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Nancy Pelosi Steeled White House For Health Care "Reform" Push
In the jittery days following Scott Brown’s Senate victory, Nancy Pelosi was eager to resurrect comprehensive health reform. But first, she had to get past longtime ally Rahm Emanuel, who was counseling President Barack Obama to consider a smaller, piecemeal approach.
During a mid-February conference call with top House Democrats, Pelosi made it clear she would accept nothing short of a big-bang health care push — dismissing the White House chief of staff as an “incrementalist.”
Pelosi even coined a term to describe Emanuel’s scaled-down approach: “Kiddie Care,” according to a person privy to the call.
Pelosi’s remark was more than just a diss. It sent a clear signal to House leadership that Pelosi wouldn’t compromise — and it coincided with Obama’s own decision to renew his push for an all-encompassing bill after weeks of confusion and discussion.
In the end, Pelosi, Obama and Senate Majority Leader Harry Reid (D-Nev.) braved a political backlash to pursue comprehensive reform, green-lighting a two-step reconciliation process that requires the House to approve a Senate health bill reviled by many House Democrats.
If the House approves the bill Sunday — and House leaders sound confident they can — it will be followed by a potentially contentious Senate rewrite of the legislation that removes special deals like the “Cornhusker Kickback” and delays an excise tax on “Cadillac” insurance plans until 2018.
Republicans may have the last laugh, of course, if they are able to capitalize on the plan’s unpopularity in the midterms.
But pass or fail, the fact that a sweeping reform effort is alive at all — much less on the precipice of becoming the law of the land after its brush with death eight weeks ago — is a remarkable turnabout for a party that was on the brink of a political and nervous breakdown in late January.
The rebirth of the reform effort is the result of a little luck, insurance company avarice, a subsiding of post-Brown panic among party incumbents and the calculation by many Hill Democrats that going small or giving up was just as politically perilous as going big.
But the main reason the bill has made it to the floor has as much to do with the complex, occasionally tense, ever-evolving partnership between the first African-American president and the first female speaker.
“I think [Pelosi] is the one who has kept the steel in the president’s back — and I think she represents that to Harry Reid, too,” Rep. Anna Eshoo (D-Calif.), Pelosi’s closest friend in Congress, told POLITICO.
“White Houses end up with — how do I say this? — they take an incrementalism pill,” added Eshoo. “But Nancy Pelosi is not an incrementalist.”
Neither is Obama, says Sen. Ben Cardin (D-Md.), it’s just that he moves more deliberately. “I don’t think [the White House] were there from Day One, but they were from Day Two,” he said. “I think they knew this would be the way.”
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Life before Scott Brown
The groundwork for Sunday’s vote was laid out during a three-day marathon White House negotiating session, which took place in the week before the Massachusetts special election Jan. 19.
The fact Brown might take Ted Kennedy’s old seat — and what that would mean for health reform — didn’t dawn on the principals involved on the bill at first, but it eventually began to sink in, lending the effort a sense of increased urgency, according to a senior Senate aide.
In sessions that stretched into the early-morning hours, Obama helped House and Senate Democrats resolve their biggest policy battles. And they left the White House the Friday afternoon before the vote with a tentative agreement. Looking back, congressional Democrats, demoralized and frustrated after the Massachusetts loss, may well have decided that they were too far apart and too exhausted to push ahead, if they didn’t have that deal.
But there was a stark reminder during those three days of the differing styles of the House and the Senate, and how that divide would define the next two months.
On the second day, Obama asked the House and Senate leaders to return after dinner with $70 billion in suggested cuts from the bill. The senators hunkered down in Sen. Max Baucus’s office, ordered pizzas and drew up a list of trims. Each senator gave up something, aides said.
Later that night, back at the White House, the House presented its approach: They would cut nothing. Obama, not persuaded, sent them to different rooms, and told them to keep working at it.
Eventually, they whittled the gap down to $20 billion, and Obama made his own suggestions.
Henry Waxman, chairman of the House Energy and Commerce Committee, seemed pleased. “I don’t speak for the House, but you have put forward a serious set of numbers,” he said to Obama, according to a person present.
Pelosi was not so impressed. “Mr. President, I agree with Henry on two points,” she said before turning to Waxman. “The president put out a set of numbers, and you don’t speak for the House of Representatives.”
Obama was done. He left the room in frustration, telling his aides to deal with it.
Living with the loss
The confusion only deepened after Brown’s victory.
Harry Reid, facing a stiff reelection challenge back in Nevada, made it clear that he was in no rush to push through another bill, committing only to doing health care “this year.”
New York Sen. Chuck Schumer, an influential Reid adviser who presided over the Democrats’ Senate take-back in 2006, prodded Senate Democrats to put the issue on the back-burner in favor of a high-profile push for jobs bills.
Rep. Barney Frank (D-Mass.), a key liberal, pronounced reform was dead. And Emanuel, a former congressman who quarterbacked the hugely successful ’06 midterm as chairman of the Democratic Congressional Campaign Committee, talked about scaling the measure down in conversations with Blue Dog Democrats — all the better to push the jobs bill and an overhaul of financial regulatory reform.
Publicly, Obama seemed to side with Pelosi over his own chief of staff, professing his commitment to comprehensive reforms at the State of the Union.
But he was also sending deeply mixed signals. In a closely watched interview with ABC’s George Stephanopoulos a day after Brown’s win, Obama expressed support for a quickly passed bill containing only “the core elements” of reform.
The White House press office wouldn’t participate in this story, saying it wasn’t appropriate to comment on the legislation while the outcome remained uncertain.
Pelosi had her own chorus of Incrementalists to deal with. A few days after Brown won, dispirited Democrats rose one by one at a private meeting to plead with the speaker to abandon her plans for a bigger bill and move something a little more piecemeal. “A lot of people wanted us to take baby steps,” said Maryland Rep. Chris Van Hollen, chairman of the Democrats’ campaign arm in the House.
She explained that incremental legislation posed even more problems because the pieces of health care reform are so interrelated — but did offer one sop to reassure them: Legislation to repeal a decades-old antitrust exemption for health insurers. It passed with more than 400 votes, but it was the last incremental bill she offered.
Around the time of Brown’s victory, Pelosi and her staff became alarmed by reports, in the New York Times and elsewhere, that consensus was growing for the House passing the Senate bill as-is – with no Reconciliation.
Pelosi, according to several associates, went through the roof, telling Obama and Emanuel that there was no chance her members would pass the Senate bill with its excise tax and sweetheart deals. Obama quickly soured on that idea, too, particularly as the backlash built over deals involving Sens. Mary Landrieu (D-La.) and Ben Nelson (D-Neb.).
For his part, Obama was frustrated with the speaker’s insistence that the Senate move first on the reconciliation bill, successfully urging her to drop the demand, according to staffers.
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The "Two-Step"
Even before the Massachusetts shocker, Ron Pollack, the executive director of the pro-reform Families USA, began canvassing health care and legislative experts for ways to keep the bill alive without 60 votes.
The most promising option was something he termed the “two-step:” The House would pass the Senate bill, followed immediately by a package of fixes that could move through the Senate through reconciliation.
A day before the election, Pollack sent an e-mail to 19 senior congressional aides, as well as senior staff at the White House. It was already being discussed privately, but Pollack wanted to the idea in the public domain, telling POLITICO about the potential approach.
“I felt it was predictable that if he did win, it would have a major impact in terms of what the perceptions would be about the future of the health reform effort,” Pollack said.
Pelosi’s staff liked it.
Obama settles in
Meanwhile, in the White House, the debate over health care was still raging: Big or small?
The idea of a scaled-back bill drew serious consideration from senior aides, with staff drawing up an outline of what a smaller bill would look like.
Publicly, the White House seemed to send a different signal each day.
In the space of two weeks, Obama or his top advisers suggested breaking the bill into smaller parts, keeping it together in one comprehensive package, putting it at the back of legislative line and needing to “punch it through” Congress, as Obama himself said at one point.
At a fundraiser in early February, Obama described the “next step” as sitting down with Republicans, Democrats and health care experts, describing a process that could take weeks, if not longer. He also seemed to acknowledge for the first time that Congress may well decide to scrap health care altogether — an admission that blunted his repeated and emphatic vows to finish the job.
Behind the scenes, Obama had, in fact, already settled on a strategy.
He would invite Republicans and Democrats to a summit, to give them one last chance at compromise, knowing they wouldn’t budge. And privately, he had decided that his favored approach was a comprehensive bill.
At the same time, recognizing political and economic realities, Obama, Pelosi and Reid pushed ahead quickly with jobs bills, to appease nervous Democrats in both houses who feared the White House had lost focus on the economy.
Still, Democrats were fed up with what they perceived as a lack of direction from the White House.
On Feb. 5, Obama met with Democratic senators at the Newseum. In the closed-door session that followed, freshman Sen. Al Franken (D-Minn.), lit into an Obama adviser for failing to show more leadership on the issue. It was the culmination of weeks of frustration.
The news breaks the Democrats’ way
That very morning, however, White House communications director Dan Pfeiffer was leafing through his daily clip package when he saw that Anthem Blue Cross in California was hiking rates dramatically, as much as 25 percent for many of its patients.
It gave Obama, who thrived in the competitive environment of the 2008 campaign, an opponent worthy of his scorn and wonky policy discourses.
“It was an a-ha moment,” Pollack said. “This was the clearest indication of what would happen if legislation didn’t pass. Even if it was condemned roundly by people in California, it was an early Christmas gift for health reform.”
The Anthem development — coupled with polls showing the unpopularity of Washington — provided Obama with a reason to hit the road, to barnstorm for the plan. He hit stops in Pennsylvania, Missouri, Ohio and Virginia — and focused on health care during a campaign swing for Reid in Nevada. And in the process, he finally appeased Hill Democrats who had been longing to see the president fully engaged.
Along the way, the GOP has given rank-and-file Democrats, who have been playing defense for a year, a way to go on the attack. In late February, Sen. Jim Bunning (R-Ky.) held up an extension of unemployment and health insurance extension benefits. The move caused a huge uproar, and Democrats were quick to tie Bunning to a Senate GOP leadership unified in opposition to almost all things Obama.
Also near the end of February, Obama convened his White House health summit, roughly three weeks after announcing it during an interview on Super Bowl Sunday. Initially, it was dismissed by some congressional Democratic aides as a waste of time, and worried activists thought the president was frittering away precious weeks.
But in the end, it turned out to be a plus. Democrats finally were able to shift the narrative away from Massachusetts and back to the policy and political differences with Republicans, aides said — boosted by the fact that Obama himself finally put forth a health care bill that he would call his own.
All of this has some Democrats talking about Scott Brown’s victory in slightly less apocalyptic tones.
"In a curious way, the Massachusetts vote helped bring a conclusion to health care,” said Senate Budget Committee Chairman Kent Conrad (D-N.D.). “It helped people get comfortable with the idea of a path forward that would have been the only path forward anyway."
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Sources: Politico, MSNBC, The Daily Beast, Google Maps
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