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Miles Mogulescu Headshot

NY Times Reporter Confirms Obama Made Deal to Kill Public Option

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For months I've been reporting in The Huffington Post that President Obama made a backroom deal last summer with the for-profit hospital lobby that he would make sure there would be no national public option in the final health reform legislation. (See here, here and here). I've been increasingly frustrated that except for an initial story last August in the New York Times, no major media outlet has picked up this important story and investigated further.

Hopefully, that's changing. On Monday, Ed Shultz interviewed New York Times Washington reporter David Kirkpatrick on his MSNBC TV show, and Kirkpatrick confirmed the existence of the deal. Shultz quoted Chip Kahn, chief lobbyist for the for-profit hospital industry on Kahn's confidence that the White House would honor the no public option deal, and Kirkpatrick responded:

"That's a lobbyist for the hospital industry and he's talking about the hospital industry's specific deal with the White House and the Senate Finance Committee and, yeah, I think the hospital industry's got a deal here. There really were only two deals, meaning quid pro quo handshake deals on both sides, one with the hospitals and the other with the drug industry. And I think what you're interested in is that in the background of these deals was the presumption, shared on behalf of the lobbyists on the one side and the White House on the other, that the public option was not going to be in the final product."

Kirkpatrick also reported in his original New York Times article that White House was standing behind the deal with the for-profit hospitals: "Not to worry, Jim Messina, the deputy White House chief of staff, told the hospital lobbyists, according to White House officials and lobbyists briefed on the call. The White House was standing behind the deal".

This should be big news. Even while President Obama was saying that he thought a public option was a good idea and encouraging supporters to believe his healthcare plan would include one, he had promised for-profit hospital lobbyists that there would be no public option in the final bill.

The media should be digging deeper into this story. Washington reporters should be asking Robert Gibbs if President Obama is still honoring this deal. They should be calling Jim Messina and hospital lobbyist Chip Kahn to confirm the specifics of the deal. They should be asking Nancy Pelosi and Senate Democratic leaders Dick Durbin and Harry Reid the extent of their knowledge of this deal. They should be asking Pelosi if the reason she's refusing to include a public option in the House reconciliation bill to be sent to the Senate is that there are at least 51 Senate Democrats who would vote for it and she needs to insure that a final bill with a public option does not end up on President Obama's desk where he would then have to break his deal with the hospital lobbyists and sign it, or veto it to honor his deal.

More deeply, there are serious questions about the extent to which Obama, with the help of Rahm Emanuel, used a K Street strategy to pursue health care reform. The strategy seems to have been to make backroom deals to protect the interests of the likes of the drug industry and the for-profit hospital industry in exchange for campaign cash, even if this meant reversing campaign promises to include a public option to put competitive pressure on private insurance premiums, and to allow Medicare to negotiate for lower drug prices and Americans to buy cheaper drugs from Canada. The result is a health care bill that is generally unpopular with voters. Questions need to be asked, too, about the extent to which the White House is following a similar K Street strategy with Wall Street financiers when it comes to shaping financial reform and new regulations to rein in the banks who brought the economy to its knees.

Voters viscerally sense that the White House and Congressional Democrats may be as concerned with protecting special interests -- whether it's drug companies, private hospitals, or Wall Street bank -- than they are with protecting the people, and this is feeding a populist backlash against Democrats that resulted in Scott Brown's victory in Massachusetts and is making a Democratic bloodbath in the fall elections increasingly likely.

Polls indicate that about 60% of voters support a public option while only about 1/3 support the overall Democratic healthcare bill. There still time -- very little time -- for Democrats to shift course and include a public option in the final bill, even if it means going back on the White House's backroom deal with the hospital industry. If the media picks up on this story, perhaps the White House and Congressional Democrats can be embarrassed into changing course. If, on the other hand, Democrats continue to honor these special interest deals, then passing an unpopular health care bill may just be walking into a Republican trap.
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RESPONSE TO COMMENTS: Whenever I write blogs which are critical of Obama and Congressional Democrats for making corporatist deals, I get numerous comments from people who believe they are progressive but say they will never vote for Obama or Democrats again, that they will stay home at the next election, or that they will vote for small third parties who have no chance of winning. It's not my intent to encourage those views. Do people making these comments really think bringing Republicans back to power would make things better?

My goal is to shine a light on these backroom deals in order to embarrass Obama and Congressional Democrats to put the interests of the voters over the interests of special interests so that Republicans can't play at being faux populists and use that to take back Congress in order to enact even worse corporatist policies.

Progressives need to have a sophisticated and nuanced relationship with elected Democrats. After the 2008 elections, too many progressive organizations demobilized believing their job was simply to take orders from the White House to support Obama's agenda, whatever it was. That was a mistake. It's equally a mistake for progressives to overreact in the opposite direction and think they can abandon electoral politics and do nothing to prevent the Republicans from regaining power. What's needed is a powerful grassroots progressive movement to force elected officials to do the right thing more often and to counter-balance the power of big money in politics. The periods of progressive change in American politics, like the Progressive Era, The New Deal, and the Great Society, have come when strong progressive movements have forced elites and elected officials to enact somewhat progressive legislation.

Back in June, 2008, I wrote a blog entitled "Obama Will Break Our Hearts--But Progressives Need to Walk and Chew Gum at the Same Time" in which I argued that progressives needed to both elect Obama and create a strong grassroots movement or pressure him.

More recently, I wrote a blog entitled "The Democrats' Authoritarian Health 'Reform' Bill and the Ascendency of Corporatism in the Democratic Party" in which I critiqued Obama's Clintonian New Democratic corporatist ideology of trying to use subsidized private sector entities to achieve supposedly "progressive" policy results, thus promoting a corporate takeover of the public sector. I explained why, in my view, this is likely to lead to failure both in bringing meaningful progressive change, and in creating a politics that can keep Democrats in power.

I will continue to write the truth, as I see it, and to criticize Obama and corporatist Democrats when I think they're wrong. But my goal is to create greater understanding and progressive mobilization, not to discourage readers or lead them to give up and stay home.