Sen. Charles Grassley (Iowa), senior Republican on the Senate Finance Committee, has asked the Joint Committee on Taxation to analyze the future effects of the Democrats’ tax increase. Specifically, Grassley is wondering why the proposed hike isn’t indexed to inflation, leaving more and more Americans to fall subject to the increase each year.

“The unintended consequences could be significant,” Grassley warned.

If that scenario sounds familiar, it’s because the Alternative Minimum Tax — designed decades ago to target just a tiny sliver of high-income households — was similarly not indexed to inflation. As incomes have risen over the years, more and more upper-middle-class families have fallen into the bracket under which they have to pay the AMT. Some liberals don’t see a problem with that. But Congress, fearing a backlash at the polls, has stepped in each year with the so-called AMT patch, providing billions of (borrowed) dollars to prevent the tax from hitting those families.

The Democrats’ motivations are easy to surmise: Had they indexed the tax to inflation they would have generated much less revenue to pay for their health-care reform bill. And the proposed payroll tax increase is much less than the AMT. Still, it’s not too far a stretch to imagine that the lawmakers of the 2030s, also wanting to appease the voters, would also find it tempting to come up with the Medicare-payroll patch.

Let’s be clear: the task force’s recommendation will have absolutely no impact on the bills we in the Senate write, debate or vote on.  [HHS Secretary Kathleen Sebelius] has also assured me there that nothing in Medicare or Medicaid will change as a result of the recommendation, and that’s the way it should be.

Yet the Senate bill says explicitly that, as a part of newly proposed minimum benefits requirements, every insurer  ”shall provide coverage for … evidence-based items or services that have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force.” The House bill contains a nearly identical provision.

The task force guideline recommending that women between ages 50 and 74 receive biennial routine mammograms, instead of annual checkups, received a “B” rating.

That in no way means that women wouldn’t have access to annual mammograms. Again, the essential benefits package represents the minimum coverage insurers would have to offer. The task force is clear that the ultimate decision on the frequency of screenings should be made by women and their doctors.

Still, there’s also the fear that private insurers will lean on the task force recommendations to justify a scaling back of coverage for routine mammograms. Julius Hobson, former lobbyist for the American Medical Association and now a senior policy analyst at the Washington law firm Bryan Cave, said it’s “inevitable” that private insurance companies will look at those guidelines, and may change their coverage policies based on what they see. Certainly, they would like the potential cost savings if women were getting routine mammograms every two years instead of every one.

“It’s almost inevitable that that’s going to happen,” Hobson said last week. “The government doesn’t move that fast, but the health insurers do.”

That has some members of Congress concerned about the threat to women’s health. As Rep. Jerrold Nadler (D-N.Y.) said in a phone interview last week, “Cancers can progress very far in two years.”

Under the Senate legislation as it is currently written, Americans with employer-provided coverage, whose income is below 400 percent of the federal poverty level and whose premiums are between 8 and 9.8 percent of their total income will be exempt from having to purchase health coverage but will not be able to access the exchange to qualify for government assistance to purchase insurance.  The agreed to amendment will make it possible for these individuals to convert their tax-free employer health subsidies into vouchers that they can use to choose a health insurance plan in the new health insurance exchanges.

Critics contend that the proposal will cause a flood of young, healthy workers to flee employer-sponsored plans, hiking rates for the older, sicker folks who remained. But a number of Senate Democrats had recently joined Wyden in urging adoption of the so-called “free-choice” amendment.

The Congressional Budget Office estimates that the change will cover an additional 1 million people, Wyden says.

“This weekend, I will vote for the motion to proceed to bring that debate onto the Senate floor,” Nelson says. “The Senate should start trying to fix a health care system that costs too much and delivers too little for Nebraskans.”

Nelson has previously indicated that his vote for passage of a final bill is far from certain, but his announcement today removes one potential Democratic roadblock on the path to a final vote. TPM also reports that two other fence-sitting Demoratic senators, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, remain uncommitted on tomorrow’s vote but have hinted they intend to vote in favor of sending the bill to the floor to debate.

Senate Majority Leader Harry Reid released the bill and its price tag to his colleagues Wednesday afternoon. He has spent weeks merging two versions of the bill that passed out of two separate Senate committees.

Reid plans to hold a procedural vote as early as Thursday to begin debate on Saturday.

It gets better.

Over the weekend, The New York Times’ Gretchen Morgenson dug deeper to discover that some of the businesses poised to benefit most from the tax rebates are home builders who are not only flush with cash, but also represent “some of the very companies that contributed mightily to the credit crisis by building and financing too many homes.”

[D]ropping helicopter money on the home builders — the folks who massively overbuilt in community after community — seems decidedly less urgent (unless you are one of these companies, of course). Given that the supply of housing far outstrips demand, it is unlikely that these companies will use these tax breaks to hire workers (unless they go into a completely new line of business).

“I AM surprised that home builders are getting hundreds of millions of dollars given that many have very strong balance sheets,” said Ivy Zelman, chief executive at Zelman & Associates, a research firm. “We question the public policy decision to gift home builders with capital that many will not use to create jobs, since they admit that job growth will be dependent not on capital, but on improving demand.”

Among the beneficiaries of the taxpayers’ largesse, Morgenson points out, will be Pulte Homes, “which will receive refunds exceeding $450 million under the new law, [and] has $1.5 billion in cash and cash equivalents on its balance sheet, according to its most recent financial statement.”

Standard Pacific, another recipient, “is poised to reap cash refunds of $80 million under the new tax break,” Morgenson writes. “According to its most recent financial filing, Standard Pacific held $523 million in cash and cash equivalents.”

Ken Campbell, the chief executive of Standard Pacific, said the money would allow his company to continue buying land. “Will we build more houses or will there be more people employed in the first quarter? Probably not,” he said. “Will employment accelerate when the market starts to grow? It will.”

Translation: The builders will sit on their new land acquisitions in hopes that the housing bubble at the root of the economic turmoil re-inflates. Meanwhile, they won’t be hiring.

So why shower these businesses with millions of dollars in the name of creating jobs if the money won’t really create jobs? Morgenson has a pretty sound theory.

Securing this tax break was a top priority for home builders, lobbying records show. The Center for Responsive Politics reports that through Oct. 26 of this year, home builders paid $6 million to their lobbyists. Last year, the industry spent $8.2 million lobbying.

Some Democrats readily conceded that they could have passed the unemployment benefits, which totaled $2.4 billion, without the business-friendly sweetener, but nonetheless agreed to the tax rebates “as a means of greasing the skids,” as Sen. Tom Harkin (D-Iowa) said at the time.

There’s some evidence that Democratic leaders aren’t exactly proud of their accomplishment. Although Senate Majority Leader Harry Reid (D-Nev.) hailed the bill as a necessary stimulus, his statement released after the bill’s passage avoided any mention of the business tax rebates.

“I don’t think that it’s a threat at all,” Brown said Monday night during an appearance on MSNBC. “There aren’t more than four or five Democratic senators that I would say are anti-choice. There are at least, I think, two Republican senators who are pro-choice.”

“Again, on an up or down vote — Harry Reid’s not going to put the Stupak language in the bill, I’d be certain,” Brown added. “Then the Republicans will try to amend it into the bill, and they will be unsuccessful; they won’t even get close to 50 votes.”

The “Stupak language” is reference to an amendment offered by Rep. Bart Stupak (D-Mich.) explicitly prohibiting exchange plans from covering abortions, even in cases when patients’ premiums are set aside for that purpose. Pro-choice House Democratic leaders were forced to include the provision in order to pass their health reform bill earlier this month, but liberal lawmakers are vowing to kill the reform bill if the language remains.

If Brown is right, then the collision between the House bill with the Stupak language and the Senate bill without it would take place during the conference negotiations between yet-unnamed leaders of both chambers.

On a great number of bills, it’s the Senate that’s been the bottleneck in recent years. It’s worth noting, though, that it was an abortion amendment that killed last year’s attempt to improve the Native American health care system — a bill that passed the Senate, but was never taken up in the House for the recognition that the abortion provision would likely survive.

Having invested so much time and political capital in health reform this year, Democrats won’t have the same option of simple abandonment. Instead, they’re likely going to have to come up with some delicately nuanced Stupak compromise.

Anti-abortion protesters in front of the U.S. Capitol (Flickr: John Stephen Dwyer)

On Saturday, 64 Democrats backed Rep. Bart Stupak’s (D-Mich.) amendment to prevent abortions from being funded with taxpayer money in the comprehensive House health care bill. On Wednesday morning, House Majority Whip James Clyburn (D-S.C.) attempted to soothe the jangled nerves of pro-abortion rights activists who were lighting up switchboards and issuing not-another-dime fund-raising threats against the party for letting it happen.

“It was not 40 votes that we were trying to get with this amendment,” Clyburn said in an interview with MSNBC. “It was 10 votes. And that’s the fact.”

Image by: Matt Mahurin

In interviews with TWI, Republicans and activists explained their theory behind a contentious–and in the end, rewarding–heat-of-the-moment decision to back an amendment to a bill that all of them want to see go down in flames. The move to back Stupak’s amendment came after lobbying from a bevy of anti-abortion rights groups, including–perhaps most importantly–the U.S. Conference of Catholic Bishops. And while some conservatives are still critical of the party for not killing the amendment and trying to sink the bill with it, most are coming around to the view that the alliance with conservative Democrats had, in the words of one long-time conservative activist, “dropped a bomb” in the Democratic conference.

“If defeating Stupak wouldn’t [have changed] the outcome on Saturday,” said Brad Dayspring, a spokesman for Minority Whip Eric Cantor (R-Va.), “then it is clearly evident that having it in and sparking a civil war amongst the Democrats is the best way to stop the overall bill.”

The Republican rush to support Stupak’s amendment was controversial from the very moment it occurred. Rep. John Shadegg (R-Ariz.), who was in the end the only Republican to vote “present” on the amendment, scorched fellow members of the minority for not joining him and sinking it. National Right to Life Committee warned Republicans it would score a “present” vote as a “no.”

“The Stupak amendment gave political cover to Democrats who voted for Nancy Pelosi for Speaker,” Shadegg said in a statement. “If Republicans had voted ‘present’ as a group, since we are the party of Life, we would have defined the ‘present’ vote as the pro-life vote. Doing so would have denied the purported pro-life Democrats cover. Given the extremely narrow margin of victory for the bill, it’s highly likely that without the Stupak language, it would have been defeated.”

Several other conservatives made this same argument to TWI, and criticized anti-abortion rights groups like the Family Research Council, National Right to Life, and Americans United for Life for backing the amendment and counting “aye” votes as “pro-life” votes. But in a lengthy Monday blog post for The Weekly Standard, John McCormack captured much of the thinking of Republican staffers and strategists–that Democrats were going to win the vote no matter what, and that to vote down the Stupak amendment would have been hypocritical and cynical. “Bringing down Stupak,” wrote McCormack, “would have seriously hurt the effort to defeat Obamacare.”

Anti-abortion rights groups backed up that assessment. “If the pro-life members of the House suddenly, cynically, pulled out the rug from under Stupak,” said Doug Johnson, the legislative director of the National Right to Life Committee, “they would have been asking for defeat. I mean, that would have been a terrific gift to the left. Pro-abortion groups–I’m including pro-Obama front groups who claim to be pro-life groups–would have shouted from the rooftops: ‘You see, they don’t really care about the abortion issue, and when they had a chance they torpedoed it!’ It would have been a train-wreck.”

Marjorie Dannenfelser, the president of the anti-abortion rights Susan B. Anthony List, agreed with Johnson. Her group marshaled 300,000 emails and phone calls to Congress to back the amendment. “For every single Republican save one to insist on a vote on this, then kill it with ‘present’ votes, would have been cynical beyond words,” Dannenfelser said. The situation for Republicans now, she argued, is a “win-win,” as it forces Democrats to stiff dozens of key members. Only one Republican, Rep. Joseph Cao (R-La.), voted for the bill, doing so after backing the Stupak amendment.

“Think about [Speaker of the House Nancy] Pelosi looking at two letters on her desk,” said Dannenfelser. “I’ve got one letter saying if I don’t take it out, 41 Democrats will vote against it. I’ve got another letter saying keep it in or pro-life Democrats will vote against it. Either way you come up with coalition that can defeat it.”

The ripples of the Stupak vote are hitting the Senate before they can hit Pelosi. A major reason for Republican and conservative self-congratulation about the amendment is the puzzle it’s created for Sen. Harry Reid (D-Nev.). A semi-reliable vote against abortion rights until he became his party’s Senate leader in 2004, Reid is in the position of crafting language that can appeal to Sen. Ben Nelson (D-Neb.)–who has said he approves of the Stupak amendment–provide cover to Democrats like Sen. Bob Casey (D-Penn.), and avoid losing pro-abortion rights votes like that of Sen. Kirsten Gillibrand (D-N.Y.)

“They’re in a major bind,” said Michael Franc, director of government relations at the Heritage Foundation. “The only way to get out of it is for one of the two Democratic camps to go against something they believe deeply. There has to be intellectual flanking movement, somebody convincing them that the future of party at stake, they can’t let this 100-year achievement flounder over this one thing.”

For anti-abortion rights activists, the muddle is a victory nine months in the making. “If it hadn’t been for National Right to Life working in the trenches since January,” said Douglas Johnson, “this legislation would have passed sooner and by a larger margin. Remember, the president and the speaker and much of the mainstream media had been saying all year long that abortion wasn’t in the bill. If they had been able to pull off this smuggling operation, it would have moved faster and passed sooner.” It happened, said Johnson, because of “the tenacity of pro-life Democrats like Stupak.”

None of the anti-abortion rights groups that supported an “aye” vote on the Stupak amendment will support the final bill. Dannenfelser and Johnson pointed to so-called “rationing,” that Conservatives fear would empower bureaucrats to deny care to some patients, and the exclusion of conscience provisions in the health care bill as surefire reasons why “pro-life” activists would be unable to support it. At the same time, they and Republicans suggested that if the health care bill survived with much of the Stupak language intact, it would be a victory unthinkable just a few months ago.

“If the Stupak amendment is in there, I would definitely define it as one of most important life votes in more than a decade,” said Johnson. “You’d have to go back to 1993. Clinton comes in. Everyone thinks the Hyde amendment [former Rep. Henry Hyde's (R-Ill.) legislation that banned federal funds paying for abortions] is gone, and they are absolutely shocked the day we renew Hyde on the floor of the House.”

This article has been updated for clarity.

But it wasn’t clear how party leaders were planning to do it. The answer might have arrived today.

Reid this week told Senate Democrats that he plans to put together yet another jobs bill this year designed to curb those rising unemployment rates, according to The Hill. Citing Sen. Ben Cardin (D-Md.), the paper reports that Reid offered no specifics about the legislation, except that passage will be a priority before Congress adjourns for the year.

When that bill emerges, you can bet that an extension of unemployment benefits will be somewhere in the package.

“It is true that we will need to extend the program before the end of the year in order for unemployed workers in high unemployment states to get access to the full 20 weeks of benefits,” a Reid aide wrote in an email.

The Democrats’ bill offers 14 weeks of additional unemployment benefits nationwide, with an extra six weeks for those living in states with high unemployment. But an end-of-the-year filing deadline would prevent anyone from getting those additional six weeks unless Congress steps in to extend the deadline.

The deadline issue wasn’t addressed in the recent legislation, the aide added, because lawmakers were focused simply on adding the extra weeks — a much different (and much cheaper) proposition than extending the entire program. They didn’t anticipate that the process would drag on as long as it did, the aide said.

Some Democrats are already urging a broad extension of the underlying unemployment extension. Reid’s office said Tuesday that the majority leader will likely get behind that push.

“I would expect that Senator Reid would move to extend the program before the end of the year,” the aide said.