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Twilight of the interest groups

obamachildshosp.JPGThink back to 1994 for a second. The insurance industry, the pharmaceutical industry, the American Medical Association, the hospital industry and the major business groups ferociously opposed Bill Clinton's health-care reform proposal. In some ways, I think that speaks to the quality and vision of Clinton's plan, but never mind that. Industry opposition was considered a primary reason for the effort's failure.

This year, the Obama administration succeeded at neutralizing every single industry. Pharma supports the bill. Insurers are incoherent on it, but there's not a ferocious and united campaign to kill the proposal. The American Medical Association has endorsed the Senate bill. The hospitals have endorsed the bill. Labor has endorsed the bill. The business community is split, with larger employers holding their fire.

You can take that as a critique of the bill's deals and concessions. But it represents a remarkable level of industry consensus. And it's been almost meaningless when it's come to Republican support. For all that liberals think the GOP is owned by insurers and pharmaceutical companies, this battle has been proof positive that they are owned by their base and they represent industry only when convenient. Imagine the concessions Pharma or the hospitals could have gotten by bringing three Republican senators onto the bill. They could've written the thing. But no such luck. Partisan incentives proved far stronger than industry interests.

The secondary lesson of this was that we really judge the extremism of legislation based on the positioning of Republicans and Democrats. If I'd told you that the Obama administration was going to release a health-care bill that would attract every Senate Democrat -- from Bernie Sanders and Barbara Boxer to Ben Nelson and Joe Lieberman -- and either endorsements or neutrality from the American Medical Association, the hospital industry, the pharmaceutical industry, AARP, labor, and much of the insurance industry (though they're press releases have become more oppositional recently), you'd have thought that was a pretty moderate, consensus-oriented bill. Which it is! But most Americans don't think that because the Republicans decided to treat it as the second coming of fascism.

Acknowledgment: The National Journal's Ron Brownstein hasn't written this up, so I can't link to him on it, but it was an interview I did with him that got me thinking about this.

Photo credit: J. Scott Applewhite.

By Ezra Klein  |  March 19, 2010; 12:32 PM ET
Categories:  Health Reform  
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Comments

Do you really think that opposing it will lead to fewer campaign contributions, Ezra?

Posted by: AZProgressive | March 19, 2010 12:38 PM | Report abuse

You're not the only one thinking along these lines. I guess one of the lessons that the Obama people learned from HillaryCare was to divide and conquer their potential opposition.

I guess it's just another sign of impending victory that we're starting to look at strategies like this. The 'validation' discussion (Rahm? Progressives?) is another sign.

Posted by: leoklein | March 19, 2010 12:50 PM | Report abuse

Why just Republicans are treating it as second coming of Fascism. Our Jame Hamsher is out with scathing criticism of this effort as give away to Corporations...

http://fdlaction.firedoglake.com/2010/03/19/fact-sheet-the-truth-about-the-health-care-bill/

I guess secretly Huffington Post also must be wishing that the bill fails. The amount of criticism these outlets are doing of Kucinich is unbelievable. FDL publishes rouge list of Dem Reps who are not voting NO because of no PO.

You see we talk about responsibility & accountability from Media, Newspaper. But we need to include Blogs as well. Pelosi brings blog media guys only for some briefing. So these Blog Media outlets are mature, influential and yet they are not behaving mature.

So what is Hamsher's recommendation finally? Effectively vote NO. Then is she accountable for all the losses which will be mounted as a result of that? It will be decades and decades before we can get anything moving here.

Bottom line - yes Obama got many interest groups on board; but we have new Internet based interest groups like FDL, DailyKos, Huffington Post which are equally irresponsible and are making life equally difficult with out any true service of the cause for the people. They are another set of actors in this drama who in the end do not bring value or rather positive end result to this political process.

Posted by: umesh409 | March 19, 2010 12:54 PM | Report abuse

I wouldn't say the battle proves Republicans are owned by their base. I would say it proves they are driven by the desire to win back power at the next election, to the extent that in the meantime, they are willing to forego all participation in policymaking.

Posted by: JeffRichmond | March 19, 2010 12:56 PM | Report abuse

"Insurers are incoherent on it, but there's not a ferocious and united campaign to kill the proposal"

Clearly you haven't watched local news in a city with even hypothetically vulnerable Democrats. Adam Smith is pretty darn safe but the US Chamber is running ads against him.

Posted by: NicholasBeaudrot | March 19, 2010 1:07 PM | Report abuse

Maybe. On the other hand, imagine you're a lobbyist under two alternative scenarios:

1. You've got a really good chance to defeat any aggressive bill. What do you do? Oppose it tooth and nail. See 1994.

2. Some sort of at least somewhat aggressive bill has a fairly high probability of passing. What do you do? Make some basic concessions and fight the small, medium and arcane stuff. See 2010.

Posted by: ostap666 | March 19, 2010 1:17 PM | Report abuse

Insurers are incoherent on it, but there's not a ferocious and united campaign to kill the proposal.


Ezra,

you've talked to Karen Ignagni before.

you know they're not incoherent on it. They want cost controls. THey aren't there.

The difference for insurers between 1994 and 2010 is that now they realize that the system is on an unsustainable path. Problem is that this reform doesn't really change it much.

Posted by: visionbrkr | March 19, 2010 1:24 PM | Report abuse

As much as progressives hate it, President Obama and White House cleared the deck as much as they could of industry or industry-related opposition.

They have not gotten credit for making it possible for the House and Senate to do their jobs -- write legislation.

During the Clinton years, when Hillary and Ira Magaziner were holed up in the White House, cutting out everyone from Donna Shalala (then HHS Sec'y) to Congress and everyone else, the very tight hold the WH kept on the process gave fuel to special interests and the Republicans.

As messy as this process was, the WH made it possible for all players to have a stakehold, and thereby neutralizing or limiting much of the dissent. What has been left are the diehard players from before: Republicans and AHIP.

The President, Rahm and key players within the WH and Congress deserve credit for creating room for legislation to happen.

Posted by: jade_7243 | March 19, 2010 1:29 PM | Report abuse

As much as progressives hate it, President Obama and White House cleared the deck as much as they could of industry or industry-related opposition.

They have not gotten credit for making it possible for the House and Senate to do their jobs -- write legislation.

During the Clinton years, when Hillary and Ira Magaziner were holed up in the White House, cutting out everyone from Donna Shalala (then HHS Sec'y) to Congress and everyone else, the very tight hold the WH kept on the process gave fuel to special interests and the Republicans.

As messy as this process was, the WH made it possible for all players to have a stakehold, and thereby neutralizing or limiting much of the dissent. What has been left are the diehard players from before: Republicans and AHIP.

The President, Rahm and key players within the WH and Congress deserve credit for creating room for legislation to happen.

Posted by: jade_7243 | March 19, 2010 1:29 PM | Report abuse

1994 was great. I'd just graduated high school, and left chicago for southern california, just in time for the OJ trial!!!

I miss the 90's. Politics was a joy to discuss then, without this never ending sense of decline and despair that accompanies these political issues now.

Posted by: zeppelin003 | March 19, 2010 1:37 PM | Report abuse

He BRIBED the right people. Nothing to be proud about.

Posted by: obrier2 | March 19, 2010 1:44 PM | Report abuse

As of September 2009, the various health care interest groups had spent close to $400 million lobbying on this issue.

The money spent clearly resulted in access and concessions. In the case of the Pharmaceutical industry, they received major concessions in the form of largely preserving the payment scheme of the Medicare Prescription Drug, "Improvement," and Modernization Act. They are receiving increased patent protections. Theoretically, could they have gotten more than was given to them in 2003? This strikes me as doubtful -- they got pretty much everything that they wanted back at that time, and I suspect they were simply satisfied at this point to lock in those gains with an administration who had threatened to revise the terms of the 2003 deal during the campaign season (something that might have been possible as part of a more piecemeal, and less ambitious approach to reforming the health care system).

Many of the industry interests were able to limit the inclusion of a public option -- even though the measure enjoyed widespread public support.

Money talked in the process -- and to some extent both parties were rewarded (e.g. the relevant industries are not punishing the GOP for their uniform opposition -- the GOP still enjoys a per capita advantage even if the Dems enjoy a slight advantage in overall dollars; compare this with the huge partisan financial advantage that Big Pharma provided to the GOP from 2000-2006).

If the Obama administration is able to get this bill through Congress, it will be a testament to the ability of the administration -- and Congress -- to thread the needle.

However, if the legislation passes, it will undoubtedly be an ongoing battle to preserve key elements of the bill with key groups seeking to either strengthen or weaken provisions (the latter when the public's attention is turned to some other issue).

The bill strikes me as a testament to the influence that interest groups continue to have in the process.

Essentially we are getting a bill modeled on a moderate GOP template from the 1990s and early 2000s (e.g. a plan which combines elements of John Chafee's vision and that of Mitt Romney and Democrats in MA).

To the extent that there are gains, it strikes me that many of these could be tenuous. Undoubtedly the insurance industry will continue to push hard to influence the enforcement of provisions at the state level; it will continue to push hard to achieve portability through a lowest common denominator approach. When the economy recovers too, I suspect many of the other interests groups might start pushing for a larger share of the pie.

While I think the bill on balance could do a lot of good, that understanding is tempered by many considerations -- including the realization that we are far from seeing the twilight of interest groups.

Posted by: JPRS | March 19, 2010 1:49 PM | Report abuse

"For all that liberals think the GOP is owned by insurers and pharmaceutical companies, this battle has been proof positive that they are owned by their base and they represent industry only when convenient. Imagine the concessions Pharma or the hospitals could have gotten by bringing three Republican senators onto the bill. They could've written the thing. But no such luck. Partisan incentives proved far stronger than industry interests."

I disagree. Other bloggers have written about the notion of class solidarity among CEOs, and I think it applies to corporate interests generally: the game, for them, is to fight as hard as they can, as a class, against ANY regulation. If each industry only fights against regulation that directly affects them, they can be taken out, one at a time. But if they ALL help each other fight against ALL regulation, they're a much tougher target, and any given industry is less likely to see increased regulation.

So the incentives of corporate interests overall proved stronger than industry interests. This is a recurring story.

And as far as the crazy teabagging GOP base is concerned - well, who do you think is manipulating these people? FOX News, Glenn Beck, Rush Limbaugh, wingnut bloggers. Beck may have gone over the line to pure crazy, but FOX, Rush, and most wingnut bloggers are corporate shills down to their bones.

It's not like the tea partiers are thinking for themselves. Hell, it's not like what's going through their brains passes for thought.

Posted by: rt42 | March 19, 2010 1:59 PM | Report abuse

"Imagine the concessions Pharma or the hospitals could have gotten by bringing three Republican senators onto the bill. They could've written the thing."

That's the crux of the argument. It's possible that those two or three senators tried, but what they tried to get didn't meet a Dem criteria about deficit impact or something. In other words, industry extracts some concessions from Dems, has Reps try to get some more, but the latter fails due to Dems holding their line. Can't say for sure unless we know whether the Dems offered anything more to them for their votes than what's now in the bill.

Posted by: CatfishHunter | March 19, 2010 2:24 PM | Report abuse

wait weren't progressives whining that Wellpoint wrote this bill anyway? That there's really so very little difference in Dems and Reps? Guess it depends on what nutty wing you talk to.

Posted by: visionbrkr | March 19, 2010 2:50 PM | Report abuse

shorter Ezra: write a bill that pays off industry insiders and that marginally meets goals of expanding access, then call it a historical win.

Posted by: goadri | March 19, 2010 2:58 PM | Report abuse

The interesting question will be how much corporate money comes in to help the GOP repeal the bill. Pharma largely got what it wanted and ran ads FOR the bill. The AMA endorsed it. The insurers are unhappy because they wanted a STRONGER mandate, something the GOP isn't likely to give them--they are readying lawsuits to declare it unconstitutional. The Chamnber will be fighting greenhouse gas regulation as its top priority.

Even granting the point about CEOs standing together to kill the concept of regulation, once it passes is the will going to be there to give the big bucks to support repeal or do small fixes?

I have always wondered how much of Dem successes in 2006 and 2008 was due to choking off some of the more corrupt sources of GOP cash, such as Abramoff, the San Diego area defense contractors etc.

Posted by: Mimikatz | March 19, 2010 4:49 PM | Report abuse

As always, Ezra doesn't know what the f..k he's talking about. Every industry is bribed to the bejeezusbelt in this unaffordable, unfunded liability.

Posted by: millionea7 | March 19, 2010 5:09 PM | Report abuse

millionea7,

An unfunded federal liability is Medicare Part D. It's the 2001 and 2003 tax cuts, which included no off-sets.

At the time of its passage Medicare Part D was an entirely new entitlement program that included no budget offsets (e.g. program cuts), and no tax increases, or new taxes. There was no effort in the final legislation to actually pay for the bill.

You can say a lot of things about the current health care proposal, but "unfunded liability" is not one of them. Even if the CBO's projections are wildly off -- the legislation still contains hundreds of billions in cuts to existing Medicare programs like Medicare Advantage over the next decade; it also includes tax increases and other efforts to pay for the program.

Posted by: JPRS | March 20, 2010 12:23 AM | Report abuse

Interesting thoughts. But you're not considering who created the monster. If Republicans are beholden to a base of crazy people, it's because Republican lies & exaggerations made those people crazy. The Republicans could have been taking their back-door deals with big Pharma, but once they turned the health care bill into a Communist plot to kill granny, they couldn't then turn around & own it.

The Constant Weader at www.RealityChex.com

Posted by: marieburns | March 20, 2010 8:48 AM | Report abuse

It's not twilight for every interest group. Big Labor has done a lot of arm-twisting.

Posted by: mike_w_long | March 20, 2010 9:25 AM | Report abuse

Ezra,
This is simple fawning over the Administration. I thought you were better than this. Your understanding of what goes on is full of facts but surprisingly superficial.

Buying off all industry groups is not the same thing as neutralizing them. "Neutralizing" implies that they DON'T get what they want, or more accurately, the health care consumer and the American people got what they want IN SPITE OF industry. This bill doesn't give people what they want (public health insurance at least as an option if not as a universal system) AND give most industries a lot of what they want.

Posted by: michaelterra | March 20, 2010 4:07 PM | Report abuse

"This year, the Obama administration succeeded at neutralizing every single industry."? Ezra, I guess you have aready noticed from the negative reaction of the progressive blogosphere that "neutralizing" was a bad choice of words. "Appeasing" would have been better. Or "selling out to".

Posted by: Gray62 | March 21, 2010 10:47 AM | Report abuse

Mr. Klein,
You've really gone over the top with this idiotic piece.
The rapacious health care industries & lobbyists who you say have been "neutralized" by Obama? They WROTE THE D*MN BILL! Have you never heard of Liz Fowler, for chrissakes?
The real explanation for the GOP's fervent opposition is that the Democrats will be raking in more campaign contributions from the health-care cartel, as a result of this industry-friendly legislation.
This administration has been as deferential to corporate interests as any other, perhaps even more so.
With all due respect, Ezra, please remove your head from the president's hindquarters and take a look at just how corrupted by special interest money our government has really become.
"Twilight of the interest groups", my fat fanny!

Posted by: pointy | March 21, 2010 4:12 PM | Report abuse

Twilight? Huh? More like Heyday for the "interest" groups.

Obama rolled over (bent over?) for these corporate interest groups in ways even Republicans never attempted, giving them a fortune from the pockets of hard working Americans.

Klein should be asking the hard questions - like what deals Obama struck instead of pretending this is some kind of victory against special interests.

Posted by: ophelia3 | March 21, 2010 7:39 PM | Report abuse

Mr. Klein, you are incorrect, sir. The "interest groups" were not "neutralized." Rather, they were bought off with trillions of dollars of what can best be described as bribes.

Posted by: Jake1976 | March 21, 2010 10:42 PM | Report abuse

This is completely absurd. Sure, the "twilight of the special interests". Yeah, yeah, yeah. Just stay away from the curtain, and absolutely do not look behind it. Just like the big head says.

Posted by: junket | March 22, 2010 12:22 PM | Report abuse

Is this snark?

The interest groups wrote this bill. The drug companies insulated themselves from price competition, the insurance industry forced mandatory customers with competition or regulation and both industries supported the bill they wrote.

This is not only the ascendancy of the interest groups, this represents their ability to cement themselves into the fabric of the policy and democratic process. The interest groups won.

Please do not confuse a temporary GOP political defeat with diminished interest group power. The two were mutually exclusive in the health insurance debate. The interests groups allowed the Democrats to have a political victory only after the Democrats bribed (acceded to extortion?) and statutory enriched those same interest groups.

Pretty sad statement.

Posted by: Kevin_F_Leahy | March 22, 2010 6:39 PM | Report abuse

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