1107806152_4182248e16_mIn what could be a strange and cruel irony, today’s special election to fill the late Senator Kennedy’s seat may deal a damaging blow to the prospects of passing a the bill that would culminate Kennedy’s life’s work in the Senate.  A surging Republican State Senator Scott Brown has pulled even (or in some polls slightly ahead) of state Attorney General Martha Coakley.  Brown would provide the 41st vote against reform and prevent an amended bill from being taken up in the Senate.

Procedurally, a Brown victory gives Congressional leaders several options to get across the finish line: Pass the Senate bill without amendment in the House, get a compromise done before Brown is seated, or go back and do a new bill via budget reconciliation.  Each of these paths is possible, but has some pitfalls.

In the first scenario: It’s unclear that the House can drum up 218 votes for the Senate bill, with possible defections coming from both the right and left of the Democratic caucus. (more on House vote count below). A  variation on this theme that could be more palatable to House members would be to pass both the Senate bill and a reconciliation package amending that bill at almost the same time.  The reconciliation package would reflect many of the agreements currently being negotiated between the House and the Senate (though some could potentially be beyond the scope of what is permissible through the reconciliation process).

Assuming they can conclude a deal and get a CBO score in time, passing a House-Senate compromise would be possible, but rushing the bill through ahead of Brown’s seating could be politically controversial.  Will Senators such as Nelson, Lieberman and Lincoln, who have been hardest to win over to supporting reform, remain supportive if Brown wins?  A variation on this theme might termed the ‘Franken scenario.’ If the race ends in a photo finish, a recount and possible subsequent legal action could take weeks or even months, giving Congress more than enough time to complete its work.

The least likely scenario appears to be starting over with reconciliation. This would require a substantial rewrite of the bill, taking time that Congress is eager to devote to other issues.

Counting noses in the House

With all roads to victory requiring another vote in the House, securing 218 votes in that chamber has become a critical task for House leadership and the White House, and should be the number one priority for grassroots supporters of reform.

When the House passed its version of reform in August, the victory margin was a mere three votes. Now, with one vacant Democratic seat and one Republican who is unlikely to provide the margin of victory, passage in the House requires persuading all of the anti-abortion Democrats to vote yes on a bill that contains the Nelson rather than the Stupak language on abortion, or persuading some members who voted no the first time to vote yes. This task could be made more difficult if a Brown upset in Massachusetts scares off more conservative members of the caucus—even perhaps some who voted yes the first time.

Progress on getting to Yes

Against an uncertain political backdrop, House and Senate negotiators appear to be making major progress on reaching agreement on a final bill.  They struck a deal early Friday morning on the tax treatment of health benefits that would raise the threshold at which the tax kicks in, make adjustments for plans that are high cost for reasons other than the scope of benefits, and provide additional temporary protection for plans negotiated through collective bargaining.

The revised provision is projected to bring in $60 billion less revenue, a hole that negotiators are trying to fill, in part, by taking a tougher line on cost containment from health industry groups. This tactic is yielding mixed results – the biotech industry in Massachusetts, for instance, is threatening to endorse Brown for Senate if protections for it in the bill are watered down.  While making adjustments to the health insurance tax was a key priority for House negotiators as well as unions and other progressives, the lost revenue will complicate efforts to make progress on another key issue—improving the affordability provisions in the Senate bill.

Although details haven’t emerged yet, the debate over whether Exchanges should be run from Washington with a state option or from the states, with a national fallback appears to be resolving productively. Reports indicate that the bill may still give states the right of first refusal over whether to run an Exchange, but establish more clear and uniform requirements for those that do.

Still to come: How to finance the elimination of the Part D doughnut hole, and a significant dispute over the extent to which immigrants will be discriminated against in reform.  There, the two issues in play are whether states would receive federal funding for covering legal immigrants under Medicaid, and whether undocumented immigrants would be barred from the Exchange even if they pay entirely with their own money.

Most of the other big issues—such as what employers would required to contribute, and how the abortion language will be structured—are expected to more closely track the Senate bill.  Whether the individual mandate will track the stricter House version or the more porous model included in the Senate bill, should depend on whether real affordability improvements are made in the bill.  A worst-of-both-worlds resolution would be a tough mandate and significant penalties coupled with inadequate affordability protections.

–Michael Miller, director of strategic policy

photo courtesy of croatry at flickr creative commons