Obama Ally: Dem Majority Is History If Health Reform Fails

ABC News' Teddy Davis reports:

A top Obama ally predicted Wednesday in an interview with ABC News that Democrats will lose their congressional majority in next year's midterm elections if they fail to put a health-care reform bill on President Obama's desk.

"I think we're talking losing control of Congress," said Andy Stern, the president of the Service Employees International Union. "[The failure of health-care reform] would totally empower Republicans to kill all change."

"It's hard to imagine the Democrats convincing the public that Republicans are to blame for health-care reform going down when the Democrats have such large majorities," he added. "After last year's promise of change, voters will start feeling buyer's remorse."

Stern, who was invited to sit with the Obama family during the president's inaugural parade, is watched closely on health-care reform not only because of the labor muscle he wields as the head of the 2-million member SEIU but also because of the effort he has made to work with business groups: in 2007, he started "Divided We Fail," a coalition which joined SEIU and AARP with the Business Roundtable and National Federation of Independent Business to promote the general principle of universal health care coverage.

Stern did not tie his 2010 prediction to the inclusion of a public option in the final bill. He did, however, warn that dropping a public option could "unravel" support for the more modest package of insurance reforms that President Obama began emphasizing last week.

"If there is going to be a mandate without real cost control and without an adequate subsidy, it's hard for us to go to our members and say, 'you have to buy insurance even though we know you can't afford it'," said Stern.

Since lawmakers have already decided not to pursue strict regulations on insurance premium increases, Stern said that a public option is the only real cost control mechanism on the table. Without the cost control provided by a public plan, Stern says it would be difficult for SEIU to support an individual mandate which would require all adults to purchase health insurance.

If support for an individual mandate collapses, it will become difficult for the Democrats to help those with pre-existing conditions who are currently denied coverage in the individual market. The insurance industry has made clear throughout the process that it will fight guaranteed issue and community rating tooth and nail if it does not get a new federal requirement that all adults purchase insurance. The insurance industry says that an individual mandate must go hand-in-hand with guaranteed issue and community rating because customers will otherwise avoid buying insurance until they are sick.

In addition to viewing a public option as vital to cost control, Stern is also concerned about the reach of the subsidies that are being proposed and suggested that they will be inadequate if members of the Senate Finance Committee were to limit them to 300 percent of poverty.

As for the idea of creating a co-op instead of a government insurance option, Stern said it was a non-starter.

"There is no way that a co-op can compete with Aetna or United American," said Stern.

He signaled that a more acceptable compromise might be to create a public option whose creation is only triggered if certain circumstances are met.

"It's obviously better than no public option," said Stern.

While warning of grave consequences if the Democrats fail on health-care reform, Stern said that he is optimistic that Senate Democrats will find a way forward, possibly with the help of Maine Sen. Olympia Snowe (R).

To help Democrats get the votes that they need, Stern is prepared to use SEIU resources to pressure recalcitrant Democrats in Congress if progress is not made by Sept. 15, the deadline which Senate Finance Committee negotiators have set for themselves.

For now, however, he is holding his fire against fellow Democrats since the president has signaled through his staff that he does not want Democrats shooting at one another.

"We call it: 'helping the president be successful,'" said Stern with a smile. "I think Democrats find a way forward in the Senate when they stop believing that they're going to get [Iowa Sen. Chuck] Grassley and [Wyoming Sen. Mike] Enzi."

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