McGaw defended his men and women—the fact that the agents were taciturn didn’t mean they were hostile, he said. They were going by the book. He expressed certainty the leak had not come from them.
His days heading the presidential security office were soon over. Through the intercession of Foster and Watkins, he was “promoted” to director of the Bureau of Alcohol, Tobacco, and Firearms. As Hillary had demanded, many of the resident Secret Service agents were now given jobs outside the White House, and replaced by others who had not served directly with the Bushes or Reagans. The number of agents assigned to the residence was reduced, as was the size of the detail hovering around the Oval Office. Upstairs, the agents now stayed out of the living area—and Hillary’s way.
11
Health Care
I didn’t fully realize the magnitude of what we were undertaking.
—Living History
THE CLINTONS CAME to Washington to accomplish great things. The greatest of their goals was to establish a system of universal health care in which every American would be insured against catastrophic illness and guaranteed adequate, paid lifelong medical care. Such an undertaking would be the biggest public works project in the nation’s history, and was perhaps the most necessary since the advent of Social Security. “If I don’t get health care done, I’ll wish I didn’t run for president,” Bill told his aides in February.
Both the Clintons were, by nature, optimists, but also realists. They understood the inevitability of political combat. But they had not expected to come to Washington and immediately find themselves under constant attack and suspicion, or forced to change their course abruptly because their predecessors had sailed recklessly into a fiscal storm and couldn’t find, or did not try to find, their way out in an election year. But those were the realities.
As in Arkansas with her education portfolio, by the time Hillary had begun consulting with experts, she already knew where she wanted to go. Hillary wanted to combine government controls and the will of the competitive marketplace, taking the best elements of both to restrain health care costs. The government (rather than private insurance companies) would dictate a set of basic medical benefits that would be available to all patients, and require private insurers to offer all of these benefits in their policies. A competitive bidding process in each state would determine the price of insurance policies, so that state officials could bargain with insurance companies for the lowest premium rates for their citizens. Most American companies would be required to pay for 80 percent of their employees’ health insurance; the government would partially subsidize the cost to smaller businesses, and buy insurance for the unemployed poor.
Hillary’s plan was an impressive demonstration of her intellect, dedication, and ability to grasp the entirety of a huge policy debate. But it was tangled from the start with political missteps that could have been avoided. Her demonstrable sense of entitlement, the idea that the goal was so worthy that extraordinary procedures could be justified to achieve it, hence her insistence from the start on secrecy that appeared almost conspiratorial, made her task far more contentious than necessary, and almost immediately jeopardized her cause.
From the beginning, Hillary and Ira Magaziner were confronted by an inherent conflict with the budgetary realities the president was trying to deal with. But they insisted that the health care model they were proposing would be more efficient and less costly than the existing Medicare and Medicaid systems it would replace. By their calculations, they could bring about substantial savings that would cover the costs of insuring the millions of Americans currently uninsured, and eventually reduce the federal deficit further to help the president. It was almost a magic bullet, they felt.
Unfortunately, most of Bill Clinton’s economic advisers thought Hillary and Magaziner’s numbers were wishful thinking.
To develop the specifics of her proposal, Hillary established what was formally known as the President’s Task Force on National Health Care Reform, comprising five hundred consultant-experts in various aspects of medical and health care policy. The consultants were drawn from congressional staffs, federal agencies, academia, corporations, and professionals in the medical community. Under Hillary’s watch, Magaziner divided the task force participants into thirty-four “working groups,” designated by specialty. They were expected to debate the issues in their purview, present a set of recommendations, and then defend their conclusions. Group assignments ranged from how to serve the particular medical needs of Native Americans to deciding whether prescription drugs and mental health counseling should be included in the basic benefits the government would guarantee.
As conceived, the duties of the task force seemed overly complex—not to mention impossible to complete within the hundred-day deadline set by the president. Magaziner distributed a rigorous—some said outlandish—schedule that called for each of the thirty-four working groups to develop recommendations on seven different topics, and present their suggestions to a huge formal assembly at seven different meetings. He explained to doubters, “People work best when they work for deadlines. It forces discipline.” Many of the task force members were working six-and seven-day weeks, often for eighteen hours a day.
The scene inside the Executive Office Building, where the five hundred consultants met, always seemed on the brink of chaos. Task force members were crammed into makeshift meeting rooms that lacked sufficient desks and chairs or adequate light.
The conclusory presentation meetings of the individual groups were held in the Indian Treaty Room, an ornate, inadequate space that had once been the Navy Department Library and Reception Room. About two hundred people would attend, usually including either Magaziner or Hillary; Shalala or an analyst from her Department of Health and Human Services; and representatives of various cabinet departments. The last to arrive—excepting senior officials—had to sit outside in the hall. The sessions often went late into the night, without reaching conclusions about the matters under discussion, as Hillary, Magaziner, and others tried to pay attention.
Hillary spent hundreds of hours in such meetings, taking notes on every issue, and trying to absorb the numbing detail. Whether she was in the White House or traveling on airplanes, she always seemed to be studying. But for all of that, she was floundering.
The White House, meanwhile, refused inquiries from the press and interested organizations to identify her five hundred consultants, or provide any details of what they were working on. This made practical sense. There was no precedent for presidential administrations drafting legislation in public and, even in secret, the process was disorderly. Advance release of partially developed ideas might encourage premature debate, divert energy from formulating final recommendations, and hamper the work generally.
But health care reform was one of the most charged public policy issues of the day. Republicans, ideological opponents of government controls, and important segments of the health care industry that stood to lose money in a revamped system complained immediately that they had been cut out of the process. For the most part, they had.
The first week in February, William F. Clinger Jr., the ranking Republican member on the House Government Operations Committee, charged that the process was illegal, and demanded that the General Accounting Office investigate whether Hillary was authorized to conduct such proceedings in private. He cited the 1972 Federal Advisory Committee Act, which mandated public meetings unless all task force members were federal employees. Clinger danced around direct criticism of the first lady, but his target was unmistakable. His accusation of illegal and abnormal secrecy was devastating. It resonated both with Hillary’s potential opponents—legislators and bureaucrats committed to existing standards and structures of the health care system, lobbyists with narrow agendas, and Republican partisans—and also with those who could have been her natural allies: journalists who covered the medical field, associations of professionals in medicine and health care, Democratic politicians, and the president’s princ
ipal economic and domestic program advisers, including Bentsen, Rubin, Panetta, and Shalala.
Clinger’s charges made Hillary appear to be something of a paranoid. It was now made to seem that she and Magaziner were running their operation with a military-like secrecy unprecedented for a peacetime domestic program. (That was pretty much true.) They had devised a security system in which it was forbidden to photocopy drafts of documents under discussion or even to bring writing instruments into many meetings. Room monitors were assigned to keep track of who reviewed certain papers. All meetings were closed not only to the press, but to all outsiders. “They would take documents away from us and look for leaks. They didn’t trust us. You’d think you were in the FBI,” said former Minnesota health commissioner Mary Jo O’Brien, who served as a task force member. “The funny thing was, these were not new ideas. I expected it would be stuff that could be patented, but there was nothing new, just discussions of policy. It was handled very poorly. It became a military operation.”
Many blamed Magaziner for the secrecy requirements, but it was Hillary who wanted them, as Magaziner confirmed later.
Hillary wasn’t open to any substantive compromise with her vision of health care reform. She ignored the possibility that instituting a system of gradually phased-in improvements to the existing health care system, leading eventually to her larger goals, might be helpful both to the Clintons’ political allies, up for reelection in 1994, and to her husband’s own political future. As Stephanopoulos said, “Compromise didn’t come naturally to Hillary.”
Hillary also tended to view anyone who criticized her plan, even constructively, as an enemy. Michael Bromberg, head of a lobbying organization for private hospitals, had tried to explain to Hillary that compromise was the biggest lesson he’d learned from working with Congress. “Any bill that passes Congress will be a credit to you,” Bromberg told her. “But if you say, ‘This must be in there,’” and the provision fails on Capitol Hill, “then it will be perceived as a loss.” Hillary replied, “Bill and I didn’t come to Washington to play the game as usual.” Hillary drew a line in the sand: she said that she and the president would make the midterm congressional elections in 1994 a vote about her health care plan, and would use the public’s support for her approach to attack those who opposed her. “We know how to run a populist campaign,” she said, reviving the warrior woman theme of Camp David.
Her husband’s top deputies were beginning to worry that she was both politically tone-deaf and strategically inept, especially within the toxic Washington environment. Hillary had convinced her own aides and a few important members of the president’s domestic policy staff that the administration could pass health care legislation without any Republican votes. A senior White House official later explained, “Among Clintonites, it was widely thought that the Republicans had engaged in so much malign neglect over the years that the public would rally to Democratic nostrums.” Lawrence O’Donnell, the principal aide to Senator Moynihan, concluded that “Hillary believed…this is so clearly a moral good that no one can stand up and say, ‘I’m going to stop it.’”
Hillary was more than three months into the job before she started soliciting suggestions from Republicans and conservative Democrats. She visited dozens of congressmen in their offices, asked about their families, complimented their work, and dutifully followed up with a thank-you note. But many lawmakers believed her attempts were mainly for show. In fact, Republicans were totally frozen out of the process. As Senator Dave Durenberger, a Republican from Minnesota, said, “We may have been consulted, but we weren’t involved.”
By then, Hillary had established her health care war room, staffed by young aides who, around the clock, monitored threats and attacks against her still secret plan. Her message was unambiguous: she did not want negotiations that would end in compromise. She was looking for unconditional surrender. Health care had now become part of the Permanent Campaign, too.
“There’s just nothing stupider in government than, You’re with me or against me,” said O’Donnell, reflecting the Washington experience Hillary lacked at that point. “Campaigning is: You beat the other guy, you leave him for dead in New Hampshire, that’s the end—you don’t care what happens to him. But you never, ever, ever beat Dole. He’s there the next day in the Senate. And he’s there for the next vote, which you desperately need.”
Shalala and the president’s other senior economic experts expressed modest objections to Hillary and Magaziner’s tactics. But a dangerous dynamic was developing: the president’s aides and advisers felt increasingly uncomfortable confronting the first lady. Even Stephanopoulos and Greenberg did not make known to Hillary their deep reservations about her plan. McLarty remained silent, too, though he believed Hillary was moving in the wrong direction. Bentsen and Rubin became so diplomatic and circumlocutous in their criticism that at times Hillary and Magaziner didn’t comprehend the extent of their concern. Laura Tyson, chairwoman of the Council of Economic Advisers, Shalala, and Deputy OMB Director Alice Rivlin were less inhibited. But they were no more successful in persuading Hillary to change what they perceived as flaws in the plan or her methodology.
Magaziner said that such concerns—particularly the sensitivity to offending conservative Democrats and Republicans—would be addressed as the legislation moved through Congress. His strategy was to get liberals on board first to ensure their support later in the process. Inevitably, he said, the bill would have to be modified during congressional negotiations but, he hoped, to the least extent possible. Shalala warned that reaching out to one group first, instead of building initial support across the political spectrum, would unite opponents against the administration’s plans. Hillary ignored the warning.
Many of Bill Clinton’s top aides felt that Hillary was impatient when listening to their criticisms or condescending, as if even Bentsen and Rubin could not be trusted. Magaziner exacerbated problems with his dismissive manner. “The president has already decided that,” he would say, or, “It hasn’t been decided yet.” Hillary frequently interrupted the president’s advisers. “You’re right.” “You’re wrong.” “No, that’s not right,” she would say. Meanwhile, Magaziner infuriated the president’s aides when they learned he was meeting privately with the Clintons in the White House residence and urging them to make important decisions without consulting either the task force or the economic team. Hillary’s stature with Bentsen and even her old friend Shalala was deteriorating.
The president seemed caught between his wife and his advisers. More often than not, he would mediate disputes between them by saying, “Let’s revisit this.” In fact, a new dynamic in the Clinton partnership was developing: for the first time, he seemed inclined to placate Hillary, and make decisions he strongly believed were against his better instincts. That was a mistake.
SOON AFTER BILL appointed her, Hillary had begun lobbying to have her plan included as part of the president’s budget. Clinton was already proposing a relatively drastic budget that would increase taxes and make large cuts to government programs. His economic advisers and congressional liaison staff had predicted it was going to be a very hard sell without the added burden of incorporating health care.
Since progress on virtually all other administration bills would be delayed until Congress acted on the overall economic plan, Bill’s political and economic advisers wanted to push a budget bill through Congress as quickly as possible. Health care would not only slow it down, it might also increase spending so significantly that it could erase the deficit reduction central to the president’s plan to get the economy back on track.
Hillary realized that the budget bill was going to be so contentious that debate about it on Capitol Hill would suck air out of her health care initiative. Unless her plan was included in the budget bill, she feared it would be impossible to enact health care reform before the midterm elections. As a matter of tactics, she argued that health care belonged in the budget because of its impact on spending, taxes,
and entitlement programs.
House Majority Leader Dick Gephardt had urged Hillary to incorporate her health plan in the budget proposal. The reality of gridlocked Washington was that any bill passed in the Senate required more than a simple fifty-one-vote majority. At least sixty votes were needed to counter the opposing party’s inevitable attempt to stop passage with a filibuster—sixty votes cast to end debate and consider the legislation on its merits—and Gephardt had no doubt that Hillary’s health care proposal on its own would head straight into a filibuster. Budget resolutions, however, required only a majority vote to be considered under Senate rules.
Persuaded of Gephardt’s position, Hillary arranged a meeting with Bill and the House leader. The president found the case for adding health care to the budget a compelling one and told Hillary and Magaziner to approach Senate Majority Leader George Mitchell. He was also supportive, telling Hillary that if the administration were to introduce a health care plan as a separate bill, it would decrease its chance of passage. As midterm elections neared, “the rules in the Senate are such that you dramatically enhance the leverage of the opposition,” he explained.
It was significant as well that not having a separate bill would take jurisdiction of the health care plan out of the realm of Senate Finance Committee Chairman Pat Moynihan, whose influence on both houses of Congress was enormous and who was skeptical of wholesale, ungraduated, health care reform. He had urged the Clintons to tackle the issue of welfare reform first.
The president, however, continued to be noncommittal about whether to include Hillary’s proposal in his budget to Congress. Frustrated, Hillary believed she needed to win over Bill’s advisers. She was in the odd position of needing their support in what she believed should be solvable in a marital discussion.
Hillary and Magaziner invited the whole economic team to a meeting in the EOB during the first week of February. The president’s advisers pointed out that details of her reform plan could not be fully enough developed in time for the president’s joint address to Congress on February 17, when he was scheduled to introduce his budget plan. Bentsen, Rubin, Shalala, and Tyson all reiterated their doubts about including health care in the president’s budget, suggesting that it might keep the budget from passing. “George Mitchell and Dick Gephardt don’t think it’s [a] crazy [idea],” Hillary said.