“If you enforce the law, people will obey the law,” Hayworth told the Thunder Mountain Republican Women, praising a strict new statute designed to curb illegal immigration. In a closely watched campaign increasingly defined by who can take the hardest line, Hayworth is a border hawk who called his book about immigration policy, “Whatever It Takes.”

And the thought of a Hayworth upset has some Democratic strategists drooling — with good reason. An April poll has Democrat Rodney Glassman, a relatively unknown Tucson city councilman, leading Hayworth by three points in a hypothetical matchup. (By contrast, McCain leads Glassman by 16.)

An internal polling memo out of Glassman’s office is hopeful that the anti-incumbency sentiment that uprooted GOP Sen. Robert Bennett in Utah will also extend to Arizona, noting the baggage Hayworth carries with him after a 12-year run in the House of Representative.

Let’s not forget — Hayworth was named one of the most corrupt members of Congress [by Citizens for Responsibility and Ethics in Washington] … and lost his Congressional seat in 2006 in large part due to his corrupt record and his dealings with convicted lobbyist Jack Abramoff.

Still, to be taken at all seriously in this election, Glassman better start raising some cash. The $0 he had in his war chest at the end of March isn’t likely to go very far.

Update: Glassman spokesperson Dawn Teo updates her boss’ finances: ”Rodney seeded the campaign with $250,000 [on] …. April 6th, with the goal of matching that with supporters’ contributions during the first month. We exceeded that goal within 3 weeks.”

Rep. Joe Sestak (D-Pa., left) and Rand Paul (R-Ky., right) both won Senate primaries on Tuesday night, while Bill Halter (D-Ark., center) forced Sen. Blanche Lincoln into a runoff. (Zuma, Bill Halter for Senate)

The results from Tuesday’s much-watched congressional primaries are in. Now the larger question remains: What’s their significance?

The fall of five-term Sen. Arlen Specter (D) in Pennsylvania marks the end of an era; the rise of ophthalmologist Rand Paul (R) in Kentucky lends both power and voice to the ever-emerging Tea Party movement; and the success of Arkansas Lt. Gov. Bill Halter — who hung close enough to Sen. Blanche Lincoln, a conservative Democrat, to force a run-off contest next month — has drawn cheers from the liberal groups that catalyzed his late ascendancy.

Yet the well-worn theme going into the day’s elections — that a nationwide storm of voter unrest spells mid-term doom for “big government” incumbents, particularly the majority Democrats — was hardly proven. Indeed, two of the three high-profile races featured establishment candidates taking on other establishment candidates — with the liberals coming out on top. If any common message emerged from Tuesday’s results it was this: Republicans, who have been hoping that the public’s discontent will translate into big congressional gains in November, might want to reconsider their strategy come Wednesday.

Specter, for example, was toppled by a more liberal Democrat in the figure of Rep. Joe Sestak, whose late campaign push revolved around ads linking Specter — a Republican from 1965 until he switched parties last year — to George W. Bush. Sestak will now square off against former GOP Rep. Pat Toomey, founder of the conservative Club for Growth, in November.

In Arkansas, Halter rode the wave of an enormous ad campaign bankrolled by some of the nation’s most predominant liberal groups, including MoveOn.org and a number of labor unions, who have been critical of Lincoln’s opposition to climate change legislation and an idling labor reform bill. And while Halter’s name isn’t well known on a national stage, the lieutenant governor is also no political outsider. As the Guardian’s Michael Tomasky wrote Tuesday, a Halter win “would not represent primary voters manifesting some bestial urge to tear the flesh of the establishment. He’s a member of the establishment.”

The run-off election between Halter and Lincoln is scheduled for June 8.

More evidence that the anti-establishment backlash remains unproven arrived Tuesday in western Pennsylvania, where Democrat Mark Critz, a former aide to the late Rep. Jack Murtha (D), defeated Republican Tim Burns in a special election. The result was a blow to Republicans, who’d viewed Murtha’s seat as low-hanging fruit in a conservative district amidst an unemployment crisis. “If you can’t win a seat that is trending Republican in a year like this, then where is the wave?” former GOP Rep. Tom Davis (Va.) told The New York Times before the outcome of the race was known. “It would be a huge upset not to win this seat.”

Not that there hasn’t been good evidence of a conservative backlash against incumbents in some districts. Sen. Robert Bennett (Utah), for example, a faithful conservative, was unseated in a primary earlier this month by an opponent who attacked him for supporting Bush’s bailout of Wall Street. And Paul’s win in Kentucky came at the expense of Trey Grayson, Kentucky’s secretary of state who’d won the endorsement of no less an entrenched Republican than Senate Minority Leader Mitch McConnell (Ky.).

Yet Tuesday’s primary results indicate that there’s more at play than a simple backlash against establishment figures. Another wild card on display Tuesday was the extent of the Obama administration’s willingness to throw its weight behind longtime incumbents. Newsweek’s Howard Fineman noted that Specter, for example, was abandoned by the White House in the lead-up to his defeat Tuesday. Fineman pointed to a report by NBC’s Chuck Todd indicating that the administration, after endorsing Specter, actually preferred Sestak.

The fact that White House political spin doctors would say this to Chuck Todd in time for him to go on the air with it at 5 p.m. Eastern, on a popular political show hosted by Philly native [Chris] Matthews, with the polls open until 8 (!), enraged [Pennsylvania Democratic Rep. Robert] Brady. “I guess that’s the White House’s idea of loyalty,” he snapped. “They’re gonna hear from me.”

Meanwhile, House Majority Leader Steny Hoyer (D-Md.) predicted Tuesday that the creation of jobs — if it continues – will, come November, overcome the current attitude of voter discontent against Democratic incumbents who pushed through the party’s economic stimulus bill and an overhaul of the nation’s health care system.

“Americans are pretty smart people,” Hoyer told reporters at the Capitol Tuesday. “If they see this continued success, I think they’re going to say, ‘Well, I was doubtful, but it seems to be working, and we will stay the path.’”

Whether he’s right or not remains to be seen. But Tuesday’s results are no indication one way or the other.

Sen. Jeff Bingaman (D-N.M.) makes his opening statements before a hearing Tuesday on the accident in the Gulf of Mexico involving the offshore oil rig Deepwater Horizon. (Pete Marovich/ZUMApress.com)

On the surface, the two accidents couldn’t have been more different. The first occurred in the rugged mountains of Appalachia; the second was more than a thousand miles away in the Gulf of Mexico. One was miles underground; the other thousands of feet underwater. One happened in pursuit of coal; the other in the unending search for domestic oil.

Yet last month’s deadly explosion at the Upper Big Branch coal mine in southern West Virginia, and the more recent fatal blast on the Deepwater Horizon oil rig off the coast of Louisiana, have at least this much in common: Both were likely preventable, according to a growing number of lawmakers and workplace safety experts — if only federal regulations designed to prevent such disasters had been enforced.

“I don’t believe it is enough to label this catastrophic failure as an unpredictable and unforeseeable occurrence,” Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, said during a Tuesday hearing on the Deepwater Horizon disaster. “If this is like other catastrophic failures of technological systems in modern history … we will likely discover that there was a cascade of failures: technical, human and regulatory.”

The message is clear: Regulations are only as good as the people enforcing them. And Congress, some experts are warning, would do well to recognize that trend as lawmakers contemplate reforms as diverse as those governing coal mines, oil rigs and Wall Street.

Along those lines, Paul Krugman, Nobel Prize winning economist for the New York Times, noted this week that the problems at the Interior Department are by no means unique. Instead, they represent “a broader pattern that includes the failure of banking regulation and the transformation of the Federal Emergency Management Agency … into a cruel joke.” The common thread, Krugman argued, “is the degradation of effective government by antigovernment ideology.”

Krugman targeted the Bush administration in particular. But many work safety experts are quick to note that the lax enforcement over the extraction industries represents a much broader trend, beginning well before Bush took office, and extending well beyond his exit. Along the way, federal enforcement agencies have been stacked, at times, with anti-regulation regulators — many of whom still remain. And the industries have showered millions of dollars on Congress in order to persuade lawmakers that, when it comes to protecting workers, business knows best. The results have been predictable.

“We have a strong anti-regulatory bent in this country,” said Celeste Monforton, former work-safety official in the Labor Department who’s now at George Washington University, “Regulation is like a four-letter word.”

In the case of the Deepwater Horizon, which is leased by BP, the Interior Department is now under a microscope on several fronts. For one thing, the Minerals Management Service granted the rig a “categorical exclusion” from a federal law designed to protect the environment from significant spills. (The agency simply didn’t believe that such a spill was possible from that project.) And quite separately, the MMS has spent the last decade transferring most of its safety-enforcement duties to the industry, in effect allowing the drillers to police themselves. The trend has led lawmakers, in the wake of last month’s deadly accident, to accuse the agency of being too close to those it’s charged with regulating.

“Clearly, stronger, more independent oversight of oil company activities is needed,” Sen. Barbara Boxer (D-Calif.), who heads the Senate Environment Committee, said during a separate hearing on the spill Tuesday afternoon.

Acknowledging that problem, Interior Secretary Ken Salazar announced Tuesday that the agency plans to split the MMS into two separate entities: One would be charged with inspecting rigs and enforcing safety measures; the other would be responsible for managing leases and collecting royalties.

Similar regulatory questions have dogged the Mine Safety and Health Administration, particularly following the deep-mine blast in Raleigh County, W.Va., on April 5. In the days and months leading up to the explosion, federal investigators had cited the mine for a long list of safety violations. Ultimately, though, they didn’t take any steps to close the operation down. A number of mine-safety experts have charged thatMSHA leaders simply didn’t want to confront the powerful mining industry, even in the name of miner safety.

Ken Hechler, former West Virginia congressman and lead sponsor of a 1969 law that overhauled mining safety, said that his bill gives MSHA officials all the authority they needed to close down the troubled mine — if they had chosen to exercise it.

“The legislation is there on the books. You can tell in black and white precisely what it means,” Hechler said in a recent phone interview. “This is why I regard MSHA as partially responsible [for the tragedy].”

Most observers are quick to caution that the cause of neither the Gulf spill nor the West Virginia blast have yet been discovered — and might not be learned for months to come. Indeed, investigators in West Virginia haven’t been able to enter theUBB mine yet, due to the accumulation of toxic gases. And emergency workers around the Deepwater Horizon are still concentrating all of their efforts on stopping the gusher, which is still spewing crude oil into the Gulf at a rate of 5,000 barrels per day.

There’s also a strong sense that the companies themselves should bear most of the blame if it’s discovered that they simply ignored existing safety measures. Peter Galvin, a former MSHA official, noted that both BP and Massey Energy, which owns the UBB mine, have troubling safety records. “In both cases, we have a large and very wealthy parent corporation with a history of ignoring worker safety and health risks until it is too late,” he said in an email.

Still, when companies fail to protect their employees, then it falls on regulators to intervene. And if they’re not doing it, Hechler said, then Congress needs to step in to force them to.

“This process of writing good laws that are not enforced,” he said, “somehow has to be toughened to require the enforcement.”

Yet a provision of the newly passed health reform bill that raises doctors’ payments under Medicaid is both temporary and limited in the scope of medical services it covers. The restrictions have left a number of health care advocates and doctors’ groups concerned about patients’ long-term access to care under the reform legislation.

The concerns are hardly trivial. The Democrats’ health reforms rely heavily on the successes of Medicaid, which will be expanded to include all non-seniors earning up to 133 percent of the federal poverty level (about $24,350 for a family of three). The bill is estimated to cover 32 million uninsured Americans over the next decade, and roughly half of those folks would fall into the Medicaid program.

Yet Medicaid rates are so low that many doctors refuse to see patients insured by the program. Indeed, doctors treating Medicaid patients in 2008 were paid just 72 percent of what Medicare paid for the same services, according to analysts at the Urban Institute, a Washington-based policy shop. As a result, only about 40 percent of physicians accept all new Medicaid patients, versus 58 percent for Medicare beneficiaries, according to a 2009 study from the Center for Studying Health System Change, which randomly surveyed more than 4,700 physicians.

Recognizing that problem, House Democrats passed legislation in December hiking certain payments under Medicaid to at least the level paid by Medicare, the federal program for seniors and the disabled. The bill initially passed by the House of Representatives allocated $57 billion to those rate increases over 10 years — a cost that Democrats more recently rejected as too high.

Instead, the health reconciliation bill signed by President Obama this week hikes Medicaid rates only for the years 2013 and 2014. The federal government would pay the entire tab of the increase, which the Congressional Budget Office estimates will cost $8.3 billion. From 2015 onward, it would fall to states to pick up the difference in cost — a tough sell in a frail economy, when state budgets are already strapped.

There are other concerns. The rate hikes, for example, apply only to some primary care and pediatric services. Emergency room and other critical care services wouldn’t be subject to the increase. Nor would counseling, disability examinations, services delivered over the phone or a long list of other procedures.

Dawn Horner, a health policy expert at Georgetown University’s Center for Children and Families, said the Democrats’ reform bill goes a long way to improve access to care for Medicaid patients, “but it would be better if the Medicaid increases were across the board.”

That’s not the only problem. Because the bill ties the Medicaid pay hikes to the senior-centered Medicare program, procedures not covered by Medicare won’t be included. That stipulation has led some children’s care providers to worry that youngsters on Medicaid won’t have access to services specific to their age group. The flushing of kids’ ears, for example — a procedure common in pediatricians’ offices — wouldn’t qualify for the enhanced rate.

Providing some comfort to health care advocates, CBO has projected that some federal funding will go toward the Medicaid pay hike for a few years after 2014 — indicating that some states would likely phase out the higher rates instead of dropping them immediately, even if they have to cover a percentage of the costs themselves. By 2019, however, CBO projects that, without additional federal help, all states will have abandoned the increased payments, putting Medicaid patients in the same uncertain spot they were in prior to the reforms.

The concerns among some powerful stakeholders in the health care arena — including governors, doctors and patient groups — mean that there will be plenty of pressure on Congress to prevent the Medicaid pay increases from evaporating in 2015.

“It will be a fight … to extend it,” William Vaughan, a health policy consultant for Consumers Union, a consumer advocacy group, wrote in an email. “And that’s a fight worth making!”

In the meantime, though, patient advocates and doctors’ groups are celebrating the increase they got.

The tally was 219 to 212 in support of reforms passed by the Senate on Christmas Eve, with 34 Democrats joining every Republican in the lower chamber in opposition to the measure. An accompanying reconciliation proposal — which tweaks the Senate bill to address what House leaders considered to be inherent weaknesses — was set to pass later in the evening.

Democratic leaders were quick to place the reforms among the most significant in the nation’s history — legislation on par with that establishing Social Security, Medicare and new civil rights protections. “This is an American proposal that honors the traditions of our country,” House Speaker Nancy Pelosi (D-Calif.) said just before the votes. “We may not have chosen the time, but the time has chosen us.”

The Senate bill now moves to the White House, where President Obama will sign it shortly into law. The separate reconciliation bill then goes to the Senate, where Democrats are hoping to pass it before the Easter recess, which begins Friday. Reconciliation rules prevent upper-chamber Republicans from filibustering the proposal, meaning that Democrats need just 51 votes — not 60 — to pass it.

For House leaders, the victory didn’t come easy. Sunday’s vote capped a tension-filled week in which some Democrats who’d previously supported health care reform announced their opposition; others who’d formerly opposed reform announced their support; and party leaders were left with the delicate task of counting heads to ensure that the bill had the numbers to pass. Quite aside from the unified GOP opposition, anti-abortion Democrats, led by Michigan Rep. Bart Stupak, had vowed to oppose the bill over language they feared would allow federal funds to subsidize abortion services — something that’s been prohibited for more than 30 years. And they had the numbers to kill the proposal. Breaking the impasse required the muscle of the White House, which stepped in Sunday to issue an eleventh-hour executive order stipulating that nothing in the reform bill would dilute the decades-old prohibition on the federal funding of abortion. The move — while blasted by abortion rights groups — caused the abortion opponents to throw their support behind the proposals.

“The real winner,” Stupak said Sunday at a press conference announcing the deal, “is really the American people.”

The rare weekend vote came after more than a year of rancorous debate over how Congress should approach health care reform. The saga first pitted Democrats against Republicans, but later — when it became clear that no Republicans would support the bill — saw liberal Democrats and their moderate colleagues doing battle over the most contentious provisions of the enormous bill. In the end, party leaders, behind Pelosi, convinced enough Democratic critics — both liberal and conservative — that the proposals would at least take steps toward fixing a health care system that all sides agree has grown dysfunctional.

“This is not the bill I wanted to support,” Rep. Dennis Kucinich (D-Ohio), the liberalsingle-payer supporter, said recently in announcing his reluctant support for the bill. “Hopefully” he added, it will take the country “in the direction of comprehensive health care reform.”

At the center of the reforms are a series of provisions reining in the most controversial practices of the health insurance industry. Under the reforms, for example, insurance companies could no longer deny coverage based on pre-existing conditions. They could no longer drop coverage when a patient gets sick. They could no longer hike premiums indiscriminately. And they could no longer put caps — either annual or lifetime — on coverage benefits.

Among the other major provisions, the reform bills will:

– Require most Americans to buy health insurance or face financial penalties.

– Take incremental steps to close the coverage gap in Medicare’s prescription drug benefit — the so-called doughnut hole — by 2020.

– Hike Medicaid rates on primary care services to equal those of Medicare.

– Extend funding for the Children’s Health Insurance Program through 2015.

To fund the changes, the proposals will:

– Cut more than $500 billion from the Medicare program, largely targeting the private insurance plans that receive huge subsidies to cover Medicare patients.

– Apply a 0.5 percent hike on Medicare’s payroll tax for individuals earning more than $200,000 and families earning more than $250,000.

– Tax the most expensive insurance plans, those costing more than $10,200 for individuals and $27,500 for family plans. (That tax will take effect in 2018.)

The Congressional Budget Office, which has estimated that the bill will expand coverage to roughly 32 million uninsured Americans, said Saturday that the changes will reduce federal deficits by $143 billion over the next decade, and by roughly $1 trillion in the 10 years to follow. The analysis at once convinced some Democratic budget hawks to support the bill, and took the wind from the sails of Republican critics who have said the reforms will bankrupt the nation.

Not that it prevented GOP leaders from attacking the reforms to the last. Rep. Marsha Balackburn (Tenn.), the first Republican to speak on the floor Sunday, set the tone early, blasting the Democrats for reforms that Republicans say will steal patient choice.

“Only they see the death of freedom … as a cause for celebration,” Blackburn said. “It is their children who will pay for their greed.”

Rep. Nathan Deal, the senior Republican on the Ways and Means health subpanel and candidate to become Georgia’s governor, echoed those criticisms. He vowed that, if elected to the governor’s office, he’ll focus on nullifying the reforms, particularly the Medicaid expansion, which many Republicans have called an unconstitutional mandate on states.

“The problem with socialism,” Deal said Sunday, “is that you ultimately run out of other people’s money.”

But in the end, Republicans — while effective in slowing the pace of the legislation — were helpless to prevent its passage.

The historic nature of the vote was not lost on Democratic leaders. Pelosi, who presided over the final vote, waved the same gavel that was used when Medicare passed the lower chamber more than six decades ago. And Rep. Louise Slaughter (D-N.Y.), the head of the Rules Committee who managed part of the day’s debate, was brandishing her own copy of a 1939 letter to Congress from Franklin Delano Roosevelt, a letter urging lawmakers to include a national health care system as part of the Social Security program.

“Good health,” FDR had written, “is essential to the security and progress of the Nation.”

Seventy-one years later, Democrats are hoping he was right.

Indeed, the House-passed reform bill strayed from the Senate proposal on a number of key issues, from children’s coverage to Medicaid payments to the creation of a public health insurance plan. Here’s how the reconciliation bill — which House leaders unveiled today to address what they considered weaknesses in the Senate legislation — would tweak (or not) some of the most contentious provisions in the upper chamber’s bill.

Paying the Freight

A central disagreement between House and Senate Democrats has been over how to pay the substantial costs associated with covering tens of millions of uninsured Americans. The House paid much of the tab with a 5.4 percent tax on the nation’s highest earners — individuals making more than $500,000 per year, and families pulling in more than $1 million. The Senate, meanwhile, passed a 0.5 percent hike on Medicare’s payroll tax for individuals earning more than $200,000 and families earning more than $250,000. But a larger chunk of funding under the Senate bill would come from an 40 percent excise tax on high-cost insurance plans — a provision that’s wildly unpopular among a key Democratic constituency: Organized labor.

The reconciliation bill alters both funding mechanisms. First, it scales back the insurance excise tax by increasing the dollar thresholds from $8,500 to $10,200 for single coverage, and from $23,000 to $27,500 for family coverage. It also delays the application of that tax until 2018. To make up the revenues lost by changes to the excise tax, the reconciliation bill also expands the Medicare tax to include net investment income (i.e. unearned income).

Kids’ Care

After years of promoting the virtues of the Children’s Health Insurance Program, House Democrats did a strange thing: They proposed to eliminate CHIP altogether, instead moving those kids into either Medicaid or private plans on newly created insurance marketplaces, dubbed exchanges. The Senate bill took a different tack, reauthorizing CHIP through 2019, while funding it through 2015. Despite a more recent White House proposal to provide an extra year of funding (through 2016), the reconciliation bill doesn’t touch the issue, leaving the original Senate provision intact (and kids welfare advocates happy).

Pharma Deal

A behind-the-scenes deal cut last year between Sen. Max Baucus (D-Mont.) and the pharmaceutical lobby drew a good deal of attention: The nation’s drug makers, under that agreement, would dedicate $80 billion toward health care reform over the next decade if Democrats would oppose further industry reforms — including a proposal allowing Americans to buy their prescriptions from abroad, and another empowering states to negotiate directly with companies on behalf of their lowest-income seniors.

While the White House endorsed the deal, House Democrats didn’t. Instead, Rep. Henry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, included the state negotiation provision as part of the House-passed bill. While the reconciliation bill does tap the drug makers for $28 billion over 10 years ($5 billion more than the original Senate bill), it doesn’t dabble with the other terms of the Pharma deal.

Abortion

Always the hot-button issue, abortion has emerged as the one topic that still really threatens House passage of health care reform. Late last year, Speaker Nancy Pelosi (D-Calif.) had negotiated a delicate compromise designed to satisfy a number of anti-abortion Democrats — notably Rep. Bart Stupak (Mich.) — who were concerned that the reform bill would allow taxpayer dollars to subsidize abortions. The so-called Stupak amendment would ban exchange plans from offering abortion coverage, forcing women to buy a separate policy covering abortion services. The Senate bill is a bit less strict, allowing abortion coverage on the exchange, but requiring women to write a separate check for those services to ensure that no federal funds go toward them. It’s the Senate provision that’s going to the floor of the House early next week, leaving Stupak and roughly a dozen other House Democrats vowing their opposition.

Anti-Trust Exemption

For 64 years, the health insurance industry has reaped the benefits of a rare exemption to federal anti-trust laws, which allows companies to share cost and coverage information without scrutiny from Washington. And for a number of years, Democrats have had their eyes on repealing it. The House bill would have done just that, but the provision didn’t make the cut in the Senate, due largely to the opposition of Sen. Ben Nelson (Neb.), the moderate Democrat whose close ties to the insurance industry include a stint as CEO of the Omaha-based Central National Insurance Group.

Like many other insurance reforms, this provision is one of those non-budget related items not eligible to move under the reconciliation process. The Democrats, though, are hoping to repeal the exemption later this year through separate legislation. Indeed, the House has already passed such a bill last month.

Medicaid Rates

The headlines today will likely focus on the plan to eliminate the sweetheart Medicaid deal that Senate leaders cut with Nebraska’s Nelson — a deal so unpopular that even Nelson himself claims now to oppose it. But much more significant for purposes of ensuring care is a provision of the reconciliation bill that hikes Medicaid rates to primary care physicians to at least the level of what Medicare pays for those same services. That provision was contained in the House bill, but not the Senate proposal.

The issue isn’t trivial. Medicaid rates are so low that many doctors refuse to see Medicaid patients. Only about 40 percent of physicians accept all new Medicaid patients, versus 58 percent for Medicare patients, according to a September studyfrom the Center for Studying Health System Change, which randomly surveyed more than 4,700 physicians. And that number drops to about 31 percent among family doctors and general practitioners.

For dental care, the numbers are even worse. Only 27 percent of the nation’s dentists will treat Medicaid-insured patients, according to a 2007 survey by the American Dental Association survey. Those trends raise important questions about the value of an insurance program that nobody accepts — and led directly to the Democrats’ decision to hike Medicaid rates.

Closing the Doughnut Hole

Though seniors participating in Medicare’s prescription drug program are generally happy with their benefits, a painful thorn plagues the program: Seniors are forced to pay the full cost of drugs when annual expenses hit $2,700, and the subsidies don’t return until total costs hit $6,154 — a coverage gap known (not endearingly) as the doughnut hole. The Senate bills took steps to reduce the size of that gap, relying mostly on the pharmaceutical companies, who offered a 50 percent discount through the doughnut hole as part of their $80 billion deal with Democrats.

The reconciliation bill expands on that plan, offering seniors an additional $250 rebate in 2010, and closing the doughnut hole entirely by 2020.

Illegal Immigrants

While both the Senate and House bills would prohibit illegal immigrants from receiving federal subsidies on the exchanges, the Senate took the restriction a long step further by preventing those folks from buying insurance from the exchanges at all — even if they paid the full price of coverage using their own money. (The House bill would allow such unsubsidized purchases.) Although some members of the House Hispanic caucus have advocated for the House language in the reconciliation bill, it didn’t make its way in.

Public Option

The House bill included the creation of a government-backed insurance plan to compete with private companies on a national exchange, while the Senate bill contained no such thing. Despite a late push from liberal groups to include the House provision in the reconciliation bill, House Speaker Nancy Pelosi (D-Calif.) declined, citing a lack of support in the Senate.

House Majority Leader Steny Hoyer (D-Md.) said today that the lower chamber hopes to vote on the reconciliation bill Sunday afternoon.

House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) (WDCpix)

Ironing Out Health Reform

After months of marathon hearings, partisan bickering and fiery floor debate, Democrats in both the House and the Senate have passed expansive health care reform bills. Now comes the hard part.

Although the two Democratic bills share the central goals of controlling health care costs and covering millions of uninsured Americans, they diverge, in key places, over how to go about it. Some of the differences concern the very topics that have been most contentious throughout the debate, including whether to create a public insurance option, what to do with illegal immigrants and how to ensure that federal funds don’t subsidize abortions. The disparities leave Democratic leaders with the unenviable task of merging the proposals while preserving the backing of the fragile coalitions that ushered the bills to passage in November and December. As difficult as it was for Democratic leaders then to unite their party behind the most sweeping health care reforms since the 1960s, the final step may prove the slipperiest yet.

The Money Must Come From Somewhere

Unlike the Republicans’ sweeping health reforms of 2003, which were unfunded, the Democrats have proposed to pay for the cost of their health care overhaul. But the two chambers would do it differently. House leaders are pushing a 5.4 percent payroll tax hike on the nation’s wealthiest people — individuals making more than $500,000 per year and families earning more than $1 million. Senate Democrats have proposed a similar mechanism, hiking Medicare’s payroll tax by 0.5 percent on individuals pulling in more than $200,000 and families earning more than $250,000. But a larger chunk of funding under the Senate bill would come from an excise tax on high-cost insurance plans — a provision that’s wildly unpopular among a key Democratic constituency: organized labor.

Kids’ Care

Few federal programs have been as successful as the Children’s Health Insurance Program, or CHIP, which was enacted 12 years ago and now covers roughly 10 million people. Yet House Democrats have proposed to terminate the program at the end of 2013, shifting those kids into either Medicaid or private plans found on a proposed insurance marketplace, dubbed the exchange. The Senate bill, on the other hand, would reauthorize CHIP through 2019 and provide funding for it through 2015.

Many children’s welfare advocates have put their weight squarely behind the Senate approach, fearing that the move to exchange plans will lead to higher out-of-pocket costs for some of the country’s lowest-income families — a barrier discouraging those parents from buying their kids insurance at all, thereby threatening to reduce kids’ coverage in the name of expanding it.

Closing the Doughnut Hole

Democratic leaders in both chambers have vowed to close the coverage gap in Medicare’s prescription drug benefit — known as the doughnut hole — but only the House bill actually does it. The trouble is that the lower chamber would fund that provision by allowing states to haggle directly with drug makers on behalf of their lowest-income seniors — a proposal that Senate leaders and the White House have promised not to support as part of an $80 billion deal cut with the pharmaceutical industry earlier in the year.

That leaves conference negotiators with two choices: Break the deal with Big Pharma or find some other way to fund the elimination of the doughnut hole. A third choice — not to close the coverage gap fully — seems unlikely from a Democratic Party hoping to win over a skeptical senior population in the run-up to the 2010 elections.

Anti-Trust

Democrats have long eyed a repeal of the anti-trust exemption enjoyed by the insurance industry, and the House bill would do just that, overturning a 64-year-old law that allows companies to share cost and coverage information without federal scrutiny. The provision didn’t fly in the Senate, however, due to the opposition of Sen. Ben Nelson (Neb.), the moderate Democrat whose close ties to the insurance industry include a stint as CEO of the Omaha-based Central National Insurance Group. Although an earlier version of the Senate bill would have eliminated the anti-trust exemption, Senate leaders later bowed to Nelson by plucking that language from the bill.

Abortion Coverage

Concerned that taxpayer dollars would be used to subsidize abortion coverage on the exchange, Rep. Bart Stupak (D-Mich.) led a group of moderate Democrats in threatening to kill the House bill unless it explicitly prohibited exchange plans from covering abortion. And they won.

The Senate restrictions aren’t quite so severe, allowing women to buy abortion coverage from exchange plans if they write two separate premium checks — one for abortion services and one for all other treatments. Though it was seen as a less stringent form of the Stupak amendment, the Senate language has still alienated many liberals who say it goes too far to restrict women from getting comprehensive care. Stupak, meanwhile, says it doesn’t go far enough. Satisfying both camps will require some delicate wording.

Illegal Immigration

Both the House and Senate bills would prevent illegal immigrants from getting taxpayer subsidies for insurance coverage on the exchange. But the Senate bill is the more restrictive of the two, prohibiting undocumented folks from buying exchange plans even if they pay full price. That provision has angered a number of liberal and Hispanic lawmakers, who have questioned how letting workers buy a product from U.S. companies with U.S. dollars could be a threat to the country’s well-being. The Senate provision, critics point out, would also encourage illegal immigrants to use emergency rooms for primary care services. Still, with the 2010 elections looming, Democrats will be tempted to go with the Senate provision for simple fear of lending campaign ammunition to Republican challengers.

Public Option

It’s been the most prominent of the hot-button issues surrounding health care reform from the start, and observers of the conference negotiations will be watching closely to see what Democrats will finally do with the proposal to create a public insurance option to compete with private companies. The House bill includes such a provision, but Senate leaders were forced to yank a similar proposal when Sens. Nelson and Joe Lieberman (I-Conn.) threatened to withhold their support. Many liberal lawmakers have said that the public plan is vital to reforming a health care system made more dysfunctional by for-profit insurance companies whose incentive is to deny care rather than pay for it. But with no sign that either Nelson or Lieberman will have a change of heart, negotiators will have little choice but to pluck the House provision for the sake of passing the larger bill.

“I expect the final bill will be pretty much the Senate bill,” Sen. Jay Rockefeller (D-W.Va.) told The Charleston Gazette last week, “simply because we have to get the 60 votes.”

Senate Majority Leader Harry Reid (D-Nev.), flanked by Sens. Max Baucus (D-Mont.) and Chris Dodd (D-Conn.), discusses the passage of the Senate health bill. (Xinhua/ZUMApress.com)

Senate Democrats on Thursday approved the best health care reform bill they could manage: a sweeping $871 billion proposal designed to extend coverage to tens of millions of uninsured Americans and slow the growth of runaway costs. It was at once a monumental achievement, which if signed into law would represent the most expansive overhaul of the nation’s dysfunctional health care system in generations, and a disappointment to many liberals who’d hoped the reforms would go further to rein in the same medical-services industries most responsible for the skyrocketing expenses.

The tally was an expected 60 to 39, with every member of the Democratic caucus (including two Independents) voting in favor of the measure and every Republican present voting against it.

“This is for my friend Ted Kennedy,” 92-year-old Sen. Robert Byrd (D-W.Va.) said just before his vote, a reference to the late Massachusetts Democrat and health reform champion who passed away over the summer.

Senate leaders must now combine their bill with the one passed last month by the House, which, despite broad similarities, strays on several key issues, including its creation of a controversial public insurance option.

The rare Christmas Eve vote came after months of acrimonious debate over how Congress should approach health care reform. The saga first pitted Democrats against Republicans, but later — when it became clear that no Republicans would support the bill — saw liberal Democrats and their moderate colleagues doing battle over the most contentious provisions of the 2,074-page bill. The Republicans, who said the bill represented an expensive government takeover, were effective in slowing the pace of the legislation, but were helpless to prevent passage once the Democrats united behind it.

For the Democratic faithful, that unification came at a price. To secure 60 votes, party leaders had to bow to the demands of two caucus moderates — Sens. Joe Lieberman (I-Conn.) and Ben Nelson (D-Neb.) — who were threatening to join a Republican filibuster otherwise. With no margin for desertions, Democratic leaders were forced to concede several of their legislative priorities in the process. To win Lieberman, they dropped their plans to create a government-run insurance option to compete with private companies — a program that many liberal policy experts consider vital for controlling rising premium costs — and to lower the age of Medicare eligibility to 55. For Nelson, they tacked on language restricting abortion coverage under subsidized plans operating on newly proposed insurance marketplaces, called exchanges. That provision has been roundly attacked by reproductive rights groups, who argue that it will restrict women’s access to comprehensive health services.

Both concessions set the stage for a fight with House Democrats when leaders of the chambers meet next month to marry the two bills. Already, some House liberals are claiming that Senate Democrats bent too far.

Rep. Louise Slaughter (D-N.Y.), the chairman of the House Rules Committee and also a leader of the Congressional Pro-Choice Caucus, blasted the Senate bill Wednesday as “not worthy of the historic vote that the House took a month ago.”

The Senate’s decision to eliminate the public option — combined with federal insurance subsidies and a mandate requiring most Americans to buy health insurance from private companies — is simply a gift to the insurance industry, Slaughter claimed, echoing the message coming from other liberal critics since the compromise with Lieberman was announced.

“I do not want to subsidize the private insurance market,” Slaughter wrote on CNN.com. “[T]he whole point of creating a government option is to bring prices down.”

It’s not the only wrinkle that will need ironing out. There are also significant discrepancies in how the chambers fund their separate bills; how they approach illegal immigrants; how broadly they would expand Medicaid; and what they propose to do with the Children’s Health Insurance Program, to name just a few.

Still, Democrats in the White House and the Senate cheered Thursday’s vote as a historic step toward covering the estimated 46 million Americans who currently lack health insurance. Senate Majority Leader Harry Reid (D-Nev.) said the bill is imperfect, but added that it nonetheless represents a giant step toward jumpstarting the “process” that is health-care reform. “Our charge is to move forward,” he said just before the vote.

Republicans, meanwhile, continued to attack the legislation as a bloated government intervention that will raise taxes and steal consumer choice. Senate Minority Leader Mitch McConnell (R-Ky.) said Thursday that the bill doesn’t cut costs as its designed. “It doesn’t do what it was supposed to do,” he said.

McConnell also warned supporting Democrats that they’ll get “an earful” from constituents when they go home for the holidays. “They know there is widespread opposition to this monstrosity,” McConnell said.

Neither side of the debate claims that the nation’s health care system isn’t in need of an overhaul. Indeed, health policy experts on and off of Capitol Hill have warned for years that the rising costs of health care services, which far outpace both inflation and wages, are threatening to swamp the entire economy. And the numbers support their case. This year health care spending is projected to top $2.5 trillion, representing almost 18 percent of the gross domestic product. By 2017, the figure is expected to jump to 20 percent. The question all along has been how to slow that growth without compromising either patient care or the health-services research needed to uncover new medical technologies and procedures.

Democrats are hoping to merge the House and Senate bills quickly to allow President Obama to sign the legislation into law before giving his State of the Union address, which is expected to take place late next month. That timeline, however, is far from guaranteed, considering that Senate lawmakers aren’t scheduled to be back in Washington until Jan. 19.

Even then, the debate over health care will be far from over. One of the first bills that Congress will have to take up following Obama’s speech will be one addressing the 21-percent cut in Medicare physician payments. Although lawmakers provided a two-month fix to prevent those cuts from taking effect on Jan. 1, a permanent solution was too expensive to fit into their larger health reform bills.

That, however, is for another day. Today, the Democrats are reveling over their hard-fought legislative victory.

Senate Majority Leader Harry Reid, Speaker of the House Nancy Pelosi (WDCpix)

Senate Democrats will return to Washington Monday to begin a long-awaited floor debate on the health-reform bill they hope to pass before Christmas. But it’s hardly the last battle they’ll be forced to wage on the health-care front.

As tough as the upper-chamber debate promises to be, many of the thorniest conflicts will likely be re-contested when Democratic leaders in both chambers meet, probably in January, to iron out the differences between their bills. The legislative disparities revolve around such high-profile topics as the public option and coverage of abortion, but also include lesser-noticed issues, like whether to honor a White House deal with the pharmaceutical industry and how to approach the Children’s Health Insurance Program.

Senate Republicans are also eyeing many of these hot-button issues, with hopes of using them to divide the Democrats in order to kill the larger bill. But with the considerable House-versus-Senate discrepancies awaiting conference negotiators, fending off opposition from Senate Republicans in the meantime could prove to be the least of the Democrats’ troubles as they attempt to pass the most consequential health-care reforms in generations.

Who Pays?

Chief among the differences between the Democrats’ bills is how each chamber has proposed to pay the considerable cost of covering tens-of-millions of uninsured Americans. The House pays the freight largely with a 5.4 percent tax on the nation’s highest earners — individuals making more than $500,000 per year, and families pulling in more than $1 million.

The Senate, on the other hand, has proposed an excise tax on the highest-cost insurance plans — those exceeding $8,500 for individual coverage and $23,000 for families. The Senate bill would also apply a 0.5 percent Medicare payroll tax to individuals earning more than $200,000 and families earning more than $250,000.

Liberals and labor unions have supported the House approach, arguing that an unprecedented tax on insurance plans would erode decades of work to secure comprehensive, employer-sponsored health-care coverage for workers. Conservatives, meanwhile, are warning that higher taxes on the wealthy will only exacerbate the nation’s economic troubles in the middle of an employment crisis.

Coverage vs. Care

Both the House and Senate bills rely heavily on a Medicaid expansion to cover the country’s poorest uninsured residents. The House would extend eligibility to 150 percent of the federal poverty level (net income), while Senate eligibility would expand to 133 percent of poverty (gross income).

The more significant difference, though, revolves around Medicaid reimbursement, which is so low in some states that many doctors and dentists now refuse to see Medicaid patients. The House bill recognizes the problem, bumping up Medicaid payments for primary care services to 100 percent of Medicare rates by 2012. Despite an effort to get similar language into the Senate legislation, a controversial funding proposal kept the provision out of the final bill.

The reimbursement increase doesn’t come cheap. The Congressional Budget Office estimates that the provision would cost $28.7 billion over the next five years and $57 billion over the next 10.

Abortion

Rep. Bart Stupak (D-Mich.) lit a firestorm earlier in the month when he amended the House bill to prohibit abortion coverage under subsidized exchange plans. The Senate bill would also ban federal funding of abortions, but would allow women receiving exchange-plan subsidies to segregate their premiums and co-payments in order to access abortion services. Sen. Orrin Hatch (R-Utah) has already said that he’ll offer the Stupak provision on the floor, though supporters will have the difficult task of rallying 60 votes to pass the measure.

Indeed, the Stupak provision is poised to cause more havoc in the House than the Senate, with some House liberals vowing to oppose the larger bill if the language survives the conference negotiations, while Stupak and other anti-abortion Democrats are hinging their support on the provision remaining intact. Satisfying both camps for the sake of the bill’s passage will likely require some delicate wording from Democratic leaders.

Illegal Immigrants

Both chambers propose to screen exchange-plan applicants to ensure that illegal immigrants don’t receive the federal subsidies available to those living below 400 percent of poverty. The Senate bill, however, goes a giant step further, proposing to exclude illegals from purchasing even unsubsidized insurance coverage on the exchange. That provision has riled a number of lawmakers and immigration advocates, who are wondering how allowing folks to buy insurance coverage from private companies with U.S. dollars could harm the country, fiscally or otherwise.

“It makes no sense for anybody,” said Jonathan Blazer, public policy attorney with the National Immigration Law Center. “Nobody’s willing to defend it on policy grounds.”

If the Senate language emerges from the conference negotiations, it will likely lead to a showdown with House members of the Congressional Hispanic Caucus, who early in the debate had threatened to vote against the House bill if it excluded illegal aliens from unsubsidized exchange coverage.

CHIP

Though largely unmentioned throughout the health reform debate, the House billwould terminate the Children’s Health Insurance Program at the end of 2013, shifting those kids into Medicaid or private plans on the exchange. House leaders — who had championed CHIP for the past 12 years — say their proposal will expand coverage by getting kids and parents under the same plan.

But some children’s health-care advocates have raised alarms over that strategy,arguing that the private plans will likely be more expensive, thereby discouraging low-income parents from getting their kids any coverage at all. And Sen. Jay Rockefeller agrees. The West Virginia Democrat — who successfully amended the Senate bill to reauthorize CHIP through 2019 — is vowing to fight to keep the program intact.

“Health care reform should improve the coverage children have,” he said, “not take their coverage away.”

Rockefeller, though, has been a lonely voice in support of preserving CHIP, leaving the ultimate fate of his amendment in question.

The Big Deal with Big Pharma

In June, Democratic leaders in the White House and Senate caused a stir when they announced a deal with the pharmaceutical lobby. Under that bargain, the drug companies promised $80 billion over the next decade to close Medicare’s drug-coverage gap (partially) if the lawmakers agreed to oppose efforts to empower states to negotiate drug prices for residents enrolled in both Medicare and Medicaid. The Senate bill keeps that agreement intact, with Finance Committee members shooting down an amendment allowing such price haggling for the sake of closing Medicare’s donut hole altogether.

House Democrats, on the other hand, have said all along that they weren’t a part of the discussions with the drug makers, and they don’t feel bound to any deal they never agreed to. As evidence, the House bill allows states to negotiate drug prices on behalf of their lowest-income seniors — a provision the CBO estimates would save more than $42 billion over the next decade.

The Public Option

At the heart of the debate over health-care reform this year has been the public option — a strategy, popular among liberals and consumer advocates, to create a public, non-profit insurance plan to compete with private companies. Senate Majority Leader Harry Reid (D-Nev.) surprised many political observers last month when he proposed to create such state-based plans in the bill he weaved together from the different proposals passed by the Finance and health committees. Reid’s bill would empower the plans’ administrators to haggle directly with doctors, hospitals and other health-care providers over reimbursement rates, but it would also leave states the option not to participate.

The House bill is similar, but creates a national insurance option rather than numerous state-based plans. Additionally, the House bill doesn’t include the state opt-out language.

Unlike the other topics mentioned here, the toughest fight over the public option seems destined to occur on the Senate floor, rather than in conference. Sen. Joe Lieberman (I-Conn.) has repeatedly vowed to filibuster any bill that includes a public plan, whether it’s opt-out, opt-in, trigger-based, or any other configuration. Meanwhile, some upper-chamber liberals — including Sens. Bernie Sanders (I-Vt.) and Roland Burris (D-Ill.) — are hinging their vote for the health reform package on the inclusion of a strong public option.

“This legislation cannot simply be a huge subsidy to private insurance companies that will get millions of new customers and be able to raise their rates as high as they want,” Sanders said in a statement last week. “I strongly suspect that there are number of senators, including myself, who would not support final passage without a strong public option.”

All of this, of course, could change. Although the House passed its health-care reform bill earlier in the month, the Senate proposal is just hitting the chamber floor today. The upper-chamber is expected to debate the measure through most of December, with hundreds of amendments likely to be offered from both sides of the aisle.

Democratic leaders hope to pass the bill out of the Senate before the holiday recess, pushing the conference negotiations to sometime in January. That 2010 is an election year won’t make those discussions any smoother.

Rep. Jim McDermott (D-Wash.) (WDCpix)

To hear the Democrats tell the tale, the extension of jobless benefits enacted over the weekend will provide those living in high-unemployment states with an additional 20 weeks of insurance.

Well, not quite.

Because the bill was held up for so long in the Senate, an end-of-the-year filing deadline will prevent anyone from accessing the final six weeks of benefits, according to state officials and sources on Capitol Hill. On Friday, President Obama signed into law legislation extending jobless benefits by 14 weeks nationwide, with an additional six weeks for those states where unemployment rates top 8.5 percent. Those benefits kicked in on Sunday. But there’s a glitch. The new law treats the 20-week extension as two separate extensions of 14 weeks and six weeks, with participants required to exhaust the first 14 weeks before applying for the next six. However, the current law keeps a Dec. 31 application deadline, roughly seven weeks from now, making collecting the full 20 weeks impossible.

That’s not all. The emergency unemployment benefits provided beginning in 2008 are also tiered. The filing deadline applies to all tiers. That is, the new extension would effectively grandfather the unemployed into the tier where they sit at the end of December, preventing them from jumping into the next, even if they were eligible.

As a result, some members of Congress are already eying another sweeping unemployment extension, which would both address the deadline glitch and provide additional help — well beyond the six weeks in question — to those unable to find work next year, when jobless rates are expected to hover near double digits.

The Orange County Register first reported on the deadline glitch last week.

In a state like California, where unemployment currently stands above 12 percent, that technicality would prove significant. Loree Levy, spokesperson for California’s Employment Development Department, said Monday that an estimated 92,000 residents had exhausted all of their available unemployment by the end of October, and roughly 285,000 will be eligible for the newly enacted benefits by the end of the year. Whether they can get 20 weeks or only 14, though, depends on whether Congress extends the filing deadline.

Some in Congress are well aware of the problem. The office of Rep. Jim McDermott (D-Wash.) said Monday that he’ll be pushing a proposal to provide as much as an additional year’s worth of jobless benefits. The proposal will be wrapped into a package to include other provisions designed to ease Main Street’s pain amid the downturn, including money to subsidize COBRA health benefits, as well as a provision to extend the full federal funding of a traditionally state-federal unemployment insurance program called FedEd, which got full federal funding under the stimulus bill. Without congressional action, states would again have to pick up part of the FedEd tab at the end of 2009.

McDermott doesn’t have an easy task. The pricetag for extending just the unemployment benefits for one year is roughly $80 billion, the McDermott aide said. With deficit spending having topped $1 trillion in the last fiscal year — and with an enormous health reform proposal in the works — the congressional appetite for expensive new proposals is hardly ravenous. Still, with national unemployment at 10.2 percent — and no wave of new jobs on the horizon — even the most ardent small-government conservatives would have a tough time voting against additional relief.