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Capital Beat

Capital Beat: Officials negotiate an MET fix – behind closed doors

They crafted a solution to prevent a $145 million budget hole, created an avenue for terminating the parental rights of rapists and agreed to give half a million dollars in flood control money back to local communities.

House and Senate negotiators wheeled and dealed their way through committees of conference last week, all with the goal of breaking gridlock between the two chambers on bills they both wanted but couldn’t agree on. In some cases, such as the ones above, compromise was achieved. In others, such as efforts to increase unemployment benefits and prevent landlord discrimination against victims of domestic violence, it wasn’t.

In most cases, the deal making happened front and center, with House and Senate lawmakers facing off across committee tables, sometimes arguing in circles and other times reaching a solution in less than 15 minutes.

But in one case – the most significant legislation of the year, in fact – we didn’t see much at all. On Friday afternoon, seven lawmakers signed off on a bill to restructure the Medicaid Enhancement Tax that will stop 25 of the state’s 26 hospitals from suing the state.

We’ve seen the final product: It gives critical access hospitals more money for charity and uncompensated care, it very gradually drops the rate of the tax, it sets caps in place to protect the state from giving back too much money if targets aren’t met, it relies on the idea that uncompensated care will go down over time as more people buy health insurance, and it will leave the state with between $45 million and $95 million less in revenue in future budget years.

What we didn’t see is how we got there. Over the course of six scheduled public committee meetings, a number of which recessed the minute after they started, we heard little of the negotiations.

At the committee’s first meeting Wednesday morning, committee Chairman Sen. Bob Odell, a New London Republican, laid out the Senate’s four “guiding principles” of a deal, which offered the best glimpse into what at least one party wanted. Senators wanted a deal that addressed the constitutional concerns, reduced the tax rate, ensured all tax dollars from the MET went to health care purposes and created predictability for the state’s and hospitals’ budgets.

The committee recessed until Thursday morning, when it recessed again until Thursday afternoon. Around 3 p.m. Thursday, Gov. Maggie Hassan breezed in with representatives from the departments of Revenue Administration and Justice to announce a settlement had been reached between the hospitals and the state.

Lawmakers asked almost no questions about the deal and recessed again until Friday. After two recesses Friday morning, lawmakers presented a bill that wrote the terms of the settlement into the law. Rep. Susan Almy, a Lebanon Democrat, expressed concern that receiving the tax bills in April would cause uncertainty for budget writers in February, and Rep. Cindy Rosenwald, a Nashua Democrat, made sure the terms of the bill matched federal law concerning audits of uncompensated care payments.

Both questions were fixed in the final bill, and that was the extent of the debate. Republican Rep. David Hess of Hooksett and Sen. Jeanie Forrester of Meredith, original members of the committee, were not present at the final meeting and were replaced by Democratic leadership to sign off on the bill. No one publicly explained why the two weren’t available or chose not to sign off. Instead, the switch happened quietly and with no explanation (this is allowed by committee rules, as the final bill will still be debated before the full House and Senate).

Ultimately the final bill is what matters here, but how we got there isn’t insignificant. Here are a few things that we don’t know, because nothing played out publicly: Who drove the negotiations? From the way Hassan presented the settlement agreement Thursday, it looks like she and the hospitals did.

Who played hardball and who backed off to reach a compromise? Was there any discussion about Senate President Chuck Morse’s desire to phase out the tax over time? (The actual reductions in the rate are smaller than what Morse wanted and don’t guarantee a long-term phaseout.)

Did lawmakers have any serious discussions about the deal’s implications on future budgets? As Jeff McLynch of the New Hampshire Fiscal Policy Institute pointed out Friday, no one mentioned how the state would deal with a $45 million to $95 million loss in general fund revenue for the next two bienniums. What the next budget looks like depends largely on who’s in charge, and Republicans have a good chance of taking control of the House this fall. But it’s very unlikely negotiators didn’t consider impacts on future budgets when making this deal.

In short, we don’t know anything about the actual process of lawmaking and negotiating that went into this deal. Legal negotiations were a large part of this deal, so it’s understandable that much of it needed to happen behind closed doors. But lawmakers could’ve debated the guiding principles behind the deal or shared their opinions on some of the specifics in front of the public.

We know Republicans aren’t happy with the deal, in part because it gives Hassan another “win” headed into November, so we’ll see partisan debates when this comes to the floor next week. The hospitals say they’re expecting some trouble, but ultimately the bill is likely to pass. If it doesn’t, lawmakers will need to hold a special session this summer, which no one wants to do in an election year, or run the risk of not getting the tax bills that are due in October.

The Senate needs one Republican other than Odell to vote in favor of the deal next week. We’ll see this Wednesday and Thursday who’s on board.

N.H. Dems join call for Shinseki resignation

U.S. Rep. Annie Kuster was the first Democratic member of the state’s congressional delegation to call for Veterans Affairs Secretary Eric Shinseki to resign, telling WMUR on Wednesday night that it was time for him to step down. Rep. Carol Shea-Porter quickly followed suit, sending out a statement that night also calling for Shinseki to step down.

U.S. Sen. Jeanne Shaheen’s call came last, although still on Wednesday night, a move that Republicans say shows she’s more of a follower than a leader. Republican U.S. Sen. Kelly Ayotte called for his resignation weeks ago, as did Scott Brown and Jim Rubens, two of Shaheen’s possible opponents this fall.

Shinseki offered his resignation Friday, a few days after the inspector general’s office released a report confirming gross mismanagement of VA resources and criminal misconduct at some facilities.

Regardless of whether Shaheen was planning to call for Shinseki’s resignation anyway, being the last member of the delegation to say so makes it look like Kuster and Shea-Porter forced her hand.

“Jeanne Shaheen continues to fall short of New Hampshire’s expectations and prove that she would rather follow others instead of providing independent leadership for our state,” the state Republican Party said in a statement.

On Thursday, Shaheen requested a full briefing on findings in the Inspector General’s report from audit teams deployed to the VA Medical centers in Manchester and White River Junction, Vt., and Shaheen and Ayotte are both cosponsors of the VA Management Accountability Act, which will give the VA secretary the authority to fire or demote senior-level employees based on performance.

Rubens has called out both Shaheen and Brown for not doing more to tackle the issue in the U.S. Senate, which first received reports two years ago of mismanagement at the VA. Slate, an online news site, also pointed out that Ayotte is one of 11 Republican senators who called for Shinseki to resign but voted against an appropriations bill last year that included significant money for the VA, among other things.

Now that Shinseki has stepped down, many people are calling on lawmakers to stop politicizing the issue and instead work to tackle the problems.

‘Conventional wisdom’ on Brown? It’s over

Steven Law, president of Karl Rove’s super PAC American Crossroads, told Politico this week that the conventional wisdom in Washington is that Brown won’t pose a serious threat to Shaheen this fall. But Law himself predicted that Brown will win.

“What’s a Republican Senate candidate who you think will win that no one in D.C. does?” Politico’s Mike Allen asked Law, to which Law responded that he thinks Brown will be a “really, really competitive candidate,” but that “the conventional wisdom in D.C. has been saying lately, ‘Oh no, it’s over.’ ”

American Crossroads spent $103 million backing 12 general election candidates in 2012. None of them won.

What to watch

∎ The filing period for state races begins Wednesday and runs through June 13. Once Walt Havenstein officially files his papers, will Democrats formally challenge his right to run based on residency issues they raised when he first jumped in the race? With the session also ending this week, expect state lawmakers in some of the more competitive races, and Hassan, to start hitting the campaign trail.

∎ The House and Senate will hold their final meetings of the session Wednesday and Thursday, where they’ll vote on committee of conference bills. As discussed above, the debate over the MET agreement will be the most significant vote of the week.

∎ Scott Brown continued to build momentum in his U.S. Senate campaign with an endorsement from Ayotte last week, and Brown competitor Jim Rubens also gained a significant “grassroots” endorsement from the Republican Liberty Caucus. Bob Smith and Karen Testerman, the other two contenders for the Republican nomination, will need to start making moves soon if they want to stay in the race.

(Kathleen Ronayne can be reached at 369-3309 or kronayne@cmonitor.com or on Twitter @kronayne.)

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