Obama Pressed to Get Health-Care Plan Back on Track (Update1)

By Kristin Jensen and Edwin Chen

July 13 (Bloomberg) -- President Barack Obama, after a week of diplomacy abroad, now faces the possible derailment of his top priority at home, the overhaul of the health-care system.

The Senate Finance Committee has failed to come up with a bill, and Chairman Max Baucus is under pressure from other Democrats to curb his efforts to reach out to Republicans. While House leaders are scheduled to unveil legislation today that will include a surtax on the wealthiest Americans, they were forced to delay a draft bill last week that drew fire from the White House and dozens of their own members.

Lawmakers, faced with Obama’s August deadline for legislation, say the president must get more involved. So far, he’s kept his hands off the process, in contrast to the approach taken by former President Bill Clinton and wife Hillary in their doomed effort to revamp health care in 1993.

“At some point, the White House is going to have to weigh in,” said Senator Tom Harkin, an Iowa Democrat and member of the Health, Education, Labor and Pensions Committee, which is crafting one version of the legislation. “The heavy lifting will come when we get to the pay portion. That’s when the White House is going to have to spend some political capital.”

Obama and his aides say they learned from the mistakes of the Clintons, who handed Congress a 1,342-page plan drawn up behind closed doors. This time, the president left Congress with the task of drafting a measure to reduce health-care costs and expand coverage to the nation’s estimated 46 million uninsured.

‘Be Patient’

“This is the way that everyone who went through the last battle recommended,” said Donna Shalala, who was secretary of Health and Human Services for Clinton and now advises Obama’s White House. “People just have to be patient.”

Obama today plans to meet with Baucus and House Ways and Means Committee Chairman Charles Rangel, a Democratic congressional aide said. This morning, the president vowed that the health-care overhaul would succeed.

“For those naysayers and cynics who think that this is not going to happen, don’t bet against us,” Obama said at the White House. Last week, he told reporters in Italy that the deadline to get a measure voted out of each chamber isn’t “do or die.”

Industry Agreements

The White House points to progress in winning concessions from industries. Last week, Vice President Joseph Biden appeared with hospital industry leaders including the chief executive officers of Nashville, Tennessee-based HCA Inc. and Franklin, Tennessee-based Community Health Systems Inc. after getting them to pledge $155 billion in cost savings.

“We have never been as close as we are today,” Biden said on July 8. “And things remain on track.”

In Congress, more doors closed than opened last week. Obama’s budget chief, Peter Orszag, on July 8 delivered a letter to House lawmakers that said their legislation didn’t go far enough to fix the system.

The next day a group of House Democrats told leaders the proposal is too expensive. The leaders postponed the release of the latest draft of their legislation as a result of a letter from the Blue Dog Coalition saying the bill was too costly.

House Legislation

The House plans to unveil legislation that would impose higher taxes on couples earning more than $350,000 to pay for health care, Rangel said last week. That’s an option also under consideration by the Senate Finance Committee.

“This is the problem when you spend over $1 trillion,” said Representative David Camp, a Michigan Republican. “You have to raise massive new taxes that, despite unemployment nearing 10 percent, hit small businesses and their employees hard.”

Baucus, a Montana Democrat, is trying to forge an agreement on the finance panel after pressure from his party to drop plans to fund the overhaul by taxing the most-expensive employer-provided health benefits. Labor unions oppose the idea.

Grappling over how to pay for the bill and how much of a role government should play in insurance, Senate Democrats are increasingly saying they want Obama at the table. His distance may lead to the same result as 15 years ago, some say.

“There is a fear of that,” said Senator Russell Feingold, a Wisconsin Democrat.

‘Quite Happy’

Rahm Emanuel, White House chief of staff, countered in an interview that some senators are “quite happy about them doing their job, and the president doing his job.”

Emanuel himself has gotten more engaged, visiting Capitol Hill at least twice last week. He met with House Democrats to assure them Obama was in favor of a government-sponsored insurance plan to compete with industry players such as Hartford, Connecticut-based Aetna Inc.

Emanuel told the Wall Street Journal the goal was to “keep the private insurers honest” and said “the goal is non-negotiable; the path is.”

The comments were criticized by Democrats who consider the public option crucial; Obama issued a statement from Moscow saying the option is “one of the best ways to bring down costs.”

The Senate probably won’t have enough time to vote before its recess, said Senator Kent Conrad.

“We can get it out of the Finance Committee,” the North Dakota Democrat said in an interview with Bloomberg Television’s “Political Capital with Al Hunt,” which aired during the weekend. “I don’t think we’ll be through the floor during this work period. I think that’s too big a lift.”

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net ; Edwin Chen in Washington at Echen32@bloomberg.net

Last Updated: July 13, 2009 13:55 EDT

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