Washington Report

Healthcare Update

Healthcare reform got a lifeline this week when the Senate Finance committee passed the Baucus bill by 14 to 9. Democrats were thrilled that Republican Sen. Olympia Snowe of Maine cast a “aye” vote, but does that a bipartisan bill make?

It was good enough for President Obama, who thanked Snowe “for both the political courage and the seriousness of purpose that she’s demonstrated throughout this process.”

Now, the really hard work begins. Next week, with the help of White House representatives, Senate Majority Leader Harry Reid of Nevada and a team of senators and senior aides will start merging the Baucus bill with the one crafted by the Senate Health, Education, Labor and Pensions committee. House Speaker Nancy Pelosi already has begun work to merge three House bills into one that both liberals and centrists can support. Then, the two chambers must negotiate one final bill.

Alabama Rep. Artur Davis predicts that the biggest debate will be over how to pay for the legislation.

“That will be the most significant difference and there are two very different approaches,” he said. “The House approach is to pay for it by raising income taxes and putting business mandates in place. The Senate approach is provider cuts and cuts within the system that exists today. There’s going to be a very significant, philosophical debate.”

Bases of compromise, he added, are subsidy levels for individuals so the individual mandate doesn’t place a big burden on the middle class and the still-controversial public option.

Snowe will continue to play a pivotal role in the process, but that doesn’t mean she’ll vote aye again. As she said after the committee vote, “My vote today is my vote today,” she said. “It doesn’t forecast what my vote will be tomorrow.”

MBDA Gets Seat at Recovery Act Table

For many years, the Minority Business Development Agency has been treated rather like Cinderella–before the fairy godmother magically appeared, existing at the pleasure of the president and underfunded. That may be about to change.

The House Subcommittee on Commerce, Trade and Consumer Protection, convened a Thursday afternoon hearing on what role MBDA can play in getting Recovery Act and other federal contracting dollars to minority businesses and communities. None of the subcommittee’s Republican members showed up.

MBDA director David Hinson said in his testimony that, “Challenges in developing capacity, including lack of capital, increased contract bundling and intensified supply chain competition, among other factors, are adversely affecting the growth and competitiveness of minority businesses.” He believes the hearing signals a genuine interest on the part of Congress to take a more active role in the growth and development of minority businesses nationwide.

But Rep. G.K. Butterfield

of North Carolina, said that the hearing is a first step in raising public awareness of the importance of minority business. But, he added, “The lack of any Republican participation demonstrates that there’s not a commitment on behalf of all policymakers to make this a reality. Chairman Bobby Rush says time and time again that we’re going to concentrate on minority business development and I’m going to hold him to his word.” Butterfield also said funding for MBDA must be increased.

Subcommittee Advances Small Business Lending Bills

Last week a House small business subcommittee on finance and tax approved eight bills that aim to update

and improve small business lending programs. The legislation, which was also the topic of a full committee hearing on Wednesday, includes the Small Business Microlending Expansion Act and the Small Business Early Stage Investment Act, which would provide funding to young businesses in targeted industries and an additional $110 million to very small start-ups.

“Traditionally, small businesses lead our country out of economic downturns by expanding and creating new jobs,” said Rep. Kurt Schrader (D-Oregon), the subcommittee’s chairman. “However, small businesses can’t play that role if they don’t have access to affordable credit. The legislation passed today will mean more loans for more businesses at more affordable rates.”

During the full committee hearing, Rep. Nydia Velazquez of New York, noted that a summer survey conducted by the Federal Reserve found that 35% of domestic banks have tightened small business lending. SBA lending is down as well.

The proposed legislation “helps firms secure financing for new purchases. It also raises SBA loan guarantees, reducing risk for lenders. That’s critical because some banks are saying they won’t loosen lending standards until the middle of 2010–and that’s at the earliest,” said Velazquez, who chairs the committee.

After the hearing, New York Rep. Yvette Clarke said that she and Velazquez have discussed arranging what she called an “eye-to-eye” between SBA and financial institutions.

“We’re going to ask, ‘Are you going to open up and make things happen for small business or do we have to do something demonstrative in terms of legislation?’ I think that’s the point where we are right now,” said Clarke.

Et Tu, Vince?

For the first time in many years, Rep. Charles Rangel will face a primary challenger during his 2010 bid for reelection. That was almost a given considering Rangel is under fire for an ethics committee investigation into his failure to pay or disclose certain taxes and assets.

But the first person to challenge the powerhouse Ways and Means committee chairman is his former aide Vincent Morgan, who in 2002 served as Rangel’s campaign director. That’s got to hurt.

Morgan, a vice president and banking officer for TD Bank, is a former high school drop out who went on to earn degrees from the University of Illinois and Columbia. He also chairs the 125th Street Business Improvement District.

When asked about Morgan’s bid, Rangel said, “I only know what I’ve read in the newspapers. I saw Vince a couple of weeks ago and he didn’t share this with me. He’s been very supportive in the past.”

But Morgan says, “It’s time for change. Our district needs new leadership that is in touch with the community and the issues that confront us today.”

Odds are Rangel was thinking along similar lines when in 1970 he challenged another black political icon–Adam Clayton Powell–and won.

If exonerated by the ethics committee, Rangel, who will be 80 next year, may decide to retire rather than run against a younger man who may be as scrappy as he once was. He will, after all, have fulfilled his goal chair Congress’s most powerful committee and served under the nation’s first black president. If he’s really lucky, he’ll be written up in the history books as having played a pivotal role in the passage of historic healthcare reform legislation.

Rangel seems pretty confident he could beat Morgan, but, he says, “Every challenge is serious.”