Saturday, 26 December 2009

Lobbyists 1, Obama 0

I’m here in the US for a white Christmas, it’s been lovely so far. The big news here, other than the terrorism attempt on a trans-Atlantic jet last night, was the historic passage of the healthcare reform bill in the US senate on Christmas Eve. But if some of you across the pond think this represents a fulfilment of the ‘hope and change’ promises in Barack Obama’s campaign, think again. The compromise legislation about to be enacted is being seen by liberals as a disappointing failure, and an indicator that the change the American president promised is not likely to materialise.

By definition, what was passed in the senate Thursday is not universal health care. It will bring the coverage level up to about 94%, meaning the US will remain the only developed nation without universal coverage. True, it will bring an additional 30 million people into the coverage umbrella. But it does so simply by legally requiring them to purchase insurance, without lowering the astronomical cost of insurance. It would force 30 million people to buy into the existing broken healthcare system. Rather than real reform, it’s a bit of a fudge.

Of course the bill does do some good, forbidding insurance companies from denying coverage to people with pre-existing conditions and providing subsidies to very poor people who can’t afford it. But at what cost? As former Democratic presidential candidate Howard Dean noted on Meet the Press Sunday, there was an opportunity here to fix the fundamental problems of the healthcare system as Obama pledged to do, but instead this legislation locks the US into the existing all-private insurance system for people under 65– and commits the country to using that flawed system as the only means to eventually achieve universal healthcare. It’s not a coincidence that health insurance company stocks hit a 52-year high last Friday when it became clear the senate bill would pass.

There are only two countries in the world that have achieved universal healthcare using a completely private system – Switzerland and the Netherlands. But both of those countries treat insurance companies as utilities, tightly regulating what they can and can’t do. In the Netherlands, insurance companies are even forbidden to charge people different rates based on their age or sex. This senate bill does contain some new regulation for insurance companies (such as forbidding them to deny coverage because of preexisting conditions), but in most areas it gives the insurance companies carte blanche. It maintains the exemption for healthcare companies allowing them to operate as monopolies. It allows the companies to charge three times as much for someone who’s older as someone who is younger. Costs aren’t controlled either. On Meet the Press Sunday Howard Dean estimated that someone making $70,000 a year could end up paying $20,000 for their insurance under the Senate bill.

Downhill slide

So how did we get here? Didn’t Obama promise to drastically reform the broken US healthcare system and prevent insurance company abuse? Yes, and he wanted to do so. But as many on the left have noted, he didn’t fight for it. The entire healthcare fight has been a continuous lowering of expectations from start to finish. Talk of a full single-payer system as exists in Canada or the UK was shelved early on in the process as the administration concluded such a social welfare system could never pass the US congress. Instead, they went with a compromise option – a combined public/private system as exists in countries like Germany. That plan would have maintained the private insurance plans that people already have, but added a ‘public option’ for people to buy into if they’re not happy with the insurance they have or if they don’t have any insurance now.

But then the madness started. Obama had hoped to get the legislation passed before the August congressional recess, but was unable to. During that month, powerful think thanks and industry groups like Freedom Works and Americans for Prosperity were able to organize an army of loud, sometimes armed protestors to show up at the town hall meetings congresspeople typically hold with their constituents during the recess. Comparing universal healthcare to fascism and Obama to Hitler, they screamed that healthcare reform would be the end of the republic. The loudest of the protesters were covered heavily by Fox News, the most-watched news channel in the US which often sets the news agenda for all other media outlets. The number of protesters at these events was actually not very big, but the media coverage they received was huge. This had a chilling effect on Democratic congresspeople from conservative states, and they came back to Washington in September quite spooked.

Then the compromise game started. Republicans united as a block in both houses to oppose any kind of reform, having decided early on that they could make this “Obama’s Waterloo". After all, if they could defeat him on this they could stop him from achieving anything during his presidency. Even though every Republican was always guaranteed to vote no on any reform vote, and they refused to participate in the process of crafting the legislation, the Obama administration became obsessed with achieving “bipartisanship” in legislation and tried to win some republican votes, even though they didn't need them with a Democratically-controlled congress. The Democratic leadership offered concession after concession to Republicans, yet still they didn’t budge.

By November it became clear that no Republican would be moved to vote for any type of reform, but by this point the vocal protests and extensive lobbying by the insurance industry had made many conservative Democrats drop their support. The House leadership under Nancy Pelosi then set about whittling down the ‘public option’ in the house bill to practically nothing in order to appease these conservative democrats. In the end she was still able to pass a house bill with a public option in it. But the senate was another story. Because of its arcane procedural rules, they needed 60 votes to pass the legislation. In the end all public program expansions that could have controlled costs were taken out of the senate bill, mainly to appease former Democratic presidential candidate Joe Lieberman.

The weak senate bill and moderately strong house bill will now have to be combined in committee, a process that will pit the steel-willed Nancy Pelosi against Senate leader Harry Reid, who was unable to control his democratic caucus in the senate. Because the end result needs to be supported again by both bodies, it will be the senate version that has to prevail - because the senate won't approve it if it resembles the house version with a public option. The only danger to the bill's passage now is if liberals in the house refuse to support a bill that doesn’t include a public option.

However it is unlikely liberal representatives will stick to their principles on this. If this bill doesn’t pass, no healthcare reform will pass – and the issue will not be revisited again for at least another decade. No legislation at all would be a failure of monumental proportions for the Obama presidency and would make him effectively a lame duck for the rest of what would likely be only a four-year term. Liberals hate this bill, but they will be forced to vote for it because to kill it would deal a crippling blow to the Obama presidency, on which all their liberal hope lies.

Rough road ahead

Long-time healthcare reform champion Ted Kennedy’s often-used expression “don’t let the perfect be the enemy of the good” has been used often in the past two weeks, and his widow wrote an impassioned editorial last week asking liberals to support the bill because something is better than nothing. In the short term, she may be right. But the humiliating concessions the Democrats were forced to make in a government which they supposedly control shows that enacting progressive reform in the United States may be near impossible. And with the 2010 election looming, Democrats have precious little time to turn around a ship that already seems to be on a collision course with failure.

Speaking on Sunday’s Meet the Press, Tavis Smiley lamented that in the president’s first big fight with a powerful lobby in Washington, the White house lost and they lost big. The insurance lobby spent $260 million fighting insurance reform. That’s double what was spent by both John Kerry and George W. Bush in the 2004 presidential election combined. “It portends something very dangerous down the road for all the other issues we have to deal with where lobbies are going to be pushing back on the White House,” Smiley noted. Both of the two big fights coming up in the winter – increasing financial regulation and enacting climate change legislation – have powerful lobbies that will also be able to spend money to influence congress, buy media coverage and stoke “astro-turf” protests against the legislation by the right-wing fringe.

The healthcare debate may be just a curiosity for the rest of the world to watch, but these two upcoming fights have real impacts on the international community. If the healthcare debate is a sign of things to come, anyone in the international community who has been anxious for the US to play a leadership role in tackling the economic and climate crises should be very concerned.

As I noted after Obama's election, when Europeans seemed to be labouring under a delusion that his election was going to suddenly change the characteristics of the US, Obama is just one man. He is working with a fundamentally centre-right country where both the political system and the media plays to the strengths of conservatives. Even when their party is out of power and in disarray, the Republicans have somehow still managed to control the debate during this healthcare debacle. And that is not likely to change with the upcoming big issues that need to be tackled.

With base Democrat voters feeling demoralized, while the right-wing base is fired up by visions of impending socialism, things are looking very bad for Democrats in the November 2010 election. Republicans could easily gain control of both houses of congress, rendering Obama virtually powerless. That gives him ten months to prove to liberals that there is a point in turning out to vote in November. I’m not sure how he’s going to do it. If it becomes clear that even electing Democrats to supermajorities in congress can't change the conservative direction of the country, why should liberals bother voting at all? Just a year into Obama's presidency, liberals' hopes of a changed nation may already be lying discarded on the floor.


Tim said...

The current system in the senate makes passing any legislation impossible. The filibuster rules need to be changed if the senate wants to function again

Christopher said...

Agreed. The healthcare legislation is a joke. This is why I can't stand the concept of bipartisanship - a bullshit word used to appeal to low-IQ voters. We have Dem majorities in both legislative bodies plus a a Dem president - the people spoke. Conservatives should have no say in this. Now we are left with a joke of a bill.

Anonymous said...

I'm a liberal Democrat voter in the US and I am ashamed by what's been conceeded in this legislation. I though I had voted for a fighter in 2008, but Obama has displayed no backbone in this fight. I don't know if I will vote in 2010, I'm asking myself what is the point? NO matter who I vote for, it will still be Fox News that runs this country