Washington Report

Finance Committee Kills Public Option

Public options in the healthcare bill currently in markup in the Senate Finance Committee suffered twin defeats Sept. 29 when amendments offered by Sen. John D. Rockefeller (D-W.Va.) and Sen. Charles Schumer (D-N.Y.) were rejected by 15 to 8 and 13 to 10. Chairman Max Baucus (Mont.), who crafted the Finance Committee’s bill and did not include a public option, voted against both amendments.

Under the Rockefeller amendment, doctors and hospitals participating in the public option would be paid Medicare payment rates for the first two years. Practitioners participating in both programs would receive a 5% bonus.

The Congressional Budget Office said the amendment would cut $50 billion from the bill’s cost over 10 years. But some lawmakers say Medicare rates are too low to keep doctors and hospitals in business. Five Democrats voted against it.
Schumer’s plan called for negotiated rates and would cost more. Three Democrats voted nay.

Baucus just wants a bill that can win 60 votes.

On the House side, lawmakers are weighing options similar to the two senators’ amendments, and will move forward with the one that has the greatest support.

“A lot of members feel that if that’s the discussion, we’ve already won,” said Rep. Robert Scott (D-Va.). But, he adds, some argue tax increases will be needed to cover the cost difference between negotiated rates and Medicare plus five, while others are concerned that the latter would pay too little to attract individuals to healthcare professions and hurt hospitals.

“There are a lot of things to consider, some of which can probably be worked out separately, but we’re just seeing where people are,” said Scott.

Square Peg, Round Hole?

Just when he thought he was almost in, Winslow Sargeant, President Barack  Obama’s nominee for chief counsel in the Small Business Administration’s Office of Advocacy, may well be out.

By all accounts, Sargeant–former entrepreneur, researcher at the Small Business Innovation Research program manager turned venture capitalist–is enormously talented. The one thing he’s not, though, is an attorney. This deeply concerns Sen. Olympia Snowe (R-Maine), ranking member on the Senate Small Business Committee, so for now, Sargeant is on hold.

The chief counsel’s primary responsibility is to be the regulatory watchdog for small businesses and to protect their interests during the legislative and rulemaking process. Being an attorney isn’t statutorily required, but since the passage of the Regulatory Flexibility Act, which aims to reduce the regulatory burdens on small businesses, many believe it’s become increasingly apparent that it should be.

So why nominate Sargeant in the first place? “Great question,” said a senior Snowe aide, speaking anonymously. “He has a tremendous background and experience, but was miscast for this position. Or, maybe they want to change the office’s focus from its core function to a research function, which is only part of the job.”

The real answer, according to a former SBA official with close ties to the agency, is that agency administrator Karen Mills is the one who chose Sargeant, whom she knows from her venture capitalist past. “Sargeant’s been offered other positions at SBA but hasn’t accepted,” he added, because Mills is really pushing this nomination.

According to conventional wisdom, it won’t move until the healthcare debate has been settled, and how it turns out is anyone’s guess. “This is unchartered territory,” Snowe’s aide said.
RNC Chairman Asks, ‘Where’s the Focus?’

Republican National Committee chairman Michael Steele slammed President Obama in a conference call with reporters this week, saying that in the past several months the president has lurched from the stimulus to cap and trade to job creation to his Olympic pitch in Copenhagen.

“I think the president needs to, along with [members of Congress], tell the American people what their focus is going to be going into the fall and next year,” Steele said.  And while the Copenhagen trip was a “noble idea,” he added, “I just don’t think it’s necessary. I don’t know the judgment behind the president going. I just think it’s not a necessary trip right now when we are facing some pretty looming issues.”

On healthcare, Steele said Democratic plans to include an individual mandate to buy coverage will force “people with limited incomes to pay excessive fines,” if they don’t comply. “That to me is not a very smart economic strategy,” Steele added. However, all of the legislation making its way through Congress would provide subsidies to low-income people to purchase health insurance.

Steele also challenged the wisdom of imposing new taxes on the industry that manufactures wheelchairs and other medical devices. “This I find the most stunning, that we’re now looking at taxing wheelchairs and other devices that cost more than one hundred bucks. This to me is yet again not the way you stimulate an economy that is in recession,” said Steele.

Chicago Eliminated From Olympic Bid Despite Obama Lobbying

Despite an extraordinary lobbying effort to bring the 2016 Olympic and Paralympic games to Chicago

by both the president and first lady, as well as local luminaries such as Oprah Winfrey, who traveled to Copenhagen where the International Olympic Committee is meeting, the city was eliminated in the first round. Rio de Janeiro, Madrid, and Tokyo were also contenders. Rio won.

Those of a betting nature were banking on either Chicago or Rio winning the 2016 bid, but the Olympics have never been held in South America, which likely gave the city an edge.

On Thursday, Michelle Obama made a very emotional appeal to the committee, and recalled growing up watching Olympic games with her father, who later was diagnosed with multiple sclerosis.

“Some of my best memories are sitting on my dad’s lap, cheering on Olga and Nadia, Carl Lewis, and others for their brilliance and perfection,” she said. “If he could have seen the Paralympic Games share a global stage with the Olympic games, if he could have witnessed athletes who compete and excel and prove that nothing is more powerful than the human spirit, I know it would have restored in him the same sense of unbridled possibility that he instilled in me.”

The president, in his pitch for his adopted hometown, said, “I know you face a difficult choice among several great cities and nations with impressive bids of their own.  So I’ve come here today to urge you to choose Chicago for the same reason I chose Chicago nearly 25 years ago — the reason I fell in love with the city I still call home.”

House Panel Examines Importance of Expiring Tax Credits

The House Small Business Committee

held a hearing on Sept. 30 to discuss tax breaks set to expire at year’s end and the impact on small business. The breaks include tax provisions for R&D credits, clean energy incentives, the Alternative Minimum Tax exemption amount, accelerated depreciation, and others. In addition, provisions such as the first time homebuyer credit are scheduled to sunset at the end of the year.

“Whether we’re talking about home-office deductions or bonus depreciation for equipment purchases, entrepreneurs rely on tax measures to expand their ventures,” said committee chair Rep. Nydia Velazquez (N.Y.).  For small firms facing tightening credit and shrinking capital, incentives can make all the difference. In some instances they’re the deciding factor for things like hiring workers and making investments.”

Keith Hall, representing the National Association for the Self-Employed, testified that allowing the tax incentives to expire that have clearly made a difference “seems t be the wrong signal at the wrong time.”

But the committee’s ranking Republican, Rep. Sam Graves of Missouri, argued that temporary tax provisions make it more difficult for companies to operate because they can’t budget or plan for the long term.

“Because small companies are constantly squeezed by ever growing costs, tax relief is essential. I would prefer that Congress pass permanent tax rate reductions rather than narrower, temporary provisions that must be renewed by Congress year after year,” said Graves. He added that if the former President George W. Bush’s 2001 and 2003 tax cuts, set to expire in 2010, are not made permanent, “working families will see their taxes increase, and their prospects for employment decline.”