Author: Mike Lillis

Our comment thread indicates some confusion about the Senate parliamentarian’s ruling on the reconciliation bill that passed the upper chamber yesterday. To clarify: The changes in the Senate, which required the bill to return to the House, were tiny tweaks to the maximum Pell grant allowance under the student lending portion of the reconciliation bill. By no stretch did they eliminate the lending reforms altogether.

Here, in full, is the language passed by the House yesterday:

(1) On page 118, strike lines 15 through 25 (and redesignate subsequent subsections accordingly).

(2) On page 120, strike lines 3 through 5.

Hopefully, the Republicans slept easier last night knowing they had exorcised those 12 sinister lines from the 153-page bill.

For the second time this week, the House tonight passed a health care reform bill designed to complement the larger reform package that President Obama signed into law Tuesday.

The vote was a technicality. The House had passed the bill Sunday night, sending it over to the Senate. But obscure rules governing the reconciliation process forced Senate lawmakers to strip two small provisions before they passed the bill this afternoon. The changes meant that the House would have to approve the proposal again before it could go to the president’s desk — which it did by a vote of 220-207.

Here’s a recap of how reconciliation tweaks the larger bill:

1) Funding: The Senate bill would hit the wealthiest Americans — individuals earning more than $200,000 and families earning more than $250,000 — with a 0.5 percent increase in the Medicare payroll tax. The reconciliation bill would add a 3.8 percent tax on unearned income — a category that includes things like interest, dividends and capitol gains on investments.

The Senate bill also applies a 40 percent tax (beginning in 2013) to the highest-priced insurance plans — those costing more than $8,500 for individuals and $23,000 for families. The reconciliation bill keeps the tax, but hikes the dollar threshold that trigger it — to $10,200 for individuals and $27,500 for family plans. In both the Senate and reconciliation bills, the thresholds are even higher for those in high-risk jobs like coal mining and firefighting. The reconciliation bill also postpones the tax until 2018.

2) Doughnut Hole: As part of its $80 billion deal with Sen. Max Baucus (D-Mont.), the pharmaceutical lobby agreed to cut the cost of name-brand drugs by 50 percent when seniors hit the doughnut hole, which is the not-meant-to-be-flattering name of the coverage gap in Medicare’s prescription drug benefit. And that’s where the Senate bill leaves it.

The reconciliation bill builds on that foundation, giving seniors in the doughnut hole an additional $250 toward their drugs in 2010, and then hiking that amount incrementally until the doughnut hole is fully closed by 2020.

3) Individual Mandate: The Senate bill requires most Americans to buy health insurance or pay a financial penalty of either $750 or 2 percent of income, whichever is larger. The reconciliation bill would alter the penalty slightly, to the larger of $695 or 2.5 percent of income.

4) Medicaid Rates: While expanding Medicaid coverage to include most folks living below 133 percent of the federal poverty level, the Senate bill would leave Medicaid rates alone. This is a problem, because Medicaid rates are so low that more and more doctors are refusing to see those patients. Recognizing that there’s little value in a health insurance program that doctors don’t accept, House leaders in their reconciliation bill hiked Medicaid rates for primary care services to at least the level that Medicare pays.

5) Cornhusker Kickback: The Senate bill includes the now infamous sweetheart deal that Democratic leaders carved out to win the vote of Nebraska Democrat Ben Nelson. Under that provision, the federal government would pay 100 percent of the cost of expanding Medicaid in Nebraska — forever. (By contrast, the other states would begin paying a portion of those costs over time.)

The reconciliation bill strikes the Cornhusker Kickback dead.

The reconciliation bill also eliminates $61 billion in federal subsidies to the private middlemen who make student loans.

To thousands of unemployed folks, two very different events are conspiring to pose an imminent threat to their federal benefits: (1) The deadline to file for jobless benefits arrives April 5, and (2) Congress leaves this weekend for a two-week vacation, and won’t be back to Washington until April 12.

Recognizing the timing issue, Democrats are trying this afternoon to pass a bill — approved by the House earlier in the month — which would extend the unemployment insurance filing deadline (not to be confused with creating a Tier V) through April. The proposal would also extend COBRA health benefits, and delay a 21 percent cut poised to hit Medicare doctors on April 1 — a problem not addressed by the larger health reform bills passed this week.

“We should not let these programs expire,” Sen. Max Baucus (D-Mont.) just said on the chamber floor, moments before he asked for unanimous consent to pass the bill.

It didn’t happen.

Sen. Tom Coburn (R-Okla.) objected, arguing that the bill isn’t offset with cuts elsewhere. It wasn’t unexpected. The Republicans this afternoon have been pushing an accompanying measure that would offset the costs.

“I don’t care how we pay for it,” Coburn said, “as long as we don’t add to our kids’ debt.”

Democrats have fought the pay-for proposal, arguing that the deficit spending is justified to address emergencies in a down economy. Stay tuned…

The count was 56 to 43 to tweak the large health reform bill signed by President Obama on Tuesday. Because the proposal was moving via the reconciliation process, the Democrats needed just a simple majority to pass the measure.

Minor changes to the reconciliation bill in the Senate mean that the proposal now moves to the House, where Democratic leaders could pass it as early as tonight.

The bill would then move to the White House, where Obama will sign it into law.

Update: Three Democrats joined every Republican in opposing the measure: Ben Nelson (Neb.), Blanche Lincoln (Ark.) and Mark Pryor (Ark.).

In short, the Senate parliamentarian has ruled that the health care reconciliation bill moving through the upper chamber this week will have to go back to the House. The New York Times reports:

Senate Democrats had been hoping to defeat all of the amendments proposed by Republicans and to prevail on parliamentary challenges so that they could approve the measure and send it to President Obama for his signature. But the bill must comply with complex budget reconciliation rules, and Republicans identified some flaws.

One of those flaws involved the maximum reward for Pell grants, the Times reported, while the second was “a technical matter” that Democrats described as “mostly insignificant.” Neither provision is thought to threaten the underlying bill.

Fixing the flaws, though, means changing the proposal. And because the House and Senate must pass an identical proposal before it can move to the president’s desk, House Democrats will have to stage another vote on the reconciliation package after it passes the Senate later this week.

Congress is scheduled to leave town Friday for a two-week Spring recess. But earlier this week, House Majority Leader Steny Hoyer (D-Md.) told reporters that if there were changes to the bill in the Senate, “our members are prepared to vote.” He was talking about staying in town as long as it takes to send the reconciliation bill to the president.

On Tuesday, President Obama signed the larger health reform bill, making it law.

House Speaker Nancy Pelosi (D-Calif.) just named the latest members of the White House deficit commission: Budget Committee Chairman John Spratt (D-S.C.), Democratic Caucus Vice Chair Xavier Becerra (D-Calif.) and Rep. Jan Schakowsky (D-Ill.).

President Obama launched the panel last month after the Senate — behind a cynical group of previously supportive Republicans — killed a proposal to create a similar commission. The panel, composed of 12 members of Congress and various budget experts, will make recommendations to Congress about ways to rein in deficit spending — a concession that Capitol Hill lawmakers can’t do the job on their own.

Rep. Louise Slaughter (D-N.Y.), the head of the Rules Committee and a high-profile player during the debate over health care reform, has been threatened in the past few days with at least two acts of violence. From her just-released statement:

There was a brick thrown through my Niagara Falls district office and a voice mail referencing snipers that was left on the answering machine of my campaign office. The U.S. Capitol Police, the Federal Bureau of Investigation and local police departments are all aware of these incidents and are still investigating.

Even more disturbing, Slaughter claimed, has been the failure of Republican leaders to condemn the behavior of certain opponents of the Democrats’ health reforms. Instead, she said, GOP leaders have egged on the protestors, “fanning the flames with coded rhetoric.”

Michael Steele, the head of the national Republican party, said that Speaker Nancy Pelosi should be put on “the firing line.” Sarah Palin said “don’t retreat – reload.” And House Minority Leader John Boehner said that a Democratic member of Congress who supported health care reform would be a “dead man.”

To his great credit, Boehner toned down his rhetoric noticeably today, telling Fox News that “violence and threats are unacceptable.”

The Associated Press is reporting that a Rapid City, S.D. doctor plans to challenge four-term Rep. Stephanie Herseth Sandlin in the Democratic primary.

Kevin Weiland, a proponent of health care reform, says millions of dollars were spent during the debate by insurance companies making political action committee contributions to members of Congress, handed out by the lobbyists trying to sway their votes.

Herseth Sandlin, a moderate Democrat, voted against the Democrats’ health reforms on Sunday, setting herself up for sharp criticisms from liberal groups.

Another potential challenger, former Obama campaign aide Steve Hildebrand, announced this week that he’ll stay out of the race.

A 21-percent cut in Medicare payments for doctors is scheduled to take effect April 1 and congressional leaders have plenty of reasons to step in and prevent it: Policy-wise, the cut could cause serious access-to-care problems if doctors stopped seeing Medicare patients, as many have threatened to do. Politically, no lawmaker wants to be on the wrong side of the powerful doctors lobby in a tough election year.

Add to this list a third item: Such a cut would undermine the Medicaid reforms that Democrats are highlighting as part of their just-passed overhaul of the health delivery system. Here’s how:

Right now, Medicaid rates are well below those of Medicare. Indeed, researchers at the Urban Institute reported last year that doctor payments under Medicaid are about 72 percent of those under Medicare. As a result, many doctors refuse to see Medicaid patients at all — an ugly trend because Medicaid patients, being the lowest income, tend also to be the most vulnerable.

Recognizing the access problem, Democrats threw a provision into their health reconciliation bill that would hike Medicaid rates for primary care services to at least the level of Medicare rates. A 21-percent pay cut under Medicare, though, would basically nullify the advantage of ending the pay disparity between the programs — because there would hardly be one.

No one thinks the Medicare cut will happen. Both the House and Senate have already passed bills providing a temporary fix, and it’s likely that Senate lawmakers will pass the House proposal this week after they wrap up debate on the reconciliation bill. That would delay the Medicare cut for another month, allowing lawmakers more time to consider the Senate’s seven-month fix. It’s not the permanent solution that the doctors lobby wants, but it gets Congress through the mid-term elections.

The list of amendments that Republicans are hoping will derail the health reconciliation bill moving through the Senate this week is an entertaining read, if only because it so clearly illustrates the GOP’s strategy of forcing Democrats to go on the record to vote against some pretty odd things.

The best amendment so far is a proposal from Sen. Tom Coburn (R-Okla.) “prohibiting coverage of Viagra for child molesters and rapists.”

Why just Viagra, and not everything in the erectile-dysfunction family? Because he knows it won’t pass, and because Viagra would create a much better jingle than Sildenafil. You can already see the ads on the campaign trail: “Democrats voted to sustain the steady flow of Viagra to child molesters — with taxpayer dollars!”

More amendments after the jump:

• David Vitter (La.): To repeal the government takeover of health care. (#3553)
• Vitter: Prohibiting use of funds to fund the Associate of Community Organizations for Reform Now (ACORN). (#3554)
• Coburn: To require that each new bureaucrat added to any department or agency of the Federal Government for the purpose of implementing the provisions of the Patient Protection and Affordable Care Act be offset by a reduction of 1 existing bureaucrat at such department or agency.  (#3557)
• Coburn: To help the President keep his promise that Americans who like the health care coverage they have now can keep it. (#3559)
• Coburn: To require all Members of Congress to read a bill prior to casting a vote on the bill. (#3566)
• Robert Bennett (Utah): To protect the democratic process and the right of the people of the District of Columbia to define marriage. (#3568)

To much fanfare, the Obama administration a year ago launched a $75 billion program designed to prevent foreclosures by providing financial incentives to lenders and servicers who modified mortgages to keep them affordable. The program, the White House said, would reach between 3 and 4 million struggling homeowners.

Well, not quite.

The watchdog overseeing the Wall Street bailout issued a report this week revealing that the program — dubbed the Home Affordable Modification Program (HAMP) – is falling far short of its target. Instead of 3 to 4 million, the HAMP is on track to help between 1.5 and 2 million homeowners, according to the report conducted by the office of Neil Barofsky, special inspector general for the Troubled Asset Relief Program.

In their defense, Treasury officials have adopted a curious argument: They say that the HAMP was never designed to help 3 to 4 million homeowners, but simply to offer trial modifications to “up to” that many families. So while hundreds of thousands of homeowners continue to suffer foreclosures each month, the debate in Washington has become a war of words.

Testifying before a House committee last month, Phyllis Caldwell, who heads the HAMP, was quick to point out that nearly 1 million homeowners are currently in trial modifications.

“There are clear signs that our efforts are having a substantial impact,” Caldwell said.

But Barofsky notes that simply offering trial mods is hardly the same thing as providing actual help — that is, if the ultimate goal is to prevent foreclosures and stabilize the housing market.

“Measuring trial modification offers, or even actual trial modifications, for that matter, is simply not particularly meaningful,” the report states. “The goal that should be developed and tracked is how many people are helped to avoid foreclosure and stay in their homes through permanent modifications.”

As of last month, roughly 116,000 mortgage mods under the HAMP had been made permanent. Meanwhile, nearly 3 million homes went into foreclosure in 2009 alone.

Housing advocates have a pretty good idea why the HAMP hasn’t been as effective as it might have been: It relies on the voluntary efforts of mortgage servicers, who often find it more profitable to foreclose on homes than make the terms more affordable to homeowners. Advocates are pushing Congress and the White House to adopt a program that would force companies to reduce principal balances. So far, though, that plan has fallen on deaf ears on Capitol Hill.

Barofsky will be testifying on his HAMP report tomorrow before the House Oversight and Government Reform Office. Expect lawmakers to be unhappy with the HAMP’s progress.

ACORN might be folding, but that’s not enough to convince Sen. David Vitter that the anti-poverty group still won’t find ways to rig the next election. The Louisiana Republican has filed an amendment to the health reconciliation bill — which is moving through the Senate this week — to prohibit federal funding to ACORN.

If that sounds familiar, it’s because Vitter helped stall an unemployment insurance bill last fall with a similar ACORN amendment.

Votes on the long list of amendments filed to the reconciliation bill are expected to come later this week.

President Obama signs the health care reform bill on Tuesday. (Pete Marovich/ZUMApress.com)

With President Obama having signed an enormous, $938 billion health reform proposal into law Tuesday, it’s tempting to imagine that the long-drawn and ubiquitous debate over health care legislation is over for a while.

If only it were so.

Image by: Matt Mahurin

Neither the bill that was signed yesterday nor the accompanying reconciliation proposal moving through the Senate this week addresses the flawed formula that dictates physician payments under Medicare — one of the most agonizing and expensive problems facing the entire health delivery system. The omission has left doctors facing a 21-percent cut in their Medicare payments at the end of the month; it’s threatened Medicare patients with access-to-care problems; and it’s inspired the powerful doctors lobby to undertake an all-out blitz in search of a permanent formula fix. It’s also put Democratic leaders in the odd position of celebrating the historic significance of their health care overhaul, while at once plotting a strategy to prevent doctors from suffering huge cuts not addressed by those reforms.

At issue is the 13-year-old formula — the so-called Sustainable Growth Rate (SGR) — that was designed to prevent Medicare doctor payments from skyrocketing by indexing reimbursements to the growth of the economy on the whole. Trouble is, health care inflation has grown by degrees faster than GDP in recent years. Indeed, the SGR has called for cuts in doctors’ Medicare pay every year beginning in 2002. That’s a perennial thorn in the side of Congress, which, having no stomach for alienating the powerful physician lobby, almost always steps in with a temporary fix.

This year, though, the temporary fix also threatens to alienate the AMA.

“The AMA cannot support proposals that aim to address only the most imminent threat to payments levels and patient access, with no regard for the future of the Medicare [program],” AMA President James Rohack wrote to Senate leaders earlier this month. “We are opposed to further short-term patches of any duration.”

Lawmakers on both sides of the aisle are well aware of the problem. Speaking to reporters at the Capitol last Friday, House Speaker Nancy Pelosi (D-Calif.) said that a permanent doc-fix remains “very important” to Democrats. “It’s not in this bill, but we will have it soon,” Pelosi said. “We have made a commitment to do this.”

The issue is hardly partisan, nor will it have any effect on the larger reform bills recently passed by the Democrats. But the fix doesn’t come cheap. Indeed, a bill passed by the House in November would scrap the SGR altogether, replacing it with a formula designed to ensure that doctors’ Medicare payments reflect the true cost of delivering care. Pricetag: $210 billion.

It was that cost — which wasn’t offset with new revenues or cuts elsewhere — that caused the budget hawks of the Senate to shoot down a similar proposal a month earlier. And it was that cost that caused Democrats — who’d vowed both to keep their reform package below $1 trillion and to offset the entire tab — to strip the doc fix from the larger reform bills.

The issue has left Democrats in a pickle: In an election year, they don’t want to alienate the AMA. But with voters already weary of deficit spending, nor can they borrow another $210 billion to fund a permanent fix.

“Any way you look at it, I don’t see how they get 60 votes [in the Senate],” said Julius Hobson, former AMA lobbyist and now a senior policy analyst at the Washington law firm Bryan Cave.

Lawmakers don’t have much time. On April 1, Medicare payments to doctors are scheduled to fall, on average, by 21 percent. Both the House and Senate have recently passed bills to delay the cut temporarily — the House by one month and the Senate by seven months. But when Senate Democrats tried Friday to adopt the House bill by unanimous consent, Republicans refused.

A spokeswoman for Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that Democrats will likely try that strategy again this week, after they’ve finished the debate over the health reconciliation bill. Complicating matters, Congress is scheduled to leave Friday for spring recess, and won’t return to Washington until April 13. That timetable leaves open the possibility that Congress would have to tackle the 21-percent cut retroactively — an uncertainty that’s been a thorn in the side of doctors trying to manage their businesses.

“For the physicians in actual practice,” Hobson said, “this is a nightmare.”

Following last night’s speedy passage of sweeping finance reforms in the Senate Banking Committee, much of the focus has been on the Republicans’ strategy to take the fight over the bill to the Senate floor, rather than pushing amendments during what was supposed to have been a long-drawn committee markup.

Overlooked, though, has been the fact that every panel Democrat voted for the bill. That might not sound unusual, but the Senate Banking Committee is home to Sen. Tim Johnson, the South Dakota Democrat with a long record of protecting the finance industry in the face of reforms. (South Dakota is a banking hub.) Indeed, last year Johnson opposed even the Democrats’ credit card reforms, a bill seen as the low-hanging fruit of finance reforms (if only because the banks were wildly unpopular at the time and so many voters have direct experience with the tricks used by credit card companies).

No matter. Johnson said at the time that the bill went “too far in prohibiting lenders from adjusting prices to account for increased risk.”

On the much more comprehensive bill passed by the Banking panel yesterday, though, Johnson indicated a change of tune, saying he was “pleased” Congress is moving to “modernize” the nation’s finance system. His vote in favor of the reforms, which are sponsored by Banking Chairman Chris Dodd (D-Conn.), provided the proof.

There’s still a long way to go. Indeed, more than 400 amendments have been filed against the bill, many of which would protect the banks at the expense of consumer protection. Still, some observers on Capitol Hill are saying today that Dodd’s ability to rally all the Democrats behind the bill is no small achievement — that Senate Democrats, for once, have shown some party discipline.

Johnson’s entire statement:

I am pleased that we are moving forward legislation that will create better regulation and protect consumers and Main Street small businesses. This has been a long process, and I commend the Chairman for working hard to find common ground to target the causes of the financial crisis, and reform and modernize our nation’s financial regulatory system.

The bill incorporates good ideas from both sides of the aisle.  It creates a systemic risk council to act as an early warning system, monitoring our economy and financial institutions for trouble.  It ends government bailouts by addressing the gaps that existed when large nonbank financial companies, like AIG and Lehman, failed and there were no tools to unwind them.  By ending “too big to fail,” the American taxpayer will never again be forced to shoulder the costs of risk taken on Wall Street.  It will also finally regulate exotic products like credit default swaps, and hold Wall Street companies accountable for the risks they take that put consumers at risk.

Our efforts at bipartisanship have led us to find good solutions to protect small community banks and credit unions. We have also found common ground to protect consumers, provide uniform rules regarding consumer protection, and level the playing field for banks and nonbanks.

This bill is not perfect, and there are certainly items each of us on this Committee would like to see improved as we go to the floor.  I am hopeful that bipartisan conversations will continue on these issues in coming weeks as the bill moves through the full Senate.

As expected, President Obama this morning signed into law the Senate’s package of health care reforms, a number of which will go into effect this year.

“Today, after almost a century of trying, today, after over a year of debate, today, after all the votes have been tallied, health care insurance reform becomes law in the United States of America,” Obama said to a standing ovation from the large group of Democratic lawmakers gathered at the White House for the signing.

The Senate today will begin debating a separate reform package that tweaks the original Senate bill. Leaders from both parties expect that measure to clear the Senate by the end of the week.

(Here’s what happens, though, if it doesn’t.)

They weren’t kidding when they said this evening’s markup of finance reform legislation would be a speedy affair.

The Banking Committee took less than an hour to pass the bill — along a party-line vote of 13 to 10 — and send it to the chamber floor. The quick process is an indication that Republicans, who’ve introduced hundreds of amendments designed to dilute the reforms, plan to stage their fight on the Senate floor, where they’ll likely have more cover from conservative-leaning Democrats who’ve historically protected the banking industry.

A Banking Committee summary of the legislation follows the jump.

Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

Ends Too Big to Fail Bailouts: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

Advanced Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated – including loopholes for over-the-counter derivatives, asset- backed securities, hedge funds, mortgage brokers and payday lenders.

Federal Bank Supervision: Streamlines bank supervision to create clarity and accountability. Protects the dual banking system that supports community banks.

Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation.

Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.

Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses.

It’s looking that way.

Observers had expected a drawn-out battle over Senate Democrats’ plans to overhaul the nations financial regulations in favor of more oversight and consumer protection. The Senate bill is being marked up in the Banking Committee beginning at 5 p.m. today.

But sources on and off Capitol Hill are now indicating that, in a surprise move, the Republicans — who’ve introduced hundreds of amendments designed to dilute the bill — will pick their fight on the Senate floor in lieu of the committee room. CNBC has the money quote (via NYT) from Sen. Bob Corker (R-Tenn), a member of the Banking panel who had been in negotiations with Chairman Chris Dodd (D-Conn.) over the reform package.

“What will happen tonight is probably — there will be no markup,” Corker told CNBC. “There will be some opening statements and the bill will pass out. So here you have a 1,300-page bill that is chalk [sic] full of substance that actually matters that really won’t be vetted.”

With today’s headlines screaming (perfectly legitimately) about last night’s health reform votes, it’s easy to forget that House lawmakers also passed the most sweeping reforms to hit the nation’s student lending system in decades.

The health care reconciliation bill, while predominately made up of health-focused reforms, also included language to eliminate the Federal Family Education Loan program, under which the government subsidizes private lenders that cater to students — and guarantees those loans so the private companies assume no risk when loans default. Instead, under the Democrats’ bill, all loans would originate directly from the U.S. Treasury (though private lenders would still compete to service them).

The Congressional Budget Office estimates that the changes would save the government $61 billion over the next decade, most of which would fund an expansion of scholarships for low-income college students.

The reconciliation bill, of course, still has to clear the Senate to become law. And while the Democrats say they have the 51 votes to pass it, they’ve been reluctant to release the names of those supporters. The focus of the Senate debate is sure to be on the health care side of things, with conservatives on both sides of the aisle blasting provisions like the new 3.8 percent tax on unearned income. But it’s worth mentioning that a good handful of Senate Democrats might also oppose reconciliation based on the lending reforms.

The Washington Post’s Dan Balz yesterday quoted Newt Gingrich, the former Republican House Speaker from Georgia, warning that Obama’s support for sweeping health care reform would plague Democrats for decades, much as Lyndon Johnson’s signing of the Civil Rights Act of 1964 jostled the party and led to the entrenchment of Southern Republicans that we still have today.

“‘They will have destroyed their party much as Lyndon Johnson shattered the Democratic Party for 40 years’ with the enactment of civil rights legislation in the 1960s,” Balz wrote, quoting Gingrich.

That statement led to my short post yesterday, questioning why Gingrich would suggest that political expediency should trump reforms as vital as those ensuring basic human rights. More recently, New York Times columnist Paul Krugman also latched onto Gingrich’s comments, asking today: “Who in modern America would say that L.B.J. did the wrong thing by pushing for racial equality?”

Turns out Gingrich didn’t like the way his words were framed, and he let Balz know it in a series of emails yesterday. That exchange led Balz today to issue this separate addendum, in which Gingrich says the Civil Rights Act was a moral necessity.

Gingrich responded with several emails saying that the context misrepresented his views by implying that he believed Johnson was wrong to sign the major civil rights legislation of the 1960s. To the contrary, he said, the civil rights revolution of 1956-1965 was “morally absolutely necessary” for the country and Johnson was correct in pushing for the legislation. Other Johnson actions, he said, inflicted more damage to the Democratic coalition.

Johnson shattered his party, Gingrich went on to say, because he had “grotesquely overreached” in four areas: mismanagement of the economy, the failure in Vietnam, the cultural divisions that emerged in part over Vietnam and later civil rights initiatives. Johnson’s mistake on civil rights, he said, was not in signing major legislation but in later getting ahead of the country by supporting school busing and failing to take a firmer stance against racial violence in the cities.

“If LBJ had done nothing on civil rights,” Gingrich said, “he would still have been in trouble on the economy, Great Society big government, the counter culture and the war.”

For the sake of argument, let’s say he’s right about that. It still doesn’t clear up the issue. For one thing, Gingrich’s comments weren’t intended to be friendly advice for Democrats. (What does he care if they flail in chaos for the next 40 years?) They were lobbed as a Hail Mary attempt to kill the health reform by causing House Democrats to fear the political repercussions of their support. And what single vote under the Johnson White House would make that point most clearly but the one enacting the Civil Rights Act?

Joe DeSantis, a Gingrich spokesman, wrote in our comment thread this morning that “Gingrich was not drawing an analogy between the health care bill and civil rights legislation.”

Maybe not. But Balz is standing by it. Indeed, despite the separate addendum, the original story remains unchanged.

With the House last night passing its health care reconciliation bill, the measure moves to the Senate this week, where Democratic leaders are claiming they’ve got the 51 votes needed to pass it. We’ll take them at their word. But just in case, it’s worth noting what it would mean if the larger, Senate-passed reform bill (which the House also approved yesterday) becomes law by itself. The biggies:

1) Insurance Subsidies: The Senate bill, while requiring most Americans to buy health insurance, also subsidizes plans for those living below 400 percent of the federal poverty level ($88,200 for a party of four). The subsidies would come on a sliding scale such that premiums would be capped at 2.8 percent of income for those living at 134 percent of poverty, and 9.8 percent of income for those living between 300 and 400 percent of poverty.

The reconciliation bill increases those subsidies for most income brackets. Those living between 300 and 400 percent of poverty, for example, would pay premiums capped at 9.5 percent of their income.

2) Funding: The Senate bill would hit the wealthiest Americans — individuals earning more than $200,000 and families earning more than $250,000 — with a 0.5 percent increase in the Medicare payroll tax. The reconciliation bill would add a 3.8 percent tax on unearned income — a category that includes things like interest, dividends and capitol gains on investments.

The Senate bill also applies a 40 percent tax (beginning in 2013) to the highest-priced insurance plans — those costing more than $8,500 for individuals and $23,000 for families. The reconciliation bill keeps the tax, but hikes the dollar threshold that trigger it — to $10,200 for individuals and $27,500 for family plans. In both the Senate and reconciliation bills, the thresholds are even higher for those in high-risk jobs like coal mining and firefighting. The reconciliation bill also postpones the tax until 2018.

3) Doughnut Hole: As part of its $80 billion deal with Sen. Max Baucus (D-Mont.), the pharmaceutical lobby agreed to cut the cost of name-brand drugs by 50 percent when seniors hit the doughnut hole, which is the not-meant-to-be-flattering name of the coverage gap in Medicare’s prescription drug benefit. And that’s where the Senate bill leaves it.

The reconciliation bill builds on that foundation, giving seniors in the doughnut hole an additional $250 toward their drugs in 2010, and then hiking that amount incrementally until the doughnut hole is fully closed by 2020.

4) Individual Mandate: The Senate bill requires most Americans to buy health insurance or pay a financial penalty of either $750 or 2 percent of income, whichever is larger. The reconciliation bill would alter the penalty slightly, to the larger of $695 or 2.5 percent of income.

5) Medicaid Rates: While expanding Medicaid coverage to include most folks living below 133 percent of the federal poverty level, the Senate bill would leave Medicaid rates alone. This is a problem, because Medicaid rates are so low that more and more doctors are refusing to see those patients. Recognizing that there’s little value in a health insurance program that doctors don’t accept, House leaders in their reconciliation bill hiked Medicaid rates for primary care services to at least the level that Medicare pays.

6) Cornhusker Kickback: The Senate bill includes the now infamous sweetheart deal that Democratic leaders carved out to win the vote of Nebraska Democrat Ben Nelson. Under that provision, the federal government would pay 100 percent of the cost of expanding Medicaid in Nebraska — forever. (By contrast, the other states would begin paying a portion of those costs over time.)

The reconciliation bill strikes the Cornhusker Kickback dead.

Senate leaders are hoping to pass the reconciliation bill before the Easter recess, which begins Friday. Republican leaders, though, are working to prevent that from happening.