Klein: Health care reform 'endgame' afoot

Ezra Klein, blogger for the Washington Post, appears to be a conduit for the Obama administration to both Congress and the American people as he apparently has gotten information on what the White House wants us to believe they are thinking regarding how they are going to rescue health care reform.

There are wheels turning within wheels here, so it is as important to note what isn't being said as much as what message the White House wants Klein to be sending.

According to Klein there are two camps in the White House on what kind of reform package the president will actually put down on paper and highlight in his joint session speech next Wednesday:

The first camp could be called "universal-lite." They're focused on preserving the basic shape of the bill. They think a universal plan is necessary for a number of reasons: For one thing, the insurance market regulations don't work without universality, as you can't really ask insurers to offer standard prices if the healthy and the young don't have to enter the system. For another, it will be easier to change subsidies or improve the benefit package down the road if the initial offerings prove inadequate. New numbers are easier than new features. Creating a robust structure is the most important thing. This camp seems to be largely headed by the policy people.

The second camp is not universal at all. This camp believes the bill needs to be scaled back sharply in order to ensure passage. Covering 20 million people isn't as good as covering 40 million people, but it's a whole lot better than letting the bill fall apart and covering no one at all. It's also a success of some sort, and it gives you something to build on. What that sacrifices in terms of structure it gains in terms of political appeal. This camp is largely headed by members of the political team.

Both camps accept that the administration's proposal will be less generous than what has emerged from either the HELP or House Committees. The question, it seems, is how much less generous.

For the administration to admit that there is a split into two camps probably means that there are not only more than two but that reform is causing the Obama administration to slowly unravel. There seems to be a rift between the far left, and the practical left, with the ideologues more numerous, but lacking the clout of the Rahmbo wing in the administration.

It is also significant that the ideologues are still pushing a strong public option. I referred to the public option as a "Zombie" on my radio show because it's still walking around, not realizing it has been killed. The numbers are just not adding up in the Senate for any kind of a public option, but it continues to be pressed because the ideological base of the Democratic party refuses to sign off on any reform that doesn't include it.

The bottom line is that it is a very difficult uphill climb for Obama to achieve any kind of legislative success on health care reform. At the moment, he just can't get there from here. The practical left realizes that but will have an enormously difficult time convincing the ideologues to drop the public option and go for more modest reforms.

A couple of thing are certain; Obama going before Congress means that the process will not be shut down, that there will be bills emerging from both the House and the Senate, that there will almost certainly be votes on those bills, and that passage in the House of a more liberal bill is almost assured.

The senate process apparently hinges on one lone senator - Republican liberal Olympia Snowe - who has taken it upon herself to negotiate for the entire party:

The answer appears to hinge on Sen. Olympia Snowe. "I'm a Snowe-ite," joked one official. Her instincts on health care have proven quite a bit more liberal than those of many Democrats. In the Gang of Six meetings, she joined Sen. Jeff Bingaman in focusing on affordability and coverage - putting her, in practice, somewhat to the left of Conrad and Baucus. The problem is that Snowe is scared to be the sole Republican supporting this bill, not to mention the Republican who ensures the passage of this bill. The reprisals within her caucus could be tremendous.

If Snowe drops off the bill, using the budget reconciliation process will probably be a necessity. The bill then goes through Sen. Kent Conrad's Budget Committee, giving him much more power over the product. The absence of any Republicans repels at least a couple of conservative Democrats. Passage becomes much less certain, which means a scaled-back bill becomes much more likely. This is the irony of the health-care endgame: The bill becomes much more conservative if it loses its final Republican.

I don't think Snowe will still be a Republican by the end of the year - especially if she is responsible for the passage of the kind of reform being contemplated. Even on judges, she has become an unreliable vote. The question is going to be asked why she didn't leave sooner.

At this point, it appears the senate will use reconciliation to pass their version of health care - a considerably more "conservative" version than will be passed by the House. At that point, the real headknocking will begin and we'll see some blood on the floor in the Democratic caucus. I'd say the chances are no better than 60-40 for any kind of bill by the end of the year. I base this on the fact that the president has failed to show leadership on the issue to this point, and expecting him to suddenly acquire the skills to ram this thing through Congress when he has shown no such ability previously is taking a lot on faith.

A couple of other things.

1. Cost "savings" in any White House package will be nothing more than smoke and mirrors. They will try to sell their version of reform as almost revenue neutral through dishonest accounting, hiding some costs in out years of the budget, as well as grossly exaggerating the dollar amounts that would be saved in specific provisions. Any CBO estimates will be ignored. Even in a scaled down version of reform, it will be the only way to fulfill Obama's promise of not signing a bill that adds to the deficit.

2. The chances of the White House and the Democratic party imploding over reform are fading as Obama becomes more engaged on the issue. Differences will be papered over to the extent that they can because all sides realize the enormous stakes involved. The president's defenders may dismiss the idea that his administration would be castrated by a failure to vote out a reform bill, but  the rest of Obama's agenda is in deep peril unless he can deliver. He is asking his party to go far, far out on a very thin limb. There are enough vulnerable members who would likely not forget being left to hang if the president can't get anything done.