Congress is behind schedule for passing the bills that authorise spending for the 2010 fiscal year, which starts on October 1st. Congress was to have been well through the process in early summer, but several factors intervened:1) stress-tests of the major banks to see what capital requirements they will need that could involve some items on-budget (most bank aid being off-budget)?
2) vituperative partisanship over Health Care plans?
3) waiting to see if predicted end of recession has arrived?
4) Republican legislators testing their minority power to see if a possible re-run of Republican stymying of Clinton's 1995/6 budget that partially shut down Federal Government in November and December 1995. This was the culmination of a process that began in '93 around both budget and health care and is being repeated as the tactic against the Obama administration today. The risk today as then is that Democrats lose their slender majorities in one or both houses of Congress as they did in '94.
In 1993, when Clinton squeezed his budget through in June, Republicans were a minority in Congress, but by galvanising their revolt, they recaptured Congress in the '94 year's interims. By failing to pass the '95 budget, and by insisting on a constitutional amendment to enforce a balanced budget by 2000 (which Clinton achieved 3 years earlier much to republican chagrin) the US economy had some growth shaved off and this coincided in '95 with one of the coldest hardest winters on record. Globally, the effect was to panic many OECD countries into thinking another recession dip was imminent in 1995/6 and consequently many, especially, the UK, upped their fiscal stance to compensate. Balancing the US budget and the political power struggles in Congress forced other countries into higher deficit spending.
We may face this in the next 2-3 years again when recovery globally remains fragile! By May '09 it looked like Congress would complete budget appropriations on time. The House passed all 12 of its spending bills. But, then, the Senate passed only four, and all twelve had to go to conference, where House & Senate versions are reconciled. That cannot happen now in the next 10 days, and the struggle to get the budget passed may also be employed to topedo the health care reform bill, on which so much of Obama's political capital is invested!
What happened in the early '90s? In Spring '91 - Minority Whip Newt Gingrich, predicted the "next great offensive of the Left will be socializing health care." He called on hardline Republicans to position themselves to stop Democrats from winning on this. The same strategy has been re-conditioned for use against Obama. In November '91 - arguing that every American should have the right to a doctor, Harris Wofford defeated Dick Thornburgh to become the first Democrat to win a U.S. Senate seat in Pennsylvania in 30 years. In January '92, the Clinton campaign issued a health care white paper as its opening salvo for the 8-month long campaign. In June '92, Clinton began using a new jargon for health care reform called "managed competition." In July, Clinton accepted the Democratic nomination vowing to "take on the health care profiteers and make health care affordable for every family." (Obama, and also Hillary Clinton adopted similar platforms in 2008.) In August '92, when the election was in full swing, Clinton was warned by campaign aides that his position on health care is too unstructured; too unclear to be easily defended. The same has now been said to President Obama, 8 months into his presidency! By end of August '92, partly as a result of political pressures from incumbent George Bush and a deal negotiated between the two candidates (one that also included no prosecutions over Iran-Contra) and partly as a result of internal debates among rival advisers, a major effort was launched to reposition health policies, to merge Democratic left and right, and shed the "pay-or-play" label that was the focus of hysterical attacks. A policy-broker was Dem Sen Jay Rockefeller who argued against changing "pay-or-play", while warning that "Americans deserve or have a right to health care" (which is echoed today in Obama's current moral crusade that relies on the last public policy letter written by Sen Edward Kennedy). back in '92 Rockefeller said the policy presented problems in that "Although many Americans may initially react positively to this statement ("pay-or-play"), over time it can make them uneasy. Before long they will be asking: How would we pay for all that care for all those people? Won't it require a huge new government bureaucracy?"
Today, this dovetails with fanning flames of anxious ire about budget deficit spending (that also internationally encourages fiscal Conservatives to grossly exaggerate the lilihood of higher tax rates). Long term budget issues are being confused with short term crisis management. Long term health care reform in the USA is being sized up as if it it could be a burden long term similar to bailing out the banks, when in truth both matters rapidly become self-financing! But, opposition politicians are not averse to under-estimating voter intelligence about the long term in search for short term plitical advantages.
Saving the Obama health reform bill may cost delay in passing his budget and in turn undermine economic recovery measures short to medium term. His response to being cornered is similar to Clinton's in '92 and '93. In September '92, Clinton pulicly revised his health reform, dropping the term "managed competition," to contrast his approach with the wholly private sector plan of President Bush. Obama did the same in '08. In November '92 and '08 Clinton and Obama respectively won the election. In both years, polls showed voters ranking health care far behind the economy behind the budget deficit. The majority of the public has only the fuzziest notion of what either Clinton or Obama had in mind for health care reform. Clinton and Obama both addressed Congress a month after taking office.
President Bill Clinton's focus was on the economy, budget and taxes, he used the speech to make the policy link between health care reform and deficit reduction. The initial positive response bred false optimism in the White House. Advisers argued for a one-two punch: First, win a great budget victory by May; then follow up immediately with the introduction of the health care plan. But the consensus among Democratic congressional leaders was that there's not support for going to the well twice for difficult votes on health care and on budget cuts. Clinton then made the error of proceeding to put health care into the main budget bill.
President Barack Obama's focus was on the economy, budget and taxes, he used the speech to make the policy link between health care reform and deficit reduction, but not in a single budget appropriations bill. Obama is not doing this. The Health bill (650 pages) is hoping to get passed by year-end. He told Congress in February that an era of extravagant spending must end; the roots of the economic crisis is short-term gains prized over long-term prosperity. "And all the while, critical debates and difficult decisions were put off for some other time on some other day. Well, that day of reckoning has arrived, and the time to take charge of our future is here." He praised Congress for passing the economic stimulus plan, which he said would create millions of jobs and revitalise the US, and promised to deliver a tax cut to 95% of Americans by 1 April (that some said is April Fools Day). "We will recover," replaced "Yes, we can!" The recovery package, signed after compromises debated in both houses, was designed to channel federal money toward infrastructure projects, health care, renewable energy development and conservation programmes. The first month of Mr Obama's presidency also included a banking bail-out worth at least $1.5 trillion plus a plan to support "responsible homeowners" struggling with mortgages. He popularly told his audience that banks and bankers taking public money will be fully accountable, vowing that tax dollars would not be frittered away (bravery about hostages to fortune). "Those days are over... It's not about helping banks, it's about helping people." The speech came days before the unveiling of the first Obama budget, with a deficit at roughly $1 trillion. President Obama said the vast deficit and the "crushing cost" of healthcare made the need for wide-ranging reform more urgent than ever, and he pledged to reform and improve the nation's schooling and boost the numbers of students in higher education, restating a pledge to cut the deficit in half by the end of his first term, and to eliminate wasteful and ineffective schemes.
Over 6 months later, President Obama had to address both houses of Congress again, after a struggle to pass his budget and serious obstacles in the way of health reform on which the Republican Opposition was now focuses much as it had been back in '93 against Clinton. Obama (9 Sept.) put the moral argument, which while gaining over 60% public support according to the pollsters, nevertheless has a hard climb to overcome medical insurers' and pharma companies' campaign contributions. His fighting talk called for serious proposals from Democrats and Republicans to address chronic health care problems and rising costs, warning that he would not "waste time with those who have made the calculation that it's better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are (to great applause from Democrats). If you misrepresent what's in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now."
In January '93, Clinton formed The President's Task Force on National Health Reform to "prepare health care reform legislation to be submitted to Congress within one hundred days of our taking office" with his wife, Hillary Clinton, heading it up. A blanket of secrecy was imposed on task force operations. Obama, like Clinton, has placed much of his political credit on Health Care. In both cases, such priority commitment instantly limits how far cabinet secretaries and White House aides can go in pressing alternate views. In order to meet their hundred-day deadline and win swift congressional passage the Clintons sought to fit the health care into the presidential budget and pass it all in one gigantic package, seeking the advantage that under Senate rules the reconciliation bill can be debated for only 24 hours before it comes to an up-or-down vote.
Obama has even less time to try this, and has achieved little if any bipartisanship. Not one Rep legislator appears prepared to vote for Obama health care overhaul! Obama confronted the concern of opponents by pledging that any health care bill approved by Congress won't increase the federal deficit, repeating past statements that savings in the existing health care system will cover most of the cost of an overhaul bill. He also said, "not a dollar of the Medicare trust fund" would pay for the bill, but provided few details of exactly how, saying the plan will eliminate "unwarranted subsidies in Medicare that go to insurance companies" and create an independent commission of doctors and medical experts to identify further waste. In an emotional conclusion, Obama invoked the late Sen. Edward Kennedy citing a letter in which Kennedy called providing health care to all Americans "above all a moral issue." "'At stake are not just the details of policy, but fundamental principles of social justice and the character of our country...'". "I've thought about that phrase quite a bit in recent days -- the character of our country," Obama said to the hushed chamber. "One of the unique and wonderful things about America has always been our self-reliance, our rugged individualism, our fierce defense of freedom and our healthy skepticism of government." - adding that Kennedy recognised that with all of the drive of Americans to stand strong, there comes a time when government must step in to help. "When fortune turns against one of us, others are there to lend a helping hand," citing "a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgment that sometimes government has to step in to help deliver on that promise." The opponents are claiming that while half of all personal bankruptcies in the US may be partially the result of medical expenses, the rising costs also mean the government is spending more and more on Medicare and Medicaid, and US government spending on the two schemes is expected to rise from 4% of GDP in 2007 to 19% of GDP in 2082, making rising healthcare costs one of the biggest contributing factors to the spiralling US budget deficit long term. This is similar to the hysteria that a Republican-dominated Congressional Budget office created in '94 about the long run cost of an ageing population, claiming, also very one-dimensionally, that the burden of old folk would absorb half of the Federal Budget and a quarter of GDP by 2050!
In March '93, the chairman of the powerful Senate Appropriations Committee, blocked the Clinton reconciliation bill strategy, calling it "a prostitution of the process" by pushing through "a very complex, very expensive, very little understood piece of legislation." We can expect the same tactic attempted now.
In April '93, media leaks were a problem, indicating that a value-added tax increase is under consideration. Hillary Clinton met with Republican and Democratic senators, imploring them to tell her what she is doing wrong and that she is having trouble getting dialogue with Republicans (Senate Minority Leader Bob Dole told Republicans not to meet with the First Lady). In May '93, a chart was leaked to the New York Times detailing health reform impact on national spending, altered to appear as if $150 billion is required in new taxes. private White House meetings are leaked to the newspapers. The Health Insurance Association of America (HIAA), restates support for universal coverage but complains of attacks on health insurance industry for "price-gouging, cost-shifting and unconscionable profiteering." Similar, brickbats were thrown this year in '09, also to diminish public support for reform. By the end of May '93 The Clinton Health Care Task Force is disbanded.
The health insurers started an advertising campaign with straplines "They choose, you lose" and "There's got to be a better way." And, the National Federation of Independent Business (NFIB) tried to kill a key element of the reform plan with mailouts and state by state meetings, to stop the "employer mandate" that would require all businesses to provide health insurance for their employees. This aspect is not in the Obama Plan.
In June '93, worried at having no effective political support team, the Clinton administration set up a "War Room" to monitor media, orchestrate responses to attacks on the Clinton health plan, and schedule administration and congressional visits to forums being held around the country. Obama may be doing the same today.
There was in '93 loss of left-wing Democratic support as the original principles were becoming less universalist.
In June '93, Clinton's budget got through only the Senate only with Vice President Gore's casting vote. Health care reform is therefore shunted off until another day.
In early Summer '93President Clinton told the DNC (Democratic National Committee) to make grassroots efforts to support health reform. The DNC first tried to set up a tax-exempt "educational" foundation, separate from but allied to the DNC. When word of that leaked, critics said it will allow power brokers with their own agenda to curry favor with Clinton by secretly financing his pet project. The DNC backed off and offered to run the program itself, but they lacked a budget for any serious grassroots efforts, which was then junked in favour of a media campaign. Some called for the health care plan be delayed until '94, but others saw this as a death sentence for health care reform. Similar thoughts are the case today, for the next year means health care is a central part of mid-term Congressional elections.Advisers are in disagreement, and President Clinton decided not to make any decisions until after his vacation. Obama did similarly, but returned to the fray with renewed vigour, except late in the Congressionl diary. In August '93 a plan is presented to a meeting of US state governors, but agreement is not found!
Ironically, while Clinton planners privately stress a conciliatory, middle-ground approach for reform, the public and many on Capitol Hill are beginning to gain an impression painted by opponents that the plan is a liberal, secretly concocted, Big-Government scheme to dictate how people get their health insurance and medical treatment. A rough draft of a plan embodying decisions on alliances, proposed price ceilings on insurance premiums, and Medicare cuts is used to brief members of Congress, but the supposedly secret plan is leaked to the press and to anti-bill lobbyists.
One difference this time is that number of congressional committees have been working on healthcare reform bills. The outlines of all competing bills are similar, and compatible with that of the White House. All favour tougher regulations for insurers, establish an individual mandate, set up insurance exchanges for those who do not have employer-provided coverage, offer subsidies for the less well-off (although the exact size of the subsidies varies from committee to committee), pay for most of the reforms by cutting waste in the Medicare programme. The major points of disagreement are on the "public option" and on how to pay for the remainder of reform. The Senate Health committee was the first to pass a healthcare reform bill
The House of Representatives bills propose to pay for reform by levying a surtax of up to 5.4% on families earning over $350,000 a year. In the Senate, the Health committee also backed the idea of a public option, but cannot rule on financial matters, the jurisdiction of the Senate Finance Committee, which has yet to produce a final bill. The Finance Committee has gathered together an informal, bipartisan group of senators - known as the "Gang of Six" - in an attempt to hammer out a compromise that will attract support from both parties. Will this work?
In September '93, President Clinton's advisers agreed on an explicit congressional strategy. Rather than start from the centre, writing a bill to appeal to conservative Democrats and moderate Republicans (while telling the liberals this is the best they can expect), they start from the left and moving as far to the centre only as needed to reach a majority. But, Newt Gingrich is determined there be no Republican support for any Clinton-designed reform and the whole effort be derailed.
The media ran stories describing and analysing Clinton's secret draft plan. Decisions are made, unmade, revised, and remade about what TV shows cabinet members and Democratic members of Congress will appear on. The result, according to one of those involved, is "piss poor planning and disastrous conflicts." Not unlike how fiscal policy and bank bailout schems are discussed today, back in September '93, opponents dismissed the economic calculations as "fantasy numbers" even to the extent of saying there is "no health care crisis."
Trying to replay the similar tactics in the run-up to next year's mid-term elections, not only health care bill but the general federal budget faces a struggle to pass in the Senate, for which very little time is left. That means Congress has to pass a “continuing resolution,” or a series of them, to temporarily fund the government, which would be a replay of '93, '94' and '95. That’s bad for a couple of reasons: One, a full federal budget for the year, federal agencies and sub-agencies can’t plan. They literally hold up recovery plans and programs because they don’t know if there’s money for them. Two, when Congress passes these bills in haste, lots of shenanigans will happen. Recall that it was in 2000, a provision was slipped into one of these big bills to remove Glass-Steagal that many claim ultimately helped cause the 2007-09 financial meltdown. That can be what Congress is playing with when it fails to get its work done on a regular schedule, and the rest of the world hanging on the economic and policy guidance teats of the USA!
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