WASHINGTON  – Sen. Max Baucus on Wednesday brought out the much-awaited Finance Committee version of an American health-system remake – a landmark $856 billion, 10-year measure that starts a rough ride through Congress without visible Republican backing.

The bill by Baucus, chairman of the Finance Committee, would make major changes to the nation’s $2.5 trillion health care system, including requiring all individuals to purchase health care or pay a fine, and language prohibiting insurance company practices like charging more to people with more serious health problems.

“This is a unique moment in history where we can finally reach an objective so many of us have sought for so long,” Baucus said.

“The Finance Committee has carefully worked through the details of health care reform to ensure this package works for patients, for health care providers and for our economy.”

Consumers would be able to shop for and compare insurance plans in a new purchasing exchange. Medicaid would be expanded, and caps would be placed on patients’ yearly health care costs. The plan would be paid for with $507 billion in cuts to government health programs and $349 billion in new taxes and fees, including a tax on high-end insurance plans and fees on insurance companies and medical device manufacturers.

The bill fails to fulfill President Barack Obama’s aim of creating a new government-run insurance plan – or option – to compete with the private market. It proposes instead a system of nonprofit member-owned cooperatives, somewhat akin to electric co-ops that exist in many places around the country. That was one of many concessions meant to win over Republicans.

In other ways though, including its overall cost and payment mechanisms, the bill tracks closely with the priorities Obama laid out in his speech to Congress last week. Baucus is still holding out hope for GOP support when his committee actually votes on the bill, probably as early as next week.

The measure represents the most moderate health care proposal in Congress so far, compared to legislation approved by three committees in the House and the Senate’s health panel. Obama’s top domestic priority is to revamp the health care system to provide coverage to nearly 50 million Americans who lack it and to rein in rising costs.

The bill includes provisions to keep illegal immigrants from obtaining health coverage through the new insurance exchanges – reflecting the White House’s newly stringent stance on the issue after a Republican House member interrupted Obama’s speech last week to accuse him of lying about it.

The bill also would prevent federal funds from being used to pay for abortions except in cases of rape, incest, or if the life of the mother would be endangered. It’s all but certain that the Baucus provisions will not be the last word on either of those volatile issues.

The bill would set up a verification system to make sure people buying insurance in the exchanges are U.S. citizens or legal immigrants, using Social Security data and Homeland Security Department files. The bill would impose penalties for fraud and identity theft.

While only legal residents would be able to buy coverage through the exchanges, illegal immigrant parents would be able to get insurance for their U.S. born children.

The bill would prohibit abortion from being included in any minimum benefits package. However, plans in the exchange could offer unrestricted coverage for abortions, provided that no funds from government subsidies are used to pay for them. Women who want coverage for abortions would have to pay for it with their own money.

Wednesday’s bill release follows months of negotiations among Baucus and five other Finance Committee senators dubbed the “Gang of Six” – Republicans Chuck Grassley of Iowa, Mike Enzi of Wyoming and Olympia Snowe of Maine, and Democrats Kent Conrad of North Dakota and Jeff Bingaman of New Mexico.

Enzi said he couldn’t support the Baucus bill and preferred an incremental approach. “Let’s start by focusing on the issues where we already have broad, bipartisan agreement,” he said.

In the end, Democrats believe Snowe may be the only Republican to support the bill, though she wasn’t ready to commit her support Tuesday night. “Hopefully at some point through the committee process we can reach an agreement,” she said.

The bill drew quick criticism from Republican leaders.

“This partisan proposal cuts Medicare by nearly a half-trillion dollars, and puts massive new tax burdens on families and small businesses, to create yet another thousand-page, trillion-dollar government program,” said Senate Minority Leader Mitch McConnell, R-Ky. “Only in Washington would anyone think that makes sense, especially in this economy.”

Many liberals also have concerns. Some wanted Baucus to include a public option, while others fear that, in his effort to hold down the price of his bill, Baucus didn’t do enough to make health coverage affordable to working-class Americans. Sen. Jay Rockefeller, D-W.Va., a member of the Finance Committee, said Tuesday that he couldn’t support the bill in its current form.

Baucus’ plan, released as a detailed 223-page summary, aims to make health insurance more affordable for self-employed people and those working for small companies, who now have the biggest problems in getting and keeping coverage.

People insured through large employers would not see major changes, but some of their health care benefits would be nicked to help pay for the cost of the plan. The Baucus proposal would limit to $2,000 a year the amount people can contribute to flexible spending accounts, which are used to cover copayments and deductibles not paid by their employers. That provision would raise $16.5 billion over 10 years.

Everyone covered through an employer would learn the full costs of their health benefits, which starting next year would be reported on employees’ W-2 tax forms. Although family coverage averages about $13,000 a year most workers don’t know how much their employer is paying.

Not carrying insurance could result in a steep fine, as much as $3,800 per family, or $950 for an individual. People who can’t afford their premiums would be exempted from the fine.

The plan proposes a $6 billion annual fee on health insurance providers, which would recoup some of the profits the companies expect to make from millions of new taxpayer-subsidized customers.

Unlike the health care bill written by majority Democrats in the House, which permanently rolls back scheduled cuts in Medicare payments to doctors, the Baucus plan only suspends the reductions for one year. That trims more than $100 billion from the cost of the bill, but has already led to criticism from the American Medical Association.

The legislation makes no changes in medical malpractice laws. It does incorporate Obama’s call for federal funds for state experiments on alternatives to malpractice lawsuits. Democratic leaders are aiming for votes in the full House and Senate this fall.

BOSTON  – Attorney General Martha Coakley announced Thursday she will run as a Democratic candidate in the special election to succeed the late Sen. Edward M. Kennedy.

The 20-year prosecutor said she can continue to be “an effective voice for the people of Massachusetts.”

Kennedy died last week of brain cancer at age 77.

Coakley said at a news conference the state has had a “crisis of confidence” following Kennedy’s death and she wants to pick up his mantle.

“We’ve depended on him here in the Commonwealth and in Washington, and we will miss his strength and leadership and his sense of humor. As some have noted, no one can fill his shoes, but we must strive to follow in his footsteps,” she told supporters at a downtown Boston hotel.

Coakley sidestepped a question from reporters whether she favored the changing state law to allow the governor to appoint an interim senator, as Kennedy had requested in a letter before his death. Legislators hold a hearing on the matter next week.

“For me, personally, I am fully focused on the race,” she said, adding she trusted legislators “will make the right decision.”

The 56-year-old Coakley becomes the most prominent candidate to officially declare. Several others are waiting for Kennedy’s nephew, former Rep. Joseph P. Kennedy II, to decide if he will run.

Coakley said in response to a question she decided to commit to the race without waiting to see if a Kennedy family member would run because of the senator’s had declared, in his letter seeking an interim appointment, the state needs strong and effective representation in Washington.

In a follow-up interview with The Associated Press, she said:
- Growing up in the Vietnam era has made her wary of President Barack Obama getting dragged into a protracted military engagement in Afghanistan, but “I trust him for now.”

- She has focused on health care cost containment as attorney general, since Massachusetts has the nation’s first universal health insurance law, and is in favor of it being included any overhaul law the president signs. She also said a so-called “public option” for providing government-sponsored insurance should be considered.

- She dismissed as “frivolous” a Massachusetts Republican Party complaint that she used $24,000 in state campaign money to pay Washington-based consultants as she considered a federal campaign. She said all her actions have been in compliance with state and federal ethics laws.

Coakley told her supporters she decided to run “because government should work well and it has to work for everyone,” adding that the performance of government “has been in some ways disheartening and discouraging.”

“I believe now is the time to move beyond the idea of, well, `It’s good enough for government work,’ and demand a new standard of excellence. And I know that I need to prove to voters across the commonwealth that I am the best candidate and that I would be the best new senator from Massachusetts,” Coakley said.

Coakley described her humble roots in western Massachusetts and her career as a prosecutor, both as Middlesex District Attorney in a large district that includes populous suburbs of Boston, and since, 2007, as the state’s attorney general.

“Now, with your help, I hope to bring my experience to Washington,” she said.

She did not overtly highlight her status as the state’s top female elected official.

Other potential Democratic candidates include U.S. Reps. Michael Capuano and Stephen Lynch. Potential Republican candidates include former Lt. Gov. Kerry Healey and state Sen. Scott Brown.

Former Boston Red Sox pitcher Curt Schilling is considering an independent campaign.

Coakley said his candidacy “would be fascinating” and she supports anyone entering the race.

RALEIGH, N.C.  – A vote by the North Carolina Senate on whether attorneys could offer a statistical argument showing that racial prejudice put a killer on death row has been postponed.

Bill sponsor Sen. Floyd McKissick of Durham County rescheduled the vote on what supporters call the Racial Justice Act from Tuesday to Wednesday as he tried to round up votes

The measure would allow judges to consider whether statistical data show race was behind the decision of prosecutors to seek, or jurors to impose, the death penalty.

In May, the Senate approved a version that would help remove obstacles that have effectively blocked executions for two years. That provision was removed by the House.

WASHINGTON, D.C. — The Senate Judiciary Committee has voted to send Judge Sonia Sotomayor’s nomination on to the full Senate.

Republicans came to Judge Sotomayor, impressed by her qualifications and experience, but extremely skeptical of whether she’ll be fair on the bench.

The Judiciary Committee voted 13 to 6 with every Republican except South Carolina’s Lindsey Graham against her.

Graham said his vote is based on her record, not her personal views.

“I can no more understand her heart than she can understand mine,” said   Graham.

The remaining Republicans said they have deep concerns.

“Speeches and articles describe a troubling record that hearing testimony did not resolve, said Utah’s Orrin Hatch.

“I’m not convinced she can set aside personal biases and decide cases based on the constitution,” said Iowa’s Charles Grassley.

“I am not able to confirm this nomination,” said Senator Jeff Sessions of Alabama.

Sotomayor brings nearly 30 years experience in law.

That’s more than the last three nominees.

But it’s her controversial statements off the bench, saying judges make law or that a wise Latino could reach a better decision than a white man, that put her on the defensive.

Sotomayor’s supporters insist she’s clearly qualified.

“In her 17 years on bench, not one example of her ruling based on bias or sympathy,” said democratic Senator Patrick Leahy of Vermont.

“I certainly don’t see any bias of any kind,” said democratic Senator Russ Feingold of Wisconsin.

“I’ll vote for her with enormous pride,” said California Senator Dianne Feinstein.

A full Senate vote is expected next week.

RALEIGH, N.C.  – House and Senate Democrats in North Carolina have signed off on a plan that would raise nearly $1 billion in taxes and help them reach an agreement on the state budget very soon.

House Speaker Joe Hackney said Wednesday fellow Democrats in his chamber are ready to support the deal reached with Senate counterparts. Democrats in both chambers held separate caucus meetings to discuss the $982 million plan.

The deal would raise the sales tax rate by a penny, add an extra 2 percent onto income tax bills and increase the cost of a pack of cigarettes by 10 cents. Alcohol taxes also would go up.

Hackney said a family making between $30,000 to $60,000 would see their tax bill go up by $66 a year under the deal.

Gov. Beverly Perdue still isn’t satisfied with the state budget and suggested more money is needed for public schools. She said school starts back in about a month and education leaders still don’t know how much money to expect for their classrooms.

Perdue’s written statement didn’t specifically mention a plan hammered out by House and Senate Democrats to raise nearly $1 billion in new taxes. The governor has said she wants more revenue.

Perdue told legislators to “find a way to protect public schools and the core services of safety and public health, period.”

A look at $982M tax plan agreed to by NC Democrats
A glance at the tax package tentatively agreed to Wednesday by North Carolina House and Senate Democrats that would raise $982 million during the 2009-10 fiscal year, with the amount raised by each provision:

- 1 percentage point increase in sales tax, raising rate most consumers pay to 7.75 percent: $803.5 million.
- 2 percent surcharge on individual income tax bills: $197 million.
- 2 percent surcharge on corporate income tax bills: $15.4 million.
- Applying sales tax to digital items purchased online and
transactions involving other Internet sales: $8.4 million.

- Increasing beer excise tax by about 5 cents per six-pack: $12.6 million.
- Increasing liquor excise tax by 5 percent: $20.1 million.
- Increasing wine excise tax by 4 cents per bottle: $2.9 million.
- Raising cigarette tax by 10 cents per pack to 45 cents: $33.3million.
- Increasing excise tax on cigars, smokeless tobacco and other tobacco products by 2.8 percent: $5 million.

The state will lose $116.3 million as it conforms state revenue law to federal law that exempts the first $2,400 of unemployment benefits from state taxes during 2009 as well as other changes.

The same plan would generate $1.32 billion in the 2010-11 fiscal year.

RALEIGH, N.C.  – The state Senate has approved a stopgap spending measure for North Carolina state government if budget negotiations with the House don’t wrap up before July 1.

The Senate agreed Tuesday to approve a so-called “continuing resolution” to allow government to keep operating past the end of June without a final budget in place.

The bill now goes to the House for consideration.

It tells Gov. Beverly Perdue to keep spending levels at no more than 85 percent of what was allocated in the past year’s budget because lawmakers are reducing spending due to declining tax collections.

The temporary spending plan is unusual because there is no expiration date. And the Senate rolled out the “resolution” early – a week before the fiscal year ends.

RALEIGH, N.C.  – The North Carolina Senate has narrowly approved changing the public school curriculum to teach adolescents about the use of contraceptives to prevent pregnancy and sexually transmitted diseases.

The bill approved 25-21 on Tuesday added details about what seventh-, eighth- and ninth-grade students should be taught about disease infection rates and the effectiveness of FDA-approved contraceptive methods.

The House now must approve or reject Senate changes.

The House has voted that schools teach two separate tracks – one focused on abstinence and the other on comprehensive sex education.

The Senate bill would teach all students about abstinence, then extend the course to cover contraception for students whose parents consent.

WASHINGTON – Senate Democrats on Wednesday took the first major step toward a sweeping overhaul of the health care system in over a decade, pushing legislation despite strenuous GOP opposition and uncertainty about its provisions and costs.

“This is about as historic as it gets for all of us,” said Sen. Christopher Dodd, D-Conn., who is overseeing the proceedings in place of Sen. Edward M. Kennedy, D-Mass., who is battling brain cancer.

“No issue is more of a moral imperative,” Dodd said. “In the richest nation on the face of this Earth, you shouldn’t have to be well-off to get well.”

The Senate Health, Education, Labor and Pensions Committee began work on a bill encompassing President Barack Obama’s legislative priority. The effort marked the first time since President Bill Clinton’s administration in the early 1990s that Congress was tackling such a broad overhaul.

High costs, uneven health care and nearly 50 million Americans uninsured have created the strongest political momentum for remaking the system in decades.

The Senate measure would cost about $1 trillion over 10 years, but leave 37 million people uninsured, according to an analysis from the nonpartisan Congressional Budget Office.

Sen. John McCain, R-Ariz., last year’s GOP presidential nominee, questioned how the committee could move ahead on legislation without hard figures on cost.

“How can we possibly, reasonably address this bill … without accounting how to pay for it?” McCain asked at the start of the committee’s session. McCain said it was “a joke if we run through this stack of papers.”

Dodd answered that the budget office had provided numbers on some elements and the committee would produce legislation that will be paid for.

But the committee was forced to delay work on its bill after getting initial high cost estimates of $1.6 trillion. Committee aides said the delays make it likely that the panel won’t be able to deliberate on its bill until after Congress’ July 4th recess.

Senate Finance Committee Chairman Max Baucus, D-Mont., would only say: “We’ll be ready when we’re ready, but we’re not there yet.”

Senate Republican leader Mitch McConnell of Kentucky, speaking in the full Senate, complained that lawmakers are being pressed to approve the measure without review or knowledge of the costs, just like the stimulus bill.

“Once again it’s rush and spend and rush and spend and a tidal wave of debt,” McConnell said.

Big holes remain on the most contentious issues in the 600-plus-page bill: a new public insurance plan to compete with the private market, and whether employers must provide health care for their workers.

The committee was scheduled to meet daily through next week. There were 388 amendments to be considered, the vast majority from Republicans.

Majority Democrats in the House could make their bill public this week, with committee votes after Congress returns from its July 4 recess.

Major cuts in Medicare and Medicaid will pay for some of the new costs but senators disagreed among themselves over whether to tax employer-provided health benefits – something Obama campaigned against. Also elusive was a compromise with Republicans on a new public insurance plan, which the GOP opposes.

The emerging bills envision a new insurance market “exchange” where people could go to shop for insurance coverage, helped by federal subsidies. Individuals will almost certainly be required to obtain coverage.

On the Net:
Senate Finance Committee
Senate Health, Education, Labor and Pensions Committee

RALEIGH, N.C.  – Their marathon budget week now over, House Democrats soon must get to work again on crafting a compromise with their Senate counterparts over the right mix of spending cuts and higher taxes.

The negotiation clock started early Saturday when the state House gave final approval after midnight to its $18.6 billion budget for state government next year that would include taking in $784 million more taxes.

The bill passed on a largely party-line vote of 64-53 following a three-hour debate during a rare Friday night session.

Democrats who drew up the House plan called it a balanced approach to handle the state’s worst fiscal situation in a generation: more than $2 billion in cuts, combined with the taxes and federal stimulus money.

“With the new revenues focused squarely on education and helping those who genuinely need our help, we have avoided the worst of the cuts,” said House Speaker Joe Hackney, D-Orange.

The House tax package would raise the sales tax by a quarter-penny so that most residents would pay 7 percent. It would also add two new marginal income tax rates for the wealthy and create or raise taxes on liquor, movies and digital downloads.

Passage of the House plan allows Democrats in the House and Senate to begin negotiating a final two-year spending plan in earnest in the coming week. The Senate passed a budget bill in April. Senate Democrats are lobbying hard for their own tax package that would raise more revenues but change dramatically sales and income taxes and lower their rates.

Democratic Gov. Beverly Perdue wants to have input on the bill, and wants it ready to sign before the new fiscal year begins July 1, but that deadline will be hard to meet.

“I’m expecting it to be a long process,” said Rep. Mickey Michaux, D-Durham, senior co-chairman of the House Appropriations Committee. “I’m hoping that it’s not.”

The competing House and Senate plans are far apart in sheer size, the result of the Senate drawing up its proposal weeks before lawmakers were told dwindling tax collections had deepened the budget hole by $1.5 billion.

House Democratic negotiators may have an advantage at the bargaining table since their proposal was based on the more realistic tax projections. The outcome will depend largely on what level of additional taxes lawmakers believe they can bear politically and citizens can bear in their wallets.

Regardless, some cuts are more likely to take effect because they appear in both plans. They include:
- Elimination of funding to pay salaries for 3,400-6,000 public schoolteachers as average class sizes are increased.
- Elimination of an undetermined number of vacant and filled jobs within state government. Remaining employees should expect no pay raises, and furloughs are possible.
- Coverage reductions for Medicaid patients and frozen or decreased payments for doctors who treat them.
- Closing of several prisons.
Michaux said a key fight in negotiations may center on the University of North Carolina system, which historically has had strong allies in the Senate.

Any tax hikes carry political risks.

“A lot of folks in my area that contacted me, they couldn’t afford additional taxes at this time,” said Rep. Van Braxton of Lenoir County, one of two Democrats who voted with the Republicans in opposing the House budget bill.

And raising income tax rates that are already the highest in the southeastern U.S. may be a deal-breaker for some Democratic senators who believe it would discourage companies from moving to the state. The rate was raised temporarily in 2001 but didn’t expire for six years.

“I’ll never vote for that – ever, never,” Sen. David Hoyle, D-Gaston, one of the authors of the Senate tax plan, said recently. “It’s just anticompetitive.”

Republicans, who are in the minority in both chambers, have argued unsuccessfully the budget could be balanced without new taxes that would delay the economy’s recovery.

“I am convinced there are hundreds of millions of dollars in cuts that wouldn’t harm citizens,” said House Minority Whip Thom Tillis, R-Mecklenburg.

Negotiations begin as more outside groups try to step up pressure on legislators.

Together NC, a coalition of more than 80 nonprofits and service providers, scheduled a Monday evening rally outside the Legislative Building to urge lawmakers to consider more taxes.

The American Beverage Institute said it would run full-page ads in the state’s two largest newspapers Sunday to oppose the House proposed 1.5 percent tax increase on liquor.

Lawmakers have already raised taxes on liquor this decade.

“Now they want to tax your drink even more to pay for their bloated budget,” one ad reads. “Tell legislators it’s time they cut spending, rather than taxing your cocktails.”