Congress launched the development of health care reform legislation this week with four House and Senate committee holding hearings on the subject. In its hearing Wednesday, the full House Ways and Means Committee received testimony from outside experts on constructing a universal health care system and how the current underpayments of Medicare and Medicaid are raising costs for commercial health plans. In his opening remarks, Chairman Charlie Rangel (D-NY) noted that the Senate appeared to be moving forward in a bipartisan manner and that he would "see what he can do" to work with Republicans in the House.

In the House Education and Labor Committee, the Health Subcommittee entitled its hearing "Strengthening Employer-Based Care" and included testimony from a small business owner and the National Retail Federation. Chairman Rob Andrews called for a health care system requiring all employers to provide insurance while Ranking Member John Kline (R-MN) noted that the employer-based system has had many successes. He called for the protection of the ERISA law allowing companies to provide benefits affordably across state lines.

The House Energy and Commerce Health Subcommittee focused its hearing on reducing costs and funding health care. Director of the Congressional Budget Office Douglas Elmendorf stated that increasing costs have contributed to slower wage growth as employers seek to offset the rising costs of insurance. The full committee chairmen of Ways and Means, Education and Labor, and Energy and Commerce wrote President Obama this week pledging to work together with the administration and each other and promised to bring legislation to the House floor before the August recess.

The Senate Finance Committee this week heard from Director of the Office of Management and Budget Peter Orszag on the President's health care proposals contained in the his 2010 budget. Orszag's testimony defended a $634 billion reserve fund set aside for health care reform that would be funded by limiting tax deductions among high-income taxpayers. Orszag also reinforced the President's eight broad goals for health care reform and proposals to strengthen Medicare. Chairman Max Baucus (D-MT) stated that he would have a bill ready for the committee to consider by June.

President Obama faces resistance to the proposed tax increases in his 2010 budget from centrist Senators of both parties. Both Sen. Blanche Lincoln (D-AR) and Sen. Olympia Snowe (R-ME) indicated that they are skeptical of plans to raise the two upper tax brackets on those with incomes of more than $250,000. The Senators are concerned that many small businesses would be subject to these increases. For more detail on the tax proposals contained in the budget, please see the Printing Industries' Budget Tax Provisions Summary. In recent hearings, Treasury Secretary Timothy Geithner has downplayed the effect on business but estimates show that as many as 4.2 million individuals who run small businesses could be affected. House Ways and Means Committee Member Ron Kind (D-WI) also expressed his doubts saying "[Small business] are the ones that are going to be able to expand and hire faster than anyone, so I think we ought to be sensitive." The publicly expressed concerns indicate that any budget passed by Congress may be significantly different from the President's plan.

Printing Industries joined with other members of the Government Withholding Relief Coalition to submit comments to the IRS arguing against implementation of the three-percent withholding requirement for government contracts. Some businesses have begun preparations for withholding even though the implementation date is nearly three years away. The Coalition is concerned that resources will be expended unnecessarily since Congress is considering whether to eliminate the rule.

As the administration and Congress outline strategies to pass carbon cap-and-trade legislation, high-ranking Senators recently offered resistance to a plan to pass a bill under "reconciliation" rules. Reconciliation is a process typically intended to reduce federal spending, and in the Senate only a simple majority of 50 votes is needed to pass reconciliation bills. Budget Committee Chairman Kent Conrad (D-ND) and Ranking Member Judd Gregg (R-NH) both indicated that using reconciliation for the bill could lead to opposition from moderate members on both sides. Senators representing Midwest states dependent on heavy industry, including manufacturers that would feel a cost impact due to climate change legislation, have also expressed their doubts in recent weeks. At the same time, Senators supportive of legislation have ramped up their rhetoric as evidenced by Sen. John Kerry (D-MA) saying that failing to act is a "mutual suicide pact." With strong feelings on both sides, the administration has already indicated that they would focus on climate change legislation next year while pushing for health reform this year.

A San Francisco Board of Supervisors committee will meet March 23 to consider a resolution supporting the creation of a California "do not mail" registry. While the resolution is not binding, it would place the debate over restricting advertising mail squarely in California, often a precedent-setting regulatory state. Printing Industries of America, Printing Industries of Northern California, and the Mail Moves America Coalition are reaching out to Supervisors to explain the value of direct mail to the local and national economy. Allied unions have also expressed their disapproval of the resolution. Many of the Supervisors are considered politically progressive and may be open to the arguments made by environmentalists. Additionally, Forest Ethics, one of the biggest proponents of legislation, is based in San Francisco.

State Sen. Dave Aronberg (D) this week indicated that he does not plan to push for passage of his "do not mail" bill. The Senator indicated that he was not fully aware of the broad opposition to such legislation upon introduction. Aronberg's bill, SB 1324, has a companion in the Florida House, HB 781 sponsored by Rep. Mary Brandenburg (D). It is unknown if Brandenburg will continue to push the bill.

Printing Industries joined with mailing industry allies on a letter to the Deputy Director of the Office of Management and Budget requesting that the Obama administration support legislation to modify rules requiring the USPS to prefund its retiree health benefits. It is estimated that such a move would save more than $2 billion. There is some Congressional support for legislation, but it is held up by a Congressional Budget Office "score" stating that the bill would cost the federal government $1.5 billion. Printing Industries and its allies maintain that there would be no real cost to the government and the move would not prevent the USPS from continuing to take all steps to control costs as mail volume decreases.

Lawyers for Al Franken (D) appear ready this week to rest their case in support of the election result showing Franken ahead of Sen. Norm Coleman (R) by 225 votes. The court will then rule on whether additional absentee ballots should be opened and added to the current vote count. Coleman is hopeful that these ballots, from Republican-leaning counties, will help him to make up the current deficit. Coleman or Franken could appeal any result further delaying the seating of a Senator.

Rep. Neil Abercrombie (D) announced he will run for governor, opening up a seat that leans to the Democratic Party. Abercrombie has served in the seat for ten terms and is the first Democrat to announce his intention to run in the gubernatorial race.

A recent poll shows Republican Jim Tedisco leading Democrat Scott Murphy 45-41 in the special election to fill the seat vacated by Sen. Kirsten Gillibrand (D). Tedisco, the current Republican State Assembly Leader, has high name recognition, but Scott Murphy, a venture capitalist, is using his personal wealth to fund his campaign and increase name ID. Both House campaign committees-the NRCC and the DCCC-will be heavily involved in the race. The special election will be held March 31.

"Jobs are being exported. We have problems with pensions and health care. To take away the secret ballot is big stuff. I'm listening to all of the viewpoints very carefully."

-Sen. Arlen Specter responding to a Reading Eagle question about EFCA