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.”

WASHINGTON – The Senate has voted to give the government extensive new powers to decide how tobacco companies will make and market their products. Supporters say that could spare millions from smoking addiction and premature death.

The legislation would for the first time give the Food and Drug Administration legal authority to regulate and order changes to tobacco products in the interest of public health. Thursday’s vote was 79-17.

FDA authority over tobacco has long been a goal of anti-smoking advocates who say it could reduce an annual toll of 400,000 tobacco-related deaths. The House has passed its own similar version, and a resolution of differences would send it to President Barack Obama, who supports it.

RALEIGH, N.C.  – Deregulation of the prices North Carolina consumers pay for landline telephone service could be approved as early as next week.

Legislation that allows AT&T and 15 smaller providers to cut loose from rate-setting regulations of household service was tentatively approved by the state Senate 44-0.

Landline telephone providers want the option to drop out of Utilities Commission price-setting oversight because cable, Internet and wireless rivals aren’t similarly regulated.

The legislation would allow phone companies to set their own prices, except for stand-alone basic residential service. Rate increases for the basic service would be limited to inflation adjustments. Rural and urban customers must be charged comparable rates.

RALEIGH, N.C.  – The leader of the North Carolina Senate says he has no plans to leave the Legislature despite being diagnosed last year with a rare degenerative nerve disease.

Dare County Democratic Sen. Marc Basnight has trouble at times with coordination and balance with his disorder, which slowly destroys nerve cells.

But his doctors told The News & Observer of Raleigh it shouldn’t affect the legislative work he does now and that it will be 10 to 20 years before the disease disables him.

Basnight said he noticed symptoms of the disease two years ago when he lost his balance and fell.

Basnight is in a record ninth two-year term as Senate president pro tempore.

WASHINGTON  – President Barack Obama’s request for continuing military and diplomatic operations in Iraq and Afghanistan easily cleared a procedural test Thursday on its way toward a final vote later in the day.

The $91.3 billion measure before the Senate closely tracks Obama’s request for war funds, although the $80 million he was seeking to close the U.S. naval prison at Guantanamo Bay, Cuba, was dropped Wednesday.

The 94-1 vote to limit debate paves the way for easy passage later on Thursday. A final House-Senate compromise is likely when Congress returns in June from a weeklong Memorial Day recess. Russ Feingold, D-Wis., cast the sole “no” vote.

Senate debate has featured none of the angst over the situation in Afghanistan that permeated debate in the House last week on companion legislation. Obama is sending more than 20,000 additional troops there and, for the first time next year, the annual cost of the war in Afghanistan is projected to exceed the cost of fighting in Iraq.

With support forces, the number of U.S. forces in Afghanistan is expected to be about 68,000 by the end of the year – more than double the size of the U.S. force at the end of 2008.

The Senate bill includes $1.5 billion as cautionary funding to fight a possible flu pandemic, including the current outbreak of H1N1 swine flu. It also provides a $100 billion line of credit to the International Monetary Fund to shore up the ability of countries around the globe to cope with financial crises, as well as $8 billion for existing commitments to the IMF.

Sen. Jim DeMint, R-S.C., promised to try to strike the IMF funding from the bill on Thursday. The funding is estimated to cost taxpayers $5 billion since the U.S. government is given interest-bearing assets in return.

The underlying war funding measure has gotten relatively little attention, even though it would boost total approved spending for the Iraq and Afghanistan wars above $900 billion.

The Pentagon would receive $73 billion under the legislation, including $4.6 billion to train and equip Afghan and Iraqi security forces, $400 million to train and equip Pakistan’s security forces, and $21.9 billion to procure new mine-resistant vehicles, aircraft, weapons and ammunition, among other items.

The House version adds $11.8 billion to Obama’s request, including almost $4 billion for new weapons and military equipment such as eight C-17 cargo planes, mine-resistant vehicles, Bradley Fighting Vehicles and Stryker armored vehicles. The measure adds $2.2 billion to Obama’s request for foreign aid – much of which appears to be designed to get around spending limits for 2010.

The Senate measure also includes $6.9 billion in foreign aid, mainly for Afghanistan, Pakistan and Iraq. There’s also $50 million to combat AIDS overseas, and $173 million for peacekeeping operations in Somalia and elsewhere.

The bill also contains $350 million for various security programs along the U.S.-Mexico border. But the money would not be awarded to the Pentagon, which asked for it and had contingency plans to use it to send National Guard units to patrol the border.

HEADLINES:

- House sergeant-at-arms completes preliminary report on actions of House member Allred
- NC Senate delays vote on taxpayer campaign funding
- NC Association of Educators president criticize potential House budget proposal

THE BRIEF:

ALLRED INVESTIGATION: House Speaker Joe Hackney said a preliminary review of accusations that a state House member embraced a teenage female page and had been drinking before speeding to work has been sent to a legislative ethics panel. The report was assembled by House Sergeant-at-Arms Bob Samuels and presented to Hackney. It makes neither conclusions nor recommendations about what, if anything, should happen to Rep. Cary Allred, R-Alamance. Allred repeated in an interview he’s done nothing wrong. Hackney, D-Orange, said the report was given to the Legislative Ethics Committee, which will decide whether further scrutiny is needed if ethics laws may have been violated. Several House members wrote they were uneasy when they say they saw Allred in the back of the House floor, give a page a lengthy hug and kissed her. Pages are volunteers from members’ districts. Allred said the teenager was a longtime family friend. She and her parents did not want to file a complaint and were OK with what happened.

PUBLIC CAMPAIGNS: The North Carolina Senate debated a measure allowing big cities to use taxpayer money for local election campaigns, then postponed a vote until next week. The Senate saw the Democratic majority jockey against Republicans opposing the bid to start voluntary public campaign financing programs in the state’s 15 largest cities. The measure was then set aside and rescheduled for a vote next Wednesday. Candidates in nonpartisan elections would have to agree to accept fundraising restrictions in exchange for public dollars. Statewide candidates for appellate judges, the state auditor, insurance commissioner and schools superintendent already can receive public funding. Chapel Hill will test taxpayer-assisted local elections this fall.

EDUCATION CUTS?: The North Carolina Association of Educators says a potential House budget proposal for public education released in a committee contains “dangerous and draconian” cuts that would put more than 10,000 educators out of a job. The proposal seeks nearly $1.2 billion in additional cuts in the public schools and university and community college systems than what the Senate made last month. The plan is weeks from being considered by the full House. Reductions may be eased or changed if Democrats consider raising taxes to help pay for them. The proposal would increase the average class size by two students, eliminate some third-grade teaching assistants and shorten the school year by five days starting this fall. NCAE President Sheri Strickland said the proposal would jeopardize the state’s economy by throwing so many people out of work.

WEDNESDAY’S SCORECARD:

In the Senate:
- H616, to make it a misdemeanor for someone to steal, destroy or vandalize a portable toilet or pumper truck. Approved. Next: To Gov. Beverly Perdue’s desk.
- H186, to prevent a local Alcoholic Beverage Control board from opening a store at a location that is opposed by the public and the governing body of the municipality. Approved. Next: To Gov. Beverly Perdue’s desk.

AROUND THE STATEHOUSE:

Advocates for the mentally ill want lawmakers to avoid what they call devastating cuts to services in next year’s state budget. More than 1,000 people – including patients and their families – visited the Legislature for their annual rally. They want to protect and improve treatment for people with mental illness, the developmentally disabled and substance abusers. The event came the same day House members discussed options to reduce mental health funding to help narrow a $4 billion-plus state budget gap for next year. One option would reduce service funds by more than $50 million.

ON THE AGENDA:

A House judiciary panel is slated to consider legislation Thursday that would ban the execution of death row inmates who suffer from severe mental illness. The original filed bill would permit a judge to declare a capital murder suspect as having a severe mental disability. If convicted, the person would face a maximum sentence of life in prison without parole.

QUOTABLE:

“There has been a problem about people taking a non-serious attitude about this product.” Sen. Doug Berger, D-Franklin. He was urging support for a bill criminalizing the vandalism of portable toilets.

WASHINGTON – The Senate is poised to hand President Barack Obama a major setback by denying him money to shut down the Guantanamo prison and block the transfer of detainees to the United States.

Last month, Obama asked for $80 million for the Pentagon and the Justice Department to close the facility, which has 240 detainees, by next January. In the eyes of the world, the prison has come to exemplify harsh U.S. anti-terror tactics and detention without trial for almost all of its inmates, most of whom were captured in Afghanistan.

The vote promises to be a sweeping rebuke of the administration, which put its Democratic allies in a difficult spot by requesting the Guantanamo closure money before developing a plan for what to do with its detainees.

Obama is scheduled to give a major address Thursday outlining in more detail his plans for Guantanamo, but it’s already clear that Congress has little appetite for bringing detainees to U.S. soil, even if the inmates would be held in maximum-security prisons.

The Senate’s move matches steps taken by the House and threatens the administration’s plan to close the detention center at Guantanamo Bay, Cuba, by January.

The vote comes as FBI Director Robert Mueller told Congress that he is concerned Guantanamo detainees could support terrorism if sent to the United States. Separately, a federal judge said the United States can continue to hold some prisoners at Guantanamo indefinitely without any charges.

In recent weeks, Republicans have called for keeping Guantanamo open, saying abuses at the facility are a thing of the past and describing it as a state-of-the-art prison with nicer conditions than U.S. prisons. And they warn that terrorists who can’t be convicted might be set free in the United States.

“The American people don’t want these men walking the streets of America’s neighborhoods,” Sen. John Thune, R-S.D. said Wednesday. “The American people don’t want these detainees held at a military base or federal prison in their backyard, either.

Meanwhile, Obama’s new Pentagon policy chief, Michele Flournoy, said it’s unrealistic to think that no detainees will come to the United States, and that the government can’t ask allies to take detainees while refusing to take on the same burden.

Obama ally Sen. Dick Durbin, D-Ill., pointed out that not a single prisoner has ever escaped from a federal “supermax” prison and that 347 convicted terrorists are already being held in U.S. prisons.

Sen. Lindsey Graham of South Carolina, among the few Republicans joining former GOP presidential nominee John McCain of Arizona in calling for Guantanamo to be closed, scoffed at the idea that the government can’t find a way to hold Guantanamo prisoners in the United States. Graham noted that 400,000 German and Japanese prisoners were held during World War II.

“The idea that we cannot find a place to securely house 250-plus detainees within the United States is not rational. We have done this before,” Graham said. “But it is my belief that you need a plan before you close Gitmo.”

While allies such as Durbin have cast the development as a delay of only a few months, other Democrats have made it plain they don’t want any of Guantanamo’s detainees sent to the United States to stand trial or serve prison sentences.

RALEIGH, N.C.  – North Carolina’s big cities and towns would be able to initiate voluntary public campaign financing programs for municipal elections in a bill recommended by a Senate committee.

The measure approved Tuesday in a voice vote by the Senate State and Local Government Committee now heads to the full Senate. The bill narrowly passed the House last month.

Municipalities with populations above 50,000 could ask the State Board of Elections to participate in a plan. Candidates in nonpartisan elections would have to agree to accept fundraising restrictions in exchange for public dollars.

Statewide candidates for appellate judges, along with the state auditor, insurance commissioner and schools superintendent, already can receive public funding. Chapel Hill also has the authority and will use it this fall.