Torrid July

Congress and the administration face two key questions in July, a crucial month for Democrats if they are to move the biggest elements of President Obama’s domestic agenda.

How will the nation pay for expanding healthcare coverage to the uninsured? And what impact will healthcare reform and climate change legislation have on the economy?

{mosads}News that more than 450,000 jobs were lost in June makes answering those questions critical. The disappointing jobs report has sparked questions about whether the $787 billion stimulus package worked, and whether another such stimulus is necessary. That’s a distraction for Democratic leaders, who are focusing on healthcare and climate change.

Lawmakers are struggling for answers.

Senate Finance Committee Chairman Max Baucus (D-Mont.) is behind schedule after promising to release his panel’s healthcare proposal in June. It’s now the second week of July, and Baucus still doesn’t have a bill, much to the frustration of other Democrats.

Several lawmakers have voiced doubts about the cost of reform, as well as the economic toll of the climate change bill approved by the House last month. Passage through the Senate is no sure thing.

Pesky bean counters offer ammunition for both parties.

The latest Congressional Budget Office (CBO) score for the Senate Health panel’s bill said it would increase coverage to 20 million more people at a cost of $611 billion. That was $400 billion less than CBO’s first estimate of a $1 trillion bill, but it’s still a huge number at a time when the country is facing a $1.6 trillion annual deficit.

CBO has yet to score the House bill crafted by three panels, though it is expected to be more expensive than the Senate version.

The climate bill would not add to the deficit, but as crafted it would not be the revenue raiser once envisioned. Most permits allowing businesses to release carbon emissions would be given away rather than sold.

CBO has estimated the price of the House bill at $175 per household, which pleased Democrats. Republicans say this underestimates the cost; proponents of green legislation argue, rather, that CBO underestimated savings from the bill.

Obama, Speaker Nancy Pelosi (Calif.) and other Democratic leaders increasingly have tried to sell both the healthcare and climate change bills as good for the economy. Fixing healthcare will help the country’s long-term fiscal balance, Obama has said, while the climate change measure will create green jobs.

Those are smart arguments to make when people are worried about losing their jobs and homes; foreclosures are running at more than 8,000 per day.

If they are to prevail on healthcare reform and climate change, Democrats need to convince recalcitrant members of their party that the measures will strengthen the country and economy, even as Republicans warn that they are unaffordable and, in any case, damaging.

We’ll probably know who is winning the argument by the end of this month.