Nancy Pelosi’s misguided attempt to use Medicare as leverage to pass the unemployment and jobs measures in the tax-extenders bill failed. Fortunately Pelosi quickly realized there was no point in continuing this strategy when Senate Republicans again blocked passage. Forty Republicans and Ben Nelson voted against the measure, blocking the measure supported by 57 Democrats. Subsequently Pelosi backed down and the House passed the temporary Medicare fix.
While misguided, at least it can be said that Pelosi meant well, motivated by a desire to promote economic recovery, which certainly could not be said of the Republicans. After the Senate passed a Medicare fix as a separate measure, she was under the mistaken belief that she had some leverage over Senate Republicans by blocking a vote on the Senate measure.
I am surprised at how badly Pelosi misread the Republicans. Republicans were willing to vote for the Medicare “doc fix” but certainly would not be heartbroken if it failed and they could blame Democrats for destroying Medicare. Even if they were actually in support of the measure, their opposition to spending money on jobs or the unemployed certainly trumped any such feelings.
Senator Debbie Stabenow of Michigan (where we recently fell to the number two in unemployment, now surpassed by Nevada) summed up the Republican mind set here:
It is very clear that the Republicans in the Senate want this economy to fail. They see that things are beginning to turn around. You know the numbers. When this president took office, we were losing 750,000 jobs a month. … Now we are gaining jobs. … Unfortunately, and cynically [on their part], in cynical political terms, it doesn’t serve them in terms of their elections if things are beginning to turn around.
I believe when you look at this bill, which is all paid for — we raised revenues to pay for it — the one piece that is technically not paid for [is the federal unemployment benefit extensions and] that is done in a way that we have always done it, … [those are] always categorized as an emergency. And, frankly, if 15 million people without jobs is not an emergency, I don’t know what is.
Ezra Klein provided this political interpretation earlier in the day when he anticipated the loss on the jobs measures:
And still, it looks like Democrats might lose the vote today. And when I say “lose the vote,” I don’t mean that a majority of the Senate will vote against it. I mean that 58 senators, rather than 60, will support the legislation. All Republicans, and possibly Ben Nelson, appear to remain opposed. And why not? The less that Democrats appear to be doing on jobs — and the fewer jobs that Democrats actually create — the better Republicans will do in November. Substantial compromises on the bill haven’t brought any new votes, and that’s in part because Republicans see no political upside in passing the legislation.
While it made no sense for Pelosi to believe that the threat of not passing the Medicare fix would get Republicans to vote for unemployment benefits, at least she did quickly back down and get the Medicare fixed later the same day.
Getting this passed quickly was important for a number of reasons. After postponing the processing of payments since the beginning of June, Medicare began processing payments with the 21 percent cut. It will now be necessary to reissue these checks with the updated amount. Earlier in the week I saw estimates that this would cost $15 million, and this would increase with every batch of Medicare payments which must be reprocessed. The delay also increases expenses for physicians and undermines confidence in Medicare. This might lead more doctors, who now see Medicare patients at a considerable discount compared to commercial payers, to decide against accepting Medicare patients.
Now that it is established that both parties agree that this needs to be fixed, hopefully we can also achieve a permanent fix to the Medicare payment formula before the end of the year. Attempts last year failed because the Republicans had wanted to include this cost in the cost of health care reform and use it as another bogus argument against reform. Now that health care reform has been passed hopefully the Republicans will not see further political gain in blocking a permanent fix.