Monday, February 22, 2010

The Summit Negotiation

The President has released a list of policy provisions that would bridge the differences between the House and Senate bills, with the general outline of the Senate bill taking precdence (no income tax increase, state based exchanges, tax on high cost insurance) plus expanded income based subsidies to improve affordability. Dan Pfeiffer, an aide to the President, characterized this as the opening bid of a negotiation. Of course, it takes two parties to negotiate.

A fundamental truth about negotiation is that you cannot control how the other party negotiates. You are affected by their choices, and you can attempt to anticipate them, but you cannot control what the other party will do. And you cannot be sure how the negotiation will conclude before it takes place.

The House could simply pass the Senate bill and a budget reconciliation bill that enacted the types of policies contained in the President's document. If that reality were certain in the absence of a negotiated deal, then surely the Republicans would negotiate, because they could improve the legislation (from their standpoint) by cutting a deal with the President. On the other hand, the President would prefer the Senate bill plus the policy tweaks outlined by the President, to a negotiated deal. However, it is not certain that the Democrats in the House and Senate will muster the will to do this, and we could end up with no bill whatsoever. If it were certain that the Democrats could pass the Senate bill and a clean up reconciliation bill, then they would have already done it. Thus, the President would almost certainly take a pared down deal that would be preferable to nothing from his standpoint, because of the uncertainty of the House passing the Senate bill plus a reconciliation bill passing both houses of Congress.

So, is there any hope of a deal? If one doesn't come about, will this summit serve to give the democracts enough nerve to move ahead and finsish the job? Time will tell.

The route to a compromise has always been through malpractice reform, and I included it with some other ideas yesterday in the News and Observer. Here is what I wrote last summer on the subject. Republicans could get quite a lot on this issue if they would negotiate, and they know it. If they offer concrete proposals on this topic, a deal could be done. If there are no whiffs in this direction, the only question left is whether the Dems have the nerve for reconciliation.

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