Speaker Pelosi Walks Away from Health Reform Deal with Blue Dogs, CBO Chief Admits Medicare Benefits Will be Cut

To keep her repeated promise of including a public plan option as part of health care reform, Speaker Pelosi is killing the deal she made with Blue Dog Democrats to get the bill out of the Energy and Commerce Committee.

From the Hill:

Speaker Pelosi is backing away from a deal she cut with centrists to advance health reform, said a source familiar with talks.

Pelosi’s decision to move away from the agreement that was made with a group of Blue Dogs to get the bill out of committee would steer the healthcare legislation back to the left as she prepares for a floor vote.

The Speaker has decided to model her government-run option on Medicare reimbursement, and given that many Blue Dogs are from rural locations where Medicare reimbursement rates are woefully low already, the Speaker is effectively twisting the knife.

As the Hill reported:

Blue Dog Democrats, many of whom represent rural districts where Medicare reimbursement rates are low, vehemently oppose tying the public option to Medicare.

Essentially, the Speaker and the Senate leadership, despite tanking poll numbers have decided to proceed with their tax the rich and change everyone’s health plan legislation. As the Hill reports:

Pelosi has also told her fellow leaders she still wants an income surtax on the wealthy, rather than a tax on “Cadillac” health plans, as a means to help pay the $1 trillion cost of the bill. The rest is to be made up with savings in Medicare by eliminating wasteful spending.

That will worry many members who led the charge against the surtax when it was rolled out.

Pelosi wants decisions on the public option and tax this week. She wants to produce a bill that will be a starting point for negotiations among the disparate and, at times, warring factions of the Democratic Caucus.

One Senate wag said, “yogurt has a longer shelf life than deals with the Speaker.”

In other news related to promises unfulfilled, the head of CBO said today that Medicare benefits would be cut under the Senate bill, as reported by the Associated Press:

Congress’ chief budget officer is contradicting President Barack Obama’s oft-stated claim that seniors wouldn’t see their Medicare benefits cut under a health care overhaul.

The head of the nonpartisan Congressional Budget Office, Douglas Elmendorf, told senators Tuesday that seniors in Medicare’s managed care plans would see reduced benefits under a bill in the Finance Committee.

The bill would cut payments to the Medicare Advantage plans by more than $100 billion over 10 years.