Deal with 'Blue Dogs' sets up health care vote

WASHINGTON (AP) - After weeks of turmoil, House Democrats reached a shaky peace with the party's rebellious rank-and-file conservatives Wednesday to clear the way for a vote in September on sweeping health care legislation.

Bipartisan Senate negotiators reported progress, too, on a bill said to extend coverage to 95 percent of all Americans without raising federal deficits.

"We're on the edge, we're almost there," said Sen. Charles Grassley of Iowa, the senior Republican involved in the secretive talks, although a fellow GOP participant, Sen. Mike Enzi of Wyoming, dissented strongly.

Sen. Max Baucus, D-Mont., chairman of the Finance Committee, said preliminary estimates from congressional budget experts showed the cost of the emerging Senate plan was below $900 billion and would result in an increase in employer-sponsored insurance - conclusions that may reassure critics who fear a bloated bill that prompts businesses to abandon the coverage they currently provide.

Across the Capitol, House Democratic leaders gave in - at least temporarily - to numerous demands from rank-and-file rebels, so-called Blue Dogs from the conservative wing of the party who had been blocking the bill's passage in the last of three committees.

The House changes, which drew immediate opposition from liberal lawmakers, would reduce the federal subsidies designed to help lower-income families afford insurance, exempt additional businesses from a requirement to offer insurance to their workers and change the terms of a government insurance option.

At their core, both the House bill and the plan under negotiation in the Senate are designed to meet President Barack Obama's goals of spreading health coverage to millions who now lack it, while slowing the skyrocketing growth in health care costs nationally.

Obama has placed the issue atop his domestic agenda, and as recently as two weeks ago was pressing the House and Senate insistently to pass separate bills by the end of July or early August.

The White House issued a statement praising the development in the House, and with appearances in North Carolina and Virginia, the president sought to minimize the significance of the slippage in his timetable.

"We did give them a deadline, and sort of we missed that deadline. But that's OK," Obama said. "We don't want to just do it quickly, we want to do it right."

In his appearances, Obama stressed that any legislation he signs will include numerous consumer protections, including a ban on insurance company denials of coverage based on pre-existing medical conditions. A White House fact sheet left room for insurers to continue charging higher premiums based on prior health problems.

Rep. Mike Ross of Arkansas, a leader of conservative and moderate "Blue Dog" Democrats, said the changes agreed to by the leadership in the House bill would reduce costs in the bill by about $100 billion over 10 years. But the new break for small businesses, among other changes, also increased costs substantially, so it wasn't clear that the deal actually generated net savings.

While Baucus reported the Senate Finance measure carried a price tag of under $1 trillion, congressional officials said it included only the cost of the first year of a 10-year, $245 billion program to increase doctor fees under Medicare. House Democrats used a similar sleight of hand, excluding the entire $245 billion when claiming their measure wouldn't add to the deficit.

The House deal was worked out over hours of talks that involved not only Democratic leaders but also White House officials eager to advance the bill. Senior congressional aides cast it as a temporary deal, saying leaders had not committed to support it once the bill advances to the floor of the House in the fall.

As word of the agreement spread, liberals fired back. "We do not support this," said Rep. Lynn Woolsey, D-Calif., co-chair of the Progressive Caucus. "I think they have no idea how many people are against this. They can't possibly be taking us seriously if they're going to bring this forward."

Plans to convene the Energy and Commerce Committee for a vote slipped until Thursday as leaders sought to allay concerns of liberals.

"We just need to get everybody on board," said Rep. Frank Pallone, D-N.J., who chairs the panel's subcommittee on health.

Whatever the longer-term budgetary or political ramifications, Democrats said the way was now clear for the committee to approve its portion of the legislation, the last step before it comes to the floor for a vote.

"We're hoping to get a bill out before we leave ... this week," said Rep. Henry Waxman, D-California, the panel's chairman.

In the Senate, Baucus, Grassley and two other senators from each party have been negotiating for weeks in hopes of agreeing on compromise legislation. Both men face considerable pressure from their respective parties - Baucus not to stray too far from Democratic objectives, Grassley not to hand the president a political victory.

Republican Sen. Enzi dissented strongly from any impression that a deal was imminent. "There are big issues that haven't been resolved. We haven't even gotten to the little issues," he told reporters. He also minimized the importance of Baucus' claim, saying the Congressional Budget Office has yet to provide a cost estimate "because no precise bill language is available yet."

Majority Leader Harry Reid, D-Nev., has given Baucus months to see compromise across party lines is possible, and he told reporters during the day he expects a bipartisan plan to emerge.

The pace of decisions appears to have accelerated in recent days, with negotiators all but settling on a tax on high-cost insurance plans to help pay for the bill, as well as a new mechanism designed to curtail the growth of Medicare over the next 10 years and beyond.

More problematic from the Democrats' point of view is a tentative agreement to omit a provision in which the government would sell insurance in competition with private industry. In its place, the group is expected to recommend nonprofit cooperatives that could operate at the state, regional or even national level.

Nor is any bipartisan recommendation likely to include a requirement for large businesses to offer insurance to their workers. Instead, they would have a choice between offering coverage or paying a portion of any government subsidy that noninsured employees would receive.

Like the House bill, the bipartisan proposal under discussion would expand eligibility for Medicaid to 133 percent of the federal poverty level.

It provides for federal subsidies for individuals and families up to 300 percent of poverty, less than the 400 percent in the House measure.

Even if the negotiations succeed before the Senate's vacation, it is not clear when the Finance Committee would vote.

The proposal would have to be blended with a more liberal measure that was approved last month by the Senate Health, Education Labor and Pensions Committee. It would then go to the Senate floor, where Democrats have 60-40 majority rather than the 3-3 lineup that Baucus and Grassley have led for months.

House Republican conservatives, relegated to the sidelines of the debate, unveiled a $700 billion health care plan with tax credits to help defray the cost of insurance.

Unlike Democratic plans, it would not set up new federally regulated purchasing pools for individuals and small businesses. Instead, it would allow individuals to use the Internet to purchase lower-cost coverage if available anywhere in the country. It would provide grants to states to help set up high-risk pools for people with medical problems who are denied coverage by commercial insurers.

The GOP bill also would limit jury awards for pain and suffering, and create new courts with specially trained judges to decide medical malpractice claims.

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Associated Press writers Liz Sidoti, Alan Fram, Erica Werner and Ricardo Alonso-Zaldivar contributed to this story.