I recommend these excellent analyses and discussions of the health care reform debate:

I will attempt to supplement these writings by providing my tactical analysis of the ongoing legislative action on health care reform. As background, I was in the middle of every major health care legislative fight from 1995 through 2008. You can think of me as a retired player now serving as a color commentator with a telestrator.

In most of those debates I was part of a team helping analyze and manage legislative strategy, tactics, and process, in addition to my traditional policy role. My job was in part to help figure out how to achieve our policy goals in a complex system of conflicting legislative forces. Sometimes those policy goals were achieved by enacting a new law, and other times by blocking a bill or sustaining a veto.

I hope that some of my Washington friends with better information than I will continue to help me by calling or emailing with their insights with which I can improve this analysis. As usual I am long-winded, so I will break this up into multiple posts. I will begin with the basic legislative process.

The following analysis may frustrate you. It risks sounding superficial, Machiavellian, and as if it is not driven by policy. Please understand that I am here providing only one slice of a multi-layer analysis that also includes policy questions of enormous consequence, as well as a macro-partisan political layer. I have to tease these layers apart to have any chance of presenting it in a comprehensible fashion. The ultimate goal is always good policy (depending on your perspective). In pursuit of noble policy goals, the tactics can be calculating and brutal.

This may also seem somewhat abstract, as I am not going to discuss any policy here, only process and tactics. I hope it becomes clearer when I add substance in a future post.

My old boss Senate Majority Leader Trent Lott (R-MS) once told me, “Others want to win the debate. You help me win the vote.” After all the important preliminaries, practical legislating ultimately becomes a question of procedural rules and how many votes you have on any given question.

Welcome to Part I of How a Bill Really Becomes a Law.

Health care reform legislative checklist

Here is the sequential checklist I would create if working for the current President, given his goal of enacting a new health care reform law. In reality I expect it would be the White House legislative affairs team that would do this, rather than the policy shop in which I used to work. Important open questions are in parentheses.

Step 1: Pass a bill out of the House in July.

Step 2: Get a bill out of (A) Senate Finance Committee, and a different bill out of (B) Senate HELP Committee. (Q: Timing on Senate Finance??)

Step 3: Senate Majority Leader Reid blends those bills (how?) with the aim of getting 60 votes on the Senate floor. He almost certainly does not use reconciliation. (Partisan, barely bipartisan, or broadly bipartisan?)

Step 4: Survive the Senate floor and pass a bill. Focus on (A) a handful of potentially killer amendments, and (B) getting 60 votes for cloture to shut down a filibuster.

Step 5A: Conference with the House. Manage House D disappointment.

Step 5B: Get 60 votes in the Senate for the conference report. Pass it in the House, too.

Step 6: Celebrate at White House bill signing.

The most difficult steps are 4B, getting 60 votes for cloture on Senate passage, and 5B, getting 60 votes for cloture and to pass the final conference report. Cloture is the vote to shut down a filibuster. The Senate floor amendment process in Step 4A also poses huge risks. The bill could unravel there.

Some suggested that Senate Majority Leader Reid would use the fast-track reconciliation process for health care reform so he would need only 51 votes for Senate passage. I continue to maintain my April view that this is highly unlikely, because reconciliation carries its own process costs. Major portions of the bill would likely drop out, allowing Leader Reid to pass only a Swiss cheese version of their desired reform.

Let us first examine cloture and final Senate passage (step 4B), then move down the checklist through conference. We will then move back up the list to earlier stages in the process.

Core concept: the marginal voter is in control on the Senate floor

On a simple one-dimensional and partisan issue, line up all 100 Senators on an imaginary policy line, with the most liberal on the left end and the most conservative on the right. Starting from the majority’s end (left in this case), count votes as you move right, drawing breakpoints after the 51st and 60th Senators. The Senators closest to the breakpoints and at the majority’s (left) edge are those with maximum leverage to modify a bill. So Leader Reid and the White House are trying to figure out how to get a bill that will be supported by liberals like Senators Rockefeller (WV), Mikulski (MD), Brown (OH), and Whitehouse (RI), and at the same time by moderates like Ben Nelson (NE) and Lincoln (AR).

You can see the advantage of reconciliation. If Leader Reid needs only 51 of 60 votes, he can produce a liberal bill that loses up to 9 moderate D votes, or a centrist bill that loses up to 9 liberal votes. If he needs 60 votes and his universe of possibles is only the 60 Democrats, he has no margin for error.

This is, of course, an oversimplification because legislation is never one-dimensional. In reality, if Leader Reid pursues a partisan path, each of 60 Democratic Senators is the marginal vote, and each can say, “I’d love to vote for this bill, but I need some changes.” Many of them will exert that leverage, some to fundamentally change the bill, and others to get a local hospital problem addressed or some other similarly trivial change.

You can also see the power of the moderate Republicans in a 60-vote situation. If Leader Reid thinks he can get 2-4 moderate Senate Rs to vote for cloture and final passage, then he has more flexibility to lose a slightly larger block of the votes on his left edge. Leaders make these decisions based on a variety of factors.

Leader Reid will have the ultimate responsibility for finding that sweet spot – where is the bill that just barely holds onto 60 votes on the Senate floor after a long and painful amendment process? In this case I think he is highly constrained by his thin margin and intense pressure from his left – he does not have a lot of room to maneuver. The public signals he is now sending are that he intends to pursue a partisan path, and not make concessions to pick up marginal Republican votes. This path keeps his liberals happy, but makes his job on the floor more difficult.

Forward into conference (maybe)

With 254 House Democrats in her caucus, Speaker Pelosi can lose 36 votes and still pass a bill without Republican votes. This gives her tremendous flexibility and dramatically weakens the leverage of individual or even groups of House Democrats. She wants but does not need those votes. This partly explains her tremendous power.

In contrast, Leader Reid is weak because he has no safety margin within his caucus of 60 Senate Democrats. In a conference negotiation with the House, this weakness becomes strength. The lead Senate conferees (probably Senators Baucus and Dodd, if the health care bill ever passes the Senate) would tell their House counterparts, “Of course we agree with you that we need a robust public option.” We actually like your more liberal and stronger version than the weak one we were able to get off the Senate floor. But we lost our moderates on that Senate floor vote, and they won’t vote for a final conference report if it has your version. The best version for which I can get 60 votes is the one that passed the Senate. So if you want a law, you need to recede to the Senate and take our provision.

They can repeat this argument on every issue, with varying levels of credibility. At times this argument is true. At other times, confirming the long-held suspicions of my many House friends, I have seen Senate chairmen in conference exaggerate their claims of Senate floor weakness in an attempt to gain leverage over their House counterpart. “My hands are tied.”

This is why the health care reform focus is on the Senate. If a health care bill passes the Senate (big if), the most likely scenario is that it gets 60 or 61 votes. If this happens, a conference report will almost certainly have to be quite close to that Senate-passed bill.

It also partly explains why key House players like House Energy and Commerce Committee Chairman Henry Waxman (CA) and Ways & Means Committee Chairman Charlie Rangel (NY) are shouting that they were not a part of the deals between Senate Finance Committee Chairman Max Baucus (MT) and the hospitals, health insurers, and pharmaceutical industry. They are trying to maintain their relevance by suggesting that they too can blow up a deal in an eventual conference.

The marginal moderate Senate Democrat is significantly less liberal than the bulk of the House Democratic caucus, so if a final bill ever makes it to the President’s desk, it will look more like the Senate bill, which will be somewhat less liberal than what passes the House. I don’t want to exaggerate this — if a bill is produced, it will still be far left of center, to keep the bulk of Democrats onboard.

Backward into the Senate Finance Committee

Similarly, the Senate Finance Committee is more relevant than the Senate HELP Committee, because the Finance Committee negotiations more closely approximate the anticipated Senate floor negotiations for the 60th vote. With a 13 D – 10 R margin in Senate Finance, Chairman Baucus does not need any committee Republicans to pass (“report”) a bill out of his committee. He can even afford to lose one of his committee Democrats if necessary, and report out a bill 12-11. Why, then, is Chairman Baucus negotiating with his ranking Republican member, Senator Grassley (R-IA), as well as Finance Committee members Hatch (R-UT), Snowe (R-ME), and Finance Committee member and HELP Committee ranking Republican Enzi (R-WY)?

Chairman Baucus may genuinely want a bipartisan bill. In addition, he knows that if he secures the support of Grassley, Hatch, or Enzi, at least a few other Republicans will also vote aye, at least on the Senate floor. He and Leader Reid will then be working with a universe of more than 60 potential votes, and they will have some flexibility to lose liberal votes on the left edge of the Senate Democratic Caucus. A bill supported by Grassley/Hatch/Enzi is almost certain to become law, potentially at the expense (from the viewpoint of the left) of some substantive sacrifices.

Senators Grassley, Hatch, and Enzi each face a similar dynamic. If they think Senators Reid and Baucus are going to be able to get 60 votes without them and enact a law, then they may decide it is in their policy interest to negotiate to make that law better (or at least less worse). At the same time, Senators Grassley and Enzi are committee leaders on the Republican side, and they are being pulled away from a deal by most of their colleagues in the Senate Republican conference, who will almost certainly oppose any deal if it comes together (some on substance, and others for political reasons). This is a difficult balancing act, because as a ranking minority member on a committee, you represent the members of your party on that committee. If you are too far from most of them, you risk losing their confidence and their support on a wider range of issues.

Senator Hatch is the #2 Republican on Senate Finance and the presumptive successor to Senator Grassley as the ranking committee Republican, so he faces a similar dynamic. He is generally conservative but has cut bipartisan health deals in the past, most notably by being the key Republican (along with Senator John Chafee) who worked with Democratic Senators Kennedy and Rockefeller to create the children’s health insurance program, S-CHIP, in 1997.

Senator Snowe is the most moderate of the four Rs negotiating with Chairman Baucus. Getting her vote would give Chairman Baucus the political/press cover of a “bipartisan bill,” and the possibility to attract a couple more moderate Senate Rs. But while she is typically viewed as the most “gettable” of the bunch, she does not bring a lot of other Republicans with her, and thus does not significantly expand Leader Reid’s flexibility on the Senate floor later in the process. Senator Snowe is frequently the marginal vote on a wide range of issues and she is a savvy negotiator.

And while you can think of Chairman Baucus as the player with the most control at the moment, you can also imagine him as the rope in a tug of war. He is being pulled rightward (not much) by Grassley/Hatch/Enzi/Snowe, and at the same time he is being pulled leftward by his Leader and the majority of his Democratic colleagues. It was therefore unsurprising that after the Senate Democrats caucused for their weekly policy lunch last Tuesday, there were press reports that Leader Reid had ordered Chairman Baucus not to close a deal with the Republicans. Liberals were rebelling, or at least raising enough of a ruckus, so that their leader weighed in on their behalf to pull Chairman Baucus back to the left. This tug of war is ongoing.

Next steps

There are three obvious possible outcomes from the ongoing Senate Finance negotiations:

  1. Chairman Baucus cuts a deal with 1-4 Republicans.
  2. Chairman Baucus goes the partisan route and produces a bill with at least 12 of 13 D committee votes.
  3. He fails at both (1) and (2), and keeps delayed the committee markup.

At the moment, the winds blow against outcome (1), but those winds can shift quickly. Public indications of Leader Reid and liberals pulling Chairman Baucus leftward risk creating the impression among Republicans that, if Senators Grassley, Hatch, Enzi, or Snowe do accept a Baucus offer, they have been duped. This impression makes such a deal less likely. The outcome depends heavily on the substantive issues in dispute, which I will discuss in a future post.

Keep your eye on comments by Senators Baucus and Reid, as well as Senators Grassley, Hatch, Snowe, and Enzi. In particular, listen to what Chairman Baucus says about the timing of when the Senate Finance Committee will meet to consider (“mark up”) this bill. The more he hedges, the less success he is having in coming to a deal, either with Republicans or members on his own side of the committee.

In future posts I will try to explain the interactions underway with lobbyists and health care interest groups, and why the numbers make it so hard for Chairman Baucus to get a deal. Kim and Jim can get you started.