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Reid Seals the Deal on Reform

Senate Democrats’ historic push to reshape the nation’s health care system found new life over the last week thanks to not only the negotiating power of Majority Leader Harry Reid (D-Nev.) and Conference Vice Chairman Charles Schumer (D-N.Y.) but also the Republicans — whose use of procedural delays energized and united the majority party.

Democrats said the turning point came during a Tuesday afternoon meeting at the White House. President Barack Obama had called the meeting after Sen. Joe Lieberman (ID-Conn.) threatened to torpedo the health care bill over its expansion of Medicare. Senate Democrats were increasingly unhappy with Lieberman; many felt he was looking to bring down the bill, and few were in the mood to compromise with him.

But then Sen. Evan Bayh (D-Ind.) — a moderate and an initial holdout on the health care measure — gave what many described as a rousing speech, arguing that Democrats could not afford to let the reform effort collapse in the face of Republican attacks. One Senate Democratic aide said Bayh made clear that “if we don’t [pass a bill] the only ones who win are Republicans, and [Bayh] doesn’t want to see that happen.—

Bayh’s speech seemed to crystallize the situation for Democrats and helped them refocus their energy away from intraparty disputes and onto the GOP and Minority Leader Mitch McConnell (R-Ky.).

“Sen. Reid and the rest of his leadership team did an extraordinary job of keeping the Conference united. But I wouldn’t be doing my job if I didn’t acknowledge the assist from Sen. McConnell, [Minority Whip Jon] Kyl [R-Ariz.] and their leadership team. They totally overplayed their hand [and] their heavy-handed tactics backfired,— Reid spokesman Jim Manley said.

When asked if the GOP’s stalling tactics helped Reid get to where he needed to go, Finance Chairman Max Baucus (D-Mont.) said, “I think it has.— Baucus pointed to the fact that anti-war Sen. Russ Feingold (D-Wis.) — who for weeks had warned he would not vote for cloture on the Defense Department spending bill — decided to reverse his position late Thursday because he didn’t want Republicans to use the appropriations measure to further stall passage of health care reform.

“I think he got fed up with their tactics,— Baucus said.

A senior Democratic leadership aide agreed, noting that, “Their obstructionism is moving us over the goal line.— Democrats ultimately agreed to drop the Medicare expansion provision, winning Lieberman’s support and inching the Conference that much closer to 60 votes.

With his caucus newly determined, Reid then turned his attention to the last remaining holdout — Sen. Ben Nelson (D-Neb.).

An anti-abortion-rights moderate, Nelson had publicly vowed to filibuster an end to debate on the health care package if it did not include stiff restrictions to abortion similar to that contained in the House-passed bill. The House adopted strong anti-abortion language by Rep. Bart Stupak (D-Mich.).

Reid and Schumer had already held a series of preliminary calls and discussions with Nelson and had a basic idea of where the lawmaker stood on the issue — as well as several other parochial issues.

Deciding to tackle abortion at the end of their negotiations, Reid, Schumer and Nelson began their talks Wednesday evening when the Nebraskan delivered a list of non-abortion-related “fixes— he wanted in the bill, including insurance tax exemption for nonprofit insurers, an exemption for Medigap plan providers, indexing of flexible spending account limits, and an opt-out from Medicaid for Nebraska.

Reid and Schumer then took the list to White House Deputy Chief of Staff Jim Messina and Obama’s senior adviser Pete Rouse, and the four men began “pregaming— the issues. They brainstormed over how to address Nelson’s demands while also trying to determine how they would impact the health care package’s price tag. Democratic aides said the final decision to have the federal government pay for all of Nebraska’s Medicaid funding, rather than provide an opt-out, came as a result of these talks.

With the basic outline of a proposal in hand Friday morning — and momentum on Democrats’ side after Feingold’s dramatic decision to agree to support cloture on the Defense bill — Reid resumed discussions with Nelson, and by noon that day they had hammered out a final deal on the non-abortion issues.

After a brief lunch in Reid’s office of tuna and turkey wraps, the group began the difficult work of tackling Nelson’s demands over abortion. Reid, Schumer, Nelson and Obama’s lieutenants spent the afternoon behind closed doors, slowly putting together a compromise which, while different from the Stupak language, would mollify the moderate Nebraska Democrat and allow him to back the bill.

With a deal in the offing, Reid brought in Sens. Barbara Boxer (D-Calif.) and Patty Murray (D-Wash.) — standard bearers for the chamber’s pro-abortion-rights Members. With Boxer and Murray camped out in the office of Reid Chief of Staff Gary Myrick and Nelson hunkered down in Reid’s office, Reid and Schumer began a “shuttle diplomacy— session, which by 10 p.m. Friday had resulted in a final compromise on the abortion language.

The final deal, introduced by Reid early Saturday morning, included new abortion funding restrictions under which states would be allowed to opt out of insurance plans that cover the procedure, and health care “state exchanges— would be required to include at least one plan that does not cover abortion.

Reid made a number of other changes to the final package. According to Democratic aides, Reid’s final version of the bill includes deficit reductions of $130 billion in its first 10 years and an additional $650 billion in the second decade, while expanding insurance coverage to 94 percent of Americans under the age of 65.

The bill also includes new tax provisions, including $12 billion in small business tax cuts beginning in 2010, the expansion of the adoption tax-credit program and a new tax on tanning salons. According to one aide, the new tanning tax was included because “the use of these tanning beds creates a health concern in terms of cancer.—

The bill also extends the State Children’s Health Insurance Program and ensures that foster children have insurance coverage through the age of 26, among other provisions.

Reid also included other sweeteners for Democratic lawmakers, particularly liberals who have had many of the top priorities — like a public insurance option and Medicare expansion — stripped from the final product.

For instance, Reid included language for the Vermont delegation — boosting funding for community health centers at the behest of Sen. Bernie Sanders (I-Vt.), who was particularly vocal and fought mightily for a single-payer health care system, and agreeing to Sen. Patrick Leahy’s (D-Vt.) request to increase Medicaid payments to the state.

Emily Pierce and Jessica Brady contributed to this report.

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