50-50 Chance of Compromise on Stimulus Package, Daschle Says; Health Care Remains ‘Sticking Point’

House and Senate lawmakers over the weekend "made little progress" in negotiations on an economic stimulus bill and could not resolve differences over a plan to help unemployed workers purchase health insurance, the Washington Post reports. The Post reports that the dispute "is rooted in philosophical differences" between Republicans and Democrats and that neither party has "found the right formula to bridge the gap" (Kessler, Washington Post, 12/17). Rep. Charles Rangel (D-N.Y.) said that the issue represents "one of the landmines" in the negotiations (Earle et al., CongressDaily, 12/14).

'Firm' Disagreement
House and Senate negotiators met late into the night on Dec. 15 to debate a plan to help unemployed workers purchase health insurance, but Democrats "remained firm" in their opposition to a compromise proposal that President Bush offered last week (Washington Post, 12/17). Bush's plan includes a $30 billion provision to extend unemployment benefits by 13 weeks and provide an "advanceable" 50% tax credit -- up to $294 a month for families -- to help unemployed workers purchase health insurance (Kaiser Daily Health Policy Report, 12/13). Democrats said that the proposal could "ultimately undermine employer-provided insurance coverage" (McKinnon, Wall Street Journal, 12/17). In addition, they said that the plan would establish the "groundwork for the administration's goal of health insurance tax credits for all Americans" (Washington Post, 12/17). According to the Wall Street Journal, "dismantling the employer link to health coverage is a longstanding goal" of Rep. Bill Thomas (R-Calif.), who has proposed a system where individuals would receive tax credits to purchase health insurance. The Journal reports that Thomas considers Bush's compromise proposal a "foot in the door, believing that if the credits work, he'd have a precedent to point to in reaching his greater objective" (Wall Street Journal, 12/17). However, an administration official said on Dec. 16 that the plan would "get benefits to displaced workers quickly" (Washington Post, 12/17). A senior administration official last week also "dismissed any concern over undermining the existing health care system" (Wall Street Journal, 12/17).

Democratic Alternative
Democrats have proposed a rival compromise proposal that would provide a 75% subsidy to help unemployed workers purchase health coverage through COBRA and additional funds to allow states to extend Medicaid coverage to unemployed workers who do not qualify for the program. COBRA, the 1986 Consolidated Omnibus Budget Reconciliation Act, allows unemployed workers to retain health coverage under their former employers' insurance plans by paying 102% of the premiums (Kaiser Daily Health Policy Report, 12/14). Senate Democrats had proposed a bill, which Republicans blocked last month, that would have provided $14.3 billion to extend benefits for unemployed workers by 13 weeks and $12.3 billion to help unemployed workers purchase health coverage through COBRA. The legislation also would have allowed states to extend Medicaid coverage to unemployed workers who do not qualify for COBRA and provided $1.4 billion to boost the federal match to states for Medicaid (Kaiser Daily Health Policy Report, 11/15). Speaking Dec. 13 on FOX News' "Hannity & Colmes," Sen. Evan Bayh (D-Ind.) said, "I think the Democrats -- I think we've got it right in a little more help for the unemployed with their health insurance" ("Hannity & Colmes," FOX News, 12/13). An administration official said the White House would consider a plan that would "go beyond" a 50% tax credit and "boost the amount of money available" to help unemployed workers purchase health insurance, but added that "it is pretty clear they (Democrats) have no room to negotiate on this" (Washington Post, 12/17). White House Press Secretary Ari Fleischer said that the "votes are there" in the Senate to pass Bush's plan, adding, "The only question is, will the Senate act?" (Anderson, Los Angeles Times, 12/15).

House GOP 'Threat'
House Republican leaders have "threatened" to pass on Dec. 18 a "scaled-down version" of an economic stimulus bill that the House passed earlier this year in the event that negotiators do not reach agreement on legislation (Washington Post, 12/17). The House in October passed a GOP-sponsored bill that would increase by $3 billion funding for the Social Services Block Grant program to allow states to provide health insurance to unemployed workers and their families. The bill also contains a number of tax and finance provisions targeted toward businesses and consumers (Kaiser Daily Health Policy Report, 10/29). Last week, House leaders offered a compromise that would include at least $20 billion to extend unemployment benefits by 13 weeks and to help unemployed workers purchase health insurance (Kaiser Daily Health Policy Report, 12/11). The Washington Post reports that the vote could help "pick up some Democratic votes" and place "pressure" on the Senate to pass a similar bill (Washington Post, 12/17). However, Senate Majority Leader Tom Daschle (D-S.D.) said, "That would be counterproductive. It would be nothing more than a political ploy." CongressDaily reports that Sens. John Breaux (D-La.) and Zell Miller (D-Ga.) have said they would consider the proposal (CongressDaily, 12/14).

'50-50 Chance'?
Daschle on Dec. 16 predicted an "even chance" that lawmakers would pass an economic stimulus bill this year (AP/Baltimore Sun, 12/17). "I believe that there is at least a 50-50 chance that we get a compromise this week," he said on ABC's "This Week" (Reuters/New York Post, 12/17). However, congressional leaders from each party over the weekend "accused the other side of stalling for political gain" (AP/Baltimore Sun, 12/17). In a Dec. 15 radio address, Bush "turned up the heat" on Senate Democrats to "take quick action" and pass an economic stimulus bill that he could support (Kirchhoff, Boston Globe, 12/16). Daschle on Dec. 15 "fired back" at Bush and said that legislation supported by Republicans would not provide "enough toward boosting unemployment and health coverage" for unemployed workers (Burger, New York Daily News, 12/16). On NBC's "Meet the Press," House Minority Leader Dick Gephardt (D-Mo.) said, "House Republicans have been out of lockstep with everybody else. Everybody else ... said that we would be for unemployment compensation, health insurance for the unemployed ... We could have done that in 10 minutes." House Majority Leader Dick Armey (R-Texas) responded that "two out of every three Americans polled believe that [Republicans] have the right plan, that it should not be the unemployment compensation, health care benefits plan of the Democrats" ("Meet the Press," NBC, 12/16).

Editorials
A Dec. 17 Los Angeles Times editorial states that the economic stimulus bill proposed by Senate Democrats represents the "better deal" for the nation. The "infusion" of funds that the legislation would provide states through Medicaid would "help prevent the predicted cuts in state health care funding," the editorial points out, adding that "by distributing money immediately to the nation's battered hospitals, doctors and patients," the legislation would likely improve the economy more than the House GOP bill (Los Angeles Times, 12/17). Meanwhile, a Wall Street Journal editorial warns that Daschle "wants to deny ... any tax cuts that might actually stimulate" the economy in favor of "loading up" provisions for unemployed workers, concluding, "And it looks as if he's going to prevail" (Wall Street Journal, 12/17).