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The HHS rate review oversight proposal, introduced by Feinstein and included in the Obama plan, hasn't passed muster with the parliamentarian under the Byrd rule, as many of us speculated would be the case at the time it was proposed.

"I'm crushed it's out," [Feinstein] said. But she added that she would bring it up with him one more time to try to make the case that it would be a legitimate use of reconciliation. "I'm going to make one last effort with the parliamentarian," she said.

It'll be a difficult effort. Reconciliation rules require that legislation must have a direct and substantial effect on the budget to qualify for the majority-vote procedure. Merely an incidental budget effect is not enough. Feinstein's rate authority would save the government money by reducing private insurance premiums, which would then reduce the amount of subsidies needed -- but such an effect is apparently too indirect for the parliamentarian to give it the thumbs-up.

Including the Feinstein's rate authority would be a risky move for Democrats. If Senate Republicans are able to alter the package in any way through parliamentary points of order, then it must go back to the House for yet another vote -- the last thing Speaker Nancy Pelosi wants. If the Senate passes the House version unchanged, it goes directly to the president for his signature.

This could be a bill passed as a stand-alone, along with the repeal of the anti-trust exemption that the House has already passed. They'd be key steps in the "building on this bill to make reform real" promises progressives keep getting in return for supporting this bill. Of course, it would probably be passed by the House only to be tossed on the pile of bills the Senate will never get to.

Originally posted to Daily Kos on Wed Mar 17, 2010 at 05:26 PM PDT.

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