'It certainly raised a lot of eyebrows,' said one source about the 'doc fix' experience. Reality hits Wyden's idealism

At a lunch with fellow Senate Democrats last week, an eager Ron Wyden was ready to pitch his plan to permanently deal with a perennial Washington problem: the “doc fix.”

But when Wyden stood up to be recognized at the start of the lunch, Senate Majority Leader Harry Reid looked the other way, seemingly ignoring his new Finance Committee chairman. When Wyden tried to speak, Reid cut him off, allowing several other senators to address the caucus instead. Finally, Reid let him talk, with aides later explaining that he was simply trying to give Wyden plenty of time to address his colleagues.


The awkward episode came as Wyden was engaged in a quixotic effort to thwart a bill personally crafted by Reid and House Speaker John Boehner. The deal achieved exactly what Wyden didn’t want: a temporary patch in Medicare reimbursement rates that punted a long-term decision to another year. The measure passed the Senate over Wyden’s objection and President Barack Obama signed it into law on Tuesday.

( Also on POLITICO: Senate backs one-year ‘doc fix’ patch)

The whole experience — especially Wyden’s public and private lobbying against the deal — ultimately resulted in ruffled feathers and a loss in the Oregon Democrat’s first major push since becoming Finance chairman in February. It underscores the limits of Wyden’s power and highlights how his famed idealism is running into the cold political reality of Capitol Hill.

“It certainly raised a lot of eyebrows,” said one Democratic source, who asked not to be named discussing private conversations. “You would have figured that Wyden would have wanted to start off [his chairmanship] and endear himself to a lot of people.”

The chairman’s maneuvering also suggests that Wyden may at times give Democratic leaders headaches in his role running the panel — which has vast oversight over tax, trade and health policy — much like his predecessor, Max Baucus of Montana. Unlike Baucus, a moderate who angered Democrats by pushing policies that irked liberals, Wyden’s views are more progressive. But Wyden, too, is known to occasionally break from his party — sometimes in a high-profile way, such as working with Republican Rep. Paul Ryan on a Medicare plan — even when the decks are clearly stacked against him.

“He has his ups and downs with most chairmen,” said Senate Majority Whip Dick Durbin said of Reid. “But take a committee as important as Finance … I think you will find a vast majority of the time, the majority leader is working closely and cooperating with the leadership in those committees.”

( Also on POLITICO: Harry Reid: Paul Ryan budget creates 'Koch-topia')

In interviews on Tuesday, Wyden and Reid downplayed the friction, signaling they were ready to move on to the next issue before the panel, the renewal of a big package of tax breaks heavily sought by the business community. And as one of the biggest draws on the fundraising circuit because of his new chairmanship, Wyden is already playing a major role helping Democrats raise cash for the 2014 midterms, attending more than a dozen events for the Democratic Senatorial Campaign Committee and several meetings with big donors, something certain to put him in Reid’s good graces.

On the health care fight, Reid and Wyden agreed on the policy even if they were sharply divided on the tactics. Reid also wanted a permanent fix to the Medicare reimbursement rate but didn’t think such a deal was politically possible in this divided Congress.

“I’m on his side,” Reid said Tuesday of Wyden’s policy proposal.

“Sen. Reid and I have talked constantly through all this,” Wyden said.

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But last week, those conversations grew tense.

Congress was racing to pass a plan by March 31 to avert a 24 percent scheduled cut in the reimbursement rate for doctors who service Medicare patients. Behind the scenes, Reid had reached out to Boehner to stave off those rate cuts for one year, putting together a $21 billion plan paid for by making certain modifications to Medicare and rearranging how some of the sequestration cuts are calculated.

In the eyes of Hill leadership in both parties, everything seemed to be moving seamlessly — until Wyden stepped in.

Wyden, 64 and first elected to the Senate in 1996, wanted to pass a plan to replace the Sustainable Growth Rate formula that calls for doc fixes — a plan negotiated earlier this year by Baucus, ranking Republican Sen. Orrin Hatch of Utah and their counterparts in the House. Baucus and Hatch, however, never agreed on a way to pay for the $180 billion plan. Wyden wanted to pay for it by using money saved from drawing down the wars in Iraq and Afghanistan.

If the temporary Reid-Boehner plan passed, Wyden argued, it would eliminate the momentum to pass a permanent solution to the long-festering problem. The best approach, he believed, would be for the Senate to pass his plan and bring House Republicans to the negotiating table in order to find a middle ground.

So Wyden and his staff began privately lobbying the House and the business community to reject the fragile compromise. Wyden’s staff warned physician lobbyists that if they came out against the new chairman, there would be consequences, according to industry sources. The American Medical Association and all of the major physician groups came out against the House bill and in support of permanent repeal. And opposition among both Republicans and Democrats began to grow, putting Boehner in a bind.

“Thank you for sticking with us thus far,” a Wyden staffer wrote in an email to K Street before the Senate vote. “Team Wyden wants to make sure you’re all a part of it (and empowered to be as helpful as possible in the process).”

Even Hatch said he was “surprised” by Wyden’s maneuvering, given that it was “pointed out to him” that it would be met with stiff GOP resistance over the financing of the proposal.

“But I certainly from time to time fight losing battles,” Hatch said.

When Reid and his staff caught wind of Wyden’s private push, they were irate.

In Reid’s view, Wyden’s bill was a political pipe dream. Even though Reid backs Wyden’s permanent repeal — and he supports the idea of using the war-funding provision to pay for eliminating the old Medicare formula — the Nevada Democrat argued that House and Senate Republicans would never go for it since many view it as a budget gimmick.

That meant Wyden had a choice: He could accept the Reid-Boehner deal or he could persuade the House and K Street to oppose the patch and muscle a permanent deal through, with Medicare beneficiaries in the cross hairs. Facing a daunting election with health care already the premier issue dogging Senate Democrats, Reid wanted to quickly pass a temporary doc fix rather than risk seeing Medicare patients and doctors revolt against his party.

Wyden insists that his focus on permanent repeal never put at risk the Reid-Boehner patch bill.

“I made it clear that [permanent repeal] was my first choice, but I wasn’t doing anything with respect to the matter of making sure that doctors were paid and there wasn’t any interruption in service.”

He defended his effort for permanent repeal — and insisted that it will happen during this Congress — and said that his campaign wasn’t at odds with passing Reid’s patch.

“Both the House and the Senate … made it clear that they weren’t going to stand for any interruption in services to seniors,” he said.

But last week in an evening meeting in Reid’s office, leadership officials and Wyden officials had a spirited — some said heated — debate over how to proceed. Wyden and his aides seemed unmoved.

Wyden says some Republicans told him they’re open to using the war funding for part of the bill but he never got GOP support for using war funds for the whole bill.

With the pivotal backing of the physician lobbying community, Wyden seemed to have some success in encouraging many House members to reject the Reid-Boehner plan. Things got so dire that Boehner had to recalibrate his tactics.

To avoid a potential messy political standoff, House Democratic leaders gave Boehner private assurances they would allow him to quickly pass the deal by voice vote in order to avoid a potential loss on the floor if members were required to cast an up-or-down vote.

The Senate followed suit, passing the deal in a 64-35 vote on Monday. But, registering his protest, Wyden voted against the plan, making him one of just six Democrats to oppose a plan under the direct purview of his committee.

“Let’s hope he gets enough votes,” Reid said on the floor of Wyden’s permanent repeal. “Until then, we’re left with a patch.”