A Medical Device Daily

Congress cleared President Barak Obama's $3.6 trillion budget largely along party lines Wednesday night, clearing the way for a potential overhaul of the U.S. healthcare system.

The Senate cleared the plan by a vote of 53 to 43 after the House passed it 223 to 193. Not a single Republican in either chamber voted for the measure. Democratic defections included Sens. Evan Bayh of Indiana, Robert Byrd of West Virginia, Ben Nelson of Nebraska and Pennsylvania's former Republican Sen. Arlen Specter, all of whom joined 17 House Democrats in voting no.

The budget includes a fast-track provision that would block a Senate filibuster on Obama's bid to transform the healthcare system, as well as his plan to change student lending.

In remarks prepared for his evening news conference, Obama said the budget "builds on the steps we've taken over the last 100 days to move this economy from recession to recovery and ultimately to prosperity."

House and Senate budget chiefs trimmed Obama's original $3.6 trillion budget proposal, leaving out certain items, such as additional bailout funding, and scaling back his "Make work pay" tax cut. Lawmakers also opted against reducing the level of charitable tax deductions taken by wealthy Americans.

But the blueprint preserves many of the president's initiatives and tees up efforts by congressional committees to expand government-subsidized healthcare. It also implements an administration-backed plan to cap greenhouse gas emissions, though it stipulates that the final budget specify how to finance both reforms. Because healthcare was included under reconciliation, Obama's healthcare plan will require only a simple majority of 51 votes to pass the Senate.

"I think it's a good beginning," Senate Budget Committee Chairman Kent Conrad (D-North Dakota) said after the vote. "I do think it is putting us on the right trajectory in the first five years and we have captured the president's major priorities."

The budget aims to cut the deficit from an expected $1.2 trillion this year to $523 billion by 2014. The total national debt would skyrocket from $11.2 trillion to $17 trillion.

A deal on the budget was only reached after Democrats agreed to demands from conservative Blue Dogs to consider legislation, known as pay-go, to help control spending. House Speaker Nancy Pelosi (D-California) and House Majority Leader Steny Hoyer (D-Maryland) have pledged to do so in a letter, while President Obama has reportedly promised to help push the cause in the Senate.

Senate takes up healthcare bill language

Members of the Senate Finance Committee began the process of building a healthcare bill on Wednesday, meeting behind closed doors for much of the day to discuss proposed changes to how the country pays for medical treatments.

Senate Finance Chairman Max Baucus (D-Montana), who had led efforts within the committee on the healthcare measure, conceded that the hardest work is yet to come. While the Wednesday meeting focused on policy proposals for the healthcare payment system, the committee has not yet formally discussed thorny issues of covering more people – which may involve a public insurance option – or financing a healthcare expansion.

But Baucus and the committee's top Republican, Sen. Charles Grassley (R-Iowa), said the committee was off to a strong start.

"I think there's near unanimity on the goals we're reaching towards," Baucus said, pointing specifically to efforts to tie payments for healthcare to the quality of treatments provided by doctors and hospitals.

But Baucus also said that senators voiced initial concerns – on how quickly the new measures would be put in place, on differences in payment rates between geographical areas and on the fate of privately-run Medicare Advantage plans.

Still, Baucus suggested that the committee could work out the details of the legislation without alienating groups representing doctors and hospitals, who will feel a significant effect from whatever steps the panel takes.

"Almost all health providers agree that the we are taking the right approach," Baucus said. "The concerns are implementation."

The politics of crafting health legislation has become increasingly complex in the Senate, where lawmakers to the left and right are trying to put their mark on a final version of the legislation. A group of 16 Senate Democrats on Wednesday pushed for the inclusion of a public insurance option to compete with private health insurance.

They sent a letter to Baucus and Sen. Ted Kennedy, (D-Massachusetts), the chairman of the Senate Health, Education, Labor and Pensions Committee.

"I would have difficulty voting for something that didn't have this language," said Sen. Sherrod Brown (D-Ohio), who signed the letter.

Sen. Bernard Sanders (I-Vermont), another signer of the letter, said at a press conference that he likely would not vote for a bill that did not contain the public option.

Other signers of the letter include Sen. Jay Rockefeller, (D-West Virginia), and Sen. Charles Schumer (D-New York).

The group could play an important role in debates over how to write legislation that will ensure universal health insurance coverage. Republicans roundly oppose the creation of a new public insurance option, which they warn will underpay hospitals and doctors and shift costs to private insurers.

"We must heed past experience that private insurance alone cannot accomplish our goals," the letter states. "To achieve meaningful reform, insurers must compete based on quality and affordability – but clearly that has not always been the case."