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Lobbyists Can’t Ignore Possible Passage of Health Care Bill in Reconciliation

Lobbyists who represent key stakeholders in health care reform quietly have begun plotting how their clients’ legislative priorities would fare if Members make good on the threat of moving reforms to a budget reconciliation package.

A budget reconciliation bill in the Senate would require a simple 51-vote majority, vastly easier to obtain than the usual 60 votes needed to break a filibuster.

As the health care debate has grown increasingly partisan, lobbyists say they are taking more seriously the looming possibility of having many reforms added to reconciliation.

“I think almost everyone looks at reconciliation as a last resort,— said John Rother, executive vice president of policy and strategy for the seniors’ lobby AARP. “But we haven’t made a lot of progress. Patience is running thin.—

Health care lobbyists say they are hedging their bets.

“The difference between the 60-vote bill and the 51-vote bill is pretty big, not only substantively, but also the political dynamics,— one health care consultant said. “From a lobbying tactics standpoint, what you’re doing right now is working both — because you don’t know which direction it’s going to go.—

Senators, especially Finance Chairman Max Baucus (D-Mont.), are still working with Republicans to find bipartisan agreement on a health care overhaul. That’s one track.

On the reconciliation track, lobbyists say they are attempting to navigate Senate rules and procedures to figure out what health care items could go — and could not go — with reconciliation.

In order to be included in the budget bill, policy measures would have to be scorable by the Congressional Budget Office and would be subject to Senate precedents and the Byrd rule, which prohibits “extraneous matter— on reconciliation bills.

“You’ve got to be carrying a couple of different approaches in your head,— said Eric Ueland, a lobbyist with the Duberstein Group and former chief of staff to then-Senate Majority Leader Bill Frist (R-Tenn.). “The whole context changes when you’re in a budget reconciliation process versus an open authorization process. It’s a time-limited process. They’re under the gun down there on the floor.—

Because of the arcane nature of the rules governing reconciliation, private-sector clients and even some Senate offices are reaching out to consultants like Ueland, former Senate Parliamentarian Robert Dove of Patton Boggs, and Martin Paone, who was the Senate’s Democratic secretary and managed its cloakroom.

The key question is what would be included under reconciliation and what would be the status of pre-existing industry deals, such as one struck with pharmaceutical companies that would reportedly raise $80 billion in revenue over 10 years or one with hospitals that agreed to take a $155 billion hit over a decade.

Lobbyists with pharmaceutical and hospital clients said it’s unclear for now what would happen to those deals, especially because budget reconciliation rules cover only a five-year period.

It’s also not clear whether items such as generic biologics, which does have a CBO score, would be eligible for reconciliation, several sources said.

In addition, many of the broader initiatives, such as insurance market reforms, would most likely not go on reconciliation.

Paone, who spent three decades on the Hill and is now a lobbyist at Timmons and Co., said many of the health care reform proposals can’t be scored by the CBO and would not be able to go on reconciliation, unless there was a 60-vote majority willing to waive the Budget Act.

“A lot of people don’t understand how difficult it is to meet all the Byrd rule exclusions,— he said, adding that Democrats looked at the idea back in 1994 during health care negotiations.

Dove said the only person who knows what could, and could not, be included under reconciliation is Alan Frumin, the current Parliamentarian.

“There are a lot of gray areas, and he will make those decisions,— Dove said. “He will keep his powder dry until the last possible moment.—

If health care reform gets lumped into reconciliation, Dove said the process will not be pretty.

“It involves weeks, sometimes months, of people coming in and going through in detail what it is they’re arguing for or against, and then the Parliamentarian weighs the back and forth,— Dove said. “It’s not fun.—

He added, “It’s not a process that lends itself to health care reform, and that’s the very reason it was not used in 1994.—

Senate Budget Chairman Kent Conrad (D-N.D.) has warned of the pitfalls of doing health reforms on reconciliation because much would be left on the cutting room floor. However, lawmakers have floated the idea of putting all the health care reforms that have scorable budget implications on reconciliation and moving other matters into another bill.

“Then the question is, could you take two roads and end up at the same place,— Rother said.

Ron Pollack, executive director of Families USA, said his organization has given thought to the idea. “But all of our energies are on getting legislation through the regular legislative process,— he said. “It’s far too premature to work within the context of reconciliation.—

Whether reconciliation or regular order, there will be trade-offs, Pollack said. “The regular legislative process means that compromises must be reached and means the legislation may not be as crisp if you didn’t have to compromise,— he said. “On the other hand, in the reconciliation process, not everything that would be part of a normal bill would be allowed. As a result, it makes most sense to give it the best shot through the regular legislative process.—

Rother, who was at AARP pushing for the Medicare prescription drug benefit that ultimately passed in 2003, said he sees similarities between that fight and health care reform. That time Republicans were in charge, and this time it’s the Democrats in control.

“The politics of this is almost the mirror image of getting the prescription drug benefit through,— he said. “If you think about the process that was used for the drug bill, it’s an interesting exercise. It passed and is now popular, so it has a happy ending, but it sure was messy at the time.—

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