LAURIE MCGINLEY:  Good day.  I am Laurie McGinley with Kaiser Health News.  We are talking today about health care policy and politics with Mary Agnes Carey and Eric Pianin of Kaiser Health News.  Thank you very much for joining us. 

Well, everyone was very touched of course by the death of Senator Kennedy and the policy question arising from that is how will his death affect the policy debate on Capital Hill? 

MARY AGNES CAREY :  I think it is unclear.  I mean, certainly as you have said, there has been a lot of outpouring of sympathy, a lot of very powerful memories about Senator Kennedy.  He himself said universal health care was the cause of his life, so the question there is will that be enough to bring Democrats and Republicans together to pass a health care bill. 

You have got Democrats, some who want much more in a bill than it may be possible to achieve, you have some who already say what the different committees are looking at is too much for them to handle.  So there will be a lot of concern, a lot of discussion among the Democrats and Republicans.

And despite the emotion and the momentum that Senator Kennedy’s death brings to health care reform, there is just a lot of harsh realities that still have to be confronted, the size of the bill, the scope of the bill, all the politics, where all the votes are and all those things will have to be decided in the next few months.

LAURIE MCGINLEY:  And the financing of the bill.

MARY AGNES CAREY :  And the financing of the bill, absolutely. 

LAURIE MCGINLEY:  Eric, what do you think?

ERIC PIANIN:  Well I think one of the things that congress will miss most is Senator Kennedy’s ability to work across the aisle and I think that time and again he demonstrated a willingness to work with people like Senator Orin Hatch who were his ideological opposites and yet he could always find common ground with them. 

I think that point was made many times during the memorial services, the funeral services over the weekend, so I think that is going to be missed.  I don’t think there are many people left in the Senate of that stature who could somehow pull together a really complicated deal like health care reform.

And that raises another question, too, just given how politically charged the atmosphere is up on the hill, how divided the two parties are, how the Democrats are split internally in a lot of different ways among the more moderate members and the more progressive liberal members who have very different views on how to proceed.

It is going to be very hard for any of the leaders to work out a deal that could muster the majority of votes they are going to need to pass legislation this year. 

LAURIE MCGINLEY:  Where do things stand at this point in terms of the Gang of Six Finance Committee bipartisan negotiations?    

MARY AGNES CAREY :  They are going to talk again this week.  As we know, congress returns, both chambers, after the August recess next week so they will be talking about all the things they have been deciding that we just mentioned, the size of the bill, the scope of the bill, the cost of the bill. 

Last week the Congressional Budget Office released some figures about the deficit saying basically we are looking at about $9 trillion of deficits over the next decade.  So I think that deficit number will weigh very heavily on these negotiations because we are talking about a bill in the Finance Committee which is around $900 billion right now.  And so I think that the deficit number will definitely be a point of discussion. 

ERIC PIANIN:  And I think it is clear from the feedback from all these town meetings across the country that those deficit numbers really caught the eye of a lot of voters who had some concerns going in and now it seems as if here is added ammunition for opponents if you will to oppose any kind of really ambitious health care reform package that would cost $900 billion or $1 trillion over the next decade. 

LAURIE MCGINLEY:  But Eric you said it would be hard to pass a bill, but as we have been discussing in the past, there are other options. They could try to pass a slim down bill that is maybe $500 or $600 billion over 10 years.  Or the Democrats may try to go for a big bill through the reconciliation process. What about those options?

ERIC PIANIN :  Well, I think that it would be difficult for the Democrats to put together a really slimmed down, modest bill that would somehow appease the Republicans and maybe attract a few votes from Republicans, especially in the Senate where those votes are really going to be needed, without really alienating the left of the party and there’s growing sentiment among the liberals that, “come on, we won the election.”

President Obama has a major mandate coming into this year. Why are we negotiating a way all the things that we think are so important for healthcare reform to appease an incredibly small faction or fraction of the Republican Party?

On the other hand, there is this alternative that a lot of the Democratic leaders are looking at now called budget reconciliation, which is a process that in the past typically was used to get through big deficit and tax deals.

Occasionally it’s been used for social policy legislation. And the advantage of it is that you can pass something with a simple majority of people present and voting rather than having to muster the 60 vote super majority that you often need to cut off a filibuster and get stuff through. But it’s not a slam-dunk to use that process. It’s very complicated and there are a lot of ways the opponents could foil your efforts.

LAURIE MCGINLEY:  That sounds like a long, involved process. When do you think it will be over?

MARY AGNES CAREY:  Well, I think Christmas. I think it’s going to go on for the fall and go well into December. And let’s not forget another factor here is this potential cut in Medicare payments to physicians. That has to be taken care of because if Congress doesn’t resolve that, they’re going to face a 20-percent pay cut in January.

So I think that’s one of the drivers here, but I think for all the things we’ve talked about here time and time again-how much the bill will cost, how big do you make the bill, how small do you make the bill, where do you get the votes, how do you get the votes, do you use budget reconciliation, do you not-this is going to take a lot of time to resolve and I think we’ll be here well into December talking about this.

LAURIE MCGINLEY:  What are the possibilities it could go into early next year, the first quarter of next year?

MARY AGNES CAREY:  Well, of course that’s always a possibility. I’ve had a people tell me a signing ceremony is a success for the President no matter when they have it, but let’s not forget what happens next year-a mid-term election. You’ve got also in January the State of the Union.

In early February, you’ll have the President has to bring his budget to Congress. Then you’re going to be well into the year and well into those mid-term political discussions. It’s not always true, but often Congress doesn’t do something big as a health care bill during an election year.

ERIC PIANIN:  I think it’s important to keep that mid-term election in mind because the Republicans enter this year really whipped and disorganized and now in a matter of a couple of months, they’ve been able to pull together their party and rally the troops against President Obama’s healthcare initiatives. And they smell success down the road. And typically mid-term elections following a Presidential campaign and election typically benefit the party out of power.

So the Republicans think they have a chance of picking up 25, 30, 40 seats in the House next year, which would give them a major lift and complicate the challenges of the Obama administration going forward.

So my feeling is that if it’s going to happen, it’s going to happen this year. And it may be very complicated. It may go on until Christmas, but I think we’re going to know early this fall sort of where this thing’s headed because there’s going to have to be some test votes in the House and the Senate and we’re finally going to have to see where the votes lie. And if they can’t get a major bill through then they may have to look at a much scaled back approach.

LAURIE MCGINLEY:  Thank you so much. This is Laurie McGinley with Kaiser Health News. Thank you for joining us.

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