April 13, 2010
Rahm Emmanuel and President Obama
On March 23, 2010, after a bruising year of debate, negotiation and backlash, President Barack Obama finally signed the health reform bill that he had promised more than a year before. But at what cost to his popularity and to the ideals of bipartisanship and open government that he'd campaigned on?
In Obama's Deal, veteran FRONTLINE producer Michael Kirk (Bush's War, Dreams of Obama) takes viewers behind the headlines to reveal the political maneuvering behind Barack Obama's effort to remake the American health system and transform the way Washington works. Through interviews with administration officials, senators and Washington lobbyists, Obama's Deal reveals the dramatic details of how an idealistic president pursued the health care fight -- despite the warnings of many of his closest advisers -- and how he ended up making deals with many of the powerful special interests he had campaigned against.
"The stakes couldn't be much higher," former Senate Majority Leader Tom Daschle (D-S.D.) tells FRONTLINE about what was involved in the landmark health care legislation. "We're talking about almost 20 percent of our gross domestic product today, $2.5 trillion. Literally tens, hundreds of millions of dollars are spent on lobbying. Every special interest has their oar in the water."
To navigate the process of health reform, President Obama turned to his chief of staff, Rahm Emanuel, a consummate deal maker, who helped stock the West Wing with an all-star lineup of congressional insiders. But almost immediately, a key member of the team was forced to step down, and the country's greatest champion of health reform, Sen. Ted Kennedy (D-Mass.), was sidelined with incurable brain cancer. The administration's hopes for reform rested with Sen. Max Baucus (D-Mont.), the powerful head of the Senate Finance Committee, who also happened to be one of the Senate's top recipients of special interest money from the health care industry.
The White House encouraged Baucus to quietly negotiate deals with the insurance lobby, drug companies and other special interest groups, despite promises to run a different kind of White House. "The president said that having people at the table is better than having them throw stuff at the table," White House Communications Director Dan Pfeiffer tells FRONTLINE.
But the deals were often controversial. FRONTLINE investigates how, near the start of the health care reform process, Baucus and the White House negotiated a secret $80 billion deal with Billy Tauzin, the former Louisiana congressman who had become the pharmaceutical industry's top lobbyist.
"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," says the co-chair of Obama's transition team, John Podesta.
The pact with Tauzin was only the beginning of a series of deals designed to win over potential opponents. The most notorious agreement, known as the "Cornhusker Kickback," was concluded only days before a vote on the health care bill in the Senate. In exchange for the support of Sen. Ben Nelson (D-Neb.), the White House and Senate leaders agreed to spend $100 million to benefit Nebraska.
The administration argued the deals were necessary to secure health reform. But the deals backfired. "It's not a pretty process," says David Gergen, who's been an adviser to four different presidents, both Republican and Democratic, over the last several decades. "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."
The backlash grew across the country. The president's approval ratings sunk, the Democrats lost control of Ted Kennedy's Senate seat, and the push for health care reform was suddenly in peril.
"The grassroots of America had turned against this," Sen. Charles Grassley (R-Iowa) tells FRONTLINE. "Health care was kind of the straw that broke the camel's back."
At the White House, the president was forced to come to terms with what looked to be his most significant failure as president, before a last push this winter -- and a last round of high-stakes, round-the-clock deal making -- finally pushed the bill through.
"The process was messy, and so it turned people off," says Communications Director Pfeiffer. "It ended up being behind closed doors. It was filled with 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."
"There is a realism that it has come with a cost," veteran Washington Post reporter Dan Balz observes. "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."