HEALTH CARE - INSURANCE

Taking the Hill
By MATT BAI
June 7, 2009

Sometime in the next few weeks, Congress and the White House will descend into the labyrinthine politics of comprehensive health care reform. For Barack Obama, this signals the end, in a sense, of the eventful prologue to his presidency. Impressive as they are, Obama’s legislative victories to this point — most notably the $787 billion stimulus bill and a stunningly ambitious $3.6 trillion budget resolution — have been relatively easy lifts for a popular new president installed at a time of economic crisis and buffered by comfortable majorities in the House and Senate. Sure, getting those bills passed required a fair amount of perseverance on the part of the White House, but persuading congressmen to spend public money in their districts doesn’t exactly qualify as dark magic. Designing a new health care system, on the other hand, is a legislative goal that has eluded every Democratic president since Harry Truman and that Obama repeatedly vowed to accomplish during last year’s campaign; he has said that it is not only a moral imperative but also a crucial part of his plan to remake the American economy, an ever-expanding share of which is swallowed up by doctors’ bills and hospital stays. Making good on his promise will require not just public expenditure on a disorienting scale but also the kind of activism and creativity, the birthing of new rules and institutions, at which Washington hasn’t succeeded for generations.
It has been 16 years, in fact, since another young, freshly inaugurated Democratic president with a Democratic Congress tried to remake the architecture of health care, and the catastrophe that followed is generally cited as the main deterrent to thinking big about anything in the capital. The plan Bill Clinton took to Congress then, running to more than 1,000 pages of impenetrable new regulations, wasn’t what you’d call politically savvy, but the strategy used to sell it was even worse. Having been elected as the latest in a series of outsider presidents after Watergate, ex-Governor Clinton seemed to believe he had been sent by the voters to purify the fetid culture of Washington; he installed a boyhood friend as his chief of staff and stocked his White House with loyal Arkansans and campaign aides ready to overrun a fossilized Congress. His wife, the current secretary of state, developed the health care plan largely without taking House and Senate leaders into her confidence, instead dropping it at the doorstep of the Capitol as a fait accompli. Ever jealous of its prerogative, Congress took a long look, yawned and kicked the whole plan to the gutter, where it soon washed away for good — along with much of Clinton’s ambition for his presidency.
The first senator elected directly to the Oval Office since 1960, Obama has an entirely different theory of how to exercise presidential power, and he has consciously designed his administration to avoid Clinton’s fate. After winning the office with the same kind of outsider appeal as his predecessors, he has quietly but methodically assembled the most Congress-centric administration in modern history. Obama’s White House is run by Rahm Emanuel, a former House leader who was generally considered to be on a fast track to the speakership before he resigned to become chief of staff, and it is teeming with aides plucked from the senior ranks of both chambers. Obama seems to think that the dysfunction in Washington isn’t only about the heightened enmity between the parties; it’s also about the longstanding mistrust between the two branches of government that stare each other down from twin peaks on either end of Pennsylvania Avenue.
And so, from Obama’s perspective, passing a health care plan this fall isn’t primarily a question of whether to include an “individual mandate” requiring every American to have insurance or how fully to regulate providers or even how to hit back against “Harry and Louise”–type attack ads, although his aides spend time contemplating all of those things. It’s more about navigating the dueling personalities and complex agendas within his own party’s Congress. Rather than laying out an intricate plan and then trying to sell it on the Hill, as Clinton did, Obama’s strategy seems to be exactly the opposite — to sell himself to Congress first and worry about the details later. As Emanuel likes to tell his West Wing staff: “The only nonnegotiable principle here is success. Everything else is negotiable.”
That this White House seems to view its majorities in Congress almost as its principal constituency reflects, in part, the shared worldview of the three former legislators who are the administration’s most powerful figures: Obama, Emanuel and Vice President Joe Biden. “I’m a Senate guy,” Biden told me bluntly when I visited him a few weeks ago in his West Wing office. “It’s been my whole life, and I’m incredibly proud of it. Other presidents I’ve worked with, they view Congress almost as a constitutional impediment, you know?”
As I listened to Biden talk about his Senate career, nearly uninterrupted, for half an hour, I was reminded that leaving any job after 36 years presents, psychologically, a difficult adjustment; at times, the vice president sounded a little like the high-school football star who has received his diploma but can’t help hanging around practice anyway, throwing imaginary passes on the sideline. Biden described for me working out at the Senate gym as vice president and stopping into the Senate dining room alone for a bowl of soup. He was amazed, he said, when his former colleagues lined up to say hello.
Part of Biden’s White House portfolio is to act as unofficial ambassador to the Senate, carrying information back and forth between his old colleagues and his new boss. During the recent debate over the budget, he walked onto the Senate floor and plopped himself down, uninvited, next to Max Baucus, the Montana Democrat who as chairman of the powerful Finance Committee will be a central figure in the coming health care debates. Biden asked Baucus what he needed from the White House in order to get a health care bill through his committee, according to both men, and then the talkative Biden spent the better part of a half-hour simply listening quietly, promising as he left the chamber (“I give my word as a Biden,” he likes to say) to faithfully relay Baucus’s thoughts to the president. It was the kind of exchange that rarely took place in 1993, and it is a large part of why Obama’s team is optimistic about succeeding where Clinton failed.
Obama has told Congressional leaders that his top priority is to get a health care bill signed into law this year. But whether that happens will depend, in some part, on whether the members in both chambers feel they can take the new president at his word. Veteran lawmakers know that presidents always arrive with grand plans to spend their political capital, but more often than not they end up cutting deals with their adversaries or retreating altogether. When they do compromise, it’s the representatives and senators who stood with them who often end up paying the price with their constituents. Clinton’s failure on health care embarrassed Democrats who had agreed to help build support for his plan, just as his proposal to pass a new energy tax the same year — a proposal that passed the House but died in the Senate — left the representatives who voted for it feeling needlessly exposed. When many of them went down to defeat in the midterm massacre of 1994, the lesson that surviving Democrats took away was to beware of presidents who care more about their own survival than they do about yours.
Obama faces a different political climate; if nothing else, consensus on health care, both in Washington and among employers and providers, is far more advanced than it was in 1993. Even so, Obama’s success in passing an expensive and sprawling new health care program will depend, in some part, on whether he can persuade Democrats in Congress that he is not going to wilt under pressure from industry lobbyists or allow a bill to be undone by tensions in his own party. They also have to be persuaded that the cost savings Obama is projecting from a new health care system really are going to materialize in the near future — and that members aren’t going to have to face furious voters a few years out, when deficits are reaching unsustainable levels and showing no signs of remission.
Having served under seven commanders in chief during his time in the Senate, Biden understands as well as anyone the pervasive fear in Congress that presidents are out only for themselves. “I’ve had presidents who say to me, ‘Hey, Joe, get out on that limb for me,’ ” Biden told me. At this, he rose from his chair and began acting out the metaphor, half-crouching as he glanced at the limb behind him. “And I’m out there. I’m out on that limb. And then you hear this shew shew shew” — he nicely approximated the noise of a saw rasping back and forth — “and you look back, and the limb’s being sawed off.
“I’ve been there with these other presidents,” he said, returning to his seat. “I’ve been there when they said later, ‘Well, you know, things change.’ ” He leaned forward and touched my knee, in a way that I imagined he might while making the very same case to one of his former colleagues. “Not this guy,” Biden said, pointing toward the Oval Office. “And they know that not over my dead body would it be that way with me.”
IN THINKING ABOUT HEALTH CARE as a candidate, Obama expected to rely on two close allies who carried enormous influence on the issue with the Democratic Senate. The first was Tom Daschle, the former majority leader and a mentor of sorts, whom Obama considered as a chief of staff and ultimately nominated, instead, to the dual post of health secretary and “health care czar” in the West Wing. But then Daschle ran into tax issues during the prelude to his confirmation hearings (he failed to pay income taxes on a car and driver), and Obama, after some hesitation, rather bloodlessly cut him loose. The second man was Ted Kennedy, whose decades-long dedication to health care reform remains, like his stature, unrivaled on the Hill. Kennedy, of course, grew gravely ill during the presidential campaign, and while his staff remains deeply engaged in negotiations on a bill, the senator himself seems in no shape to muscle it through.
This strange sequence of events has suddenly elevated the profile of Max Baucus, a senator little known outside Montana. (It’s a circumstance made all the more striking by his longstanding disdain for Daschle, going back to a dispute over tax cuts.) Low-key and slightly nervous, Baucus has emerged as the pivotal Democrat on what is once again the most pivotal debate in Congress. He is the man charged with designing a plan that can win broad support in the Senate. “It’s a lot of fun,” Baucus told me recently, which is something you don’t often hear a senator say.
Obama hardly knew Baucus during his abbreviated Senate term; Baucus remarked to me offhandedly that Obama “didn’t really serve in the Senate,” which seems to be the prevailing sentiment among senators who saw him for only a brief time before he took off to run for president. But Obama’s White House has been trying mightily, in ways both overt and indirect, to make up for lost time. Since the inauguration, Baucus has been to the White House twice for personal meetings with the president and once for a dinner at which he was seated next to the first lady. (They talked about Sidwell Friends, the school from which Baucus’s son graduated and where the Obama girls are now.)
On a flight to Trinidad aboard Air Force One in April, Obama called Baucus to his cabin — along with Charles Rangel, Baucus’s counterpart in the House — to talk health care for a half-hour or so. “He just turned to me and said, ‘This is my No. 1 issue,’ ” Baucus recalled. “He wants meaningful, comprehensive health care. He doesn’t want to pass something where everybody gets flu shots.”
Perhaps most significant, Rahm Emanuel hired Jim Messina, who was Baucus’s longtime chief of staff and who worked last year on the Obama campaign, as a deputy chief of staff at the White House — a move that seems not entirely coincidental. Messina wasn’t just another aide to Baucus; when Messina informed the senator, on the eve of Baucus’s son’s wedding last summer, that he was leaving the Senate to go work for Obama’s campaign, Baucus amended his dinner toast to say that he was losing not one son but two. The two men talk more or less constantly, giving Baucus a close ally in the White House and the president an influential advocate.
All of this strategizing and ingratiating appears to be paying off. When I asked Baucus, who worked with George W. Bush to pass his tax cuts in 2001, what kind of impression he had formed of Obama to this point, he looked down at his hands and thought for a moment. “How do I say this delicately?” he asked. “President Bush, he liked being president. You know, there are be-ers, and there are doers. And I think he liked being president, as opposed to doing.” Obama, on the other hand, strikes Baucus as a doer. “You’ve really got to work at it, rather than just enjoying the job,” he said.
OBAMA’S AGGRESSIVE COURTSHIP of Congress is plotted and directed by Emanuel, who despite his legendary personality flaws — his penchant for profane mockery is now so well documented that you sometimes have the sense he’s cursing at you so as not to disappoint — is freakishly well suited to the job. Emanuel served as a senior aide in Clinton’s White House before running for Congress and then overseeing the Democrats’ successful drive to take back the House, which means he is that rare politician who feels equally at home on both ends of the avenue. “Rahm is family to all of us,” Nancy Pelosi, the House speaker, told me recently.
Emanuel has taken an unusually personal role in handling Congress. One of the first things he did as chief of staff was to give out his cellphone number to every Democratic senator (and some Republicans too), and he occasionally pops up on the House floor, jawing with one member or another. Like Biden, he still exercises on the Hill, at the House gym, mostly so he can jog next to members who might have a question or some new rumor to share. Emanuel’s wife and three children are still back in Chicago (they arrive in Washington later this month), and his social calendar is taken up by dinners with former House colleagues on both sides of the aisle, often at one of the trendy downtown restaurants he favors.
During a recent conversation in his expansive West Wing office, Emanuel explained that he was well aware, as he and his fellow transition aides set out to fill the various roles in Obama’s White House last fall, that many of the aides they hired had pivotal friendships on the Hill that Obama could exploit. “That was a strategy,” Emanuel said. “We didn’t kind of parallel-park into it. We had a deep bench of people with a lot of relationships that run into both the House and Senate extensively. And so we wanted to use that to our maximum advantage.”
On health care, for instance, the administration has both chambers of Congress well covered. In addition to hiring Messina, Obama chose as his legislative director Phil Schiliro, who was for 25 years Henry Waxman’s closest aide. Waxman, the chairman of the Energy and Commerce Committee, just happens to be the one taking the lead, along with Rangel, on drafting health care legislation in the House. (He is also working on a “cap and trade” bill on carbon emissions.) Dozens of other former top-level Congressional aides are serving in the administration, including several within steps of the Oval Office: Pete Rouse, whom Senate aides used to refer to, only half-jokingly, as the 101st senator because of the power he wielded as Daschle’s longtime chief of staff; Lisa Konwinski, Schiliro’s deputy, who spent nearly a decade alongside another influential Senate chairman, Kent Conrad, on the Budget Committee; and Melody Barnes, the domestic policy director, who used to be Ted Kennedy’s most trusted aide. Across the alley, in the Old Executive Office Building, the Office of Management and Budget is run by Peter Orszag, the former director of the Congressional Budget Office, and Rob Nabors, the former staff director of the House appropriations committee. With Emanuel’s encouragement, these aides are constantly in touch with their old bosses and colleagues on the Hill, vouching for the new president and gathering intelligence from the halls of the Capitol.
“There’s a couple different parts to the theory,” Emanuel told me, speaking generally about the way the White House tries to engage Congress. “First, if you go back and study mistakes in the White House, you find they get leadership-driven and they don’t reach beyond that.” By “leadership-driven,” Emanuel meant that previous White House teams tended to focus almost entirely on the handful of leaders of each caucus rather than on building relationships with individual members. “I mean, if I think of one thing that we did that was a mistake under President Clinton,” he said, “it was that early on it was just too driven through a couple of committee chairmen.”
The second tenet of Emanuel’s theory is that the White House itself comes with strategic assets you can put to good use, if you allocate them properly. There’s the White House theater, where guests can watch movies and sporting events; formal state dinners; smaller gatherings in the first family’s residence, which spouses can join; tickets to the Easter-egg roll for kids; tickets to the White House tours that members like to give out to their constituents. These prizes are not handed out randomly or, as in the Bush White House, doled out mostly as rewards to allies who’ve demonstrated the requisite loyalty. Rather, in Obama’s nascent administration, they are considered carefully and accounted for obsessively. Emanuel holds a daily legislative meeting at which aides discuss the status of pending legislation, and often they go over the distribution of White House assets during those sessions. “We have a tracking system,” Emanuel told me. “Who came to watch the football game? Who came to watch the basketball game?”
Often in my visits to the White House this winter, as Congress debated first the stimulus bill and then the president’s budget, I watched as one long bus after another, surrounded by Capitol police on motorcycles, pulled up to the northwest gate of the White House, dropping off a Congressional delegation for a personal briefing with Obama. According to the legislative-affairs office, which keeps track of such things, as of mid-May, some 320 members of Congress and about 80 senators had visited the White House since Obama got the keys.
Of all the assets the White House has at its disposal, of course, none are more valuable than a three-dimensional president with a 60-plus-percent approval rating. Emanuel and I had been talking for just a few minutes when his office door suddenly burst open and the president strode in. I hadn’t seen Obama since interviewing him last September on the day when the stock market crashed (John McCain crashed soon after), so I congratulated him belatedly, and he chatted amiably for a few minutes, appearing entirely untroubled in the midst of the myriad crises facing his administration. Fumbling clumsily to button my suit coat as I stood in his presence, I was reminded of how different it is to talk with someone who has actually assumed the historical weight of the presidency, even if you’ve spoken with him before. Emanuel knows this phenomenon is as real for senators and congressmen as it is for reporters, which is why he choreographs the same kind of “spontaneous” drop-bys when members comes to see him. “I’ll have a lunch here, and he’ll come by to say hi to Susan Collins the way he came by to see you,” Emanuel told me after Obama departed, referring to the senator from Maine. “It’s an efficient use of his time.”
Obama is not the schmoozer that Clinton was, nor does he bestow nicknames like Bush. Rather, he has impressed lawmakers with a direct, businesslike manner and an outward deference to the legislative branch. As Obama mulled whether to nominate Sonia Sotomayor or some other jurist to the Supreme Court last month, he called every member of the Judiciary Committee personally, taking the “advise” part of “advise and consent” to a level that impressed some longtime senators. “This is the first time I’ve ever been called by a president on a Supreme Court nomination, be it a Republican or a Democrat,” Charles Grassley, the Republican senator from Iowa, told Peter Baker and Adam Nagourney of The Times after Sotomayor’s nomination was announced. A hallmark of Obama’s style, in these early months, has been to meet with key senators alone, without the phalanx of aides who almost always attend Oval Office meetings. Three senators with whom I spoke, including Baucus, had been impressed by this tactic; it implies equality between the branches of government and enables Obama to establish personal relationships more quickly than he otherwise might. (“You been hunting lately?” Obama asked Ben Nelson when the Nebraska senator walked into the Oval Office and found himself, much to his surprise, alone with the president.) Advisers, of course, generally hate for their bosses to meet by themselves; the general rule among aides is that you should never leave politicians in a room alone where they might say or agree to something that can’t easily be reversed. When I asked Emanuel if he would prefer that the president have someone around while negotiating with individual lawmakers, he smiled tightly. “I prefer whatever he prefers,” the chief of staff said, sounding uncharacteristically diplomatic.
ALTHOUGH WASHINGTON DEMOCRATS, in their euphoria over winning back total control of the capital, often overlook this fact, Clinton’s Congressional landscape during the health care debate in 1993 was, in terms of sheer numbers, strikingly similar to the one Obama has now inherited. At this time in 1993, Clinton’s party controlled 56 seats in the Senate and 258 seats in the House. Obama can claim a slightly higher margin than that in the Senate — he’ll have 60 seats, including independents, if the Minnesota courts release Al Franken from his purgatory — and his party has 256 House seats, or two fewer than Clinton’s. In other words, if Obama is to succeed where Clinton did not, it will have to be a triumph of circumstance and political salesmanship rather than a reflection of simple math.
Clinton’s health care experience indicates that Obama faces, in his approach toward Congress, two overarching strategic questions. The first might be called the problem of calibrating distance. The Clintons, fresh from their shared experience with a small-state legislature, at first chose to commandeer the legislative process, simply delivering their bill to Congress for ratification. This is, incidentally, precisely the same tactic that George W. Bush tried when he virtually demanded that a Republican Congress pass his prepackaged Social Security plan in 2005. The lesson, according to members of Obama’s team, is that professional legislators consider it their business to legislate. “One of the mistakes of the past is that when presidents arrive on Capitol Hill with legislation chiseled into stone, it’s not well received,” says David Axelrod, one of Obama’s most influential advisers. “You have to give people a sense of ownership.”
Obama seems to have decided early on that his model for pursuing legislation would be something closer to Ronald Reagan, a president whose political savvy he has often expressed admiration for. Partly by necessity, because he had to work with a Democratic Congress, Reagan was known for providing broad policy frameworks while delegating the details to lawmakers. In this way, he managed to fundamentally reform the tax code and shore up Social Security during his first year in office — achievements for which he gladly took credit, even if Congress didn’t give him precisely what he wanted. To this end, Obama’s chief health care adviser, Nancy-Ann DeParle, has been all over Capitol Hill, consulting with various members and soliciting their advice, but the administration has been careful not to weigh in with too much authority or to make any public pronouncements on the negotiations.
Obama’s situation is somewhat different from Reagan’s, however, and more complex. Working with a Congress controlled by your allies, rather than by your adversaries, means having to provide a more significant degree of leadership on the intricacies of policy than Reagan did, while at the same time avoiding the appearance that you are trying to dictate the result. And finding that balance — the optimal relationship with Congress that is at once neither too removed nor too meddlesome — has proved to be a significant challenge for Obama’s young administration in other legislative forays leading up to the health care debate.
The most useful illustration here is the debate over an economic stimulus package, which the administration started working on with Congress even before Obama’s team moved from its K Street transition offices into the White House. Obama’s policy advisers had in mind enough specific plans to fill a 300-page binder — plans that might total some three-quarters of a trillion dollars in public spending. Fearful of handing Congress one of Axelrod’s stone tablets, however, they decided to offer only the vaguest outlines of their plan, laying out broad categories on spreadsheets rather than in binder-length written proposals. They were surprised when aides to David Obey, the House Appropriations Committee chairman, soon complained that the Obama plan was, in fact, too vague. The suspicion in the House, perhaps not entirely unfounded, was that Obama wasn’t really being sensitive to Congressional prerogative when he punted on the details; instead, he was trying to dump the whole spending bill — and the potentially onerous responsibility for throwing around billions in taxpayer money — on lawmakers, so he wouldn’t have to own it.
“There’s a cognitive dissonance there,” a senior administration official complained to me, trying to grasp the contradictions in Congress. “On one hand they want to feel like they’re in charge, but then on the other they also want guidance and political cover.”
The $819 billion bill that passed the House in February, after much informal consultation with the White House, ran into trouble right away in the Senate, where a powerful centrist bloc takes a dim view of wasteful spending. Obama’s new legislative team had helped “scrub” the bill, as Hill veterans like to say, for overblown expenditures or pet projects that could be easily caricatured by Republican opponents — the lurking equivalent of the $640 submarine toilet seat that vexed Congress during the Reagan years. They noted the roughly $200 million for restoring the National Mall but left it in because they actually deemed it a worthy-enough project. (The money would later be ridiculed and withdrawn.) But they completely missed a provision, backed by Pelosi, to finance contraception programs. When Republicans extracted that explosive provision from the bill and detonated it in the media, a frustrated Obama sided with them, irritating Pelosi and other House Democrats in the process.
Meanwhile, as even centrist Democrats in the Senate began to raise objections over the size of the bill, public support for the stimulus began to falter. It started to dawn on Obama’s team that, as nice as a hands-off approach might sound in theory, a stimulus bill owned by a notoriously unpopular Congress rather than by an unusually popular president might not actually garner enough votes to pass. They had calculated that Congress would be more apt to pass the bill quickly if the White House wasn’t meddling in it and taking the credit, but now they ran up against another reality — that the House wasn’t going to pass anything if the public deserted it en masse.
“We realized we had to go out and sell it,” Messina, the deputy chief of staff, told me later. And so Obama left Washington for big rallies in Indiana and Florida, where he stood behind the bill and urged voters to support it. Not long after, the polling data stabilized, and the Senate passed its own version of the bill. The lesson Obama’s team took from this experience, and one that will no doubt inform its approach to health care, is that it’s fine for a president to stand back from the process — but not so far back that Congress thinks he’s trying to duck the consequences or that the public comes to see the whole enterprise as just another Congressional spending spree. If Obama is going to sign a transformative health care law this year, it will, at some point soon, have to become his plan, no matter how much autonomy he wants to confer on his allies in Congress.
THE SECOND STRATEGIC QUESTION confronting Obama has to do with the relationship between the two chambers of Congress, and it’s a question of knowing just how much disagreement between them constitutes a sort of advantageous disharmony — and at what point that disharmony becomes, instead, potentially calamitous. There is a cliché in the capital, attributed to George Washington, that the House of Representatives is like a hot cup of coffee, and the Senate is the saucer that cools it. The metaphor, like most Washington décor, could use some updating (maybe something about a Starbucks latte and its cardboard sleeve), but it is as apt for the 111th Congress as it was for the first. The Democratic House is a decidedly liberal body, its leadership dominated by members from the coasts and the industrial Midwest, and Obama has very little to worry about when it comes to getting legislation through. Of course there are caucuses set aside for fiscally conservative “blue dogs” and moderate “new Democrats,” and Emanuel personally lobbied many of those members to vote for the president’s budget. Generally speaking, though, the president can rely on the House to pass an agenda that reflects a more activist view of American government, with less concern about fiscal restraint, than any that Congress has produced since at least the 1970s.
The Senate — more deliberative or just more timid, depending on your point of view — is considerably trickier. Here the fate of Obama’s top legislative priority probably depends on that small group of self-proclaimed centrist Democrats who will invariably try to roll back some aspects of whatever sprawling legislation comes over from the House. So far, there don’t seem to be many policy differences separating Rangel and Waxman in the House from Baucus and Kennedy in the Senate, but at least one potential disagreement threatens to complicate the negotiations. Waxman strongly favors a government-run insurance plan that would compete with private insurers, an idea that is anathema to most Republicans. Kennedy has come out for a public plan, too, but Baucus hasn’t committed himself one way or the other, and it’s not clear how many other centrist Democrats will go along with the proposal.
Clinton faced similar tensions within his party’s caucus in 1993; liberals in the House complained that Clinton’s plan didn’t go far enough toward the single-payer, government-run system they wanted, while a compromise bill in the Senate, spearheaded by the majority leader at the time, George Mitchell, failed to win enough Democratic support. (Daniel Patrick Moynihan, the New York senator who then occupied Baucus’s perch atop the Finance Committee, savaged the Clinton plan for the onus it would place on small businesses, which he feared would be tempted to shed full-time workers rather than assume the bulk of their health care costs.) It was generally clear where Clinton stood in this kind of debate; as the leader of the “new Democrats,” he sympathized more with the centrists in the Senate than he did with his party’s more doctrinaire liberals.
What makes Obama different is that his own ideological loyalties remain, as they have from the beginning of his presidential campaign, more opaque. House leaders seem confident that Obama stands squarely with them in favor of a new liberal renaissance in America, if only a few calcified senators would get out of the way. But some of Obama’s former colleagues in the Senate feel just as certain that he shares their concerns about an ever-expanding federal government. “He’s basically a pragmatist, I think, with a bit of a liberal twist,” is how Baucus described Obama. Ben Nelson, who is probably the most conservative Democrat in the Senate, told me: “You probably couldn’t tell from the votes, and the other side kept saying he was the most liberal senator, but you’ll notice that he approaches most things from the center. On most issues, we’re just not that far apart.”
Here again, the stimulus process is illustrative, specifically at the point when negotiators for the two chambers met to reconcile the differences in their bills. A bipartisan group of senators led by Nelson and Collins had secured enough votes to hold up final approval of the bill, and they wanted it scaled back to under $800 billion — a symbolic threshold, really, but one that would slash billions in school construction and other programs from the final package. It was at this point that the White House, in the person of Emanuel and Orszag, inserted itself as arbitrator and effectively took charge of the process. For several contentious days and late nights, a frenetic Emanuel personally shuttled between the offices of Pelosi and Harry Reid, the Senate majority leader, bargaining and cajoling and bullying his way toward a compromise. At a typically chaotic point late one evening, as one participant described it to me, Emanuel was standing in Reid’s office shouting at Pelosi over the speakerphone, then dismissed her to take a call from the president on his cellphone. Ultimately, the marathon process yielded a deal more to the centrist senators’ liking than it was to Pelosi’s; the bill Obama signed came in at about $787 billion.
Virtually the same routine was repeated in internecine struggles over Obama’s $3.6 trillion budget and the federal government’s $410 billion omnibus spending bill. In each case, once the two chambers passed their versions of the bills, the White House stepped in to referee a compromise. With each succeeding negotiation, tempers seemed closer to the surface. During the back and forth over the budget resolution, Emanuel grew so furious at one of Pelosi’s policy aides, Wendell Primus, that he refused to stand in the same room with him, letting loose a string of expletives long enough to reach the Washington Monument. “You can’t keep doing this,” Reid told Emanuel one night, and by this he meant the round-the-clock brawling that seemed to accompany every conference report.
EMANUEL MAY HAVE been the one doing the shouting, but the House and Senate negotiators have reserved most of their rancor for one another. As a result, friction between House and Senate Democrats now seems to have reached a point where they might want to build their own virtual fence down the middle of the rotunda. And yet Obama has, thus far, gotten more or less what he wants out of the deal. Far from finding his path obstructed by centrist senators, in fact, Obama seems to be running a sophisticated game in which those senators are actually doing him a significant political favor. Thanks to them, Obama doesn’t have to pick any fights over spending or ideology with the liberal leaders in the House or with outside interest groups on the left, even when he thinks they’ve given in to excesses that will serve as fodder for his conservative critics. Rather, he simply encourages the House to go wild, and then he relies on centrists in the Senate to do the unpleasant work of scaling back the legislation, which yields a more politically palatable bill and one that’s probably more in keeping with his own essentially pragmatic philosophy anyway. And while House and Senate leaders may end up wanting to throttle one another, Obama gets to play the reluctant arbiter between the two, rather than actually having to challenge his base.
It’s an impressive balancing act, but it may not be sustainable as the emotional debate over health care unfolds. Some House Democrats I talked to have already begun to wonder audibly why they’re the ones who always have to surrender in Emanuel’s middle-of-the-night negotiating sessions. They accuse Reid and his lieutenants of repeatedly placating Republicans to avoid a filibuster, rather than taking a stand on principle now and then. Why not force centrist Democrats to vote against their party and let Republicans filibuster the agenda on national television? What would the voters think then? Centrists in the Senate, meanwhile, have grown furious at some of Pelosi’s backroom maneuvering — most notably, the final negotiations over the stimulus bill, when she brazenly reinserted $50 million in arts funding that had been struck as part of an earlier compromise. (The move sent Emanuel into a state too, but by then it was too late to do anything without unraveling the entire bill.)
The danger here for Obama is that, at exactly the moment when he most needs House and Senate Democrats to pull together and accept a compromise, the growing friction between leaders in his own party could erupt to the point where it’s no longer so easy to bridge the differences over something as intricate as a new national health care system. “It’s genius when it works, but it’s disaster when it doesn’t,” Tom Daschle told me recently, speaking generally of Obama’s skill in playing the two chambers against each other. “On some of the president’s biggest issues, he’s going to have to make sure he hasn’t so ruptured the relationships on the Hill that he can’t get them together when he needs to.” On health care, Daschle said, “I’ve told the president there will come a time when I think it’s going to be very important for him to take control of the process or at least to insert himself and be a major player.”
“HILLARYCARE,” AS OPPONENTS referred to Clinton’s 1993 health care plan, has been ridiculed ever since as the apotheosis of liberal, out-of-control bureaucracy-building. However flawed the politics of the effort may have been, however, the plan itself, weighing in at the size of an urban telephone book, was less a testament to Orwellian ambition than it was to the sheer mind-bending complexity of the issue itself. Few policy aims in American life could involve so many moving parts as designing a new health care structure, which has to involve fundamental changes in how medical providers are paid, how consumers are insured, how businesses pay their employees and even how Americans safeguard their own health. To use a home-improvement metaphor, if welfare reform was like remodeling your kitchen, and if adding the prescription-drug benefit to Medicare was like building a sizable addition onto the back porch, then overhauling the health care system is more like ripping out all the walls of your house and completely reconfiguring the plumbing, the air ducts and the wiring all at once. Each aspect of the job is painfully complex and essential to the whole, and if one piece is poorly conceived, then none of the others may actually work as planned.
The good news for Obama and Congressional Democrats — and, you would hope, for Americans as a whole — is that the climate for such an undertaking is considerably improved from what it was in 1993, partly because the circumstances surrounding health care in America are so obviously worse. According to the Federal Centers for Medicare and Medicaid Services, health care spending in the United States nearly doubled in the decade after Clinton’s plan died, reaching about 16 percent of the gross domestic product — the highest percentage on record. Some businesses that might have opposed reform in 1993 are now desperate to address their growing health care costs, and insurance companies and health care providers seem increasingly open to compromise if it means they can avoid more drastic forms of government regulation.
Working on parallel tracks, committees in the House and Senate seem to be reaching a broad consensus around what a new system would look like. The separate bills they come up with will probably mandate that every American have health care coverage, establish a government-regulated marketplace for private insurance and require employers with a certain payroll (perhaps of more than $500,000) to offer health insurance to their workers or pay a tax.
What House and Senate leaders don’t agree on, necessarily, is how to get the legislation done. Waxman and Rangel are more than happy to shove a bill down the throats of their Republican colleagues, if need be. That’s why the House forced Senate leaders to accept a provision in the budget that allows health care to pass by “reconciliation” — an arcane budgeting maneuver that would enable Senate Democrats to force through a bill with a simple majority, rather than with the 60 votes needed to forestall a filibuster. But in the Senate, Baucus remains determined to send to the floor a bill with bipartisan support; passing health care reform by reconciliation, he says, would make the new law unsustainable in the long term. This is why Baucus hasn’t yet committed to the idea of a public plan to compete with private insurers. It’s not that he particularly dislikes the policy or that he can’t find enough centrist Democrats who might vote for it. It’s more that Baucus fears the provision will drive away Republicans, making it far less likely that Democrats can pass a bill without resorting to reconciliation. During our conversation in his office, Baucus told me his main goal is to keep Senate Republicans at the negotiating table for as long as he can. “Everything is on the table,” Baucus told me more than once, which is the same theme he’s been hammering home to his Republican colleagues.
When I asked Baucus what he needed from the White House in order to help pass a viable health care plan, his answer, more or less, was nothing — as in, the most helpful thing they can do is butt out and let the Senate worry about the details. No doubt this has something to do with the traditional turf battles among the branches; Baucus has been a legislator now for 35 years, and he doesn’t need another Democratic president telling him how to do his job. But there is a more practical reason for his wariness, as well. So far, he has managed to keep the parties talking largely because neither Democrats nor Republicans have any clear idea of which specific provisions Obama will accept — and that’s exactly the way Baucus wants to keep it. If the president were to shed his reticence and set out his terms for a bill, Republicans would focus on their differences with Obama and would most likely end up abandoning the process, either because they wouldn’t believe a compromise was possible or because they would want to seize on any excuse to derail his agenda. “Right now, the president sort of keeps them guessing as to what he might be supportive of,” says John Breaux, the former Democratic senator who is now a corporate lobbyist. “I think that’s why you still see Republicans actually trying to work on it.”
As it happens, this arrangement — whereby Baucus negotiates the bill and Obama keeps his distance — is politically advantageous to the president too. During his campaign last year, Obama took at least two positions on health care that he may soon find hard to maintain. First, in the primaries, he differentiated his plan from Hillary Clinton’s by refusing to back an “individual mandate” — that is, the provision that would require every American to obtain insurance. Then, during the fall campaign, Obama criticized John McCain for proposing to tax employer-based health benefits. If he were to offer a detailed proposal of his own right now, Obama might have to walk out into the Rose Garden and reverse himself on one or both positions. But with Baucus urging him to leave the details to his committee, Obama can instead wait for a plan to emerge from the Senate and then, if need be, reluctantly change his mind in the interest of compromise. Thus he preserves the option of backing away from his previous anti-big-government stances, and he gets to appear statesmanlike and pragmatic in the process.
THE NETTLESOME THING about leaving the details of the health care plan to Congress, though, is that this Congress, like most every other Congress, doesn’t appear inclined to pay for much of anything. And it is this part of the health care debate — where to find the money — that seems most likely to derail the process. Most discussions of America’s health care woes begin with talk of the uninsured — some 46 million of them at last count. How much a new health care system will cost depends primarily on how close to universal coverage you really want to get. On the high end of the scale, insuring every American might well cost as much as $1.5 trillion over the next decade at a time when deficits are gobbling up a greater share of the nation’s income than at any time since World War II.
The White House has focused mostly on new efficiencies in health care, insisting that lowering the costs of medical care could easily save $2 trillion in public money over the next decade. A coalition of providers, drug makers and insurance companies — no doubt looking for the best possible deal in health care legislation — helpfully vowed in a White House photo-op last month to institute changes that would lead to such savings, but their promise was maddeningly vague and utterly unenforceable (and in any event, the industry groups almost immediately distanced themselves from it). Short of realizing these projected savings, there are only so many ways to pay for health care — and, not surprisingly, congressmen and senators aren’t exactly lining up to embrace them. One way, as McCain proposed, is to rescind the tax exemption for some workers who receive health care benefits from their employers; Baucus is open to at least capping the exemption, but labor unions are adamantly opposed, and Rangel has publicly renounced it (though he and other House Democrats appear to be re-evaluating that stance). Another way is to slap new taxes on some of the products that cause health problems in the first place, like soft drinks, but industry lobbyists are already spending satchels of cash to head that off. Congress can always choose to slash Medicare benefits or the payments that doctors receive, but that idea generates about as much enthusiasm as you might find for putting George W. Bush’s face on the $5 bill.
In a larger sense, this may be the nagging flaw in Obama’s notion of the Congressional presidency, this strategy that leaves the lawmaking to Congress, even as it enables him to claim credit for one legislative success after another. Professional legislators can be great at devising complex language and finding creative ways to get a deal. What they are not especially good at — at least not in the current era — is making the difficult decisions that governing responsibly often requires. Left to their own devices, legislators rarely seem to ask the voters to sacrifice anything by way of taxes or entitlements or services, if only because voters don’t find the entreaties of legislators all that persuasive. And so, absent his own engagement, Obama’s vow to reverse our “collective failure to make hard choices,” as he put it in his inaugural address, may well be pushed aside for another day.
At critical times in his young political life, and several times already in his presidency, Obama has fallen back on his gift for explanation and oratory to try to change the dynamic of a national debate. He did it on race relations, delivering a historic and bracingly candid speech in Philadelphia during the Democratic primaries. On two consecutive days last month, he undertook to lay out his thinking on national security and civil liberties in twin speeches at the National Archives and the Naval Academy. In a recent speech at Georgetown University, he tried to tell the larger story of the nation’s economic crisis and his response to it, riffing on the Biblical image of a house built on shifting sand. It seems likely that Obama, who has to this point focused on a sophisticated legislative strategy for achieving health care reform, will at some point soon have to take his case to the public instead — this time asking Americans not just to support an ambitious expansion of government but to accept the sacrifices necessary to do it. Only a president will make that case, and only a president can.
Matt Bai, who covers politics for the magazine, is the author of “The Argument: Inside the Battle to Remake Democratic Politics.”

HEALTH CARE - INSURANCE

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Health Care Reform Begins

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