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Profile: Max Baucus
Max Baucus was a participant or observer in the following events:
Detroit’s Big Three CEOs testify for more than two hours in a hearing before the Senate Banking Committee, using dire language to describe the financial straits that are threatening to bankrupt their companies. Chrysler LLC CEO Robert Nardelli says that without immediate help, his company could be forced into bankruptcy. “We cannot be confident that we will be able to successfully emerge,” he says. General Motors (GM) Corporation’s CEO, Rick Wagoner, adds that the failure of the industry would be “catastrophic,” causing the loss of 3 million jobs. Ford Motor Company CEO Alan Mulally tells the committee that if one of the automakers failed, the whole industry could be disrupted. “You’re here to get life support,” says ranking minority member Richard Shelby (R-AL). “Why aren’t you making money? How would you pay this money back?”
Financial Losses Worse than Originally Believed - The automakers say that their financial losses were worse than they at first thought, with Nardelli testifying that his company ran through $5 billion this year, including $3.3 billion in the third quarter, with only $6.1 billion on hand to last through the end of the year. Wagoner says that his firm would spend $15 billion by the end of 2008, and another $10 billion in 2009. Wagoner wants $10-$12 billion for GM, while Mulally and Nardelli want $7 billion for their respective corporations. Both Wagoner and Nardelli say that their companies will run out of money in a matter of months. One senator asks if the automakers would be willing to make monthly status reports on cash flow if the Senate agrees to the loan. Nardelli offers to take $1 a year as salary compensation; neither Mulally nor Wagoner did not make the same commitment. Nardelli also committed to Chrysler’s agreeing to consider new fuel efficiency standards. “We’d be open to any requirements,” he says.
Already Cut Costs, Moved to Restructure - The automakers testify how aggressively they have moved to cut costs, restructure, and revamp their product lines to be more competitive with foreign rivals, and say their companies were making progress until they were derailed by the credit crisis that has stalled the global economy and dried up consumer confidence. Auto sales are at their lowest level in at least 15 years, they say, dropping nearly 32 percent in October. As a testament to the seriousness of their financial crisis, the three automakers assure the committee that they would spend the requested $25 billion in the United States; however, they refuse to say that they would not come back for further bailout funding. Wagoner testifies that GM has cut $9 billion in costs since 2005. He touts labor agreements with the United Auto Workers that will further cut wage and health care expenses, and says that improvements in designing and manufacturing vehicles as well as developing fuel-saving technologies will also assist in reining in manufacturing costs. “As a result of these and other actions, we are now matching—or besting—foreign automakers in terms of productivity, quality and fuel economy,” he says. Wagoner assures the committee that the company was moving quickly to right its business. “We have more work to do in all aspects of our business,” Wagoner said. “This is hard stuff.” He said that GM would use some of the money to pay suppliers and pay for part of the Chevrolet Volt program.
UAW President Grilled - In his own testimony, United Auto Workers President Ron Gettelfinger ranks the relative financial health of the Big Three as Ford being the most solvent, with Chrysler at number two, while General Motors may be at or near insolvency by the end of 2008. The UAW chief faces tough questions as well, as Senator Bob Corker (R-TN) pushes back on union work rules and the jobs bank. “I understand Mr. Gettelfinger has done a good job on behalf of all workers not working and being paid,” Corker says, calling the practice unacceptable in other businesses.
Disagreement among Democrats, Republicans - Democrats support a plan to subtract $25 billion from the $700 billion Wall Street bailout package, known as the Troubled Asset Recovery Program (TARP), while Mitch McConnell (R-KY) has joined the White House call to speed up money previously authorized for the automakers through an Energy Department loan program. “To basically change the qualifications of the money that we have already appropriated is a sound way to go forward,” said McConnell. House Democrats and many environmentalists oppose the use of the Energy Department loan, since it is approved only for projects that lead to significant fuel efficiency improvements. Carl Levin (D-MI) says that in order to get a bill, Republicans must write language that explains how they would quickly get $25 billion from the Energy Department program to automakers. But Levin is realistic about the long road they face. “Progress: No. Effort: Hell, yes. Big-time effort,” he says. “We haven’t seen progress and won’t see progress until we see the language from those who want to see the [Energy Department] funds.” Debbie Stabenow (D-MI) says she will “very reluctantly” agree to reworking the retooling loans if that was the only way to get help now. Other Senate allies of the auto industry, including Claire McCaskill (D-MO) and Ken Salazar (D-CO), opposed the proposal to shift $25 billion from TARP. “I’m not sure we want to throw good money after bad,” Salazar says. Max Baucus (D-MT), chairman of the Senate Finance Committee, says it will be nearly impossible to make a deal before Congress adjourns for the year later this week. “Reading the tea leaves, I just don’t think it’s going to happen,” Baucus says. “There’s not enough time given the opposition of the White House and opposition of the other side of the aisle.” Corker echoes the belief that nothing would get done this year, calling the hearings “the first step in a loan application.”
Further Hearings Slated - The CEOs will return to Capitol Hill for a hearing before the House Financial Services Committee on Tuesday, November 25. [Detroit News, 11/19/2008]
Entity Tags: United Auto Workers, Ford Motor Company, Debbie Stabenow, Chrysler, Carl Levin, Alan Mulally, General Motors, Senate Banking Committee, Max Baucus, Rick Wagoner, Robert Nardelli
Timeline Tags: Global Economic Crises
The Senate Finance Committee, chaired by Senator Max Baucus (D-MT), holds a series of hearings about health care reform, on April 21, May 5, and May 12. In all, 41 experts testify, but none of them advocate the so-called “single-payer” form of health care, a system which essentially has the government providing health care insurance instead of private insurers—“Medicare for all Americans,” as some characterize it. [Politico, 5/5/2009; Single Payer Action, 5/21/2009] The experts are from organizations like America’s Health Insurance Plans (AHIP), the health industry’s largest lobbying firm, and health insurers Blue Cross and Aetna. Some of the invited organizations employ former Baucus staff members. [Rolling Stone, 9/3/2009] Baucus says that single-payer is “off the table,” and will not be considered. [TPM Cafe, 5/5/2009]
Health Industry Heavy Donors to Baucus - The nonpartisan organization Consumer Watchdog has reported that Baucus, one of the Senate’s most important architects of Congressional health reform, has accepted more campaign contributions from the health insurance and pharmaceutical corporations than any other current Democratic member of the House or Senate. During the last two election cycles, he received $183,750 from health insurance companies and $229,020 from drug companies. [Single Payer Action, 5/21/2009]
Protesters Disrupt Hearings - Protesters disrupt the hearings by standing up and shouting criticisms of the committee over its failure to bring single-payer into the discussion. Eight protesters are led out of the hearing room and later arrested. At one point, Baucus asks for more police officers to enforce security. The protests are organized by Healthcare Now, Physicians for a National Health Program, and Single Payer Action, all of whom support a single-payer, government-run health care system. One protester calls the hearings nothing more than “political theater.” For his part, Baucus assures the audience, “I want you to know I care deeply about your views.” [Politico, 5/5/2009] The eight protesters spend around seven hours in jail. One, Dr. Margaret Flowers, later recalls: “It’s funny, the policemen were all telling us their horror stories about health care. One was telling us about his mother who was 62 and lost her job and was uninsured, waiting to get Medicare when she was 65.” The protesters are sentenced to six months’ probation. Baucus later admits that not allowing single-payer advocates to participate in the hearings was a mistake; he will eventually agree to meet with a group of those advocates (see June 3, 2009).
Single-Payer Never Considered - In September, Rolling Stone reporter Matt Taibbi will note that Baucus, like President Obama and other prominent Democrats, has supported single-payer insurance in theory, but asserts such a proposal would never get through Congress. Journalist Russell Mokhiber, who advocates for single-payer as a member of Single Payer Action, later says that the Obama administration and Congressional Democrats made an agreement with health industry leaders months before considering legislation for health care reform that single-payer would not be part of their proposals. In return, Mokhiber will say, they asked the industry not to oppose their reform efforts, a request that the industry has generally not honored. [Rolling Stone, 9/3/2009]
Entity Tags: Aetna, Healthcare Now, Consumer Watchdog, Barack Obama, America’s Health Insurance Plans, Single Payer Action, Blue Cross, Russell Mokhiber, Margaret Flowers, Matt Taibbi, Senate Finance Committee, Max Baucus, Obama administration, Physicians for a National Health Program
Timeline Tags: US Health Care, Domestic Propaganda
Max Baucus (D-MT), the chairman of the Senate Finance Committee, meets with advocates of “single-payer,” or government-run health insurance. Baucus recently chaired hearings on health care reform which excluded single-payer advocates (see April 21-May 12, 2009). He meets with representatives of the advocacy group Physicians for a National Health Program (PHNP), two Harvard University medical professors, a medical school dean, and representatives of the California Nurses Association. One of the participants, Dr. David Himmelstein of PHNP, says: “Bowing to mounting pressure from single-payer advocates around the nation, Senator Baucus has asked to meet with some representatives of the single-payer movement.… We have no illusions that our discussions alone will persuade Senator Baucus to back a single-payer bill. But the meeting is a clear indication that demonstrations and activism can move even our money-corrupted political culture.” Some polls show that a majority of Americans back single-payer insurance, as do doctors and health economists. [Single Payer Action, 5/31/2009]
Wendell Potter (r) being interviewed by Bill Moyers (l). [Source: PR Watch (.org)]Former health care executive Wendell Potter, who left the insurance giant Cigna after fifteen years, appears on “Bill Moyers’ Journal.” He was formerly the head of corporate communications before he resigned his position, a post he calls “the ultimate PR job.” He says he was not forced to leave the company, and was extremely well compensated for his duties. He left after realizing that the health care industry is using underhanded and hurtful tactics to undermine the drive towards health care reform. He never went to his bosses with his observations because, he says, “for most of the time I was there, I felt that what we were doing was the right thing. And that I was playing on a team that was honorable. I just didn’t really get it all that much until toward the end of my tenure at Cigna.”
Health Care Expo Changed His Perceptions - In June 2007, Potter recalls, his perceptions were drastically changed by his visit to a health care exposition in Wise, Virginia (see June 2007).
Changing Plans - The industry shifted from selling primarily managed care plans, he says, to what they call “consumer-driven plans.” Despite the name, they are health care plans with high deductibles and limited coverage.
'Highlight Horror Stories' - Moyers shows Potter a copy of an “action plan” devised by America’s Health Insurance Plans (AHIP), the industry’s trade association. In large gold letters, the plan tells lobbyists and industry representatives to “Highlight horror stories of government-run systems.” Potter says that AHIP and other industry representatives try to paint government-run health care as socialism, and as inevitable failures. “The industry has always tried to make Americans think that government-run systems are the worst thing that could possibly happen to them,” he says, “that if you even consider that, you’re heading down on the slippery slope towards socialism. So they have used scare tactics for years and years and years, to keep that from happening. If there were a broader program like our Medicare program, it could potentially reduce the profits of these big companies. So that is their biggest concern.” Moyers also notes that the AHIP plan targets the film Sicko, a 2007 documentary by leftist filmmaker Michael Moore that portrayed America’s health care industry in a dismal light. AHIP’s action plan is to “Position Sicko as a threat to Democrats’ larger agenda.” Potter says that was an effort to discredit the film by using lobbyists and AHIP staffers “to go onto Capitol Hill and say, ‘Look, you don’t want to believe this movie. You don’t want to talk about it. You don’t want to endorse it. And if you do, we can make things tough for you.’” If they did, AHIP would retaliate by running negative ads against the lawmakers in their home districts or other electoral punishments. AHIP focused strongly on the conservative Democratic Leadership Council. Another tactic, as delineated in the memo: “Message to Democratic insiders. Embracing Moore is one-way ticket back to minority party status.” Moyers says that AHIP attempted to “radicalize” Moore and portray him as an extremist who could not be believed. Many politicians used AHIP talking points in discussing Moore and his film. “So your plan worked,” Moyers observes. Potter agrees: “It worked beautifully.” The lesson that was lost from Moore’s film, Potter says, was that Americans “shouldn’t fear government involvement in our health care system. That there is an appropriate role for government, and it’s been proven in the countries that were in that movie.”
Conservative Counter-Strategy - Moyers then displays a memo from Republican strategist Frank Luntz, who in the spring of 2009 wrote a strategy memo for health care reform opponents. The memo reads in part: “First, you have to pretend to support it. Then use phrases like, ‘government takeover,’ ‘delayed care is denied care,’ ‘consequences of rationing,’ ‘bureaucrats, not doctors prescribing medicine.’” He then shows film clips of House Minority Leader John Boehner (R-OH), Senate Minority Leader Mitch McConnell (R-KY), Senator Jon Kyl (R-AZ), and others using Luntz’s talking points in discussions on the floors of Congress. Potter says that many conservatives—Democrats as well as Republicans—“are ideologically aligned with the industry. They want to believe that the free market system can and should work in this country, like it does in other industries. So they don’t understand from an insider’s perspective like I have, what that actually means, and the consequences of that to Americans. They parrot those comments, without really realizing what the real situation is.” He notes that Representative Zach Wamp (R-TN), who grew up very near Potter’s childhood home in Chattanooga, told reporters that half of America’s uninsured don’t want health care, they would rather “go naked and just take the chance of getting sick. They end up in the emergency room costing you and me a whole lot more money.” Potter notes that the word “naked” is an industry term for people who choose not to buy health insurance. He calls Wamp’s comment “ridiculous” and “an example of a member of Congress buying what the insurance industry is peddling.” Moyers cites conservative Democrat Max Baucus, the chairman of the Senate Finance Committee, as another politician central to the health care reform process who is heavily influenced by corporate lobbyists—two of whom used to work on his own Senate staff. Potter says: “[I]t does offend me, that the vested special interests, who are so profitable and so powerful, are able to influence public policy in the way that they have, and the way that they’ve done over the years. And the insurance industry has been one of the most successful, in beating back any kinds of legislation that would hinder or affect the profitability of the companies.”
Fierce Opposition to Public Option - The “public option,” the idea that the government would extend a non-profit, government-run health care alternative for citizens, is fiercely opposed by the health care industry. Potter says the reason why is “[t]he industry doesn’t want to have any competitor. In fact, over the course of the last few years, has been shrinking the number of competitors through a lot of acquisitions and mergers. So first of all, they don’t want any more competition period. They certainly don’t want it from a government plan that might be operating more efficiently than they are, that they operate.” Government programs such as Medicare and the Veterans Administration’s medical providers are far more efficient than private, for-profit health care providers, and the industry fears that having to compete with such a program will slash their profits. Medical companies will do whatever it takes to keep their profit margins—and shareholder returns—above a certain threshold. They will deny more claims, kick more people off their rolls, purge employer accounts, whatever it takes. Potter, evidently bemused, says, “You know, I’ve been around a long time. And I have to say, I just don’t get this. I just don’t understand how the corporations can oppose a plan that gives the unhealthy people a chance to be covered. And they don’t want to do it themselves.… I’m a capitalist as well. I think it’s a wonderful thing that companies can make a profit. But when you do it in such a way that you are creating a situation in which these companies are adding to the number of people who are uninsured and creating a problem of the underinsured then that’s when we have a problem with it, or at least I do.” A public option would help “keep [health care corporations] honest,” he says, and they would inevitably lose profits.
Predictions - Right now the industry is primarily involved in what Potter calls a “charm offensive,” where it is attempting to give the perception that it, too, is for health care reform. But once Congress begins putting out specific legislative language, the industry and its flacks will begin attacking specific provisions. Moyers says the upshot is for the industry to either “kill reform” or prevent lawmakers from agreeing on a bill, just like what happened in 1993-94 under the Clinton administration. No matter what they say—favoring the elimination of pre-existing condition restrictions, for example—the industry will adamantly oppose reform of any kind. “They don’t want a public plan,” Potter says. “They want all the uninsured to have to be enrolled in a private insurance plan. They want—they see those 50 million people as potentially 50 million new customers. So they’re in favor of that. They see this as a way to essentially lock them into the system, and ensure their profitability in the future. The strategy is as it was in 1993 and ‘94, to conduct this charm offensive on the surface. But behind the scenes, to use front groups and third-party advocates and ideological allies. And those on Capitol Hill who are aligned with them, philosophically, to do the dirty work. To demean and scare people about a government-run plan, try to make people not even remember that Medicare, their Medicare program, is a government-run plan that has operated a lot more efficiently.… [T]hey want to scare you into thinking that through the anecdotes they tell you, that any government-run system, particularly those in Canada, and UK, and France that the people are very unhappy. And that these people will have to wait in long lines to get care, or wait a long time to get care. I’d like to take them down to Wise County. I’d like the president to come down to Wise County, and see some real lines of Americans, standing in line to get their care. [PBS, 7/10/2009]
Entity Tags: John Boehner, Frank Luntz, Cigna, Bill Moyers, America’s Health Insurance Plans, Zach Wamp, Wendell Potter, US Veterans Administration, Senate Finance Committee, Michael Moore, Medicare, Max Baucus, Mitch McConnell, Jon Kyl, Clinton administration
Timeline Tags: US Health Care
Bloomberg News counts up the number of lobbyists the health care industry is funding to pressure lawmakers to oppose or support the reform legislation proposed by Congressional Democrats and the White House. It finds that some 3,300 lobbyists—six for each of the 535 representatives and senators weighing the issue—are working to convince lawmakers to take their clients’ position on the health care reform package. Over 1,500 organizations, from pharmaceutical firms and medical providers to “grassroots” organizations and citizens’ groups, employ the lobbyists, with three new organizations signing up each day, and each of the 10 largest Washington lobbying firms is involved in the effort. The groups spent a combined amount of $263.4 million on lobbying Congress during the first six months of 2009, exceeding the $241.1 million spent during the same period in 2008. The Sunlight Foundation’s Bill Allison says, “Whenever you have a big piece of legislation like this, it’s like ringing the dinner bell for K Street,” referring to the Washington street where many lobbying firms have offices. “There’s a lot of money at stake and there are a lot of special interests who don’t want their ox gored.” Most lobbyists assume that health care reform is going to happen in some form or fashion, says John Jonas of the lobbying firm Patton Boggs LLP. “They assume health care reform is going to happen and they want to be protected,” he says. Jonas’s firm has three dozen clients in the debate, including Bristol-Myers Squibb and Wal-Mart. Many lawmakers, such as Senator Max Baucus (D-MT), the Senate Finance Committee chairman, see lobbyists every day. Baucus’s office rotates between different schools of lobbyists, seeing representatives of health care providers one week, purchasers the second, and consumers the third. Larry McNeely of the US Public Interest Research Group says, “The sheer quantity of money that’s sloshed around Washington is drowning out the voices of citizens and the groups that speak up for them.” [Bloomberg, 8/14/2009]
Entity Tags: Max Baucus, Bloomberg News, Bill Allison, Bristol-Myers Squibb, Larry McNeely, Senate Finance Committee, John Jonas, Wal-Mart, Sunlight Foundation, US Public Interest Research Group, Patton Boggs LLP
Timeline Tags: US Health Care, Domestic Propaganda
Charles Grassley (R-IA), a Republican senator considered a key element in the Obama administration’s push for bipartisan health care reform, says that the recent outpouring of anger and resistance at “town hall” forums has “fundamentally altered the nature of the debate and convinced him that lawmakers should consider drastically scaling back the scope of the effort.” Grassley says he believes the public is strongly against the Democrats’ ideas for health care reform, and considers the ideas a run-up to what he calls “a government takeover of health care.” Grassley is a member of the so-called “Gang of Six,” a group of three Republican and three conservative Democrats on the Senate Finance Committee primarily responsible for writing the committee’s reform proposal. In recent days, some Democrats have accused him of attempting to suborn any bipartisanship in the process by his advocacy of “death panels” (see August 12, 2009) and his misleading use of Senator Edward Kennedy (D-MA)‘s terminal illness (see August 5, 2009) in his arguments against reform.
Obama Should Prove Commitment to Bipartisanship by Abandoning Public Option - Grassley says that if President Obama is serious about a bipartisan approach to reform, he should abandon his support for the so-called “public option” entirely. Such a statement, he says, is “pretty important… if you’re really interested in a bipartisan bill.” Grassley also says that a reform bill would not be truly bipartisan unless it received far more than a 51-vote majority, or even a 60-vote “supermajority,” enough votes to defeat a filibuster attempt. “It’s not about getting a lot of Republicans. It’s about getting a lot of Democrats and Republicans,” he says. “We ought to be focusing on getting 80 votes.” [Washington Post, 8/20/2009] Washington Post columnist Greg Sargent contrasts Grassley’s contentious position with the more accomodating overtures from the White House. He writes: “Grassley knows the White House is under tremendous pressure to contain a revolt on the left over the public option. It’s hard to imagine any reason for demanding Obama renounce the public option right now, before there’s even a bill out of the finance committee, other than to make life politically difficult for the president. How does that compare with the White House’s treatment of Grassley? When the Senator endorsed the ‘death panel’ claim, the White House reaffirmed its commitment to working with him. Dems quietly let Grassley claim a big victory by dropping the public option from the Senate bill he’s negotiating. And when Rahm Emanuel questioned the sincerity of GOP leaders yesterday, an apparent shot at Grassley, the White House rapidly walked it back. Grassley, meanwhile, has now raised the bar yet again for what will constitute true bipartisanship on the White House’s part. Pretty telling.” [Plum Line, 8/20/2009]
Bipartisanship Not Universally Desired - Other Republicans are less interested in bipartisanship. House Minority Leader John Boehner (R-OH) blames Obama for the increasingly strident tone of the debate, and accuses Obama officials of “reject[ing] our efforts to work together.” Governor Tim Pawlenty (R-MN), considered a likely 2012 candidate for president, says flatly: “The Republicans should kill the bill. It’s a bad idea.” House Member James Clyburn (D-SC) says Democrats might do well to abandon any idea of bipartisanship and work on a bill without Republican input, especially since it is unlikely that Republicans will vote for any reform bill at all. But Max Baucus (D-MT), chairman of the Senate Finance Committee, says he remains committed to the idea of bipartisanship. [Washington Post, 8/20/2009]
Senator Max Baucus (D-MT), the chairman of the Senate Finance Committee and a key player in the Democrats’ health care reform process, defends his insistence on a bipartisan process that will produce reform supported by both Democrats and Republicans. Yet Baucus admits that Senate Republicans are almost uniformly committed to killing reform outright. Baucus is a member of the Finance Committee’s “Gang of Six,” a group of three conservative Democrats and three Republicans who are working to craft a reform proposal. “I just think if it is bipartisan, it’s more sustainable, it’s more durable, long-lasting,” Baucus says. “There will be more buy-in around the country. We’re going to make some mistakes. If it’s bipartisan, it will be easier to fix the mistakes, work together to fix the mistakes. It’s just better for the country.” However, he says: “The Republican leadership in the Senate and in the House is doing its utmost to kill this bill. They are putting intense political pressure on Chuck Grassley, Olympia Snowe, and Mike Enzi [the three Republican members of the “Gang of Six”], to bow out, because they want to kill it. So I’ve got a challenge ahead of me to work out all this on policy as we go through these meetings. The other thing is the politics of it: ‘People, this is the right thing to do for America. I know you’re under intense political pressure, but do the right thing. I know it’s easy for me to say right now, because I’m getting beat up by both sides, but not nearly as much as you are by the Republican hierarchy.’” Baucus says it is important to craft a bill that can garner the 60 votes needed to defeat a filibuster, which the Republicans will almost certainly invoke to try to delay or kill any reform bill. He does not support the reconciliation process that would allow the bill to pass with a 51-vote majority. [Think Progress, 8/21/2009; Helena Independent, 8/21/2009]
The Pharmaceutical Research and Manufacturers of America (PhRMA) acknowledges it has funded a series of television advertisements in support of legislation primarily written by Max Baucus (D-MT), chairman of the Senate Finance Committee, to reform US health care. The television ads are part of an agreement between the Obama administration, Baucus, and PhRMA in June, where the organization agreed to various givebacks and discounts designed to reduce America’s pharmaceutical spending by $80 billion over 10 years. PhRMA then set aside $150 million for advertising to support health care legislation. More progressive House Democrats such as Henry Waxman (D-CA) are pushing for stiffer drug industry givebacks than covered in the deal. PhRMA is led by Billy Tauzin, a former Republican congressman. Until recently, the organization spent some $12 million on ads by an offshoot coalition called Americans for Stable Quality Care, and aired television ads such as “Eight Ways Reform Matters to You.” PhRMA’s new ads will specifically support the Baucus bill. Many are critical of the deal, with James Love of the progressive research group Knowledge Ecology charging, “Essentially what the US got was not $80 billion, but $150 million in Obama campaign contributions.” [New York Times, 9/12/2009] Investigative reporter Matt Taibbi agrees with Love, accusing the White House of colluding with Baucus and Tauzin’s PhRMA to orchestrate a “big bribe” in exchange for the Democrats’ dropping of drug-pricing reform in the Baucus bill. Taibbi writes that in June, White House chief of staff Rahm Emanuel met with representatives from PhRMA and drug companies such as Abbott Laboratories, Merck, and Pfizer to cut their deal. Tauzer later told reporters that the White House had “blessed” a plan involving the $150 million in return for the White House’s agreement to no longer back government negotiations for bulk-rate pharmaceuticals for Medicare, and to no longer support the importation of inexpensive drugs from Canada. Taibbi writes that the White House worked with Baucus and PhRMA to undercut Waxman’s attempts to give the government the ability to negotiate lower rates for Medicare drugs. PhRMA’s ads are being aired primarily in the districts of freshmen Democrats who are expected to face tough re-election campaigns, and in the districts of conservative “Blue Dog” Democrats, who have sided with Baucus, Obama, and PhRMA to oppose the Waxman provision in favor of PhRMA’s own provision, which would ban the government from negotiating lower rates for Medicare recipients. [True/Slant, 9/14/2009]
Entity Tags: James Love, Henry A. Waxman, Americans for Stable Quality Care, Abbott Laboratories, Rahm Emanuel, Pharmaceutical Research and Manufacturers of America, Senate Finance Committee, Obama administration, Medicare, Max Baucus, Matt Taibbi, Pfizer, Merck, W.J. (“Billy”) Tauzin
Timeline Tags: US Health Care
Max Baucus (D-MT), the chairman of the Senate Finance Committee, releases his committee’s final version of health care reform, a version known as the “chairman’s mark.” None of the Republicans on the committee support the bill (known as the “America’s Healthy Future Act,” or AHFA), and some Democrats, including John D. Rockefeller (D-WV), have serious questions about it as well. Baucus says: “The $856 billion dollar package will not add to the federal deficit. The Finance Committee will meet to begin voting on the chairman’s mark next week.” An analysis by the Congressional Budget Office (CBO) shows that the bill will actually “result in a net reduction in federal budget deficits of $49 billion over the 2010-2019 period.” Senators Charles Grassley (R-IA) and Mike Enzi (D-WY) have said that they want a much smaller bill that imposes no fees on health insurance companies, prevents legal immigrants from gaining coverage for five years, and bans any federal coverage for abortions. The Baucus bill does not allow for federal monies to be used for abortions, as Republicans have insisted upon, with the exception of situations involving rape or incest. Illegal immigrants are not provided coverage through the bill; legal immigrants cannot get government subsidies and must wait five years before qualifying for Medicaid. Immigrants’ citizenship status will be verified, as Republicans have requested. Another Republican provision, “tort reform” (efforts to reduce legal claims against doctors and HMOs), is part of the bill. There is no “public option” for government-financed health care for uninsured citizens, as Republicans and conservative Democrats have demanded. The bill allows for the purchasing of insurance across state lines, for “high-deductible” policies, and for so-called “high-risk pools,” three provisions Republicans have demanded. And, beginning in 2014, federal monies will be made available “to all states to defray the costs of covering newly-eligible beneficiaries.” [111th Congress, 1st Session, 9/16/2009; Think Progress, 9/16/2009; Think Progress, 9/17/2009] Even after seeing a bill with so many inclusions they have asked for, Senate Republicans continue to insist that there is nothing in the bill they can support. [Think Progress, 9/17/2009]
Max Baucus (D-MT), chairman of the Senate Finance Committee, makes several revisions to the “final” draft of the Chairman’s Mark of the America’s Healthy Future Act (AHFA, the name for health care reform legislation—see September 16-17, 2009). The “chairman’s mark” is a recommendation by a committee or subcommittee chair of measures to be considered in a markup, and is usually drafted as a bill. Baucus says in a statement: “The modifications focus largely on making care more affordable for low and middle income Americans by increasing the Health Care Affordability Tax Credit, lowering the penalties for people who fail to meet the individual requirement to have health insurance, and increasing the High Cost Insurance Excise Tax threshold for people whose basic health care is more expensive… and effectively slows the growth of skyrocketing health care costs.… This modification incorporates important ideas from my colleagues on both sides of the aisle.” According to Baucus, AHFA as it now stands will make it easier for families and small businesses to buy health care coverage, ensure Americans can choose to keep the health care coverage they have if they like, and slow the growth of health care costs over time. “It will bar insurance companies from discriminating against people based on health status, denying coverage because of pre-existing conditions, or imposing annual caps or lifetime limits on coverage.” Baucus continues to assert that AHFA will not add to the federal deficit. Some of the new provisions include:
Lowering the amount that insurance companies can vary premiums based on age, ensuring that these companies cannot charge elderly clients far more than younger ones. The provision was first submitted by Senators John Kerry (D-MA) and Ron Wyden (D-OR).
Providing $5 billion in additional assistance to small businesses attempting to provide coverage for their workers. The provision was first submitted by Senators Kerry and Debbie Stabenow (D-MI).
Including more senior citizens in the Medicare Advantage program.
Making prescription drugs more affordable for senior citizens by reducing co-payments. This provision was first submitted by Senators John D. Rockefeller (D-WV), Jeff Bingaman (D-NM), and Ben Nelson (D-NE).
Improving Medicare beneficiary access to bone density tests, a provision first submitted by Senator Blanche Lincoln (D-AR).
Creation of a three-year Medicare Hospice Concurrent Care (HCC) demonstration program that would provide Medicare patients eligible for hospice care with all other Medicare-covered services during the same period of time. This provision was first submitted by Senator Wyden.
Improving access to Home and Community Based Services (HCBS) for low income individuals in Medicaid who are in need of long-term care, a provision first submitted by Senator Kerry.
Creating nursing home alternatives for patients in need of long-term care, a provision first submitted by Senator Maria Cantwell (D-WA).
Provide alternatives to nursing home care for disabled individuals on Medicaid, a provision first submitted by Senator Charles Schumer (D-NY).
Improving access to mental health care for Medicaid patients, a provision first submitted by Senator Olympia Snowe (R-ME).
Financial assistance for “high-need” states having difficulty paying for their Medicaid obligations, and use of surplus Medicaid funds to improve the program.
Create an exemption to encourage health care beneficiaries to use generic prescription drugs by waiving co-payments, a provision first submitted by Senator Stabenow.
Remove the mandate that would require states to cover all prescription drugs for Medicaid beneficiaries.
Direct the secretary of health and human services to implement programs to reduce waste in the way drugs are dispensed to seniors in long term care facilities. [Senior Journal, 9/22/2009; New York Times, 9/22/2009; The Capitol (.net), 2011]
Entity Tags: Blanche Lincoln, Ben Nelson, Debbie Stabenow, Jeff Bingaman, Charles Schumer, John D. Rockefeller, America’s Healthy Future Act, Maria Cantwell, Max Baucus, Olympia Snowe, Ron Wyden, Senate Finance Committee, John Kerry
Timeline Tags: US Health Care
America’s Health Insurance Plans (AHIP), the health insurance industry’s largest lobbying organization, releases a study that claims the Democrats’ health care reform initiative would send health insurance costs sharply upward. The study is released the day before the Senate Finance Committee votes on its version of the reform proposal. [The Week, 10/12/2009] AHIP says it intends to circulate the study among lawmakers on Capitol Hill and use it as the basis for new advertisements attacking the health care reform proposals. [Washington Post, 10/12/2009] NBC Washington calls the study “a surgical strike against Democrats’ best hope for passing health reform,” specifically targeting the Finance Committee’s legislative efforts, which it calls the “Baucus bill” for committee chairman Max Baucus (D-MT). Until now, AHIP has operated largely behind the scenes to delay or terminate Congressional efforts to reform US health care; the study marks its most public and overt effort to influence the discussion. According to the study, which was carried out by accounting and services firm PriceWaterhouseCoopers (PWC) and paid for by AHIP, the average cost increase would be $1,700 per family per year by 2013. “[T]he cumulative increases in the cost of a typical family policy… will be approximately $20,700 more than it would be under the current system,” the report claims. “[T]he cost of coverage for both single and family policies in the individual, small group, large group, and self-funded insurance markets” will rise dramatically. AHIP official Karen Ignagni says private insurers would almost certainly pass cost increases to consumers for a number of reasons, including her claim that too many people with pre-existing conditions would sign up for insurance. “The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system,” she writes. Baucus calls the study “seriously flawed.” A spokesman for the Finance Committee, Scott Mulhauser, says: “Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need. It’s a health insurance company hatchet job, plain and simple.” [America's Health Insurance Plans, 10/11/2009; NBC Washington, 10/12/2009; Washington Post, 10/12/2009] An analysis of the committee’s proposal by the Congressional Budget Office (CBO) shows that while some people’s premiums would go up, the subsidies to be provided by the government would make health insurance considerably less expensive for most consumers. According to the CBO, premiums under the government “exchange” option proposed in the Baucus bill would cost consumers $14,400 per year in 2016, while the average private insurer would charge their customers $21,300 by 2016. [Think Progress, 10/12/2009] Nancy-Anne DeParle, director of the White House Office of Health Reform, says PWC is not the firm to have carried out such a study. “Those guys specialize in tax shelters,” she says. “Clearly this is not their area of expertise.” [Washington Post, 10/12/2009] Almost immediately after the study’s release, critics begin attacking it, calling it deeply flawed and an “industry hit job” (see October 11-12, 2009). And PWC itself will back away from the study’s central claims (see October 12, 2009).
Senate Finance Committee Chairman Max Baucus (D-MT) asks the IRS to investigate a number of private organizations organized under the nonprofit, tax-exempt 501(c)4 and (c)6 status to ensure that they are not violating tax law. Such groups can engage in political activity, such as funding television ads for or against candidates for office, as long as their primary purpose is not politically motivated. Baucus writes in his letter to the IRS that he believes many of these groups, most of whom support Republican candidates and/or attack Democratic candidates, are almost exclusively focused on politics. The tax laws organizations such as Crossroads GPS and Americans for Job Security (AJS) operate under allow them to keep information about their donors secret while simultaneously running advertisements in elections. Baucus asks the IRS to examine whether the groups’ “political activities reach a primary purpose level” and “whether they are acting as conduits for major donors advancing their own private interests regarding legislation or political campaigns, or are providing major donors with excess benefits.” He continues, “Possible violation of tax laws should be identified as you conduct this study,” and adds that the committee plans to “open its own investigation and/or to take appropriate legislative action.” In his letter he notes that an “Alaska Public Office Commission investigation revealed that AJS, organized as an entity to promote social welfare under 501(c)(6), fought development in Alaska at the behest of a ‘local financier who paid for most of the referendum campaign.’ The Commission report said that ‘Americans for Job Security has no other purpose other than to cover money trails all over the country.’ The article also noted that ‘membership dues and assessments… plunged to zero before rising to $12.2 million for the presidential race.’” He also provides information about another, unnamed 501(c)4 group, which “transform[ed] itself into a nonprofit under 501(c)(4) of the tax code, ensuring that they would not have to ‘publicly disclose any information about its donors,’” and engaging primarily in political activity. He asks, “Is the tax code being used to eliminate transparency in the funding of our elections—elections that are the constitutional bedrock of our democracy?” He also writes that the IRS should be concerned “whether the tax benefits of nonprofits are being used to advance private interests.” He concludes by writing that the committee will open its own investigation into the matter. [Politico, 9/29/2010]
Democrats in Congress are contemplating using the Constitutional amendment process to overturn the controversial Citizens United ruling by the Supreme Court that allows unlimited corporate spending on elections (see January 21, 2010). A new poll from Public Polling Policy as commissioned by the Progressive Change Campaign Committee (PCCC) finds that a plurality of voters would support such an amendment. Forty-six percent of voters surveyed agreed that “Congress should consider drastic measures such as a Constitutional amendment overturning the recent Supreme Court decision allowing unlimited corporate spending in elections.” Thirty-six percent disagreed, and 18 percent had no opinion. Such an amendment would likely fail in Congress, as it would require a two-thirds majority in both chambers and then ratification by three-quarters of the states. Representative Donna Edwards (D-MD) wrote such an amendment, in draft form, the evening that the Citizens United decision was announced. Her proposed amendment reads: “The sovereign right of the people to govern being essential to a free democracy, Congress and the States may regulate the expenditure of funds for political speech by any corporation, limited liability company, or other corporate entity. Nothing contained in this Article shall be construed to abridge the freedom of the press.” She says that there have been times in American history that such amendments catch the public attention and move quickly into law. “The process is very rigorous, and it should be,” she says. “But there have been plenty of examples of amendments to the Constitution that have happened, actually, with fairly rapid-fire when they catch on.” She adds: “I really concluded that the Supreme Court actually put the challenge out to us, here in the Congress. They said, you know, you could make a judgment that this is not really good for the system, but the fact is that the Constitution doesn’t allow you to regulate this. Congress, you have no—the Court told us directly—Congress, you have no authority to regulate. And when the Court says that so directly, it only leaves us one choice.” Two prominent Senate Democrats, John Kerry (D-MA) and Max Baucus (D-MT), support the amendment. A Baucus spokesperson says, “Max is always willing to work with anyone toward the common goal of making sure Montanans’ voices don’t get drowned out by out-of-control corporate campaign donations.” PCCC co-founder Adam Green says: “It’s time to stop thinking small-bore. The solution to Citizens United is not merely disclosure, it’s to overturn Citizens United—and even last November’s Republican-skewed electorate agrees.” Edwards says that Democrats should embrace the concept that the Constitution is a political ground worth fighting on. “A lot of progressives are not accustomed to using the mechanisms of the Constitution,” she says. “The right has used—has tried to do that an awful lot of times on a whole range of different things in state legislatures and across the board. And as progressives, we’re not accustomed to doing that, and this is one instance, though, where the populist demand is there, and our energy and our policy has to match that demand and a Constitutional amendment does that.” [Huffington Post, 11/23/2010]
The progressive magazine Mother Jones reports on Congressional Democrats’ plans to curb the effects of the Supreme Court’s Citizen United decision, which allows unlimited contributions to campaign organizations by corporate and union donors (see January 21, 2010). Last year, Senate Republicans refused to allow a campaign finance reform bill, the DISCLOSE Act, to come to the floor for a vote (see July 26-27, 2010). Now Democratic leaders say they are considering filing challenges to the nonprofit tax statuses of many of the groups that were so influential in the 2010 elections. Representative Chris Van Hollen (D-MD) tells a Mother Jones reporter about the plan. According to Van Hollen, two of the groups they plan to target are Karl Rove’s Crossroads GPS and the American Action Network (AAN—see Mid-October 2010), headed by former Senator Norm Coleman (R-MN). Together, the two groups spent over $43 million supporting conservative candidates and targeting Democrats, accounting for some 23 percent of all outside conservative spending between them. According to Van Hollen, “People are looking at different legal strategies through the courts because there’s emerging evidence that these groups have abused the rules.” Representative David Price (D-NC) agrees. “I think there are ample goals for challenging the way those groups have acted,” he says. Crossroads GPS spokesperson Jonathan Collegio says in return, “Van Hollen is irresponsibly making claims on zero evidence whatsoever and this is extremely irresponsible for an elected official holding high office.” No one from AAN is willing to respond to the Mother Jones reporting. Both Crossroads GPS and AAN, like many other such groups, are organized under the IRS’s 501(c)4 tax status—tax-exempt, not-for-profit groups whose purpose under the IRS code is “primarily to further the common good and general welfare of the people of the community” (see 2000 - 2005). The law allows such groups to engage in political advocacy, such as running ads for or against candidates, but such “electioneering” activities must not be those groups’ “primary activity.” As far as is known, Crossroads GPS and AAN have no other purpose except electioneering. 501(c) groups do not have to register as political action committees (PACs) and are allowed to conduct their business with very little outside scrutiny. However, if the Federal Election Commission or the IRS determine a group has violated the rules, that group would be forced to register as a PAC and disclose the sources of its funding. If the Democrats challenge the status of these groups, they would be following in the footsteps of private organizations. A coalition of public advocacy groups has filed complaints against Crossroads GPS and another 501(c)4 group, American Future Fund (AFF—see October 12, 2010), claiming that their primary functions are, according to the Crossroads GPS complaint, to “influence the 2010 federal elections and to elect Republicans to office.” The complaints are still pending. In September 2010, Senator Max Baucus (D-MT) asked the IRS to examine several 501(c) groups to “ensure that political campaign activity” wasn’t their primary activity (see September 28, 2010). [Mother Jones, 1/28/2011]
Entity Tags: David E. Price, American Crossroads GPS, American Action Network, American Future Fund, DISCLOSE Act of 2010, Max Baucus, Norm Coleman, Jonathan Collegio, Karl C. Rove, Chris Van Hollen, Mother Jones, US Congress
Timeline Tags: Civil Liberties
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