By  Peter Wallsten, Published: September 8

More than two dozen senators from both parties met privately this week to revive hopes of a grand debt-cutting bargain — exploring how to push the newly formed debt “supercommittee” to find far more than its assigned goal of $1.5 trillion in deficit reductions.

The senators want at least $3 trillion slashed from the deficit over the next decade. In addition, they plan to press the committee to pass a major tax overhaul to lower rates and close special-interest loopholes, as well as changes to entitlement programs such as Medicare, according to several participants.

The effort comes as the 12-member supercommittee begins what is expected to be a grueling process to map out its plans before a November deadline — and it threatens to undercut the chances for President Obama to win passage for portions of a jobs plan expected to cost hundreds of billions of dollars in the short term.

“I don’t think I’m speaking out of school that it was a unanimous feeling among a large group of senators from both sides of the aisle,” said Sen. Bob Corker (R-Tenn.), one of the meeting participants. “Most people are far more focused on this supercommittee than any speech the president’s going to give.”

Another in the group, Sen. Joseph I. Lieberman (I-Conn.), said the senators want to “encourage” the supercommittee “to reach for a higher number.” He said the committee should “compromise with one another and do what parts of each party will not like, for the greater good, because that’s really what most of the people in the country want.”

Obama, too, is expected to press the committee to exceed its deficit-reduction goal. In his speech Thursday night, he called on Congress to increase the super­committee’s deficit-cutting goals to cover the costs of his jobs plan, and he said that a week from Monday he will announce a more detailed plan “that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.”

Several people familiar with the discussions said the lawmakers felt that, after the pomp and ceremony of Obama’s joint-session speech fades, the center of political and policy gravity on Capitol Hill will be the work of the special committee, chaired by Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Tex.).

Under last month’s debt-ceiling deal struck by Obama and GOP lawmakers, deep cuts would automatically take effect in national security and other areas if the supercommittee fails to reach agreement or if Congress fails to pass legislation by December.

One senior Democratic aide called Obama’s jobs plan largely “dead on arrival” because its expected price tag would roughly cancel out the one year’s worth of savings many lawmakers hope the supercommittee will find.

The Senate on Thursday blocked a resolution of disapproval for an additional $500 billion increase in the debt ceiling. The procedure is required by the legislation to raise the borrowing limit in phases by at least $2.1 trillion.

A Senate staffer familiar with the senators’ private discussions said the effort was intended to be “complementary” to the work of the supercommittee but also to offer a gentle nudge.

The staffer said the senators’ push would “demonstrate there can be some support and safety if they choose to go beyond their charge.”

Both aides spoke on the condition of anonymity in order to discuss the private deliberations.

The private gathering this week, held Wednesday in a Capitol meeting room, included about 25 centrists from both parties. It was organized by Sens. Mark R. Warner (D-Va.) and Saxby Chambliss (R-Ga.), two members of the “Gang of Six,” which tried unsuccessfully to engineer a grand deal patterned loosely after the plan laid out by the deficit commission headed by former Clinton White House chief of staff Erskine Bowles and former senator Alan Simpson.

At least a third of the Senate at one time had indicated some level of support for the broad framework being negotiated by the Gang of Six, according to people familiar with that group’s discussions.

By  Associated Press, Published: September 8

WASHINGTON — In an early show of optimism, Republicans and Democrats on a powerful committee charged with cutting deficits pledged Thursday to aim higher than their $1.2 trillion target, work to boost job creation and reassure an anxious nation that Congress can solve big problems.

Tax reform as well as cuts to benefit programs such as Social Security and Medicare will be among the options considered, members of the so-called supercommittee emphasized, although no specific proposals were debated at an opening session than ran scarcely an hour.

While they readily acknowledged numerous obstacles to a deal, committee members said it was essential to try at a time the economy is weak, joblessness is high and the country gives every sign of intense frustration with its elected leaders.

Compromise “is the difference between a divided government that works for the country and a dysfunctional government that doesn’t,” said Rep. Chris Van Hollen, D-Md., the last of a dozen members to speak.

The panel, co-chaired by Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., lawmakers from opposite ends of the political spectrum, hopes to help broker a deal somewhere in the middle — on an issue where failure is the rule.

Shortly after the session, at least one Republican member threatened to quit if the panel considers cuts in defense beyond the $350 billion over a decade that Congress approved last month as part of a package of deep spending reductions and an increase in the debt limit.

“I’m off the committee if we’re going to talk about further defense” cuts, Arizona Sen. Jon Kyl said he told panel members. Speaking at a defense forum, Kyl said the military “has given enough already, and any further hit would be inimical to our national security around the globe.”

The committee, three members from each party in each house, faces a deadline of Nov. 23. Its most consequential sessions are expected to take place in closed door sessions that will give President Barack Obama and congressional leaders from both parties the opportunity to influence the outcome.

Ironically, the committee owes its existence to earlier failed attempts at sweeping deficit-cutting compromises, most recently an abortive negotiation between Obama and House Speaker John Boehner, R-Ohio.

Their talks collapsed over the summer, at a time Republicans were demanding deficit cuts in exchange for passage of legislation to raise the debt limit and prevent a first-ever government default.

In the end, the two sides agreed to increase the debt limit by enough to let the Treasury pay its bills through 2012 while also cutting $1 trillion over a decade from one category of government programs.

It was a significant sum, but far less than the White House and some Republicans had been hoping for. Nor did it change the tax code or significantly affect Medicare, Medicaid, Social Security, farm programs and other costly benefit programs than many lawmakers say must be part of any attempt to slow and ultimately reduce the nation’s debt.

That is particularly true of Republicans, although Democrats are largely unwilling to go along unless their GOP counterparts will agree to higher revenues at the same time.

“I approach our task with a profound sense of urgency, high hopes, and realistic expectations,” Hensarling said as he gaveled the session to order. He said the task “will not be easy, but it is essential,” and said the panel “must be primarily about saving and reforming social safety net programs that are not only failing many beneficiaries but going broke at the same time.”

A fellow Republican, Sen. Pat Toomey of Pennsylvania, added another item to the agenda moments later, speaking of “wasteful tax subsidies” that should be eliminated and calling for changes that can turn the tax code into an engine for more economic growth.

“When huge, iconic American corporations can pay little or no income tax, well that’s indefensible,” he said. “So I think we ought to wipe out those special interest favors, have commensurately lower rates, encourage the economic growth that will generate more revenues, generate more jobs.”

Among Democrats, Murray stressed the importance of compromise, saying that in meetings with constituents last month, they “asked why it was that every time they turn on their televisions, they hear about more political battling, more partisan rancor_but nothing more being done for people like them.”

She added pointedly that she was pleased that other members of the panel “have refrained from drawing in the sand or carving out areas that can’t be touched” as part of any deal.

The committee is scheduled to hold a public hearing next week at which Douglas Elmendorf, head of the nonpartisan Congressional Budget Office, is expected to explain the forces that have driven the annual deficits into the $1 trillion-plus range, and left the country with a debt of $14 trillion.

The legislation that created the committee also approved a $400 billion debt limit increase, and permitted Obama to request yet another $500 billion increase, with an option for Congress to block it. An attempt to do so failed in the Senate on Thursday evening.

If the committee fails to produce a 10-year package of cuts of at least $1.2 trillion, across-the-board spending cuts would take place that would and simultaneously allow the president to seek another increase in the federal debt limit of the same size.

On the other hand, any agreement on cuts totaling up to $1.5 trillion that are approved by both houses of Congress would permit Obama to request a dollar-for-dollar rise in the debt limit. There is no upper limit to the amount of deficit reductions the panel can recommend.

The committee proceedings were briefly interrupted by demonstrators who shouted “Jobs Now!” in a hallway outside the room. The group dispersed after police threatened them with arrest.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed

By Lori Montgomery

Washington Post Staff Writer
Monday, February 14, 2011; 12:57 PM

President Obama rolled out a $3.7 trillion budget blueprint Monday that would trim or terminate more than 200 federal programs next year and make key investments in education, transportation and research. The plan is aimed at boosting the nation’s economy while reducing record budget deficits.

<!– var rn = ( Math.round( Math.random()*10000000000 ) ); document.write('‘) ; // –>In a news conference at a Baltimore County middle school, Obama cast the document as a responsible alternative to the deep spending cuts that Republicans will urge in a vote this week on the House floor. Obama’s plan would trim domestic spending by hundreds of billions of dollars over the next decade, striking hard at programs long favored by Democrats to make room for targeted increases in energy and medical research, corporate research and development and a new network to bring high-speed Internet access to 98 percent of Americans.

However, Obama also would rely heavily on new taxes, to a degree unacknowledged by administration officials in recent days. His budget request calls for well over $1.6 trillion in fresh revenue over the next decade, much of it through higher taxes on the wealthy and businesses.

Households with income of more than $250,000 a year would immediately see new limits on the value of their itemized deductions. And starting in 2013, they would lose the lower tax rates and other breaks that were enacted during the George W. Bush administration and recently extended.

The president proposes to hit businesses with an array of proposals he has offered in the past, including an end to subsidies for oil and gas companies, new taxes on hedge fund managers and a $30 billion fee on financial institutions aimed at repaying taxpayers for the federal TARP bailout.

The cuts target defense, heating assistance and community development grants and include a scale-down of the Pell grant program for college and vocational students.

The announcement was Obama’s opening argument in what is likely to be months of debate with congressional Republicans who want to see deeper cuts.

He cast the reductions as necessary but also said that more funding for scientific research, innovation and education were essential to keep American competitive with other nations.

“It would mean cutting things that I care deeply about,” Obama said. “But if we’re going to walk the walk when it comes to fiscal discipline, these kinds of cuts will be necessary,”

He said that “while we are absolutely committed to working with Democrats and Republicans to find further savings … we can’t sacrifice our future in the process.”

Obama described his education initiatives as “investments in the future” and said he would fight for more funding.

Although Obama seeks an overhaul of the corporate tax code to lower the 35 percent rate on corporate profits, his budget does not make that costly adjustment. Instead, it offers previous proposals to eliminate tax breaks for corporations that do business overseas, reaping $129 billion in new revenue through 2021.

 

Obama also directs Congress to develop a plan to pay for a new, multi-year transportation bill, a measure traditionally funded by increasing the federal tax on gasoline. “Bipartisan financing” for the transportation trust fund is likely to add another $328 billion to the revenue tally, raising total tax hikes in Obama’s budget request to nearly $2 trillion through 2021.

<!– var rn = ( Math.round( Math.random()*10000000000 ) ); document.write('‘) ; // –>The request drops one major proposal from previous budgets: Obama’s plan to develop a system of tradeable vouchers for greenhouse gas emissions. The measure, which passed the House, came under fierce attack from the GOP and the industry and was never taken up by the Senate.

Obama’s deficit-reduction strategies would do little to improve the immediate budget outlook. Obama projects that the deficit will hit a record $1.6 trillion this year – which, at nearly 11 percent of the economy, would be the largest since World War II. The bigger wave of red ink is caused in part by the recent bipartisan tax deal, which reduced payroll taxes this year for virtually every working American.

The annual deficit would recede to $1.1 trillion next year, as Obama’s latest policies began to take effect – the fourth straight year of trillion-dollar deficits. Obama projects that the deficit would fall rapidly thereafter, settling around $600 billion a year through 2018, when it would once again begin to climb as a growing number of retirees tapped into Social Security and Medicare.

All told, Obama estimates that the nation would have to borrow an additional $7.2 trillion through 2021 under his policies, an improvement from previous projections that exceeded $9 trillion. His plan calls for annual deficits – and therefore annual borrowing – to stabilize at about 3 percent of the economy for much of the decade. The national debt would then level off at about 76 percent of economy, nearly double the debt burden the nation carried before the recent recession.

However, those figures are based on the assumption that the economy will grow 4 percent in 2012 and 4.5 percent in 2013 – well above most private and governmental projections.

Obama said the document represents a pivot toward fiscal responsibility after two years of increased spending to stabilize the ravaged economy.

“Now that the threat of depression has passed, and economic growth is beginning to take hold, taking further steps toward reducing our long -term deficit has to be a priority, and it is in this budget,” Obama wrote. “We will not be able to compete with countries like China if we keep borrowing more and more from countries like China.”

But Republicans blasted the document as a bait-and-switch, saying it fails to live up to recent assertions by White House budget director Jacob Lew that Obama would reduce deficits primarily by cutting spending.

“What we have here is a total abdication of leadership and talking points based on gimmicks and cooking the books,” House Budget Committee Chairman Paul Ryan (R-Wis.) said in an interview. “To me, it’s more than disappointing. I expected more taxes, but I also expected some serious spending controls or reforms, and we’re getting none of it.”

Although the budget request offers an important glimpse of the president’s priorities – his first since Republicans regained control of the House in November – it is unlikely to have much influence in the budget debate on Capitol Hill. House Republicans plan to offer their own spending proposal for fiscal 2012, after attempting to push through sharp and immediate cuts to spending this year.

Democrats, who control the Senate, have vowed to block the GOP cuts, setting the stage for a battle that could shut down the government unless the two sides can agree by a March 4 deadline. For next year’s budget, Senate Democrats are more amenable to Obama’s approach. But they, too, are pursuing a bolder budget strategy in hopes of striking a bipartisan compromise that would go further to solve the nation’s long-term problems.

 

“If we’re going to get this debt down to a level that’s sustainable, then we’ve got to do substantially more than $1 trillion worth of deficit reduction in the next decade. We just do,” said Senate Budget Chairman Kent Conrad (N.D.).

<!– var rn = ( Math.round( Math.random()*10000000000 ) ); document.write('‘) ; // –>A senior administration official said Obama’s budget request maps “a sustainable path” that would stabilize government finances in preparation for a broader debate about how to tackle the biggest drivers of future deficits: Social Security and health care for the elderly, as well as a tax code that offers more in breaks and deductions than it collects in revenue.

Obama’s budget makes clear that he will not take the lead in that debate: It contains no specific recommendations for tax or entitlement reform.

Senior administration officials pointed to two significant changes that would improve the budget outlook by eliminating long-standing gimmicks Congress has used to hide the true depth of the red ink. The first would cover the cost of adjusting Medicare to ensure that payments to physicians are not subject to steep reductions. The second would pay for adjustments to the alternative-minimum tax to prevent it from striking deep into the middle class over the next three years.

And with Republicans unwilling to consider changes in tax policy as part of their deficit-reduction effort, Obama challenges them to reconsider. If Congress would permanently fix the AMT, or pay for its provisions, after 2014, the nation’s debt would start to shrink as soon as 2015.

The budget plan offers challenges for Democrats, as well. With voters clamoring for less spending, Obama is proposing cuts that many of his colleagues in Congress will find painful, lawmakers said.

A five-year freeze on domestic programs would reduce spending in that category to the lowest level, measured against the economy, since President Dwight D. Eisenhower left office in 1961. Half of all agencies would see their budgets reduced.

Among the cuts: Community development block grants would lose $300 million; low-income heating assistance would be sliced in half; a Great Lakes Restoration initiative would lose 25 percent of its funding; $1 billion would be cut from large airport grants and nearly $1 billion would be trimmed from a fund that finances water treatment plans and other infrastructure projects.

Nearly 40 duplicative or inefficient education programs would be condensed into 11, and 13 more would be eliminated. Sixty duplicative transportation programs would be consolidated into five, and limited to making investments only if Congress agrees on a financing plan that would not increase the deficit.

The Pentagon would also take a hit of $78 billion over the next five years, and defense spending would increase only for inflation thereafter. Combined with the drawdown in Iraq, overall military spending would be cut by 5 percent in 2012, compared with Obama’s fiscal 2011 request.

On Sunday, a senior White House official pointed to a trade-off that he called emblematic of the administration’s efforts: a plan to scale back portions of the Pell grant program, a key initiative of the Obama administration, to cover the growing cost of providing a maximum $5,550 benefit to more than 9 million eligible students.

Republicans attacked the blueprint based on early reports, saying it would do too little to satisfy the public hunger for smaller government.

“The president talks like someone who recognizes that spending is out of control, but so far it hasn’t been matched with action. And his only solution to one of the most significant problems facing our country is to lock in spending at levels we all know are completely unsustainable,” Senate Minority Leader Mitch McConnell (Ky.) said in a statement. “Americans don’t want a spending freeze at unsustainable levels. They want cuts, dramatic cuts.”

Democrats defended the president.

Obama’s budget blueprint “strikes the right balance, offering tough cuts in a responsible manner,” said Rep. Chris Van Hollen (Md.), the senior Democrat on the House Budget Committee. “Compared to the slash-and-burn Republican approach, this budget positions the president as offering a responsible approach to deficit reduction.”

Hu Jintao State Dinner

CHRISTOPHER BODEEN   01/16/11 08:24 PM   AP

BEIJING — Chinese leader Hu Jintao is being feted in Washington this week with a lavish state banquet at the White House and other pomp usually reserved for close friends and allies – all intended to improve the tone of relations between a risen, more assertive and prosperous China and a U.S. superpower in a tenuous economic recovery.

The shaky trust between the United States and China has been eroding recently because of an array of issues – currency policies and trade barriers, nuclear proliferation and North Korea – and both sides seem to recognize the need to recalibrate relations.

The U.S. is one of China’s biggest markets, with $380 billion in annual trade largely in Beijing’s favor. Washington increasingly needs Beijing’s help in managing world troubles, from piracy off Africa to Iran’s nuclear program and reinvigorating the world economy.

Hu sounded a conciliatory tone in a rare interview with U.S. newspapers ahead of his visit, saying the two countries could mutually benefit by finding “common ground” on issues ranging from combatting terrorism and nuclear proliferation to clean energy and infrastructure initiatives.

“There is no denying that there are some differences and sensitive issues between us,” Hu said in written answers to questions submitted by The Washington Post and The Wall Street Journal that were published over the weekend. “We both stand to gain from a sound China-U.S. relationship, and lose from confrontation.”

Hu called for more dialogues and exchanges to enhance “practical cooperation,” stressing the need to “abandon the zero-sum Cold War mentality” in U.S.-China relations.

Center for Strategic and International Studies scholar Charles Freeman, a former trade negotiator in the George W. Bush administration, said, “It is absolutely critical for the two sides to be setting a tone that says ‘hang on a second, we are committed to an effective, positive relationship.'”

The state banquet President Barack Obama is hosting will be Hu’s first. In the days before his visit, senior officials from both countries have spoken publicly in favor of better ties.

Secretary of State Hillary Rodham Clinton said in a speech Friday that the countries needed to manage their conflicts but their shared interests were so entwined as to constitute entanglement.

“History teaches us that the rise of new powers often ushers in periods of conflict and uncertainty,” Clinton said. “Indeed, on both sides of the Pacific, we do see trepidation about the rise of China and the future of the U.S.-China relationship. We both have much more to gain from cooperation than from conflict.”

Chinese officials have emphasized what they see as common concerns while acknowledging the complexity of the relationship.

“When the relationship is strained we need to bear in mind the larger picture and not allow any individual issue to disrupt our overall cooperation,” Vice Foreign Minister Cui Tiankai said in a speech Friday.

Such maxims, however, don’t apply to issues China defines as its “core interests,” including Taiwan, Tibet and the overarching authority of the Communist Party. That’s a condition Hu’s visit won’t change.

In his interview for the U.S. newspapers, Hu said the two countries should “respect each other’s choice of development path,” an implicit rejection of U.S. criticism of China’s human rights record and other internal affairs.

Hu, whose four-day trip starts Tuesday, is expected to talk up China’s intended peaceful rise in a speech to business leaders and opinion-makers in Washington on Thursday and to highlight the benefits of China’s market and investment when visiting Chicago.

Aware of China’s plummeting image in American opinion, Chinese Foreign Ministry functionaries have in recent weeks been looking for ways to make the usually stiff Hu, and China as a country, appear more human, something akin to reformist patriarch Deng Xiaoping’s donning a 10-gallon hat in Houston in 1979 just after the opening of diplomatic relations.

For the protocol-obsessed Chinese leadership, a highlight of the visit will be Wednesday’s state banquet – an honor denied Hu on his last trip to the White House in 2006. President George W. Bush thought state banquets should be reserved for allies and like-minded powers and instead gave Hu a lunch. Even worse, a member of Falun Gong, the spiritual movement banned by China, disrupted Hu and Bush’s joint appearance, and an announcer incorrectly called China “The Republic of China,” the formal name of democratically ruled Taiwan.

In this visit, no major agreements are expected. Talks over a joint statement ran aground until last-minute negotiations in Beijing last week. But the shared recognition to put things right and the bumpy relations of the last year augur for a better outcome.

The U.S. wants Beijing to move toward faster appreciation of its currency to boost U.S. exports and reduce unemployment. But in his written answers to the U.S. newspapers, Hu did not signal any significant changes in China’s currency policy.

China now holds the world’s largest foreign currency reserves at $2.85 trillion and a major chunk of U.S. government debt. At current rates, economists estimate China will overtake the U.S. as the world’s largest economy within 20 years, possibly by the end of this decade.

Hu said “the current international currency system is the product of the past,” but he did not dispute the U.S. dollar’s role as the global reserve currency. He said it “will be a fairly long process” before the Chinese renminbi can become an international reserve currency.

Beijing has largely rebuffed U.S. appeals for help in reining in bellicose North Korea, curbing Iran’s nuclear program and dismantling of trade barriers. Chinese officials and the nationalistic state-run media have criticized Washington’s renewed attention to Japan, South Korea and Southeast Asia, its arms sales to Taiwan and its continued naval patrols in the Yellow and South China seas as attempts to constrain China’s influence in its backyard.

March 17, 6:18 PM Political Buzz Examiner Ryan Witt

By now the health care reform bill has become something like Bigfoot in that everyone talks about it but few know what it really looks like if it exists at all.  For clarification there is in fact a “bill” which is set to be voted on by the House of Representatives this weekend.  The current bill was already passed by the Senate and has been analyzed extensively by experts. However in addition to the Senate bill the House also plans to vote on a “fix” to the bill which will then go back to the Senate.  The “fix” is not all together settled and is still being written after going through markup in the House Budget Committee (picture on left).

Still the fixes are relatively small because they must be in order to be passed through the reconciliation process in the Senate.  We therefore know most everything that the bill would do if it is passed this weekend.  Here is a plain language summary of the major provisions of the health care reform bill.

Would I Be Forced to Purchase Insurance?

Probably not.  If you already have employer-provided insurance you can keep it.  If you do not currently have any insurance you may have to purchase a plan by 2014.  Beginning in 2014 most Americans would have to purchase health care insurance or be forced to pay a fine.  If someone already has insurance (including through their employer) they would not need to worry about this provision.  For those who would be affected they could purchase insurance from anywhere but if they do not they would need to pay either $750 or 2% of their income, whichever is greater.  Exemptions would be granted for those in financial hardship which is measured using the poverty line.

Would My Current Insurance Be Affected?

Yes and no.  Yes in that any new plans would be regulated by the federal government.  The regulation would make plans provide a minimum of amount of benefits but not a maximum.  It would also implement consumer protections and an appeals process for consumers who want to dispute the decisions of their insurance companies on individual coverage.  The Congressional Budget Office estimates that premiums would go down under reform compared to the rate premiums would go up without reform.

Having said all that the reform plan “grandfathers” plans already in existence.  Therefore a plan currently in existence would be exempt to any changes at least for a while under the current bill.

What About This Exchange Idea and the Public Option?

There is no public option or new government provided insurance plan under the current bill.  Instead each state would have a health care insurance exchange where any individual can purchase health insurance.  The insurance plans in the exchange would have to meet federal regulation that would ensure they provide minimum benefits, etc.  Individuals who are currently covered by an employer-provided plan could not purchase form the exchange.  Undocumented immigrants could also not purchase from the plan. 

All plans in the exchange would be regulated by the federal government.  These regulations would include requirements that the plans provide a certain minimum level of coverage, that they do not discriminate based on pre-existing exclusions, that they spend a high percentage of their premiums on actual care (around 80%), and that they follow certain consumer protection laws.  In addition plans could no longer limit how much costs they are willing to cover.  In the past insurance companies would be able to limit their liability to $250,000 for example and stop paying once that limit was reached.

What Would Happen to Medicare?

The proposal would set up a board that would research and propose solution to reduce the costs of Medicare.  The board would be specifically prohibited from proposing anything which would amount to rationing care for the elderly.  Instead the proposal would focus on reducing waste and fraud while making Medicare more efficient.

What if I Can Not Afford Health Insurance?

Individuals who make between 100%-400% above the federal poverty level would be eligible to receive credits to assist them in purchasing health care insurance.  The amount of credit would generally go down the more income an individual made.  For the poorest the credit may pay for all of their health care premiums.

Would Employers Be Forced to Provide Insurance?

Maybe.  If a business has over 50 full-time employees they will be forced to offer health care coverage or face a $750 fee per employee.  Businesses with less than 50 employees would be exempted from providing coverage.

What About Medicaid?

Medicaid would be expanded to cover all individuals under the age of 65 who make less than 133% of the federal poverty level.  Currently the poverty level is around $18,000 for a family of three.

Does the Bill Pay for Abortions?

The bill keeps the current federal law on abortion funding in that federal funds could not be used directly to pay for abortion or abortion-related services.  The current bill does not include the abortion language in the House bill which put restriction on funding which were even more strict than the current law.  Essentially the House bill would have prevented individual receiving federal assistance from purchasing any health care plan (private or not) that provided abortion coverage.

What About Small Businesses?

Initially small businesses would receive a tax credit for up to 35% of the money they pay to purchase health insurance for their employees.  By 2014 that percentage would increase to 50%.  The idea is to help small businesses pay for health insurance coverage since they currently do not have the bargaining power of larger businesses.

Small businesses would be allowed to join forces in order to purchase insurance for their employees.  In other words five small businesses could all negotiate with an insurance company together in order to get a lower rate as big businesses currently do.

How is It All Paid For?

First there is a cadillac plan tax.  If an insurance plan costs $8,500 for an individual or $23,000 for family it would be taxed at 40% for any amount above those amounts.  Most health care plans cost much less than those amounts in premiums.

Secondly there are taxes on health insurance companies, pharmaceuticals, and medical supply companies.  Each of these companies would be assessed fees.  Pharmaceuticals would pay $2 billion, medical supply companies would pay $2.3 billion, and health insurance companies would pay $2 billion starting in 2011 and increasing to $10 billion by 2017.

Finally the bill would count on increased efficiency and reduced waste in Medicare to offset some of the other costs.  Overall the bill was projected to save a little over $100 billion in the first ten years of its existence and well over $700 billion after that.  Those projections were done by the non-partisan Congressional Budget Office.

Obama Health Care

March 5, 2010

WASHINGTON — The end game at hand, President Barack Obama took command Wednesday of one final attempt by Democrats to enact bitterly contested health care legislation, calling for an “up or down vote” within weeks under rules denying Republicans the ability to kill the bill with mere talk. Appearing before a White House audience of invited guests, many of them wearing white medical coats, Obama firmly rejected calls from Republicans to draft new legislation from scratch. “I don’t see how another year of negotiations would help. Moreover, the insurance companies aren’t starting over,” the president said, referring to a recent round of announced premium increases affecting millions who purchase individual coverage.

While Obama said he wanted action within a few weeks, Senate Majority Leader Harry Reid, D-Nev., seemed to hint a final outcome could take far longer. “We remain committed to this effort and we’ll use every option available to deliver meaningful reform this year,” he said.

 The results will affect nearly every American, mandating major changes in the ways they receive and pay for health care or leaving in place current systems that leave tens of millions with no coverage and many others dissatisfied with what they do get.

With Republicans united in opposition, there is no certainty about the outcome in Congress – or even that Democrats will go along with changes Obama urged on Wednesday in what he described as a bipartisan gesture. With polls showing voters unhappy and Democrats worried about this fall’s elections, Obama also sought to cast the coming showdown in terms larger than health care, which is an enormously ambitious undertaking in its own right. “At stake right now is not just our ability to solve this problem, but our ability to solve any problem,” he said.

Republicans dug in for another struggle on an issue that they agreed would echo into the fall campaign. The Senate GOP leader, Mitch McConnell of Kentucky, said a decision by Democrats to invoke rules that bar filibusters would be “met with outrage” by the public. “This is really not an argument between Democrats and Republicans. It’s an argument between Democrats and the American people,” he said. At its core, the legislation under discussion still is largely along the lines Obama has long sought and GOP critics attack as a government takeover of health care. It would extend coverage care to tens of millions of uninsured Americans while cracking down on insurance company practices such as denying policies on the basis of a pre-existing medical conditions. A new “insurance exchange” would be created in which private companies could sell policies to consumers under terms fixed by the federal government.

Much of the cost of the legislation, nearly $1 trillion over a decade, would be financed by cuts in future Medicare payments to hospitals and other providers and higher payroll taxes on individuals earning more than $200,000 and couples over $250,000.

 Story continues below The president’s appearance marked a presumably final pivot point in a long, uphill effort by Obama and other Democrats to enact far-reaching changes to the health care system – and with his own administration at an important crossroads. Eager to turn attention to efforts to stimulate the economy and create jobs, the president is seeking a victory on health care that can also give him a boost on other priority legislation. At the same time, a defeat could damage Obama’s ability to help fellow Democrats heading into the fall campaign. Failure on health care could well lead to a shake-up of the president’s White House team, which has received criticism recently from Democratic lawmakers.

After nearly a year of struggle, the House and Senate passed separate bills late last year, and appeared on course for approving a final compromise version early in 2010. But those efforts were abruptly abandoned when Republicans unexpectedly won a special election in Massachusetts. Sen. Scott Brown’s victory gave the GOP an ability they had lacked, the strength to sustain a filibuster, a form of opposition that requires supporters of a bill to post 60 Senate votes in order to cut off debate and force a final decision.

 Democrats went into something of a political fetal position, and have begun to stir in recent days only as Obama asserted his determination with a bipartisan summit followed by a revised set of proposals.

Obama said the use of rules that deny the minority the right to a filibuster had been used numerous times in recent years, including on passage of welfare reform legislation in the 1990s and twice when President George W. Bush pushed tax cuts to passage. Health care “deserves the same kind of up or down vote” as those earlier measures, he said.

 Under the rather complicated approach under discussion, the House would be asked to approve the bill that passed the Senate late last year, despite objections by many members of the rank and file to several provisions. Simultaneously, both houses would also vote for a companion measure whose purpose would be to make changes in the first bill sought by either House Democrats or the White House.

Obama said he was exploring GOP proposals for cracking down on fraudulent medical charges, revamping ways to resolve malpractice disputes, boosting doctors’ Medicaid reimbursements and offering tax incentives to curb unnecessary patient visits to doctors. The ideas include an experiment that would establish special courts in which judges with medical expertise would decide malpractice allegations. The idea has been criticized by the Center for Justice & Democracy, a consumer group that prefers the current system of awarding damages. It said health courts would be “anti-patient.”

The White House and Democratic leaders said they hoped that Obama’s maneuvering would at least win the votes of wavering conservative and moderates in their own party, even if it didn’t entice Republicans. But there was no guarantee of success, despite Obama’s vow to do everything in his power to succeed – and a White House announcement that he would travel to Pennsylvania and Missouri next week to campaign for the legislation.

 ___ Associated Press writers Jennifer Loven, Ben Feller, Alan Fram and Erica Werner contributed to this story.

NEWTON, Iowa — President Barack Obama, standing Wednesday in the shell of a once-giant Maytag appliance factory that now houses a wind energy company, declared that a “new era of energy exploration in America” would be a crucial to leading the nation out of an economic crisis.

With pieces of wind turbine towers as a backdrop, Obama touted the small manufacturing firm as a success and as a step toward reducing the United States’ reliance on polluting fuels. But as the president on Earth Day set a goal for wind to generate as much as 20 percent of the U.S. electricity demand by 2030, legislation to make that a reality faced a challenge back in Washington in the Democratic-led Congress.

“The nation that leads the world in creating new energy sources will be the nation that leads the 21st century global economy,” Obama said in a state that launched him on the road to the White House with a surprise upset over one-time rival Hillary Rodham Clinton.

“America can be that nation. America must be that nation. And while we seek new forms of fuel to power our homes and cars and businesses, we will rely on the same ingenuity _ the same American spirit _ that has always been a part of our American story.”

It’s an American spirit, though, that has been damped with economic downturn and financial crisis.

The president left Washington for a few hours Wednesday to visit this small Iowa town, which took a huge economic hit when Maytag Corp. shut its doors in 2007. The Maytag plant employed some 4,000 in a town of 16,000 residents in jobs that paid about $30,000 to $40,000 a year.

In its place is Trinity Structural Towers, a 90-person manufacturing firm that makes parts of wind turbines the president hopes to expand on land and at sea through the government’s first plan to harness ocean currents to produce energy.

O”Now, the choice we face is not between saving our environment and saving our economy,” Obama said. “The choice we face is between prosperity and decline. We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.”

In Washington, the president’s plan to increase alternative energy sources and create environmentally friendly jobs hit some snags despite Obama’s fellow Democrats controlling both chambers of Congress. Energy Secretary Steven Chu, EPA Administrator Lisa Jackson and Transportation Secretary Ray LaHood reinforced Obama’s message in testimony to a House Energy and Commerce subcommittee on Wednesday.

The administration’s draft bill is designed to help stem the pollution blamed for climate change by capping greenhouse gas emissions and reducing the nation’s reliance on fossil fuels. The goal is to reduce greenhouse gases by 20 percent from 2005 levels by 2020, and by 83 percent by mid-century.

The White House wants to see movement on the legislation by Memorial Day. To help that along, aides said the president plans to personally make his case that the costs of dealing with climate change can be reduced dramatically by adopting programs that will spur energy efficiency and wider use of non-fossil energy such as wind, solar and biofuels.

In Newton, Obama proclaimed that “once-shuttered factories are whirring back to life,” although the facility he toured is a shadow of what it replaced here about 30 miles east of Des Moines.

“Today this facility is alive again with new industry,” Obama said, while noting that “this community continues to struggle and not everyone has been so fortunate as to be rehired.”

Trinity now employs about 90 people _ hardly the replacement Newton so desperately needs.

“We’ll never have another Maytag,” said Paul Bell, a Newton police officer who also serves in the state legislature. “Maybe we shouldn’t have had a company here that the majority of people worked for. We put all of our eggs in one basket.”

Recognizing the challenges remaining in Newton and scores of towns like it coast-to-coast, Obama quickly added: “Obviously things aren’t exactly the same as they were with Maytag.”

With the same root in realism, Obama acknowledged the United States’ energy policy will not change instantly, given the country’s reliance on oil and natural gas.

“But the bulk of our efforts must focus on unleashing a new, clean-energy economy that will begin to reduce our dependence on foreign oil, will cut our carbon pollution by about 80 percent by 2050 and create millions of new jobs right here in America, right here in Newton,” he said.

But it won’t come quickly. The United States imports almost 4.9 billion barrels of oil and refined products annually. That is raw energy that cannot be replaced, one windmill at a time.

Instead, Obama urged bold thinking _ and spending _ to address climate change and energy supplies.

“So on this Earth Day, it is time for us to lay a new foundation for economic growth by beginning a new era of energy exploration in America,” he said to applause.

Obama also pushed personal responsibility, calling on every American to replace one incandescent light bulb with a compact fluorescent. The president also said the leaders of the world’s major economies will meet next week to discuss the energy crisis.

In Landover, Md., on Monday, Vice President Joe Biden marked Earth Day by announcing that $300 million in federal stimulus money will go to cities and towns to purchase more fuel-efficient vehicles.

___

Associated Press writer Brian Westley in Landover, Md., contributed to this report.