A telling episode recounted by Senate Finance ranking member Charles Grassley reveals the Obama administration might be more worried than they are letting on that a Republican senator's comparison of the healthcare overhaul to Waterloo might be dangerously close to the truth.

Grassley said he spoke with a Democratic House member last week who shared Obama's bleak reaction during a private meeting to reports that some factions of House Democrats were lining up to stall or even take down the overhaul unless leaders made major changes.

"Let's just lay everything on the table," Grassley said. "A Democrat congressman last week told me after a conversation with the president that the president had trouble in the House of Representatives, and it wasn't going to pass if there weren't some changes made ... and the president says, 'You're going to destroy my presidency.'"

The White House did not respond to requests for comment.

Grassley did not name the member but said he was not from the senator's home state of Iowa. He brought up the anecdote in response to a question about whether the president's rebuke of the Waterloo remark Monday was affecting Finance Committee negotiations on a bipartisan overhaul bill. Grassley said the imbroglio was not taking a toll on the bipartisan effort.

President Obama and the Democratic National Committee pushed back hard this week against South Carolina Republican Sen. Jim DeMint's remark Friday that the healthcare overhaul could be Obama's Waterloo. Obama went directly after the comment in a speech Monday and Democratic leaders and organizations have fired off countless e-mails to call out Republicans for attempting to bring down the effort rather than offer constructive alternatives.

Most of the Blue Dog Coalition opposes the House overhaul bill and have managed to delay the Energy and Commerce Committee markup. (See related story, page 1.) Rep. Mike Ross, D-Ark., the Blue Dogs' Health Care Task Force chairman, said Tuesday he is not the member Grassley was referring to.

Rep. Bart Stupak, D-Mich., defended Obama even though he is also opposed to House Democrats' bill. "I can't see him saying that," Stupak said. "He's got too much self-confidence."

House Republicans Tuesday made hay of the issue, with Ways and Means minority staff sending out an e-mail asking, "Who's really blocking health care reform?"

"Do not be fooled by the president's repeated attempts to create a Republican straw man for his health care troubles," the e-mail reads. The GOP pointed to ads the Democratic National Committee is running to pressure Democratic lawmakers.

Meanwhile, the Finance Committee continues to negotiate its bipartisan bill. Seven negotiators have been at the table, but Senate Finance Chairman Max Baucus referred Tuesday to "all six in the room." Sen. Orrin Hatch, R-Utah, has not been noticed attending the meetings for some time.

Senators discussed offsets for the $1 trillion measure Tuesday afternoon with Thomas Barthold, chief of staff for the Joint Committee on Taxation. An offset offered by Sen. John Kerry, D-Mass., meant to be a compromise on taxing employer-based health benefits, is under discussion, Baucus said.

Kerry's idea is similar to a proposal pushed in 1994 by former Sen. Bill Bradley, D-N.J., and approved by the Finance Committee that would tax the difference between the average health insurance premium in a region and insurers' higher-cost plans.

Unions have come out heavily against that proposal because of the potential for higher costs to be passed down to workers. Most big companies offer their own insurance plans to employees, meaning the pain could be spread beyond the insurance industry.

An industry source expressed concern that "self-insured" company plans would be victimized, noting a 2008 Kaiser Family Foundation survey that found 77 percent of firms with more than 200 employees fund their own workers' benefits, rather than contract with an outside insurer. That figure goes up for firms with 1,000 or more workers, where the vast majority are self-insured, said Marisa Milton, vice president for healthcare policy and government relations at the HR Policy Association.

Finance members are looking at the exclusion that protects employees from paying taxes on employer-based health benefits to try to reduce the growth of healthcare spending, but have run into pushback from Democratic leaders and Obama.

The bipartisan Finance group met earlier in the day with two actuaries to discuss potential penalties for individuals and businesses that do not acquire insurance.

Senate Majority Leader Reid insisted Tuesday that the Finance panel would produce a bill this week and begin a markup Saturday, but Finance members were skeptical. Baucus raised his hands and laughed when asked about Reid's comment and Senate Budget Chairman Kent Conrad went just with a good laugh.

(National Journal - Wednesday, July 22, 2009)