Mixed signals: "The Divisions in the White House Over Health-Care Reform"

Ezra Klein:

This is health-care reform's endgame, or close to it. Next Wednesday, Barack Obama will give a prime-time address before both houses of Congress. But that's not all he's giving Congress. The administration is going to put a plan down on paper. The question is what it will say.

Conversations with a number of White House officials make it clear that, at this point, even they don't know. The argument was raging as recently as last night, and appears to have hardened into two main camps. Both camps agree that the cost of the bill has to come down. The question is how much, and what can be sacrificed.

The first camp could be called "universal-lite." They're focused on preserving the basic shape of the bill. They think a universal plan is necessary for a number of reasons: For one thing, the insurance market regulations don't work without universality, as you can't really ask insurers to offer standard prices if the healthy and the young don't have to enter the system. For another, it will be easier to change subsidies or improve the benefit package down the road if the initial offerings prove inadequate. New numbers are easier than new features. Creating a robust structure is the most important thing. This camp seems to be largely headed by the policy people.

The second camp is not universal at all. This camp believes the bill needs to be scaled back sharply in order to ensure passage. Covering 20 million people isn't as good as covering 40 million people, but it's a whole lot better than letting the bill fall apart and covering no one at all. It's also a success of some sort, and it gives you something to build on. What that sacrifices in terms of structure it gains in terms of political appeal. This camp is largely headed by members of the political team.

Both camps accept that the administration's proposal will be less generous than what has emerged from either the HELP or House Committees. The question, it seems, is how much less generous.

The answer appears to hinge on Sen. Olympia Snowe. "I'm a Snowe-ite," joked one official. Her instincts on health care have proven quite a bit more liberal than those of many Democrats. In the Gang of Six meetings, she joined Sen. Jeff Bingaman in focusing on affordability and coverage — putting her, in practice, somewhat to the left of Conrad and Baucus. The problem is that Snowe is scared to be the sole Republican supporting this bill, not to mention the Republican who ensures the passage of this bill. The reprisals within her caucus could be tremendous.

If Snowe drops off the bill, using the budget reconciliation process will probably be a necessity. The bill then goes through Sen. Kent Conrad's Budget Committee, giving him much more power over the product. The absence of any Republicans repels at least a couple of conservative Democrats. Passage becomes much less certain, which means a scaled-back bill becomes much more likely. This is the irony of the health-care endgame: The bill becomes much more conservative if it loses its final Republican.