Health care overhaul endangered by Mass. election

WASHINGTON (AP) - Democrats faced the unthinkable Tuesday - losing their prized health care overhaul along with Edward M. Kennedy's Senate seat, just as Kennedy's and President Barack Obama's goal seemed tantalizing close to reality.

Obama and party leaders anxiously worked through fallback options - none good - for salvaging the president's top domestic initiative. At the same time, their eyes were on Massachusetts' special election.

If Republican state Sen. Scott Brown prevailed over Democratic Attorney General Martha Coakley, it would deprive Democrats of the 60-vote Senate majority needed to pass health care over the so-far-unanimous opposition of Republicans.

That would force Obama and Democratic leaders to consider a series of wrenching short cuts involving escalating political risk. Significant differences between the House and Senate health care bills would have to be quickly settled by presidential fiat, and Democratic lawmakers would have to move in virtual lockstep to enact them.

That could be too much to ask from rank-and-file Democrats demoralized by losing a seat held in an almost unbroken line by a Kennedy since 1953. Efforts to woo a Republican convert could increase. But with polls showing voters soured on health care overhaul - and GOP leaders certain to intensify their attack - the president could be abandoned by lawmakers of his own party.

White House spokesman Robert Gibbs acknowledged for the first time that Obama may have come up short in making his case for the sweeping legislation.

"I think we'd be the first to admit that we think there are a lot more benefits than people see and feel in these bills," Gibbs told reporters. "If that's a failing, I think that it's certainly a failing that I and others here at the White House take responsibility for, up to and including the president."

Democratic congressional leaders put on a show of resolve. In 1994, Democrats failed to act on President Bill Clinton's health care package and lost control of Congress.

"Let's remove all doubt," House Speaker Nancy Pelosi, D-Calif., told reporters Monday. "We will have health care one way or another."

But how to get it done?

"I don't want to speculate," House Majority Leader Steny Hoyer, D-Md., said Tuesday. "We are not there on making that decision." The goal remains to get an agreement to resolve differences between the House and Senate bills, Hoyer insisted, and pass a final bill through the normal legislative process.

The House and Senate bills would provide coverage to about 95 percent of eligible Americans, offering federal aid for low-income and middle-class uninsured households. People who buy their own insurance and those working for small businesses would gain the most from the legislation, which would forbid insurance companies from denying coverage based on medical problems. For the first time, most Americans would be required to carry medical insurance.

As recently as Friday it seemed that Democratic congressional leaders and Obama were close to a deal to remove remaining obstacles to final passage in the House and Senate, sending the bill back for votes in both chambers.

Two fallback options if Democrats lose in Massachusetts were discussed over the weekend, but they represent a long shot. Even more uncertain are the chances for persuading Maine Republican Sen. Olympia Snowe to come along, since she opposed the Senate version.

The cleanest option calls for the House to quickly pass the Senate bill and send it to Obama for his signature. But that ignores at least two significant problems.

Labor unions are adamantly opposed to an insurance tax in the Senate bill, and they successfully negotiated with Obama last week to weaken it in key respects. Second, a core group of anti-abortion Democrats says the Senate bill's provisions on restricting taxpayer funding for abortion are too weak.

On top of that, many House Democrats do not believe the Senate bill provides enough aid to make health insurance affordable.

"The Senate bill clearly is better than nothing," Hoyer said. He refused to speculate on whether House Democrats could be cajoled into voting for it without changes.

Those House objections lead to the second fallback option: getting the Senate to accept changes to its bill as a condition for House passage. It involves a complicated legislative choreography that could take several weeks to play out.

Without 60 votes needed to overcome Republican delaying tactics, that strategy would require Senate Democratic leaders to use a special budget-related procedure to pass the changes with only 51 votes. It's guaranteed to enrage Republicans, and it's not clear that Senate Democratic leaders have political support to pull it off.

To complicate matters, additional legislation may be required to resolve disputes about abortion funding and illegal immigrants. In the meantime, the drumbeat from opponents of the legislation could be deafening.

Snowe, the Maine Republican who supported a version of the Senate bill in committee, remains an intriguing figure in the endgame.

Obama called Snowe on Friday to discuss health care. They have spoken before on the issue.

Snowe told The Associated Press earlier this month that she wants to improve the bill even if she ultimately votes against it. She opposed the measure in the Senate's Christmas Eve vote. "Undeniably, we need to have health care reform," she said.

Gibbs said Obama continues to work hard in winning over Snowe.

Meanwhile, Wall Street was cheering the prospect of a Republican win. Investors moved back into stocks on hopes that the Massachusetts election would diminish the power of Senate Democrats and make it harder for Obama to make changes to health care.