Fisher Investments Editorial Staff
Politics

Dead Bill Walking?

By, 02/23/2010

Story Highlights:

  • The White House announced its own health care plan in an attempt to bridge the two versions passed by the House and Senate last winter.
  • Obama's plan comes ahead of a bipartisan health care "summit" Thursday and is largely based on the Senate version with nods to some components found in the House bill.
  • There are doubts whether members of Congress will hop aboard Obama's plan—even in the Democratic ranks.
  • The closer we get to November elections, and the longer this all drags out, the more it should appear any health care bill is a lost cause or at least very watered down if it passes.

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Despite multiple blows, the health care bill continues to roam Capitol Hill like a member of the undead—not wholly alive, but not in the grave either. The White House tried to give it new life Monday, announcing its own health care plan in an attempt to bridge the two versions passed by the House and Senate last winter. 

Obama's plan comes ahead of a bipartisan health care "summit" Thursday and includes proposals to delay a "Cadillac" tax on high-end, employer-sponsored insurance; increase penalties on companies failing to provide insurance to workers; require by law every individual to have health insurance; increase Medicaid funding for cash-strapped states; and instill federal authority over premium-rate increases. The plan is largely based on the Senate version with nods to some components found in the House bill.  

Seems a bit odd to release a full-blown plan just days before a "bipartisan" summit. Rather makes one think the summit is all for show, but never mind—maybe this simply underlines the daunting task of pinning down a congressional compromise over anything at all at this point. After all, the health care bill is unpopular and getting more so—now even with Democrats—and from what we've seen, the White House proposal doesn't exactly stem the tide. Obama's plan strips out many of the provisions House Democrats pushed for in their bill, like the Stupak language which appealed to the conservative Dems. Without that amendment, enough House Democrats had previously vowed a nay vote to finally behead this zombie. Plus, let's remember the Democrats have lost the 60-vote Senate supermajority they once enjoyed. This isn't about getting more Republicans—this is now about keeping enough Democrats from jumping ship. 

If the House and Senate can't get it done, the White House has openly threatened to go the reconciliation route—i.e., tacking it onto the budget process—which only requires a simple majority in the Senate. But reconciliation takes time. And time is not on Obama's side. With mid-term elections looming, and the lesson from Scott Brown's win still fresh, even a simple majority may be hard to scrape together the closer we get to November—when wary politicians may be less inclined to stick out their necks over anything contentious, especially one with such a high price tag. 

We have been consistently surprised at how long health care reform has clung to life—it remains persistently undead. And as long as some kind of reform plan still looks viable, it may spook markets some—they generally prefer status quo to a major government-induced overhaul. But the closer we get to November, and the longer this all drags on, the more it should appear any health care bill is a lost cause or at least very watered down if it passes. Though the horrors of trying to push through such a major, controversial piece of legislation may haunt the White House for some time.

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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