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This is Why They Have Conference Committees

By Matthew Yglesias on September 17, 2009 at 12:14 pm

"This is Why They Have Conference Committees"

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Probably the easiest way to think about the differences between the Baucus bill and the House bill is to put them both in the context of the President’s original framework. What Obama said was he wanted a bill that:

— 1. Provides affordable coverage to all Americans.

— 2. Is deficit neutral in the scoring window.

— 3. Bends the long-term cost curve.

Both the House and Baucus bills are extremely complicated, so the differences between them are in some ways extremely complicated. But in a big picture sense the differences are pretty simple and just add up to what you would expect the differences between a liberal bill and a centrist bill to be: The House bill does a lot better on (1), the Baucus bill does a lot better on (3) and they both meet (2) albeit in different ways. In particular, both the House and Baucus include some speculative provisions on delivery reform that will probably bend the curve but Baucus melds this with tax measures that definitely will. Conversely, Baucus would expand coverage and increase affordability, but leave us with a substantial residual of people who don’t really have comprehensive affordable coverage—a substantial flaw in something that purports to be a universal health care bill.

In some ways I’m not so sure. What I really want to say is that curve-bending and affordable coverage are two great tastes that taste great together. What fundamentally makes the Baucus bill worse than the House bill is that it doesn’t spend enough money. But what fundamentally makes the Baucus bill better than the House bill is its excise tax on high-cost insurance plans. Happily, taxes are also what lets you finance more spending. If you added a Baucus-style excise tax to the House plan, you’d make that bill a lot better. Alternatively, if you added some additional House-style “surtax” revenue to Baucus and ramped up subsidy levels to where the House has them you’d make his bill a lot better.

Viewed optimistically, this is what conference committee is for. Each version of the legislation is audacious along one axis—committing major funds to affordability in the House, trying to take a serious whack at cost growth in Baucus—and a conference committee could meld them into a bill that does both. You could imagine a productive meeting that produces the kind of result I’m talking about that lets Mike Ross walk out and say he added tough cost controls to the bill, while Jay Rockefeller gets to walk out and say he beefed up affordability, and then Max Baucus and Henry Waxman get to congratulate each other on being masters of legislative compromise. Alternatively, of course, the whole thing could fall apart. But ultimately my point would be that both version of the legislation have strong points that could be combined into some very good legislation indeed.

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