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“ObamaCare Cannot be Passed through Reconciliation”

Micheal E. Hammond, former General Counsel of the U.S. Senate Steering Committee, is one of the preeminent experts on U.S. Senate procedure. Here is what he says about passing ObamaCare via reconciliation.

February 22, 2010, 10:00 a.m. EST
MEMORANDUM
FROM: Michael Hammond
RE: New Obama Health Care Draft

As of this hour, there is an 11-page document on the White House web site outlining Obama’s newest version of ObamaCare. Before laying out a summary of the most recent Obama proposal, I would like to make a couple preliminary points:

PRELIMINARY POINT #1: OBAMACARE CANNOT BE PASSED
THROUGH RECONCILIATION

There are several reasons for this:

First, you cannot get the bill through the House
without “fixing” abortion, and you cannot do
abortion on reconciliation in the Senate.

Cao will not be the deciding vote. This means that,
if absolutely nothing has changed, the current House
vote count on the House bill is 217-216. But things
have changed:

-Public support for ObamaCare has continued to
sink through the floor.

-Between 10 and 12 “yes” votes would vote against
the Senate bill based on its abortion language.

-Many House Democrats are still uncomfortable
about the “Cadillac tax.”

But, under the Byrd Rule (which prohibits
reconciliation language with budgetary implications
which are only ancillary to the policy
ramifications), you can’t fix abortion on
reconciliation. We have asked Senate parliamentarian
Alan Frumin concerning our ability to offer abortion
amendments to reconciliation, and he has adamantly
stood by the position that this is not allowed. And,
to get around the Byrd Rule, the Senate requires 60
votes. Without an abortion “fix,” this bill cannot
pass the House.

Furthermore, the new provision to allow the
government to set insurance rates is also a violation
of the Byrd Rule.

Also, the $60 billion union “fix” requires a $62
billion offset. And the additional substantial costs
of Obama’s proposal would also have to be offset.
Assuming they take the entire $2.5 trillion package
and pass the whole thing through reconciliation, they
can pay for some of these costs with the phony $124
billion budget “surplus” contained in the Senate-
passed bill. The downside of this is that the
insurance “reforms” (preexisting conditions, limits
on copayments, etc.) which form the core of the bill
will be thrown out under the Byrd Rule.

But, assuming they are using reconciliation for
nothing more than a “fix,” they have to come up with
a new set of offsets. The offsets on the Senate bill
are unavailable to them. And it’s not like it has
been easy to come up with the offsets they have.

In order to comply with the 1974 Act, these offsets
would have to make the reconciliation bill compliant
with the reconciliation instructions during the first
five-year window and revenue-neutral in every year
thereafter. Thus far, NO VERSION OF THE LEGISLATION
HAS BEEN ABLE TO COMPLY WITH THIS REQUIREMENT, EVEN
USING THE PHONY ACCOUNTING GIMMICKS.

Incidentally, Pelosi is now demanding that the Senate
act on reconciliation before House members are forced
to put their necks on the line again. But a Senate-
initiated tax bill is unconstitutional, and would be
“blue slipped” in the House.

Incidentally, the 1974 Act allows an unlimited number of amendments to be offered, without debate, at the end of the 20-hour statutory time for debate. My recommendation would be that, if Senate Democrats decide to invoke the “nuclear option” and throw out the Senate rules in order to do reconciliation, that the first ten amendments be the pro-gun agenda.

Finally, the Senate has failed to comply with the reconciliation instructions that mandated reporting by October 15. And, although they may get a pass on this, the production of a new concurrent budget resolution will extinguish this possibility unequivocally.

PRELIMIARY POINT #2:

What bothered the American people, as much as anything, was the perception that the Senate’s ObamaCare bill was produced by fraud, secrecy, corruption, bribery, and extortion. Rather than improve the process, the White House has actually made it more corrupt by –-

-threatening to fraudulently take a process
restricted SOLELY to deficit reduction and using
it to pass the biggest deficit engine in human
history; and

-refusing to release legislative language, in the
hope that controversies can be kept secret.

WHAT THE NEW OBAMA PROPOSAL WOULD DO

The newest Obama proposal consists of the Senate bill, tweaked in the following ways:

-Elimination of Ben Nelson’s Nebraska bribe, in favor
of more generalized federal Medicaid aid to states
which Nelson was demanding.

-Taxes:

-increase of the “Cadillac tax” threshold from
$23,000 to $27,500;

-increase of the Senate tax on “high-income”
households by 2.9% for income from interest,
dividends, annuities, royalties, rents, and
trade and business income;

-increase of pharmaceutical taxes from $23
billion to $33 billion;

-miscellaneous “loophole” closings dealing with
biofuels and “unjustified tax shelters.”

-An unspecified “series of changes” in the long-term
care Ponzi scheme created by the bill.

-Delay in the $67 billion assessment on health
insurers -– and modification of the $20 billion fee
on medical devices.

-Full phase-out of the “donut hole” by (1) initially
offering a $250 Medicare rebate to those who hit the
“donut hole,” and (2) claiming to close the hole
entirely by 2020 by phasing down the coinsurance
requirement to the standard rate applicable to
non-donut hole prescription drug expenditures.

-Increase the Senate’s $8.5 billion for “community
health centers” (theoretically benefiting Planned
Parenthood and ACORN-type groups) to $11 billion.

-Destruction of “grandfather clauses” allowing you to
“keep the coverage you currently have” by adding a
whole bunch of new mandates on the policies “you
currently have,” including:

-coverage of dependents to age 26;

-federally mandated changes in appeals processes;

-rescission prohibitions;

-limits on copayments and deductibles;

-bans on preexisting conditions;

-mandated review of rates, conducted by states
but in accordance with oversight by HHS.

-Increase of the subsidies for families earning below
$55,000.

-A tweak of the penalties which Americans would have
to pay if they refused to purchase government-
mandated insurance by, inter alis, slightly lowering
the Senate’s flat-dollar penalties by $55 (indexed by
inflation) -– and also tweaks the formula for
determining penalties imposed on employers.

-Creation of a new Health Insurance Rate Authority to
review rates –- and oversee state reviews in a way
that would effectively give the federal government
regulatory control over insurance rates.

-Creation of a series of cost-control measures,
including:

-a database on sanctions which have been
imposed;

-a registration requirement for billing agencies;

-broader access to a database concerning “quality
control and peer review organizations”;

-liability for Medicare administrative
contractors who submit bills on behalf of non-
eligible providers;

-strengthened standards for community mental
health centers;

-limits on bankruptcy protection for “fraudulent
health care providers”;

-expedited analysis of claims data;

-criminal penalties for sale of private Medicare
beneficiary information;

-a study on the benefits of the medical use of
universal product numbers;

-“profiling” of Medicaid prescription drug use;

-tightened review of and cuts to Medicare
Advantage;

-removal of current statutory limits on random
medical review of certain Medicare payments;

-establishment of a Medicare/IRS datamatch;

-an expansion of FTC enforcement authority to
limit payments for limiting development and
marketing of generic drugs

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