Frontline
Obama's Deal
Posted April 13, 2010, updated April 23, 2010
PRODUCED BY
Michael Kirk
Jim Gilmore
Mike Wiser
REPORTED BY
Jim Gilmore
WRITTEN AND DIRECTED BY
Michael Kirk
|
Jim Gilmore |
Sen. BARACK OBAMA (D-IL), Presidential
Candidate: Fired up! Ready
to Go!
ANNOUNCER: Tonight on FRONTLINE-
Sen. BARACK OBAMA: Your voice can win an election!
ANNOUNCER: He promised change.
Sen. BARACK OBAMA: Your voice can create the kind of America
we dream about!
ANNOUNCER: Then he took on one of Washington's toughest issues.
Sen. BARACK OBAMA: Let's be the generation that says we
will have universal health care in America. We can do that!
ANNOUNCER: What happened next surprised everyone.
Sen. ORRIN HATCH (R-UT), Finance Committee: The only way you they could get it
through was to bribe their members.
TOM DASCHLE (D-SD), Senate Majority Leader,
2001-03: Hundreds of
millions of dollars spent on lobbying.
CHRIS JENNINGS, Sr. Clinton Health Care Adviser,
1993-01: Very political,
very aggressive at creating deals.
DAVID GERGEN, Counselor to President Clinton,
1993-94: Those deals can
be pretty smelly.
NEWSCASTER: Another day, another headache for President Obama.
NEWSCASTER: Is this just the dirty reality of politics?
NEWSCASTER: News of a back room deal-
SCOTT BROWN (R-MA), Senate Candidate: All those back room deals- it's just
wrong, and we can do better!
PETER BAKER, The New York Times: It was a wake-up call that President
Obama wasn't everything that they thought he was.
SHERYL GAY STOLBERG, The New York
Times: The president
has staked his entire first term on this.
RYAN LIZZA, The New Yorker: There's always two sides of Obama. You
have to lift up people, but at the end of the day, it is about deal making.
ANNOUNCER: Tonight on FRONTLINE, Obama's Deal.
Pres. BARACK OBAMA: At stake right now is not just our
ability to solve this problem but our ability to solve any problem.
NEWSCASTER: It's the inauguration day of the nation's first
African-American president.
NARRATOR: Barack Obama had promised change.
NEWSCASTER: He spoke of no less than remaking America.
NARRATOR: His signature issue, universal health care.
Pres. BARACK OBAMA: In this effort, every voice has to be
heard.
NEWSCASTER: This is a huge issue the president is taking on now.
Pres. BARACK OBAMA: Every idea must be considered.
NEWSCASTER: Everybody loves the idea of health care reform.
Pres. BARACK OBAMA: Every option must be on the table. There
should be no sacred cows.
NEWSCASTER: Could health care reform really happen?
NARRATOR: From the very beginning, even inside his own West Wing,
the issue would test President Obama.
RYAN LIZZA, The New Yorker: The White House had a debate about
whether they should actually go forward with it.
NARRATOR: No president had ever made headway on comprehensive health
care reform.
JONATHAN COHN, Sr. Editor, The New
Republic: First if became,
"Let's not do health care." Then it was scale health care back.
RYAN LIZZA: Vice President Biden was opposed to doing it, absolutely
opposed to doing health care. Biden had seen too many universal health care
programs die in his long time in Washington, and he warned Obama and his aides
not to do it.
DAVID NEXON, Fmr. Kennedy Aide: The economic team was saying, "Oh,
listen, we've got to spend all our energy on fixing the recession. We can't
launch a big spending program at this time."
NARRATOR: The president took it all in, and then it was chief of
staff Rahm Emanuel's turn.
SHERYL GAY STOLBERG, The New York
Times: He's a brilliant
political strategist, hard-nosed, profane, just a force of nature.
CHRIS JENNINGS, Sr. Clinton Health Care
Adviser, 1993-01: Very political,
very aggressive at creating deals. In fact, probably more so than one would
anticipate someone from the Obama administration being.
NARRATOR: Obama's choice of an inside deal maker like Emanuel had
surprised many of his supporters.
RYAN LIZZA: He's sort of the opposite of Obama in a lot of ways. It
was an immediate indication that this White House was not going to be about
"Kumbaya" and getting along and trying to do everything they could to
win Republican votes, they were going to try and win.
NARRATOR: Emanuel told Obama to win, he needed to move fast.
PETER BAKER, The New York Times: He recognized that the moment Obama was
going to be at his strongest was the beginning.
NARRATOR: In the end, the president decided to go for health care
right away to make a larger point.
DAN PFEIFFER, White House Communications
Director: We were sitting
in the Oval Office and we were sort of having a debate around health care at
one point, and the president said, "It's about health care, but it's not
really about health care. It's also about proving whether we can still solve
big problems in this country." And this was going to be the test case for
that.
NARRATOR: In his first address to Congress, the president wasted no
time putting health care on the nation's agenda.
Pres. BARACK OBAMA: Let there be no doubt. Health care
reform cannot wait, it must not wait, and it will not wait another year!
SHERYL GAY STOLBERG: The president has staked his entire
first term on this.
MATT BAI, The New York Times Magazine: There's no bigger priority than health
care.
Pres. BARACK OBAMA: [February 24, 2009] We can no
longer afford to put health care reform on hold. We can't afford to do it!
NARRATOR: At the time, it looked like an easy victory for the
president.
TOM DASCHLE, (D-SD), Senate Majority Leader, 2001-03: Failure to do this would be viewed as a
failure to govern, an inability to use the 60 vote majority that we have in the
Senate and the significant margin we have in the House.
JOHN PODESTA, Co-Chair, Obama Transition,
2008-09: I don't think
anyone in the White House or on Capitol Hill believe that failure's an option
here. They have to be successful in getting health care reform done or they'll
pay a tremendous political price.
NARRATOR: Rahm Emanuel knew about the political price an
administration pays when it loses the battle for health care reform. Sixteen
years ago, he worked in the Clinton administration.
DAN BALZ, The Washington Post: The Clinton effort to do health care was
sort of a classic "smart people will solve your problems" approach to
an enormously complex, messy political issue.
MATT BAI: Bill Clinton delivered a, you know, thousand-page plan
onto the doorstep of Congress after a year and said,"My wife came up with
this. It's a really good plan. Pass it," at which point the chairmen,
who'd been there longer than them and were going to be there longer than them,
basically tossed it aside and killed the bill.
DENNIS RIVERA, Service Employees Int'l Union: I remember Patrick Moynihan, the senator
from New York, telling me in his very thick Irish accent that he just got this
document, 1,273 pages, describing how health care reform should be done and
basically
says, "I'm not even going to read
it."
NARRATOR: The Clinton White House also angered powerful special
interests.
TOM DASCHLE: The AMA opposed them. The insurance companies opposed
them. The doctors across the board, hospitals, you name it, they were on the
other side, and the Clinton administration understood that there was little
hope that they would ever bring them around.
"LOUISE": [television commercial] But this
was covered under our old plan!
NARRATOR: They buried the administration in an avalanche of negative
TV commercials.
"HARRY": The government may force us to pick from
a few health care plans designed by government bureaucrats.
"LOUISE": Having choices we don't like is no
choice at all.
"HARRY": And they choose.
"LOUISE": And we lose.
DAVID GERGEN, Counselor to President Clinton,
1993-94: The Harry and
Louise ads cost and cost and cost us in the Clinton years.
Sen. GEORGE MITCHELL (D-ME), Majority Leader: It is clear that health insurance reform
cannot be enacted this year.
NARRATOR: They were handed a devastating defeat. Emanuel had seen it
all. Sixteen years later, as President Obama's chief of staff, he would try do
things differently.
SHERYL GAY STOLBERG: What did he do that's different from
what Bill and Hillary did? Everything. Everything.
DAN PFEIFFER: The great lesson that everyone shared,
both folks like Rahm, who were there, and historians, is you need congressional
buy-in on the front end.
NARRATOR: The White House would hold Congress's hand every step of
the way. Obama and Emanuel had stocked the West Wing with an all-star line-up
of former congressional insiders.
JOHN PODESTA: He's got Pete Rouse, who served as both
Daschle and then Senator Obama's chief of staff.
MATT BAI: The head of management and budget, Peter Orszag, was the
head of the Congressional Budget Office.
SHERYL GAY STOLBERG: Melody Barnes, who is the head of the
Domestic Policy Council, was for years a top aide to Ted Kennedy.
JOHN PODESTA: Phil Schiliro, who was the top staff guy
for Henry Waxman.
MATT BAI: In the communications department, Robert Gibbs, who worked
in the Senate, who's now the press secretary.
JOHN PODESTA: So they had a very, very strong team of
people who knew the Hill, knew how to work the Hill, knew how to have success
on the Hill.
NARRATOR: And to run it, they brought back the quintessential
Washington insider, former Senate majority leader Tom Daschle.
MICHAEL MYERS, Sr. Adviser to Sen. Kennedy,
1998-09: It was an
enormous signal that this really is a priority for the administration. They're
not messing around, they're bringing in the pros, they're bringing in the big
guys to get this done.
NARRATOR: Obama decided he would stay in the background. He would
encourage Congress to come up with a plan, fast track it, relying on good will
and personal
relationships to get it passed. But the idea of hiring insiders
almost immediately hit a snag.
NEWSCASTER: ABC News has learned of problems faced by another of
President Obama's cabinet choices, Tom Daschle, the president's-
NEWSCASTER: Tom Daschle is trying to save his nomination.
NEWSCASTER: -an unwanted distraction for the Obama administration-
COMMENTATOR: And I think that just shows a problem with integrity, and
we cannot afford that in our government right now..
NARRATOR: The once powerful Senate majority leader had made enemies.
The Finance Committee chairman, Max Baucus, a Democrat from Montana, was an old
rival.
CECI CONNOLLY, The Washington Post: Daschle was not helped by the fact that
Max Baucus was not necessarily a close friend or ally.
NARRATOR: Baucus allowed Republicans on the committee to tear into
Daschle's personal finances.
DAN BALZ: You had a very rigorous Senate Finance Committee staff
that was scrubbing the tax returns of the nominees that were going through that
committee that's unlike anything that I think we've seen in many years.
NARRATOR: Senate investigators found income tax problems. Daschle
had left the government and cashed in, making millions at a Washington law
firm. Along the way, a client had provided a limo for Daschle's personal use.
Eventually, he paid more than $140,000 in taxes and penalties on the gift.
JONATHAN COHN: To this day, I think there are people in
the greater Daschle universe who say the reason that Tom Daschle did not make
it through the confirmation process is because Max Baucus gave him such a hard
time, dragging out the confirmation, and the details and all the financial disclosures.
NEWSCASTER: There is plenty of drama in Washington at the moment-
NEWSCASTER: -Republicans talking about limousine liberals who don't
even pay taxes on their limousines-
NEWSCASTER: It's a very bad cloud over this nomination.
POLITICIAN: It's disheartening, obviously. It frustrates me.
NEWSCASTER: Do
NEWSCASTER: Does
this really represent the kind of change that Mr. Obama said he would be
bringing to his administration?
NARRATOR: Daschle
had been around long enough to know he had become a liability for the new
president.
CECI
CONNOLLY: Obama quickly, calmly accepted the resignation offer, did
not pause, did not look back.
NARRATOR: He'd
campaigned as a political outsider but surrounded himself with insiders and
watched as one of them was taken down in a political knife fight. Seven weeks
into his presidency, in March of 2009, the new president gathered in one room
at one time friends and potential enemies alike.
NEWSCASTER: They're
talking about lawmakers, doctors, nurses, hospitals-
NEWSCASTER: -bringing
together lawmakers and interest groups, cabinet officials, members of Congress,
the White House team conferring on how to overhaul health care.
Pres.
BARACK OBAMA: I know people are afraid we'll draw the same old lines in
the sand and give in to the same entrenched interests and-
CECI
CONNOLLY: Many of these players for years, if not decades, had a
record of opposing any sort of health care reform efforts.
NARRATOR: Rahm
Emanuel engineered this strategy. Everyone remembered how special interests had
sabotaged the Clinton plan.
PETER
BAKER: They want to get people at the table. They don't want this
to be, at first at least, a fight against the insurers, a fight against the
medical industry. They want- the pharmaceutical industry. They want to get
buy-in.
Pres.
BARACK OBAMA: I want to switch gears and get some groups in here.
NARRATOR: Obama's
advisers had told him that many of the lobbyists in the room were prepared to
cut a deal. Karen Ignagni is the chief lobbyist for the insurance industry.
Pres.
BARACK OBAMA: Why don't you wait for a mike, Karen, so that-
KAREN
IGNAGNI, Pres., America's Health Insurance Plans: We
entered this year being committed to change, being committed to restructuring
and committed to actually helping to get this done.
We hear
the American people about what's not working. We've taken that very seriously.
You have our commitment to play, to contribute, and to help pass health care
reform this year.
Pres.
BARACK OBAMA: Good. Thank you, Karen. That's good news. That's America's
Health Insurance Plans. [applause]
SHERYL
GAY STOLBERG: This was really astonishing. Here she was, on record,
saying, "We're going to help you." And so, too, were the drug
companies.
WENDELL
POTTER, V.P., CIGNA Insurance, 2003-08: Karen Ignagni wanted to
be sure that she was at the White House, representing the industry in the most
positive way that she possibly could. It was part of the industry's charm
offensive, as I call it. The industry knew that it was going to be under attack
this year, or at least the legislation would focus very heavily on the
insurance industry.
JONATHAN
COHN: And you know, look, I mean, they could read the political
tea leaves, You know, the saying in Washington was, "You can be at the
table or you can be on the menu."
NARRATOR: Privately,
Ignagni was playing hardball. She said she'd support the bill only if everyone
was required to buy health insurance.
TOM
DASCHLE: They said for the first time they would support universal
coverage with one caveat, and that is that we have an individual mandate
requiring people to buy insurance, so it's not just the sick that buy insurance
but everybody. That was the quid pro quo.
NARRATOR: Obama
had campaigned against the mandate. Ignagni was insisting he reverse himself.
WENDELL
POTTER: They want to make sure that they get a requirement that
all of us buy health insurance. They want to make sure that we are all forced
by to buy products from them. And they want to make sure that there's no
alternative other than the private insurance market. That's why they're so
adamantly opposed to the public option.
NARRATOR: Obama
had also supported the public option, a government health plan, and Ignagni
wanted him to walk away from that, too.
JONATHAN
COHN: It is not wiping out the private insurance industry, it's
just creating a public insurance plan that would compete with private insurers.
But they wanted no part of that.
NARRATOR: Emanuel
would keep Obama away from direct deal making with Ignagni, but with Tom
Daschle gone and health care's most powerful advocate, Ted Kennedy, dying of
cancer, the negotiations would have to be handled by that powerful chairman of
the Senate Finance Committee, Max Baucus.
CECI
CONNOLLY: Who do they get after losing Tom Daschle and largely Ted
Kennedy? Max Baucus. Not the first choice of most of the people in the West
Wing.
MATT
BAI: He's not glamorous. He's one of the senior most senators.
Very few Americans know anything about him.
PETER
BAKER: He's from Montana, a more conservative Democrat than a lot
of people in the White House, worked with the Bush administration on things
like tax cuts and issues that are anathema to a lot of the liberal base.
NARRATOR: Cutting
deals with health care industry groups was right down Max Baucus's alley.
PAUL
BLUMENTHAL, Sunlight Foundation: In 2008, during his
reelection campaign, which is really when this debate began, he raised well
over a million dollars only from the health insurance sector. That's a pretty
astounding amount for somebody who's going to have a central role in this
debate.
NARRATOR: In
all, Baucus received more than $2.5 million from special interest groups in the
health industry.
CECI
CONNOLLY: What the campaign contributions often do is that they open
doors. They give industries entree to important congressional staffers and lawmakers.
[www.pbs.org:
Follow the campaign contributions]
NARRATOR: Privately,
Ignagni pushed Baucus for a bill that would include the mandate to buy
insurance and kill the public option. That didn't sit well with the president's
liberal supporters.
HOWARD
DEAN, Chair, Democratic Nat'l Cmte., 2005-09: The Senate bill,
you know, frankly, is just an insurance company bill. The insurance companies,
actually, literally did write it. There were two senior staffers in Max
Baucus's office, one who used to work for United Health Care and one who used
to work for WellPoint, who wrote the bill. It's a great bill from the insurance
companies' point of view. It doesn't happen to do a whole lot to change the
system and to bring reform.
NARRATOR: The
left counterattacked at a hearing in May.
NEWSCASTER: Going
to take you live to a Senate Finance Committee hearing looking at health care.
Sen.
MAX BAUCUS (D-MT), Finance Committee Chairman: The
committee will come back to order!
NARRATOR: Liberal
outrage arrived in Baucus's own hearing room, as health care activists, one
after another, shouted him down.
PROTESTER: With
all respect to Senator Baucus, this hearing is public, but the public is not
being heard.
PROTESTER: There's
millions for the insurance industry, the HMOs and the pharmaceutical companies,
and you're denying the people a voice!
PROTESTER: We
want a seat at the table.
PROTESTER: Why
are their voices not being heard? Every health care lobbyist in America is at
the table!
NARRATOR: The
activists were especially angry that Ignagni had a seat at the table but they
did not.
MARGARET
FLOWERS, M.D., Physicians for a Nat'l Health Prgm.: When
we received the list of the dates of the hearings and who was being invited,
and we saw who was invited, we requested that we have one person invited in
the, you know, series of three hearings. They were inviting 41 people total to
testify. And they said no.
Sen.
MAX BAUCUS: Committee will be in order. The committee will stand in
recess until the police can restore order.
KAREN
IGNAGNI: I thought Senator Baucus did a spectacular job of handling
that, not getting rattled in any way, handling it in a not only very
professional way but an empathetic way.
NARRATOR: Baucus
himself declined to discuss his role with FRONTLINE.
NEWSCASTER: Five
people were arrested at a Senate Finance Committee meeting hearing on health
care reform and charged with disruption-
NEWSCASTER: So
what Chairman Baucus has decided, this option cannot be part of the discussion
at a Senate hearing? I think that's wrong. I don't think it's fair!
NARRATOR: That
spring, Baucus and the White House were also secretly negotiating another deal,
this time with the pharmaceutical industry. Their top lobbyist was a classic
Washington character.
CECI
CONNOLLY: Billy Tauzin is a New Orleans politician, a very colorful,
lively figure who took over the pharmaceutical industry trade group, PhRMA.
Rep. MICHAEL
BURGESS (R), Texas: Billy Tauzin is a formidable negotiator. And Billy Tauzin
knows how things work on the Hill, and he knows how things work in this town.
NARRATOR: His
most notorious act took place when then Congressman Tauzin and Senator Baucus pushed
through a Medicare prescription drug bill.
Rep.
BILLY TAUZIN (R), Louisiana: We are about to pass a
$400 billion insured drug account for these citizens who have no drug insurance
today.
NARRATOR: In
2003, in the middle of the night, Tauzin kept the House voting machine open
until he could scrounge and wheedle just enough votes to pass the controversial
measure.
Sen.
SHERROD BROWN (D-OH), Health Committee: It was a payoff to two
industries, the drug industry and the insurance industry. There was no question
about it. They did very, very well out of this bill.
NARRATOR: It
meant hundreds of billions of dollars for the pharmaceutical industry.
Rep.
DAN BURTON (R), Indiana: The comptroller general said when we
passed the Medicare prescription drug bill that it was the worst piece of
legislation, fiscally, that he had ever seen. And he said over time, it was
going to be a disaster.
NARRATOR: It
continues to be a classic Washington story of money and behind-closed-doors
maneuvering. It made Tauzin's reputation.
Rep.
MICHAEL BURGESS (R), Texas: You know, smart money's always going
to be on Billy Tauzin in a negotiation because he knows what he's doing.
NARRATOR: And
just over a year later, Tauzin was hired as the pharmaceutical industry's top
lobbyist.
Rep. DAN
BURTON: Billy got a very good job with PhRMA. I think he makes
around $2 million a year. At least, that's what I've been told. Many of his
staff people went with him or went to work for pharmaceutical companies. And
Billy was the main pusher of the bill.
NARRATOR: In
the 2008 presidential campaign, the incident became one of Barack Obama's
favorite complaints about the Washington political culture.
Sen.
BARACK OBAMA, Presidential Candidate: And you know what? The
chairman of the committee who pushed the law through went to work for the
pharmaceutical industry making $2 million a year. Imagine that. That's an
example of the same old game playing in Washington. You know, I don't want to
learn how to play the game better, I want to put an end to the game playing.
NARRATOR: But
secretly, one year later at Max Baucus's Senate office, the Obama White House
was negotiating with Billy Tauzin.
PETER
BAKER: It's a very Rahm Emanuel idea, get them at the table, make
them agree to something with the threat that something worse could be out there
if they don't. And once you get this buy-in, that should eliminate pockets of
opposition.
NARRATOR: Billy
Tauzin knew that during the presidential campaign, Barack Obama had promised to
slash drug prices.
CECI
CONNOLLY: PhRMA had some real concerns that there would be an effort
by the Democrats to enable the government to negotiate for its prices on
Medicare prescription drugs, and this could be potentially a very big hit to
the industry.
NARRATOR: Tauzin
also knew the White House was eager for any early deal that appeared to contain
costs.
JOHN
PODESTA, Co-Chair, Obama Transition, 2008-09: I think he was
smart in saying that "If I get in early, I can make a deal that my members
can live with."
NARRATOR: He
proposed a complicated formula which he said would cut drug costs by $80
billion over 10 years. White House aide Jim Messina took the deal to the Oval
Office. Emanuel and Obama believed there was an implicit threat attached. If
they didn't agree to the deal, Billy Tauzin could do real damage.
DAVID
NEXON, Sr. Adviser to Sen. Kennedy, 1983-05: From the point of
view of Obama and the Finance Committee, it's a huge advantage to have this
interest group on your side.
CECI
CONNOLLY: PhRMA certainly had deep enough pockets to do some real
damage advertising-wise if it wanted to.
RYAN
LIZZA, The New Yorker: If you can stop $100
million from being spent to attack your plan, that looks very- you know, that's
not such a bad deal.
NARRATOR: But
taking the deal meant the president would back off his campaign promise to
dramatically cut drug prices.
TOM
DASCHLE: We talked about it. It's always been my practice not to
reveal conversations I've had with the president or people in the White House.
NARRATOR: Tom
Daschle continued to visit the Oval Office in an unofficial capacity.
TOM
DASCHLE: The president saw it as an opportunity to seize the
moment, you know, to get signatures on the line, to say, "This looks like
an opportunity we haven't had before. So let's lock them in to the extent we
can. I'm going to seize the moment."
DAN
PFEIFFER, White House Communications Director: They
brought stuff to the table and were willing to work with us. And the president
said that having people at the table is better than having them throwing stuff
at the table.
INTERVIEWER: But
not an easy thing to do?
DAN
PFEIFFER: No, certainly not. Certainly not. And went in with full
eyes open that there are going to be people in our party who would be critical
of that.
NARRATOR: The
president accepted the deal.
RYAN
LIZZA: There's always two sides of Obama. You have to have the
sort of inspirational message. You have to have something to lift up people. But
at the end of the day, when you're passing legislation, it is about deal
making. There's no other way to do it.
NARRATOR: In
June, the president announced the broad outlines of the PhRMA deal. He did not
mention what he had given up to get it.
Pres.
BARACK OBAMA: [June 22, 2009] This is a significant breakthrough
on the road to health care reform, one that will make the difference in the
lives of many older Americans.
NARRATOR: It
didn't take long for the secret to leak.
NEWSCASTER: Another
day, another headache for President Obama.
PROTESTER: Is
this just the dirty reality of politics?
PROTESTER: News
of a back room deal riled fellow Democrats.
NARRATOR: Once
again, it was the liberals in the president's own party who began to criticize
the deal.
NEWSCASTER: There's
also growing concern that the Obama administration secretly made concessions to
drug companies.
PETER
BAKER, The New York Times: The liberals were
watching what was going on with increasing alarm because what they saw was the
new White House getting in bed with the people that they thought they had been
fighting against for all these years.
NEWSCASTER: Obama's
rewarded the drug companies in a big way.
PROTESTER: What
did the pharmaceutical industry get in return?
JOHN
PODESTA: I think people who thought that the pharmaceutical
industry was still reaping profits that were excessive were unhappy with that
deal and were particularly unhappy that it got cut behind closed doors.
PETER
BAKER: It was a wake-up call, really, to a lot of liberals that
President Obama wasn't everything that they thought he was.
NARRATOR: For
months, the president had been doing deals- insurance and pharmaceuticals, Now
it was time to write a bill and to fulfill another campaign promise, to create
a Washington beyond partisan politics.
DAN
BALZ: A bipartisan outcome, even in a minimalist sense, was
certainly a very, very high priority of President Obama.
NARRATOR: Again,
Max Baucus would have to be the point man. Getting through his Senate Finance
Committee would be the crucial test.
PETER
BAKER: If they could get five, ten Republicans, that would have
been enough. And Max Baucus was, they thought, their key to getting that.
NARRATOR: Baucus
had a close relationship with the ranking Republican, Chuck Grassley.
Sen.
CHARLES GRASSLEY (R-IA), Finance Committee: Senator Baucus and
I were still working on what we thought ought to be a- not just a bipartisan
bill but a kind of a consensus bill. In other words, something that would get
75 or 80 votes.
NARRATOR: But
others said they saw nothing for the Republican Party in Baucus's proposals.
Sen.
ORRIN HATCH (R-UT), Finance Committee: I found myself coming out
of those secret meetings, those private meetings, and criticizing virtually
everything they were doing. So I talked to Max, I talked to Chuck Grassley and
others and said, "Look, I don't think I can support this."
NARRATOR: And
from the beginning, Grassley was under intense pressure from his own party.
JONATHAN
COHN, Sr. Editor, The New Republic: Charles
Grassley is in line for a committee chairmanship. The Republican Party plays
hardball with its members. I think the message got through that he was
jeopardizing his standing in the party by playing too nice with health care
reform.
MIKE
MYERS, Sr. Adviser to Sen. Kennedy, 1998-09: It became clear
that the Republican game plan was going to be just to say no, to deny this
president any victories.
JONATHAN
COHN: There was enormous pressure from the Republican
leadership. They did not want to be part of this. They did not want to make a
deal. The word went out.
DAN
PFEIFFER: You had the Senate leadership in Mitch McConnell and John
Kyl saying, "Don't get involved. This is going to be the president's
Waterloo. It's our way to win back the Congress."
NARRATOR: And
as the summer wore on, winning Grassley over became harder and harder for
Baucus.
JOHN
PODESTA: The process, particularly in the Finance Committee, just
felt like that race that was being run starting on January 20th all of a sudden
hit some mud, and people's shoes got pretty soggy and pretty heavy.
Rep.
MICHAEL BURGESS (R), Texas: Everything kind of bogged down. I
mean, here we were on this march to produce this bill and at least get it
through the House floor before the August recess, and all the wheels came off.
NARRATOR: Impatient,
Emanuel began a campaign to convince the president to change course, to scale
back their ambitions.
RYAN
LIZZA: Rahm Emanuel is all about, as he says, putting points on
the board. Just get a deal and get it over with.
DAVID
GERGEN: Rahm was the guy who was skeptical about trying to go for
major comprehensive health care reform. He saw what happened. He was there
during the Clinton debacle. He knows how much it takes out of a presidency.
DAN
PFEIFFER: It was entirely a conversation of feasibility. Option A,
pass the comprehensive bill. Option B, smaller bill. And option C, which no one
would entertain, would be to do nothing.
NARRATOR: The
president made the final decision.
RYAN
LIZZA: Obama weighed in and said, "No, I want to try and get
what I campaigned on. I want to try and get the full bill."
NARRATOR: But
Congress was in no hurry.
NEWSCASTER: Some
members of Congress telling the president to slow down, don't push so hard.
NEWSCASTER: They
don't like timetables over there at the Finance Committee.
NARRATOR: By
August, as Congress headed home for the summer recess, there was still no bill.
Some in Washington wondered whether health care reform could survive the
recess.
PETER
BAKER: Heading into the summer recess is a period of great
frustration for the White House. Everything was getting stuck. Everything was
sort of slowing down. And as they head into August, they don't recognize what's
about to hit them.
PROTESTER: You
want to kill my grandparents, you come through me first!
PROTESTER: God
will take care of health care.
PROTESTER: You
dirty thieves!
PROTESTER: We
can't afford it!
PROTESTER: Afro-Leninism!
NARRATOR: Angry
citizens, stoked by economic fears, outraged about bail-outs and expanding
government-
PROTESTER: The
things that Obama's doing are the exact things that Hitler did.
PROTESTER: No
public option!
NARRATOR: -focused
their rage on the health care bill.
Rep.
MICHAEL BURGESS: Boom, the summer town halls literally blow up in our
faces.
PROTESTER: Radical
communists and socialists!
Rep.
MICHAEL BURGESS: The fat really hit the fire when we went home in August
for what usually is a fairly leisurely stroll through the district-
PROTESTER: Yes,
we can!
Rep.
MICHAEL BURGESS: -a town hall here-
PROTESTER: Baby
killer! Abortion is murder!
Rep.
MICHAEL BURGESS: -a summer parade there, an ice cream social here. No, it
was all health care all the time. And people were- were red hot about it. It
was a radioactive issue all summer.
PROTESTER: We
won't pay for murder!
NEWSCASTER: The surprise is just how out of hand these town hall
meetings are getting-
NEWSCASTER: There is an ugliness with these fringe people who are
comparing the president to Hitler.
KENNETH VOGEL, Politico: This opposition was real. And this
opposition rose up. And this opposition let individual members of Congress from
across the country know that they had problems with this health care plan.
JOHN PODESTA: In that first week of August, the anger
was spilling out. It was spilling out so much that guns were spilling out of
people's coat pockets at town hall meetings.
TOWN HALL PROTESTER: I'm not a lobbyist with all kind of
money to stuff in your pocket!
JOHN PODESTA: And I think that the members themselves
were a bit taken aback by the intensity of that anger.
TOWN HALL PROTESTER: -and the rest of your damned cronies up
on the Hill! _[applause]
PETER BAKER: There was anger out there, and members of Congress
listened and they were scared.
JONATHAN COHN: We had this horrible backlash. I mean,
there were moments in August when it looked like it was done, this was the end
of health care reform.
NARRATOR: Senator Grassley, the swing man in the president and Max
Baucus's bipartisan strategy, felt the fire from his conservative base.
Sen. CHARLES GRASSLEY: I had people come to my town meeting
with sheets of paper that thick off the Internet and quoting from the bill. You
know, I've never had that happen before. People were up on it, and people
didn't like what they were reading.
TOWN HALL PROTESTER: Democrat or Republican or whoever, senator
or congressman, voted this bill, we will vote you out! [cheers]
PETER BAKER: Suddenly, the idea of cutting a deal with President Obama
no longer looked like it was good politics, no longer looked like it was good
policy.
Sen. CHARLES GRASSLEY: There's a bill out of the House of
Representatives put together under Speaker Pelosi's leadership. I'm- I'm- [boos]
I am- I'm- I would not vote for that. [applause]
RYAN LIZZA: It's not a profile in courage. It's someone who becomes
convinced that health care, if he supports it in any version, will end his
career politically down the road.
PETER BAKER: Once they sort of lost Grassley, they lost arguably their
last chance to really get a bipartisan bill.
PROTESTERS: Kill the bill! Kill the bill! Kill the bill!
NARRATOR: Just as the town hall anger was reaching its boiling
point, the president received more bad news.
NEWSCASTER: Senator Edward Moore Kennedy, the patriarch of the Kennedy
clan, has died.
NEWSCASTER: The last in the line of this extraordinary American dynasty
is gone.
NEWSCASTER: Last night, an American political era came to an end.
NARRATOR: The most passionate advocate of health care reform was
dead, but some believed Kennedy's death might change the tone of the debate.
Pres. BARACK OBAMA: Ted Kennedy's life work was not to
champion the causes of those with wealth or power or special connections, it
was to give to give a voice to those who were not heard.
PETER BAKER: It was an emotional rallying point for Democrats for a
while- "Win this for Teddy" kind of thinking.
CECI CONNOLLY: Some people thought, "Well, gosh,
maybe in memory of Senator Kennedy, some of these old Republican friends of his
would rejoin the effort."
NARRATOR: The president would redouble his efforts to achieve
Kennedy's dream.
JOHN PODESTA: After consulting with a number of
people, including Senator Daschle and others, I think the president concluded,
"I need to take back control of this."
CECI CONNOLLY: They know that their most powerful tool
is Barack Obama- always has been, probably always will be.
JOHN PODESTA: His audience really in that speech
wasn't the public in general, it was the people sitting in that chamber.
Pres. BARACK OBAMA: [September 9, 2009] The time for
bickering is over. The time for games has passed. Now is the season for action!
Now is when we must bring the best ideas of both parties together and show the
American people that we can still do what we were sent here to do!
PETER BAKER: It was an attempt to sort of recapture the high ground. It
was an attempt to, you know, bring the debate back to a loftier level.
NARRATOR: But the tone immediately sunk to a new low.
Pres. BARACK OBAMA: There are also those who claim that our
reform efforts would insure illegal immigrants. This, too, is false. The reforms - the reforms I'm proposing would not apply to those who are here
illegally.
Rep. JOE WILSON (R), South Carolina: You lie!
Pres. BARACK OBAMA: Not true.
PETER BAKER: A lone congressman says,"You lie"
Rep. JOE WILSON: You lie!
NARRATOR: It was Republican representative Joe Wilson from South
Carolina.
PETER BAKER: -crystallized this moment in Washington. It crystallized
the anger. It crystallized the fervor of the opposition.
MIKE MYERS: I was in the chamber when the speech was being given, and
there was a gasp on both sides of the aisle.
Sen. ORRIN HATCH: I was upset with that. That was
inappropriate. I was sitting there and I thought, "What in the world? Why
would anybody do something like that?"
NEWSCASTER: -an outburst that continues to reverberate across the
country.
Sen. JOHN McCAIN (R), Arizona: Totally disrespectful, no place for it.
RUSH LIMBAUGH, Radio Talk Show Host: He is lying, President Obama is, from
the moment he opens his mouth until he ends the speech!
COMMENTATOR: How did we get to a point where it's OK to yell "You
lie" at the president while he's speaking to Congress?
NARRATOR: The effort to forge a bipartisan agreement was for all
practical purposes over. Now the president would turn to the Democrats. They
pressured Max Baucus. Emanuel wanted a bill ASAP.
Sen. ORRIN HATCH: They just ignored Max in the end. They
just felt they could ram this right through and to heck with Republicans, to
heck with conservatives.
CECI CONNOLLY: I don't think Rahm Emanuel ever worried
much about bipartisanship. He was focused on winning.
NARRATOR: Senate majority leader Harry Reid would take control of
the bill. Talk of a public option was back. The mandates the insurance industry
had fought for were watered down. Karen Ignagni didn't like what that might
mean for the bottom line.
KAREN IGNAGNI, Pres., America's Health
Insurance Plans: I was concerned
about what we were seeing from our actuaries, what we were seeing from our
economists. We were very concerned about what was happening.
DAN BALZ, The Washington Post: And the insurance companies at that
point decided, "We've got to fight back on this."
NEWSCASTER: -America's Health Insurance Plans said the finance bill
could result in dramatically higher insurance premiums.
NEWSCASTER: The insurers are trying to scuttle the health care bill.
NEWSCASTER: White House officials today said they feel broadsided.
NARRATOR: At the White House, they decided a war with the insurance
industry was just what the doctor ordered. In his weekly Internet address, the
president let them have it.
Pres. BARACK OBAMA: The insurance industry is rolling out
the big guns and breaking out their massive war chest to marshal their forces
for one last fight to save the status quo.
DAN PFEIFFER: It's always great to have an enemy in
politics. There's no question about that. However, we didn't pick the insurance
companies as the enemy, they decided to play that role when they decided to
spend tens of millions of dollars to defeat health reform.
[www.pbs.org: Read Pfeiffer's Interview]
Pres. BARACK OBAMA: They're flooding Capitol Hill with
lobbyists and campaign contributions. And they're funding studies designed to
mislead the American people.
KAREN IGNAGNI: I have a hearing disability. I wear a
hearing aid. And I didn't have my hearing aid in, and I thought to myself,
"This can't be true." I ran around looking for my hearing aid because
I was sure that I was mishearing, not hearing it correctly.
Pres. BARACK OBAMA: It's smoke and mirrors. It's bogus. And
it's all too familiar.
NARRATOR: Karen Ignagni and her allies fought back.
TELEVISION COMMERCIAL: New, hidden taxes that Congress wants on
your health care, hidden health care taxes on medicines, medical devices and
health insurance.
NARRATOR: They secretly funneled millions of dollars to a tough ad
campaign by the Chamber of Commerce.
TELEVISION COMMERCIAL: Call Congress. Tell them no hidden
health care taxes in a recession.
NARRATOR: And powerful senators stepped up to support her cause.
CECI CONNOLLY, Co-Author, Landmark: There were still some- Senator Lieberman
was one, Senator Nelson of Nebraska was another- who still said there's merit
to what the insurance industry is saying. And those were critical swing votes.
NARRATOR: Emanuel and Harry Reid were now doing deals just to win
over Democrats. They killed the public option, pleasing Senator Lieberman and
others. They lowered proposed taxes for medical device makers for Evan Bayh.
The final hold-out was the Democrat from Nebraska, former insurance executive
Ben Nelson.
PETER BAKER: Ben Nelson is one of the more conservative members of the
Democratic caucus in the Senate, and they needed his vote. They had to have his
vote.
CECI CONNOLLY: That meant sitting down and hammering
out a deal, really giving him almost what he wanted, anything he wanted.
HOWARD DEAN: The focus at the end of a bill like this is always about
how you're going to get those last two or three votes. And compromises are made
and thrown at senators' feet in order to get them to vote.
NARRATOR: In Nelson's case, the cost was $100 million. The costs of
expanding Nebraska's Medicaid would be covered by the U.S. taxpayers.
Sen. ORRIN HATCH: To a lot of us, we were very, very upset
about it. It was very poorly done. But the only way they could get it through
was basically to bribe their members.
NARRATOR: Senator Nelson denied there was a quid pro quo for his
vote, saying instead he was opening the door for all states to receive similar
Medicaid compensations. But Washington and the media saw it differently ...
they called it the "Cornhusker kickback."
RUSH LIMBAUGH: Prostitution has been legalized in
Washington, D.C.!
COMMENTATOR: Is this deal for Ben Nelson forever and ever, amen?
Forever and ever and only for Nebraska?
COMMENTATOR: You've got to compliment Ben Nelson for playing The Price
is Right.
DAVID GERGEN: It's not a pretty process. There is deal
making. That's the way it's been done for a long time. But those deals done in
your front parlor can be pretty smelly. The public was already up to here with
what they were seeing in Washington, and I think it just put them over the
side.
Sen. ORRIN HATCH: That was very sour stuff to most people
in this country. They realized that this is not the way to legislate.
SENATE CLERK: Mr. McConnell, no. Mr. Menendez?
Sen. ROBERT MENENDEZ (D), New Jersey: Aye.
NEWSCASTER: The Senate convened to send President Obama a hard-fought
Christmas present.
SENATE CLERK: Ms. Murkowski.
Sen. LISA MURKOWSKI (R), Alaska: No.
NEWSCASTER: -its first roll call vote on Christmas Eve since 1895.
SENATE CLERK: Mr. Nelson of Nebraska.
Sen. BEN NELSON (D), Nebraska: Aye.
Vice Pres. JOE BIDEN: The ayes are 60, the nays are 39. HR
3590 is passed.
NEWSCASTER: Tonight, the ayes have it. The Senate passes an historic
health care bill.
NEWSCASTER: This was a strictly party-line vote, all the Democrats
voting yes, all the Republicans voting no, the final tally 60 to 39.
CECI CONNOLLY: On Christmas morning, everyone was
sitting around thinking that he was an LBJ-like genius because it appeared that
he was on the verge of accomplishing what no president had for 70 years.
SHERYL GAY STOLBERG, The New York
Times: They were so
close. They were inches away from getting this bill.
PETER BAKER: They had 60 votes on record in the Senate. They had the
House bill in hand. The Emerald City was right there in the distance.
NARRATOR: The White House wasn't paying attention, but up in
Massachusetts, that "Cornhusker kickback" was still hanging in the
air. It was almost election day. At stake was Ted Kennedy's Senate seat.
NEWSCASTER: The polling numbers are all over the place.
NEWSCASTER: This could be a breakthrough for the Republicans.
NEWSCASTER: I think the headline in The Boston Herald this morning
says it all- "Mass hysteria."
NARRATOR: A political newcomer was on the verge of taking a seat the
president was counting on to pass health care reform.
NEWSCASTER: Republican Scott Brown is riding a wave.
NEWSCASTER: Brown's campaign language has the aura of a revolutionary
crusade.
SCOTT BROWN (R-MA), Senate Candidate: Business as usual is not the business we
like, and all those back room deals from Nebraska and others - it's just wrong,
and we can do better! [cheers]
PETER BAKER: Scott Brown effectively used that as a way of saying that
change has not come to Washington.
NARRATOR: The Democrat, Martha Coakley, was sinking in the polls.
PETER BAKER: Only belatedly does it dawn on the White House what's about
to happen. The president's not going to go up there to campaign for her until
the Friday before the election, when Martha Coakley calls David Axelrod personally,
and says,"I need him to come up."
CECI CONNOLLY: They frantically sent Obama up to
Massachusetts the weekend before.
PETER BAKER: He makes very clear to the Massachusetts electorate what's
at stake here is the Obama presidency, and do they want to hand the Republicans
the power to stop his agenda on health care, on everything else?
NARRATOR: By election day, the president knew they would lose.
CECI CONNOLLY: January 19th, 6:30 PM, about an
hour-and-a-half before the polls close in Massachusetts, Obama calls for
Pelosi, Reid, Biden and Rahm Emanuel to come to the Oval Office.
NARRATOR: They immediately convened an emergency meeting.
DAN PFEIFFER: From the very moment that it was clear
that Scott Brown was going to win that seat, he began thinking through what the
next steps would be to be able to right the ship and get health care done.
NARRATOR: The president asked Speaker of the House Nancy Pelosi if
she could get the House to pass the Senate bill.
CECI CONNOLLY: Pelosi is annoyed and quite adamant that
there's no way she can sell that to her House members, almost kind of
lecturing, saying, "You don't understand the realities in the House. This
won't work." And Obama finally snaps, uncharacteristically for him, and he
says, "I understand that, Nancy. What's your suggestion?" And there
is no suggestion.
DAN PFEIFFER: We went from, basically, beginning to
plan how and when the president would sign the bill to if we could even
resuscitate the bill.
NEWSCASTER: Scott Brown is the winner of the Massachusetts United
States Senate race.
NEWSCASTER: Brown's victory shakes up Massachusetts and it shakes up the
nation!
NEWSCASTER: -Republican taking over the seat that Ted Kennedy held for
46 years.
CAMPAIGN WORKER: Here he is, the United States Senator
from Massachusetts, Scott Brown!
Sen.-Elect SCOTT BROWN: People do not want the trillion-dollar
health care plan that is being forced- [cheers]
Sen. CHARLES GRASSLEY: In one election was a composite of all
that ill feeling from the grass roots of America. And if it can be expressed in
liberal Massachusetts, they know it's a lot worse in Montana and Wyoming.
[www.pbs.org: More of Sen. Grassley's
interview]
Sen. ORRIN HATCH: If they replace the so-called Kennedy
seat with a Republican, then my gosh, you'd better wake up.
NARRATOR: The president's supermajority was gone. The Republicans
now had their 41st vote.
The worst blizzards in history buried
Washington in February.
NEWSCASTER: Getting a health care bill passed now looks more difficult
than ever.
NEWSCASTER: All of the options for health care get very ugly.
NARRATOR: It closed the government.
NEWSCASTER: I don't see any way you go forward from here with health
care.
NEWSCASTER: They're shell-shocked.
NEWSCASTER: They're going to need a whole new strategy on health care
reform.
NARRATOR: Barack Obama was coming to terms with what looked like his
first significant failure as president.
Pres. BARACK OBAMA: This is a complex issue. And the longer
it was debated, the more skeptical people became. I take my share of blame for
not explaining it more clearly to the American people.
DAN PFEIFFER: The process was messy, and so it turned
people off. It ended up being behind closed doors. It was filled with a lot of
partisan wrangling, people yelling at each other across the table. We ended up
having a process that represented a lot of what the American people hated about
Washington.
DAN BALZ: The president is in some ways kind of rebalancing himself.
The year had been very hard on him. The Massachusetts defeat symbolically was
terrible, and practically, had a devastating effect.
NEWSCASTER: The president admitted he's made some mistakes in his
first year in office, but said he won't quit.
NEWSCASTER: A chastened U.S. president Barack Obama concedes he's made
some mistakes in his first year in office.
NEWSCASTER: He's got an uphill fight here.
NARRATOR: While the country waited, Obama formulated a new plan. He
would personally sell the bill to Congress and the American people.
DAN PFEIFFER: The president said to us that he would
do anything, he will call anyone, meet with anyone, he will speak anywhere, he
will do whatever it takes to make the case. He was going to have to be the
primary spokesperson for health reform. He was going to have to force action.
NARRATOR: He deployed Rahm Emanuel to work with Speaker Pelosi. They
would try to get enough Democrats on board to push through the Senate bill.
CECI CONNOLLY: They realized that their political
operation had come way off the tracks and they needed to quickly right that
operation.
NARRATOR: They began their comeback by staging a showdown with the
Republicans out in the open, on national television.
Pres. BARACK OBAMA: [February 25, 2010] I'm looking
forward to listening.
NEWSCASTER: The president is gathering House and Senate leaders, Democrats
and Republicans, to try to save health care reform.
NEWSCASTER: It's a high-stakes gamble that could be all or nothing for
the president.
Pres. BARACK OBAMA: Everybody please have a seat.
DAN PFEIFFER: The summit was an opportunity to hit the
restart button on how people viewed the process, to do it all on live on TV,
open for the American people to see, make them feel more comfortable with the
process.
Pres. BARACK OBAMA: Here's the bottom line. We all know this
is urgent.
SHERYL GAY STOLBERG: Suddenly, the president was in the
driver's seat.
Pres. BARACK OBAMA: This became a very ideological battle.
CECI CONNOLLY: They needed to show that Obama was back
in charge.
NARRATOR: Political theater. One by one, he took on Republicans.
Sen. LAMAR ALEXANDER (R), Tennessee: The Congressional Budget Office report
says that premiums will rise.
Pres. BARACK OBAMA: No, no, no, no, Lamar. This is an
example of where we've got to get our facts straight. Let me respond to what
you just said Lamar, because it's not factually accurate.
DAN BALZ: That was, I think, the moment that he stepped up in a way
that he hadn't before.
Pres. BARACK OBAMA: Let's- let me just make this point,
John, because we're not campaigning anymore. The election's over.
Sen. JOHN MCCAIN (R), Arizona: I'm reminded of that every day. [laughter]
Pres. BARACK OBAMA: Yeah.
DAN BALZ: There's no question that there was a change in his style.
He took ownership of this health care issue. He challenged everybody on this
front.
Pres. BARACK OBAMA: -of how we actually get a bill done.
NARRATOR: And then for a month, Barack Obama the campaigner hit the
road to sell the bill.
Pres. BARACK OBAMA: Do not quit! Do not give up! We keep on
going! We are going to get this done! We are going to make history! We are going
to fix health care in America with your help! God bless you! And God bless the
United States of America! [cheers]
NARRATOR: On Sunday, March 21st, the president waited to see whether
he had convinced just enough members of his own party to push the bill through.
NEWSCASTER: -down to the wire on health care reform. The House votes
just hours from now.
NEWSCASTER: After months of rancor in the streets, the vote takes
place in just a few hours.
DAN PFEIFFER: Sitting in the Roosevelt Room, the
president, the vice president- we sat- there was a small bit of anxiety as we
watched the votes tick up. We've had victory snatched from us before.
REPRESENTATIVE: On this vote, the yeas are 219, the nays
are 212. The motion is adopted.
SHERYL GAY STOLBERG: When the 216th vote comes over, a big
cheer erupts.
NEWSCASTER: It's 219 to 212. No votes from Republicans.
NEWSCASTER: -all Democrats, no Republicans.
NEWSCASTER: This is a huge victory for this president.
NEWSCASTER: For decades, they've been trying to do it. It has now been
done.
Pres. BARACK OBAMA: Good evening, everybody. This
legislation will not fix everything that ails our health care system, but it
moves us decisively in the right direction. This is what change looks like.
NARRATOR: It was victory, but experienced Washington knew the
president would pay for it.
CECI CONNOLLY: It came at a high price, the entire
first year basically dedicated to this, having their hopes for bipartisanship
dashed. And the White House still is not certain how this will sell in the
country.
DAN BALZ: There is a realism that it has come with a cost. We don't
know what's going to happen in the November elections. We don't know what's
going to happen in 2012. But there's no question that this health care battle
has put his party at risk, and how they deal with that is the next chapter. But
this was a historic moment.
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posted april 13, 2010; updated april 23, 2010
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