The U.S. Senate has passed one of the last hurdles in its efforts to cope with the overwhelming issue of health care in America by a 60-40 party line vote at 1AM today.

The issues behind the bill seem all but forgotten as Senate Majority Leader Harry Reid (D-NV) pushes his Democratic colleagues and Republican opposition to the breaking point simply to achieve this long unaccomplished Presidential goal.

Teddy Roosevelt once sought universal healthcare, as did Truman and others, but it appears President Obama will get some measure of broader, though not universal healthcare.

The final version of the Senate bill is expected to pass by a simple majority vote on December 24th, keeping Senators and their staff working far beyond their normal holiday recess period. Because of vast changes in the Senate’s version of the House Bill, the two will go into conference committee after the New Year, where they will be reconciled (theoretically) before returning to both houses for passage.

However the changes in language over abortion funding, the public-option (which provides true universality) and specific Medicare guarantees for Nebraska only are likely to break the final bill or keep it in conference so long that the final bill will not be resolved until the 2010 elections are over.

Even if the bill passes handily, which is very much unlikely, we believe that hundreds of special interest groups will challenge it in Federal courts around the nation and seek injunctive relief to prevent it from moving forward in whole or in part.

On analysis and a review of the Senate’s provisions, we too believe it to be unconstitutional. For one thing, it provides taxation for a service that is not to be delivered for up to 4 years – an unprecedented accounting trick to make the bill appear budget neutral. It also sets out an unfair balance by providing special guarantees in perpetuity for Nebraska alone to provide it with full costs of Medicaid, where every other state must contribute towards such costs.

By increasing the scope of Medicaid, the bill adds billions of Dollars in such expenses for each state during an ongoing economic crisis. Individual states attorneys general will likely to take action in Federal courts to prevent their states from being hit with this major, mandated cost increase at a time when 44 of them are in a budget crisis. States, after all, cannot do as the Federal government and operate in deficit – they must have balanced budgets.

Hospitals, expected to provide more will likely face economic difficulty, as will medical practitioners as Medicare services are cut. But most of all, Americans will suffer as the majority of the bills protections do not take effect until 2014 to 2016.

The Institute thoroughly expects the healthcare bill would cause great harm to the national economy and create massive unemployment. Its effect will be to the nation what Smoot-Hawley did in 1930 – to push a recessed economy over the edge to full-fledged economic depression.

Small companies, already strained to the breaking point by decreased sales and increases in costs, particularly upcoming new taxes, will be compelled to provide healthcare if they have 5 or more employees. This will likely force such firms to terminate loyal workers and to provide contract work only, removing from those workers all the other safety nets such as unemployment and ceasing payments to Social Security, Medicare/Medicaid and other state services. This will dramatically and quickly decrease the revenues of Medicare/Medicaid, pushing it to the brink of failure by 2014 instead of the expected 2017.

The Federal tax base, already decreased (as we predicted in 2007) by 400 Billion Dollars will be further impacted and states will be hit with a sudden, massive number of unemployment claims as many of those small and mid-sized companies permanently lay-off workers, many of them handicapped – viewed by employers as being at the highest risk of increasing the company’s health costs. Many of those who will be laid off will be middle-aged and older workers and the bill provides no protection from an employer reviewing the health record of an employee and terminating on the basis of potential increased medical costs.

We believe in universal health care and further, believe that health-care reform is essential, but the Senate and House bills lost sight of what is needed to achieve these, largely due to the lack of a legislative draft from the White House. When Presidents want specific achievements from Congress, they usually draft language or an outline for leadership in both houses to follow. In this case, the President did not submit a legislative draft, leaving it to Congress to draft a bill. Candidly, this was new leadership – or a lack of it, as each member had his or her own healthcare agenda.

The staff in the White House forgot that some Senators and Members of the House are strongly influenced by industries based in their states. Joe Lieberman (I-CT) for example has a large number of insurance companies based in his state, while New Jersey’s two Senators are strongly influenced by the pharma companies mostly based there.

Many Senate Democrats say they know their bill is flawed, but believe they can come back later to fix it. Unfortunately, that theory is far from realistic or fair to taxpayers or voters. Creating any “messy” problems causes harm which may be irreparable and will have concomitant consequences. If workers lose their jobs because of this legislation, how quickly will Congress act to restore those jobs and fix the underlying cause, or to reimburse already strained taxpayers for their losses as a result of the Healthcare Reform Bill?

The bill was pushed because President Obama set an arbitrary deadline, motivated by politics more than necessity. But his timeline might well have severely harmed the prospects of his party in the 2010 elections. It is normal for the mid-terms to present a significant swing in the other direction following a single-party landslide in Congress and the White House. Essentially, without Presidential coat-tails, many members of both houses are vulnerable to losing their seats, including both freshmen and well-established members such as Senator Chris Dodd (D-CT) and Harry Reid (D-NV), the current Senate Majority Leader.

A dramatic shift in the Senate, just four or five seats would cause the Democratic majority to be lost, making passage of any legislation more difficult. In the House, it is expected that the Democratic majority could become a nearly 50-50 split or be lost entirely, making a Presidential legislative agenda more difficulty to pass.

Knowing this, and that because few members of either legislative body would like to risk discussion of the health care issue in their upcoming elections after July 1st, President Obama worked diligently to move this issue in 2009 while he has a majority in both houses. But he should have set the agenda, and in failing to do so, he may leave a legacy of achieving the worst possible health care reforms possible. If this does adversely impact Americans, even if the reforms don’t take affect until 2014 (after the 2012 Presidential elections), those who’ve lost their jobs and voted for him in 2008 are likely to blame him in 2012 and he could be a one-term wonder, swinging the White House back to Republican hands or, for the first time in a very long time, to an Independent.