Health Care: Can Obama Swing It?

Assessing how a president is doing at any given moment runs the danger of mistaking the momentary for the long run, and failing to take into account the political realities he has to face. Judgments of Barack Obama’s presidency have suffered from these failings, which in turn affect—negatively—his ability to govern. The Republicans in Congress have shown that they well understand that the more they can undermine public confidence in Obama’s ability to govern, the more they can undermine his presidency. This explains why they have been so intent on portraying—against much evidence—the $787 billion economic stimulus bill as a failure.

Thus, by Labor Day of 2009, not only his health care proposal but Obama’s very effectiveness as a president were widely—if not necessarily accurately—viewed as hanging by a thread. A White House aide told me that Obama was “very frustrated” by his inability to convince people that the stimulus program was working. And so, months after it had been passed, he began to explain more clearly than ever before what the program—which he insisted on calling the Recovery Act (its actual name is the American Recovery and Reinvestment Act)—was designed to do, and had already done. As was the case during the presidential campaign, Obama is sometimes slow in arriving at an effective formulation, and he presses his aides to sharpen his message. Finding a voice that is explanatory rather than oratorical can be difficult for him. This definitely has been the case with health care. On September 20, Obama told George Stephanopoulos:

There have been times where I’ve said I’ve got to step up my game in terms of talking to the American people about issues like health care. I’ve said to myself, somehow I’m not breaking through…. This has been a sufficiently tough, complicated issue with so many moving parts that no matter how much I’ve tried to keep it digestible, it’s very hard for people to get their whole arms around it. That has been a case where I’ve been humbled and I just keep on trying harder because I really think it’s the right thing to do for the country.

In fact, the question has arisen of whether Barack Obama’s particular—one might say idiosyncratic—governing style is right for these times.

The circumstances in which Obama has had to govern have been daunting. The polarization between the political parties is greater than ever before in modern history—particularly as the shrinking Republican Party has come to be dominated by white conservatives, if not radicals, and it enforces discipline more harshly than in the past. Lacking any real leaders now, the Republicans’ vacuum has been filled by the likes of talk-show hosts Rush Limbaugh and Glenn Beck, whose job it is to be outrageous, and before whom Republican politicians quaver. Those who stray from the conservative orthodoxy are more likely than ever to face a challenge from the right in their next primary. (When he announced in late April that he was switching to the Democratic Party, Senator Arlen Specter of Pennsylvania forthrightly said that he didn’t think he could win the Republican primary in 2010.)

The goal of the Republicans is not just to oppose Obama’s policies they disagree with but to destroy his presidency. Thus the Republican opposition to health care reform is part of a larger agenda, as some Republicans have been unwise enough to admit openly. Senator Jim DeMint of South Carolina said in July: “If we’re able to stop Obama on this [health care], it will be his Waterloo. It will break him.” Even the Clintons governed in a more felicitous setting; the economy was rebounding and a number of moderate Republicans were willing to make deals with the administration. Now, moderate Republicans are nearly extinct. And back when the Clintons were targets of an effort to undermine Bill Clinton’s presidency, the Internet and cable television weren’t the instruments for repetitious and vile attacks that they are today.

With nearly all Republicans determined to oppose him, the President is almost totally dependent on the support of his own party, which is itself split between liberals and moderate-to-conservative members.

Moreover, any record of Barack Obama’s first year in office has to take note of the fact that this summer, race broke open as an issue. The rise of the “birthers”—who claim he was born outside the US—and the uncommon incivility shown toward Obama by Republicans during his September 9 speech to Congress on health care suggest that a substantial segment on the right doesn’t see Obama as a legitimate president. He was not just called a liar by South Carolina Representative Joe Wilson, but also confronted with boos and rude signs; and vicious comments were made about him at the anti-big government (and anti-Obama) rally in Washington the following weekend.¹

In fact, a number of leading Republicans, including House Minority Leader John Boehner, are concerned about the party’s getting too identified, or involved with, the movement on the far right. Vin Weber, a prominent Republican and former member of Congress (and ally of Newt Gingrich when they were backbenchers), says:

There’s a fringe out there that’s embarrassing. While it can gin up Republican intensity, the party can’t get too associated with the nutcases out there. The Republican leadership has a keen awareness of the benefits and the risks of this movement.

Obama’s preference for consensus, his inclination to listen to all sides but not reveal his own thinking, his occasional disinclination to take firm positions, his innate cautiousness (as with his evasion of his campaign promise to end the ban on gays in the military), and his desire to please—all these have conveyed a sense of weakness. He left it to Congress to draft both the health reform and the stimulus bill. (And weak not just domestically: “Est-il faible?” Nicolas Sarkozy was reported to have asked aides after meetings with Obama.) One purpose of Obama’s health care speech on September 9 was to project strength and portray himself as a force to be reckoned with; another was to reinvigorate disappointed and dispirited Democrats.

The economic crisis Obama inherited upon taking office forced him to use up a great deal of political and real capital on measures he hadn’t planned for and didn’t particularly want to carry out. The actions he took—the various bailouts, with help from the Federal Reserve—rescued the country from financial calamity. But unemployment remains unexpectedly high; employers have been unusually reluctant to rehire and employed people are more hesitant to retire. The recovery hasn’t been behaving like previous ones. Overlooking the fact that George W. Bush had initiated the bailouts—including of the banks and automobile industry—Republicans charged that the new president was intent on intrusive, big-spending government. They portrayed Obama’s health care effort as just another “big-government program” that “we can’t afford.”

Expanding the health care system to provide universal coverage means taking on entrenched interests, such as insurance companies that are extremely powerful and well financed. Most people who already have medical coverage like their plans well enough despite shortcomings, and aren’t interested in shouldering the financial burden of providing for others’ access to insurance. Lyndon Johnson limited the expansion of medical care to just the elderly—Medicare—because a convincing argument could be made that they were the most vulnerable segment of society, with a large number of them needing medical help they could not afford.

In order to get the prescription drug program (Medicare Part D) through Congress, George W. Bush assured the drug companies that the government wouldn’t negotiate the prices of medicines, thus surrendering the most effective way of lowering them. So when the Obama White House—despite denials all around—made a similar deal with the drug companies, in exchange for $80 billion in promised savings in their costs (too low, many Democratic critics said), he was following a precedent.

It is widely believed, including, apparently, by Barack Obama, that the Clintons lost their effort to enact universal health care because they sent up their own bill to Congress (that’s what presidents usually do). But they failed because they sent up a hopelessly complicated bill, drawn up in secret (excluding the views of powerful committee chairmen on Capitol Hill), and because Hillary Clinton refused to negotiate with Republicans who offered reasonable alternatives.

Because of the enormous and ever- increasing budget deficit—most recently projected to reach a staggering $9 trillion over the next ten years—Obama has to try to push through a health care plan under constraints that no other president has faced. This is why in his speech before Congress he pledged that the projected cost of the reform would be $900 billion over ten years—a political number chosen to avoid the dread word “trillion,” which he had earlier said was acceptable.

According to Joseph Califano, Johnson’s powerful chief domestic adviser, when Medicare was being considered, “LBJ raised hell with anyone who projected costs, and the costs we did project were lowballed.” And at that, Califano said, Johnson made deals with major health providers that discouraged efficiencies, and the cost of Medicare exploded; the program is expected to run out of money by around 2017. In any event “projections” of how much a piece of legislation will cost over the years are just estimates, another term for guesses, which is why they’re so often wrong: they can’t take into account perhaps the two most important factors—unpredictable technological developments and human behavior.

Califano, who has remained active in the health care field, told me:

It’s preposterous to project ten-year costs. When we passed Medicare no one foresaw MRIs, CT scans, transplants, or the explosion of life expectancy. And now we’re on the verge of a revolution in neurology and in genetics, stem cell research, and multiple transplants.

Earlier this year, Obama told congressional leaders that he would leave the details of how to pay for his health reform to Congress. He made some proposals that—as he must have, or should have, expected—wouldn’t be acceptable on Capitol Hill, but he essentially left the hard calls to the Senate and the House. Obama’s lack of specificity annoyed many Democratic legislators who essentially support him, and who clamored for months for more precise policies.

His recent speech before Congress continued to evade some of these questions. He remained vague about how his program was to be funded. The problem was how to enact a mandate that every individual had to have insurance (with the exception of certain hardship cases) and require that businesses either provide coverage for their employees or pay a fee (with the exception of certain small businesses), while also subsidizing those individuals unable to afford insurance—and find the money to pay for it all. He had already circumscribed his own options, not only for paying for the health care plan but also for reducing the deficit, by flatly barring tax increases for the middle class, and by pledging that the new health care program would not increase the deficit. (When, in August, his economic advisers—responsibly—floated the idea that taxes might have to be raised at some point to reduce the deficit, White House aides firmly knocked that down.)

Obama’s argument at the outset of his effort this year that his health care program was essential in order to reduce the deficit, while true enough, frightened off a great many people; the elderly were especially troubled by his talk of cutting $500 billion from Medicare. He thus made one of his biggest tactical mistakes. (Not coincidentally, according to recent surveys, those under thirty-five approve of how Obama is handling his job by a two-to-one margin, while those sixty-five and over are evenly divided.)

In any case, it was counterintuitive to believe that the President’s program would expand coverage to include nearly all of the forty-five million people who don’t have it and at the same time save money. It’s even harder for people on Medicare to accept that the proposed cuts in the program would not—as administration officials insisted—affect their benefits. The pledge to achieve most of the cost reductions by eliminating “waste and abuse”—a vague but handy phrase going back at least as far as Ronald Reagan—wasn’t convincing or reassuring.

Administration officials speak of encouraging preventive medicine and “wellness,” and rewarding doctors for achieving positive results, and hospitals for greater cost efficiency. The point is to reduce unnecessary tests and procedures. But it wasn’t entirely clear how these things were to be done, or who was to decide, or what this meant for, say, chronic or fatal illness. Obama implicitly admitted that his early strategy of promoting health care reform as a way to cut the deficit hadn’t worked when, in July, he changed his sales pitch into an attack on insurance companies (while he was still counting on the industry not to block the program).

And then Obama made an explicit admission of strategic error when on the morning of his September 9 speech before Congress he said on Good Morning America :

I, out of an effort to give Congress the ability to do their thing and not step on their toes, probably left too much ambiguity out there, which allowed the opponents of reform to come in and to fill up the airwaves with a lot of nonsense.

By that time, the message that had finally been settled on was that the President’s program would provide “stability and security”—words that sound as if they had poll-tested well.

People I respect differ on whether Obama should have submitted his own health care bill. Some say it would have been helpful to give members of Congress a specific program to argue for, especially during the August recess; some say it wouldn’t have made any difference, that others would have offered their own programs anyway, that he still would have been charged with attempting a “government takeover of health care” (another familiar Republican slogan), and that lies about his program would still have circulated in August—such as that pending legislation would cover illegal aliens, provide government support for abortions, and establish “death panels.” In fact, during August, support for health care reform actually reversed its decline and went up.

Senator Jack Reed of Rhode Island, who is close to the President, said that “as a student of history, Obama’s model is Franklin D. Roosevelt, who liked to keep a lot of balls in the air, and then cut a deal. FDR was very hard to pigeonhole on a lot of issues.” Reed also said that Obama wanted to stay flexible enough to try to arrive at something that would attract enough Republicans to get a bipartisan bill. A high administration official, perhaps unintentionally, offered me a more disturbing explanation of why Obama hasn’t put forward a bill of his own: “When you send up a bill, it becomes more of a defeat when you compromise [on] the bill.”

Bipartisanship is essentially a chimera in today’s politics. It’s hard to achieve when one party is determined to do in the other. But part of Obama’s appeal in 2008 was that he presented himself as a “post-partisan” figure. The idea was that his presidency would be so strong, his popularity and powers of persuasion so great, and public revulsion with the tone of Washington so clear that vehement partisanship would dissipate. Obama had very pragmatic reasons to seek the support of Republicans for health care reform, just as he had reason to seek their support for the stimulus bill: for one thing, if he doesn’t get a health care program with some Republican support, he will be seen to have tried. Also, if a new and controversial program has two-party support, it’s more likely to be accepted by the country, and have a firmer basis. (Though these days, the support of one or two Republicans is considered “bipartisan.”)

But the underlying fact is that even with the interim appointment of Paul G. Kirk Jr. to fill Edward M. Kennedy’s seat, technically giving the Democrats sixty votes in the Senate, and even if the Senate Democrats are united on a bill, Senate Democratic leaders will probably need one Republican vote. The ailing ninety-one-year-old Robert Byrd of West Virginia cannot be counted on to be present for what promises to be a grueling affair. A large number of roll call votes are expected, with Democrats trying to amend the bill and Re- publicans trying to kill it. Besides, about ten “moderate” Democratic sen-ators, seeking political cover, have expressed reluctance to vote for a bill that has no Republican support.

If the Senate Democratic leaders conclude that they can’t get sixty votes, they would reluctantly go the route of “reconciliation,” a procedure in the Senate budget process that requires only a majority vote, but which could face all sorts of obstacles, including rulings by the Senate parliamentarian that key parts of the bill wouldn’t affect the federal budget and therefore couldn’t be considered (as required by the “Byrd rule,” in order to prevent reconciliation bills from being used to pass “extraneous” legislation). This could require a second bill, but Republicans might be so inflamed by the Democrats’ using reconciliation (even though George W. Bush used it) that they’d do all they could to stop that second bill.

It’s commonly understood in Washington that delay works to the advantage of the opposition, giving it more time to stir up sentiment against legislation and for the interest groups on their side time to affect it. In fact, two of the three Republicans that Senate Finance Committee Chairman Max Baucus negotiated with for months in the hope of winning their support for a bill—Chuck Grassley of Iowa and Mike Enzi of Wyoming (the third was Maine’s Olympia Snowe)—have admitted that they worked to postpone agreement on a deal until after the August recess. In the House, the Blue Dogs, fifty-two conservative Democrats, also prevented health care legislation from coming to the House floor before the recess. (As it happens, the Blue Dogs received 25 percent more money from health industry groups than other Democrats.)

Obama’s original plan was to let Congress do its work, passing conflicting and probably unsatisfactory bills, and then to exert his influence during the conference on a final bill. He would wait for the conference between House and Senate members before he would get deeply involved in the details. “Just send me a bill,” he implored. Five congressional committees—three in the House and two in the Senate—worked on parts of the program, and four of them—all but the Finance Committee—had bills ready before the August recess. Obama’s approach gave the impression for too long that he was disengaged, even though some of his aides were working closely with Congress, and he had many private conversations with influential members—some of them remarking later that they still didn’t know where he stood on important issues.

Part of the problem was the makeup of the Senate Finance Committee, which overrepresents western states (including Baucus’s Montana and Enzi’s Wyoming) whose populations are especially suspicious of and resistant to big government programs. According to one analysis, the six committee members Baucus decided to negotiate with—to the dismay of other committee members and a number of other Democrats—represent 3 percent of the country’s population. In announcing on September 16 his own draft for an $865 billion reform plan, Baucus endorsed mandatory medical insurance for individuals beginning in 2013, though he did not require employers to offer insurance. Those that didn’t would have to defray the government’s costs of providing subsidies to their employees. But he did not include a public option—some sort of government-run insurance program for those who couldn’t otherwise get coverage—replacing it with North Dakota Senator Kent Conrad’s proposal for a system of “private, nonprofit insurance cooperatives,” even though few such co-ops exist and the prospect of establishing them across the country is highly doubtful; nor are they expected to be large enough to have real leverage on health care providers.²

Other provisions of Baucus’s draft bill were particularly troubling for many Democrats and health care experts. First, in order to hold down costs, the subsidies to be paid by the government were so low that they could make coverage unaffordable for middle-income people. Another provision gave companies incentives to avoid hiring the poor and the unwed. And Baucus’s bill extended coverage to fewer people than the other bills did—but it was the only one that met the President’s test of paying for itself and lowering health care costs over the years. (Baucus announced on September 22 that he’d offer changes to the most controversial parts of his proposal, especially those affecting affordability.)

Obama’s handling of the most controversial part of reform efforts—the public option—was another blunder, and contributed to the sense of weakness on his part. Early in the year, Senator Harry Reid informed Rahm Emanuel that the public option could not get through the Senate. At the same time such an option became for many progressives, especially in the House, the very definition of bona fide health care reform. The public option would be a separate insurance program, one choice among available plans listed on an “exchange”—essentially a menu of different insurance plans that would be available in a particular state—from which uninsured individuals and certain small businesses could choose coverage, with basic costs, benefits, and requirements of each to be set forth so that they could be compared. People who went on the exchange could receive government subsidies if needed to pay for the insurance.

The public option was considered a possible way of pressuring private insurance companies to lower their costs, or as Obama would say on those occasions when he defended it, it would “keep the insurance companies honest.” He predicted that, according to Congressional Budget Office estimates, “less than 5 percent of Americans would sign up.” Various experts—who don’t want to be named so as not to risk the wrath of the left—say that while a public option would be helpful, it’s not essential. Tom Daschle, who despite having to give up an official role remains deeply involved in the health care debate, advising the White House as well as members of Congress, says that as useful as the public option can be, “It shouldn’t be the issue that stops health care reform.”

Obama’s solution to the political dilemma posed by the left as it pushes for a provision that wouldn’t get enough votes in the Senate (and perhaps not even the fifty votes needed under reconciliation) was to try to have it both ways. Intermittently he would praise the public option but then also downplay its importance. Sometimes it was on his list of what he said were the underlying principles he sought in health care reform and sometimes it wasn’t.

Starting early this year, Emanuel let it be known that the White House wasn’t all that committed to the public option. Another problem was that the administration never really made clear how a public insurance plan would work. Just after the President’s September 9 speech to Congress, a White House official told me, “There are several versions floating around.” For many progressives, the public option already represented a surrender of their preferred single-payer system, which was never in the cards. They didn’t want to retreat any further.

In fact, both the supporters and opponents of the public option started from the same place: both saw it as the “camel’s nose in the tent” for a single-payer system. So sixty progressive House Democrats threatened to vote against a final bill if it didn’t contain the public option, and the fifty-two Blue Dogs threatened to oppose it if it did. Each group had enough votes to kill a House bill—causing Speaker Nancy Pelosi to engage in shuttle diplomacy. All this went on despite a broad understanding on the part of the Senate and House leaders that the public option wouldn’t survive the Senate and was unlikely to be in the final bill. Still, one of Obama’s closest allies argues that he should have fought harder for the public option—at lease to energize the progressives and give them a sense that he stood by them, rather than seem to give it away early for nothing in return.

As the time for the President’s big speech before Congress approached, it was clear that the White House was still making up its health care proposal as it went along. At a background briefing that day, a senior White House official set forth the confusing new idea of a “trigger”—one by which the health care program would be delayed if enough savings to pay for it hadn’t been found. (There had already been talk of a trigger—apparently Snowe’s idea—to start the public option after a few years, if insurance companies didn’t lower their costs.) When, two hours before the President’s speech, I asked someone closely involved in the design of the President’s program how this idea would work, he replied, “Keep in mind that this is all very fluid.”

It’s apparent that Obama is still learning the differences between campaigning and governing. And sometimes his inexperience shows. His speeches on health care on Labor Day and before Congress a few days later drew on his old rhetorical skills and finally showed some passion, and the one before Congress was his most effective so far in combining both rhetoric and explanation. But it was of interest that Chuck Todd of NBC reported that before he gave those speeches Obama’s staff had had to get him “fired up” to take on his critics. Obama, whose high self-esteem is well known among close observers, had previously assumed that a “following,” a “movement,” would be there without his having to do much to stimulate it.

But late in the game, he realized he had to do so. He’s now thrown his full weight behind his health care push by, among other things, in mid-September going on five Sunday television programs—not as questionable an idea as conventional pundit wisdom had it, since he is, after all, the administration’s most effective communicator. And around the same time, Michelle Obama, who had been seeking a more substantive White House role, entered the fray as someone who could especially appeal to women, in particular young mothers, about the stakes for them in health care reform. After this, no one would be able to charge that Obama hadn’t tried.

The White House and the Democratic leaders in Congress are counting on enough Democrats supporting a final health care bill because the alternative—losing another chance for universal health care—would be more devastating to their political futures, and to Obama’s presidency, than any compromises they make along the way. And its consequences would be felt for a long time. For some time the odds have appeared to favor passage of a health care bill. But the road to getting there is still full of hazards. If Obama does get a bill that contains significant health insurance reforms and substantially expands coverage, he will have achieved more than any other president has, and under far more difficult circumstances. Then the assessment of him will—or should—be quite different than it was around Labor Day.

—September 24, 2009