“With regard to the health care issue, as we all know, the bill that was reported yesterday will not be the bill voted on. Right down here in the Majority Leader’s conference room they’ll be writing the real bill that will be brought up.”—Senate Minority Leader Mitch McConnell,
October 14, 2009
“THE REAL BILL is currently being written behind closed doors in the dark corners of the Capitol and the White House,” warned Senator Orrin Hatch. Speaking to the Senate Finance Committee shortly before its October 13 vote on the America’s Healthy Future Act, the Utah Republican was working a memetic line that congressional Republicans are counting on to erode support for health care reform.
The following day, Minority Leader Mitch McConnell rehearsed the same trope. “With regard to the health care issue, as we all know, the bill that was reported yesterday will not be the bill voted on,” McConnell told reporters. “Right down there in the Majority Leader’s conference room they’ll be writing the real bill that will be brought up.”
Are these guys serious? Elections have consequences, one of which is the majority’s dominant role in shaping legislation. Republicans understand that, even if Democrats don’t seem to get it. At the end of 2003, with no pretext of a bipartisan process, President George W. Bush and a Republican Congress passed the largest health-care entitlement bill since Lyndon B. Johnson signed Medicare into law in 1965.
The 2003 Medicare prescription drug bill was sold to the public as a $400 billion expenditure that would provide prescription drugs for elderly Americans—which it has. Yet, unlike the bill voted out of Senate Finance in mid-October, no provision was made to pay for it—either by tax increases or by reductions in other programs. Nor were its real costs anywhere close to the $400 billion the White House and congressional leadership promised.
Douglas Holtz-Eakin, then director of the Congressional Budget Office, estimated that the prescription drug benefit would cost at least $1 trillion by its second decade: 2014-2023. (Holtz-Eakin later served as director of domestic and economic policy for John McCain’s 2008 presidential campaign.) The numbers didn’t matter. House and Senate Republicans did what was required to fulfill a campaign promise the president had made to elderly Americans, on which he believed he had to deliver to be reelected.
The complex legislation was rewritten under the direction of House Ways and Means Committee Chairman Bill Thomas, with no Democratic participation. And the bill was delivered to members twelve hours before it was scheduled for a vote on the House floor.
“Democrats who are seriously interested in a place at the table have one,” said Jon Grella, House Majority Leader Tom DeLay’s press flack. Only weeks earlier Bill Thomas had ordered Capitol police to physically remove Democratic members from a House committee room, where they were trying to watch the rewrite of the bill.
DeLay was in charge of the vote on the floor, where the fifteen-minute limit on voting, established by House rules, was extended to three hours. President Bush was awakened somewhere over the Atlantic at 3 a.m. on Air Force One, to make calls to wavering Republicans. Health Education and Welfare Secretary Tommy Thompson personally lobbied House members as they voted. And shortly before the sun rose on November 22, 2003, Republicans passed a historic piece of legislation by a 220-215 vote.
The process in the Senate was more genteel but no more open or bipartisan. The dramatic tension involved an intramural fight between Senator Charles Grassley of Iowa and Rep. Bill Thomas of California—both Republican committee chairs. In the end Grassley moved a highly partisan $400 billion bill, with a $1 trillion fiscal note in the “out years,” through the Finance Committee he chaired—after winning $25 billion in additional Medicare funding for rural states.
Once the bill made it to the Senate floor, Grassley and Arizona Republican Senator John Kyl—Finance Committee members who today are intractable opponents of “partisan and fiscally irresponsible” Democratic health care reform—forced Mississippi Republican Trent Lott to end a procedural filibuster that was blocking a vote on the bill.
It is against this backdrop that the Republican campaign against health care reform should be considered, particularly in the Senate, where the threat of a filibuster by 40 Republicans—while a few wavering Democrats and Independent Joe Lieberman refuse to vote for cloture—remains an obstacle.
THINGS FALL APART—Lyndon Johnson liked to keep his enemies close. “I’d rather have’em inside the tent pissin’ out than outside the tent pissin’ in,” Johnson would say. That tactic seemed to be working for Barack Obama until the trade association he brought into the tent bolted.
America’s Health Insurance Plans (AHIP) is the muscle working for the health insurance industry. When Bill Clinton made a run at health care reform in 1993, AHIP turned its lobbyists loose on Congress and underwrote the convincing “Harry & Louise” TV spots that foundered Clinton’s reform plans. (In 1993 AHIP was the Health Insurance Association of America.)
So AHIP President Karen Ignagni made news when she showed up at a White House Health Care Forum last March. Ignagni joined Blue Cross Blue Shield and the Pharmaceutical Research and Manufacturers of America (PhRMA), all inside the tent.
Then things fell apart. The day before the Senate Finance Committee voted on the last of five health care bills wending their way through Congress, AHIP stiffed the White House. A 17-page report that PricewaterhouseCoopers (PWC) prepared for the trade group was released with no warning that an industry-friendly critique of the Finance Committee bill was in the works.
PWC’s report warned about “market reforms” that are not linked to effective coverage requirements. “Coverage requirements” are universal enrollment mandates the industry demands before it will end the practice of refusing to insure people with preexisting medical conditions.
The report also took issue with the taxation of high-value insurance policies. And it argued that the reduced rates that government-run programs propose to pay for medical services will result in shifting of costs to the private insurers.
The work was quickly dismissed by independent health care authorities. The Washington Post‘s Ezra Klein recalled that PWC has a history of projecting doom and despair for those who pursue reform, as it did when it produced a report for the tobacco industry in the ’90s. Klein, who has studied the 1993 legislation and followed health care for several years, found little that he could agree with in the PWC report. Several other sources measured PWC’s findings against the work of MIT economist Jonathan Gruber and found them failing.
But it was PWC’s predictions of rate increases—which read like a veiled threat to the White House and Congress—that provoked responses that AHIP might not have anticipated. The report predicts that health care costs will increase 79 percent over the next 10 years if nothing is done, but will spike 111 percent over the same time period if the Finance Committee’s proposals become law.
Massachusetts Senator John Kerry methodically picked PWC’s findings apart in two minutes of testimony, then derided the report as something the insurance industry should be ashamed of. Kerry also called the report a powerful argument for the public option the insurance industry opposes.
Are all bets with industry off? They should be.
AHIP’s interest is almost always at odds with the public interest. Yet the trade group agreed to nothing more than a seat at the table in exchange for good behavior. The deal the White House cut with PhRMA was a literal sellout: $80 billion in price reductions over 10 years for brand-name drugs for seniors—in exchange for no re-importation of American-manufactured drugs and no authorization for Medicare to use its bargaining power to negotiate lower prices.
If American consumers were allowed to re-import American-manufactured drugs from Canada or European countries where prices are regulated, consumers would pay 3-to-5 times less than what they are spending at home.
The pharmaceutical industry has already reaped $60 billion in profits from the Medicare prescription drug legislation its lobbyists helped draft in 2003. And the House Oversight and Government Reform Committee reports that Medicare could save $156 billion if it were allowed to negotiate for lower drug prices.
As we go to press, health care bills produced by five different congressional committees are being consolidated and renegotiated. Maine Senator Olympia Snowe’s lonely vote for the modest proposal produced by the Senate Finance Committee is a bellwether of Republican support. AHIP has walked away from the table. And PhRMA President and CEO Billy Tauzin (who as a Republican congressman helped draft the 2003 prescription drug bill before accepting his current $1 million-a-year job) is threatening to bolt if Congress tampers with the deal he cut with the White House.
Congressional Democrats might take a moment to study Tom DeLay. Not the disgraced elected official who put his dignity, collapsing arches, and gyrating ass on the line in “Dancing With The Stars.” But rather the Republican leader known as “the Hammer,” who muscled his party’s version of health care reform through Congress in 2003.
CORRECTION AND CREDIT: In our October 1, 2009, lead story, “Houston, We’ve Had a Problem,” we credited Houston KHOU-TV news reporter Mark Greenblatt with breaking the voter suppression story in Harris County. Alan Bernstein of the Houston Chronicle actually had the story in July 2008. The Chronicle‘s reporting was an early warning that Republicans were suppressing votes in Houston. Greenblatt’s series began several months later.