative amendment] and it's probably one of these issues where it will obfuscate the issue, but that not one single pill will get into this country if that side-by-side is adopted."

Thune, another co-sponsor of the amendment, said he was unsure how many fellow Republicans would come along. "It remains to be seen. Everybody's close to the vest on this and I think that's why the Dems don't want it voted on. They don't know how many votes their side has to deliver to defeat it. They've got a lot of people on their side that would normally vote for it," said Thune.

Did he think some Republicans would vote for it just to cause mischief, HuffPost asked.

"It's possible," he said.

Sen. Roger Wicker (R-Miss.) agreed it was a possibility, adding, "And some members of the Democratic leadership might vote against it even though they love the idea, because they've been so cozy with their new-found friends in PhRMA."

Wicker said he has yet to decide how he'll vote. "I've frankly been all over the map on that issue, so I'm being courted heavily," he said.

There's no certainty that PhRMA would walk away from the entire bill if the amendment passed, because it contains a basket of other goodies the industry won from the White House - not to mention about 30 million newly-insured consumers. "Who knows what people are going to do? It's hard to predict what's going to happen," Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, said Friday.

Asked about the state of the amendment, he said: "Limbo."

The lobby is fighting the amendment as hard as it can, along with Carper, the senator from Delaware, which is home to a range of pharmaceutical interests.

Dorgan said that Carper's hold is unusual. "When somebody comes in and says, 'Let's have a vote,' it's generally, by consent, let's schedule a vote for 2:15," he said.

The hold causes problems for Dorgan and buys time for the amendment's opponents. "You can only beat a hold though after you file a cloture petition and wait two days and the cloture petition ripens and you get your vote," said Dorgan. "As a result of that [hold], I have also objected to them doing other business until I get my vote."

Ken Johnson, PhRMA's vice president, tells HuffPost the industry opposes the amendment for three principal reasons. First, he said, the Food and Drug Administration can't guarantee the safety of reimported drugs. Second, he says, it would cut into drug makers' profits - money it needs for research. And third, he says, the uncertainty around the origin of reimported drugs could tarnish the pharmaceutical brand, as people wonder about the authenticity of the drugs in their medicine cabinet.

Carper asked the FDA for its opinion on Dorgan's amendment and the administration wrote back on December 9 that it opposed it.

Publicly, President Obama continues to support reimportation, as he did during the campaign.

"The President supports reimportation of safe and effective drugs. He made that clear in his FY 2010 budget, which included $5 million to enable the FDA to begin developing policy options," reads a statement from the White House. "The Food and Drug Administration has raised safety concerns about the current proposal and will continue exploring policy options to create a pathway to importing safe and effective drugs."

UPDATE: "We're not whipping against the Dorgan amendment. Those rumors just aren't true," says a White House aide in an e-mail. The aide says that the White House has taken no position on the amendment.

Ryan Grim is the author of This Is Your Country On Drugs: The Secret History of Getting High in America

Truckers, Farmers, Airlines Battle Wall Street

2009-12-10T19:26:22Z

A broad coalition of businesses and organizations that use derivatives to legitimately hedge risks associated with their operations came out Thursday in favor of a range of Democratic amendments to the financial regulatory overhaul bill on the House floor.

The small businesses -- known as "end users" -- are calling for tighter regulation of derivatives and demanding that they be traded in the open on regulated exchanges. Under current law, hundreds of trillions of dollars of derivatives are traded in "dark pools" -- meaning investors and regulators have little idea what's going on in the aggregate. That uncertainty was a major driver of the financial collapse, as investors lost faith in the derivatives market.

The opacity also allows for manipulation by speculators; the 2008 gas-price hike being the most vivid example. Such manipulation explains why groups such as the American Truckers Association are calling for greater transparency.

Wall Street banks, which dominate the derivatives market, have strongly attempted to persuade end users to lobby Congress on their behalf.

Some were not convinced.

The members of the Commodity Markets Oversight Coalition are just the type of businesses and organizations that have popular appeal with lawmakers: the South Dakota Petroleum & Propane Marketers Association, Tennessee Oil Marketers Association, United Egg Producers, Utah Petroleum Marketers & Retailers Association, Vermont Fuel Dealers Association, Western Peanut Growers, West Virginia Oil Marketers & Grocers Association, to name a few.

The smaller businesses are joined by big ones, too. The Agricultural Retailers Association, Air Transport Association, National Farmers Union and other major groups joined the truckers in pushing for greater regulation.

The letter represents a split between end users and their dealers and brokers on Wall Street.

"We are hopeful you will send the Senate strong, pragmatic legislation that will bring light to opaque, unregulated or under-regulated markets and market activity, close the door on potential fraud and manipulation, and give federal regulators the tools they need to prevent financial speculation from driving food and energy prices," they write.

"Such action is essential to rebuilding confidence in these markets as price discovery and risk management tools for bona-fide physical hedgers, to reducing systemic risk and market volatility, and helping to prevent further destabilization of our nation's economic recovery."

Read the full letter:

December 10, 2009

U.S. House of Representatives
United States Capitol Building
Washington, DC 20515

Dear Representative:

The undersigned members of the Commodity Markets Oversight Coalition would like to extend its gratitude to Representative Collin Peterson of Minnesota, Chairman of the House Agriculture Committee, and members of his committee, for the hard work and efforts necessary to bring the over-the-counter (OTC) derivatives legislation, which is apart of H.R.4173, the Wall Street Reform and Consumer Protection Act of 2009, to the House floor this week.

Both Chairman Peterson and House Financial Services Chairman Barney Frank and the members of their committees are to be commended on their efforts towards meaningful reform of the commodities futures/swaps markets. As members of Congress are well aware, our coalition has since early 2007 advocated for legislation to bring about greater transparency, oversight and accountability in these markets and to empower federal regulators with the authority and resources to protect against fraud, manipulation and excessive speculation.

In light of this, we urge your support for the following floor amendments to H.R. 4173 that will help to strengthen this legislation:

#47 (Rep. Stupak) - Would require transparency in swaps contracts by requiring all non-cleared swaps be executed on a registered swap execution facility.

#48 (Reps. Stupak, DeLauro, Larson, Van Hollen) - Would give the Commodity Futures Trading Commission and the Securities and Exchange Commission the authority to ban abusive swaps, amends any proposed commercial risk definition to disregard balance sheet risk, and maintains any illegal swap entered into after enactment of this Act will not be valid.

#114 (Rep. Peterson) - Would provide for the CFTC to define the terms "commercial risk," "operating risk," and "balance sheet risk" for purposes of the Commodity Exchange Act.

#115 (Reps. Peterson and Frank) - Would provide for position limits for physical commodities, clearing of over-the counter transactions, increased transparency, reporting, and recordkeeping, and transparency of offshore trading. It also addresses jurisdictional issues in the context of swaps by providing for CFTC jurisdiction over swaps and SEC jurisdiction over swaps that are primarily based on securities (or narrow-based security indexes). These two agencies are required to consult with each other and with banking regulators before regulating.

#135 (Rep. Lynch) - Prohibits swaps dealers from controlling more than 20% of an exchange. Provides rules toward the equitable governance of clearing houses and swap exchange facilities.

We are hopeful you will send the Senate strong, pragmatic legislation that will bring light to opaque, unregulated or under-regulated markets and market activity, close the door on potential fraud and manipulation, and give federal regulators the tools they need to prevent financial speculation from driving food and energy prices.

Such action is essential to rebuilding confidence in these markets as price discovery and risk management tools for bona-fide physical hedgers, to reducing systemic risk and market volatility, and helping to prevent further destabilization of our nation's economic recovery.

Sincerely,

Agricultural Retailers Association

Air Transport Association

American Feed Industry Association

American Cotton Shippers Association

American Truckers Association

Arkansas Oil Marketers Association

Colorado/Wyoming Petroleum Marketers Association

Columban Center for Advocacy and Outreach

California Independent Oil Marketers Association

Florida Petroleum Marketers Association

Food & Water Watch

Friends of the Earth

Fuel Merchants Association of New Jersey

Gasoline and Automotive Service Dealers of America

Independent Connecticut Petroleum Association

Institute for Agriculture and Trade Policy

Illinois Petroleum Marketers Association

Illinois Association of Convenience Stores

Latino Farmers Association

Louisiana Oil Marketers & Convenience Store Association

Maine Energy Marketers Association

Maryknoll Office for Global Concerns

Massachusetts Oilheat Council

Mid-Atlantic Petroleum Distributors' Association

Missionary Oblates - Justice, Peace & Integrity of Creation

Montana Petroleum Marketers & Convenience Store Association

National Association of Oilheating Service Managers

National Association of Truck Stop Operators

National Family Farm Coalition

National Farmers Union

National Grange

Nebraska Petroleum Marketers & Convenience Store Association

New England Fuel Institute

New Jersey Citizen Action Oil Group

New Mexico Petroleum Marketers Association

New York Oil Heating Association

North Dakota Petroleum Marketers Association

Ohio Petroleum Marketers & Convenience Store Association

Oil Heat Council of New Hampshire

Oil Heat Institute of Long Island

Oil Heat Institute of Rhode Island

Organization for Competitive Markets

Petroleum Marketers Association of America

Petroleum Marketers & Convenience Stores of Iowa

Petroleum Marketers & Convenience Store Association of Kansas

Propane Gas Association of New England

Public Citizen

R-CALF USA

South Dakota Petroleum & Propane Marketers Association

Tennessee Oil Marketers Association

United Egg Producers

Utah Petroleum Marketers & Retailers Association

Vermont Fuel Dealers Association

Western Peanut Growers

West Virginia Oil Marketers & Grocers Association

Cc: The Hon. Gary Gensler, Chairman, U.S. Commodity Futures Trading Commission

The Hon. Michael Dunn, Commissioner, U.S. Commodity Futures Trading Commission

The Hon. Jill Sommers, Commissioner, U.S. Commodity Futures Trading Commission

The Hon. Bart Chilton, Commissioner, U.S. Commodity Futures Trading Commission

The Hon. Scott O'Malia, Commissioner, U.S. Commodity Futures Trading Commission

Pelosi Backs Off Public Option

2009-12-10T16:49:52Z

The public health insurance option died on Thursday, December 10, 2009, after a months-long struggle with Senate parliamentary procedure. The time of death was recorded as 11:12 a.m. Eastern Standard Time.

Its death had been rumored numerous times over the past year, but the public option repeatedly and defiantly battled back. The Senate's insistence on 60 votes, combined with President Obama's decision not to intervene on its behalf, eventually proved overwhelming.

The public option leaves behind a Medicare buy-in for people aged 55-64, an expansion of Medicaid, a quasi-public option for those under 300 percent of the poverty line and a collection of national private plans managed by the Office of Personnel Management.

The one remaining chance for the public option rested with the House somehow forcing its will on the Senate.

But House Speaker Nancy Pelosi (D-Calif.) pulled the final plug in a press briefing with reporters Thursday.

She had often said in the past that a health care bill without a public option simply wouldn't have the votes to pass the House. She was asked about that claim Thursday, in relation to the Senate compromise, and pointedly told reporters that any bill could pass as long as it met certain broad goals.

"Well, what I said -- it is a two‑part statement that quotes what the President has said. We believe, we in the House believe, that the public option is the best way to hold insurance companies honest -- to keep them honest and also to increase competition. If there is a better way, put it on the table. As soon as we see something in writing from the Senate, we will be able to make a judgment about that. But our standards are that we have affordability for the middle class, security for our seniors, closing the donut hole and sustaining the solvency of Medicare. Responsibility to our children, so not one dime is added to the deficit. And accountability of insurance companies. We will take a measure of that bill in those regards," Pelosi said.

A reporter pointed out that some House liberals had spoken positively of the Senate compromise that drops the House version of the public option. "What I have said, as I have always said to our members: Give the Senate room. I said that about the President. Give the President room, give the Senate room. But we honestly have had no paper on this. And probably we will know a great deal more when the paper comes back from the Congressional Budget Office. But between their bill and our bill, I know one thing for sure, we will have a great bill when we put them together," she said.

In the hallway outside the press briefing, Pelosi was asked about a Senate plan that would have the Office of Personnel Management (OPM) oversee national private plans instead of a public plan. "Let's see what it is. It might come as a surprise," she said. "We haven't seen the paper from the Senate. There is certainly a great deal of appeal about putting people 55 and older on Medicare. That's something people in the House have advocated for for years."

On Tuesday, passionate public-option backer Rep. Anthony Weiner (D-N.Y.) said he was happy with what he'd heard of the Senate deal.

"Now, I need more clarification of what the other plan is--the OPM plan--Office of Personnel Management," said Pelosi. "But we've also said, if you want something like what the members of Congress have, this might bear some resemblance to the federal employee plan. I don't know, because I haven't seen it and I don't like to comment on what I haven't seen."