The way forward on health care remains unclear, and will not be resolved before tomorrow’s State of the Union. It’s unlikely Barack Obama will even offer a path to follow. But there is enough talk in the air in Washington to get certain conservative Democrats nervous.

The strategy that appears to be getting the most attention right now, as described in the New York Times, is that the Senate – not the House, but the Senate – first passes sidecar legislation through the reconciliation process to fix certain elements of their bill and make it palatable to the House. Then, the House passes the Senate bill, along with their own sidecar bill. The President sequences the signing of the bills so that everything takes effect, and the job is done. CAP’s John Podesta has confirmed that this has become the consensus strategy, moving forward. House Democratic leaders like

Sounds easy, but there are numerous hurdles. First of all, on the Senate side, Republicans would be sure to object on procedural grounds. Judd Gregg says so today:

The senior Republican on the Budget Committee, Senator Judd Gregg of New Hampshire, said Democrats would have trouble executing their strategy. “It would be a very hard lift,” Mr. Gregg said. “We would make it an extraordinarily difficult exercise.”

The items that would go into a sidecar bill, while collectively not the most popular set of fixes, do seem to be budgetary in nature, so despite the procedural objections, that’s not the biggest obstacle. Talk of using a student loan bill as the vehicle for this reconciliation sidecar seems more difficult, but there are health care reconciliation instructions which Democrats can act upon. That’s not a major issue.

A somewhat bigger – yet more amusing – problem is that conservative Democrats, who would be shut out of any deal requiring 50 votes on the Senate side, and who may fear the return of popular measures like the public option into the sidecar bill, have begun to state their objections. Ben Nelson stated his opposition to a national insurance exchange, one of the items that could be altered in reconciliation:

“The national exchange is unnecessary and I wouldn’t support something that would start us down the road of federal regulation of insurance and a single-payer plan,” Nelson told reporters Monday.

If Senate Democrats still had 60 votes, this would matter a lot […]

But for now, Democrats are trying to write a companion bill to the full Senate legislation that would need only 51 votes in the Senate. That means Nelson’s threat to vote against any bill with a national exchange doesn’t mean much.

Nelson knows it, too.

“Those who didn’t want me to be the 60th vote, get their wish,” he said.

Joining Nelson today were Evan Bayh and Blanche Lincoln, in opposition to reconciliation. My guess would be that Mary Landrieu and Joe Lieberman would also oppose, and Robert Byrd’s rigidity to using reconciliation for what he calls policy issues would lead him in the direction of opposition as well. So dropping six Democrats from the 59 in the Senate would get you to 53 and a small margin for error. Russ Feingold, also inclined against procedural moves like this, is apparently rethinking his position if it’s the only way to pass health care. And Max Baucus and Kent Conrad have talked up reconciliation. So 50 votes remains a reachable goal, in all likelihood.

With enough Senators probably in support, and House leaders like Jim Clyburn and even Steny Hoyer talking it up, the momentum seems to be in place. But the problem, ONCE AGAIN, as I’ve been saying for weeks, remains the jitters among rank-and-file Democrats to pass any health care bill, and in particular the leverage of Stupak Democrats on the abortion issue, which may be out of order in a sidecar reconciliation fix. Ezra Klein alluded to this issue yesterday.

There are four major compromises that the health-care bill probably needs in order to move forward: The excise tax has to be softened, the subsidies need to be increased, the exchanges need to become federally-regulated, and the abortion language needs to be tweaked. The experts I spoke to said that the subsidies and the excise tax were no problem for reconciliation. Abortion and exchanges are less clear.

“If it’s strictly a prohibition against federal funds going towards abortions,” says budget expert Stan Collender, “it’s probably okay. Simply a regulation, probably not. If you can make the case that the government will spend more or less due to national exchanges, then the ruling could be that it’s a material impact. But if it’s just regulations, it could be extraneous.”

Collender, however, takes an expansive view. “Given how intertwined everything seems to be in health care, I could make the case that there’s very little that doesn’t belong in reconciliation.”

Good luck with that expansive view. Judd Gregg is already telegraphing that he’ll have something to say about that. If the upshot of reconciliation is that Democrats have to fire the Senate Parliamentarian to make a certain item germane, the backlash will be swift.

If it’s not possible to fix the abortion language, we appear to be right back where we’ve started – with a bill that doesn’t have the 218 votes to pass the House of Representatives. Again, I’d like to be wrong about that, but nothing I’ve seen leads me to an alternate conclusion.

David Dayen

David Dayen

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