National Institute of Health Policy - Advancing health policy dialogue

Commentary from Dave Durenberger
Thursday, November 29, 2012

Americans Always Do What's Best . . .

Winston Churchill once described America’s penchant for trying everything but the obvious and the difficult… until just before we hit the wall.  In this election, a majority of us chose to go with the presidential leadership we knew.  Even in states President Obama did not carry, voters elected Democrats to the U.S. Senate.  Therein lies the message, “We’ll trust you with four more years because the alternative is just too risky.”   The Republican victories in 2010 and the party’s 2012 campaign spoke not at all to change we can believe in.  Just change.  Its vision for the future was 12 million new “trickle-down” jobs.  It was built on a foundation whose cracks were apparent during the presidential primary as well as in its candidate for president.  Its financing and its messaging were outrageously negative.   By the end it was impossible to carry on civil conversations on the election at work, in church or community, or in our families.  So we decided to gamble.

There is something so exceptional about an American election.  It’s the “we the people” thing at work again.   After years of polar opposition we get a morning after feeling of “it worked.”  No taking to the streets or jailing of protesters.   As Peggy Noonan said in her Thanksgiving op ed in the WSJ on 11-24-12, “We just experienced a national election, and once again a miracle occurred, that historic marvel:  Awesome power and authority were fought over, contested . . . and then the people voted, peacefully, with no fuss, and everyone absorbed the decision and accepted it.”

MINNESOTANS ARE BEST AT DOING IT

76% of us voted in the 2012 election, the best voting percentage in the nation. That’s been true for 12 of the last 16 elections. The 3 million Minnesota voters set a record also.  In Hennepin County (our largest, including Minneapolis) the voter turnout was 84%; as it was in the Republican suburb of Eagan, home to former Governor Tim Pawlenty.  Proudly, Minnesotans stopped Republicans from amending the state’s 1858 constitution to prohibit same-sex marriage and to require all voters to carry official government photo I.D. 
What’s great about this place is that the marriage amendment was neck-and-neck to the end because opposition against the counter-culture campaign of various church leaders from the wealthy and corporate-employer community was substantial.  On the other hand, the Voter I.D. amendment looked like it would pass fairly easily right to the end. There was no big spending campaign against it.  But one great TV commercial featuring DFL Governor Mark Dayton and former Republican Governor Arne Carlson reminded us of what we are; proud supporters of voting rights for all in this state.  More MN voters voted NO to government IDs in the constitution than voted NO on marriage.  Hurray for us!

THE 2012 ELECTION AND THE FISCAL CLIFF

If the fiscal cliff, or even federal budget deficits, were driving Americans to vote, Mitt Romney would be the president-elect.  If entitlement reform and tax reform were the drivers, Romney again.  Obama voters, and some Romney voters, voted for the candidate most likely to protect their country’s and their family’s economic security.  The same way they voted for national security in 2004 and re-elected George Bush even though they had doubts about the means he was choosing to deliver on it.  President Obama was re-elected because he convinced Americans he “had their backs.”  Romney said as much in explaining Obama’s victory to his contributors by referring to the “gifts” the president had lavished on voters who were in an economic bind.

THE GIFT OF BOWLES-SIMPSON

The infamous Grover Norquist tax pledge has done as much as the economy to drive fiscal deficits upward under both Presidents Bush and Obama. If Republicans in Congress were willing to substitute $4-5 trillion of spending reduction and reformed tax revenue increases, the cliff would disappear.  The financial markets and industry would respond positively and the president would be free to focus on some of the equally critical economic and national security challenges the country faces.  Senate Republicans on the Bowles-Simpson Commission all agreed to the package. House Republicans led by Rep. Paul Ryan did not.

BARACK OBAMA IS STANDING IN THE GAP

Voters put Barack Obama in charge of spending reform and tax reform and he appears to be taking the assignment seriously.  Neither is easy.  Both are political; and they require some relational skills he hasn’t yet honed very well. Time is on the side of the president.  The collapse of the fiscal cliff on Jan. 1, 2013, will require Republicans to help design something approximating a $5 trillion deal during the next four weeks, which gives congressional leaders nine months to agree on and pass legislation, implementing it before FY 2014 begins.
Tax revenue enhancement is now on the table.  Still, some debate about income tax rates, but the tax base will definitely be broadened on both individual and corporate taxes.   Excise taxes on gasoline (which haven’t been raised in twenty years) and other excises are likely with proceeds dedicated to e.g. transportation, or energy conservation, alternatives, environmental impact, healthcare.  New spending in the ACA (Obamacare) will be targeted by GOP:  Medicaid eligibility expansion, tax subsidies for lower income individuals buying through new health insurance exchanges.  Hard to believe the Obamacare medical device tax or excess coverage health insurance taxes can be eliminated.

JOHN BOEHNER TAKES CHARGE

In the four years from the disastrous end of the last Republican administration, the GOP earned a deserved reputation as "the Party of NO."  No stimulus spending, no taxes, no regulations, no Obamacare, and no increase in the debt ceiling.  American voters said no to Republican candidates in 2012.  Except in the House, where Speaker John Boehner has acted quickly to take charge.  First he made sure Majority Leader Eric Cantor understood the members blowing smoke up his (ego) came out on the short end of the political stick.
 
Then he moved to ensure the election of Cong. Cathy McMorris Rodgers (R-WA), a plain vanilla successor to Bob Nethercutt (R-WA) and Tom Foley (D-WA)  won a leadership election over winger Tom Price (R-GA) and added three other women to the seven-member leaders group.  Boehner adroitly expanded his own powers on the panel that doles out plum committee assignments by assigning himself five votes (up from four) to Cantor's three, Kevin McCarthy's two, and other members' single vote.

REPUBLICAN ENTITLEMENTS

The President is out hustling up public support for allowing the law to return tax rates on the wealthiest Americans to 39% as planned by the Bush era Republicans.  The new Republicans are gradually redefining the Grover Norquist tax pledges they all took.   To mean they can raise revenue by reforming the income tax base, but they will not agree to any temporary or permanent rate increases or any new taxes. And in any event, they won't do anything until Democrats agree to serious changes in eligibility and benefits of "entitlements" like the social insurance programs Social Security and Medicare.
 
Every "loophole" in the income tax code is a form of tax spending.  If you spend money on a home mortgage, the public agrees to cover your costs up to your income tax rate.  Same for charitable deductions, capital gains tax preference, employer paid health insurance.  The list is long and the amount of tax spending through loopholes is greater every year than the total amount of federal taxes paid.  Tax payers who take advantage of each of these tax breaks has become "entitled" to the extra pay, as have the other beneficiaries of tax spending - the homebuilders and realtors, the charities, financial institutions and investors, and the health care providers.

WHAT WOULD ROSTY DO?

Back in 1985-86 President Reagan challenged the Congress to reform the nation's income tax code.  Democratic Ways and Means Committee chair Dan Rostenkowski (D-IL) who had to originate the reform bill, took the President up on the challenge, worked with Treasury Secretary Donald Regan to shape a reform product that took the marginal rates from 50% (which he had lowered from 70% in 1981), to 35%.  We on the Senate Finance Committee applauded but did Rosty one better - dropped it to 25% with no net loss in revenue.  The compromise rate was 28%.  Rostenkowski was happy to have Reagan take credit for reforming all those "tax entitlements," knowing that Reagan as President would also have to take all the heat.  And there was plenty.  Can Republicans do that in 2013?  No indication so far they can or will.

AND AMBASSADOR SUSAN RICE

Sen. John McCain along with Sen. Lindsey Graham (R-SC) and Sen. Kelly Ayotte (R-NH) have decided to blame UN Ambassador Susan Rice for misrepresenting the cause of deaths of Ambassador Christopher Stevens and three other Americans in a terrorist attack on the U. S. Consulate in Benghazi, Libya.  McCain and Rice are of like personality and I suspect they have rubbed each other wrong in the past.  If McCain had not been buddy-buddy with Gaddafi up until the Arab Spring uprising, or had resorted to similar attacks on President Reagan back when 273 U.S. Marines lost their lives in the terrorist attack on their barracks in Lebanon in 1983, or when U.S. CIA officers were being routinely kidnapped by Iranians as trading bait for Reagan and Oliver North's missiles in 1985-86, I'd give McCain the benefit of the doubt.

But the issue now is not McCain.  It's Susan Rice, whom President Obama has defended as strongly as anyone in his administration, so far.  More importantly, it is the presidency and how well equipped President Obama will be in his second term of challenges abroad, to earn the Nobel Peace Prize he received just nine months into his first term.  Should Obama appoint Rice Secretary of State, he, and we, will end up paying a price we should not have to pay regardless of who is "right" so far as the deaths in Benghazi are concerned.  Hillary Clinton has set very high stakes for the secretary's job in very difficult times.  The challenges aren't getting any easier. President Obama needs an exceptional, not just a well-qualified, choice for that job.  I am unsure John Kerry would meet that test, nor would retiring Sen. Joe Lieberman (I-CT) who would like it.  Maybe New York Times columnist Tom Friedman does, or his candidate, Education Secretary Arne Duncan, but not Susan Rice.

PAUL RYAN IS ON HIS WAY

Cong. Paul Ryan (R-WI) will be on the GOP short-list for president in 2016.  In the meantime, he is positioned to be the principal policy guru for the House Republicans for the next four years.  The Romney running mate was given an extension of his Budget Committee chairmanship for the 113th Congress (2013-14) and he will be next in line to succeed Cong Dave Camp (R-MI) as chair of the powerful House Ways and Means Committee in the 114th when Camp’s three-terms as chair expire.  His voice will be key in the fiscal cliff debate on entitlement, tax, and Obamacare reform.  His principled approach to all three so far is reassuring given the intense lobbying pressure to be exerted on all three.

WHICH BRINGS US TOO QUICKLY TO 2016

The Democrats prefer Hillary Clinton.  She is well qualified.  She lost to Barack Obama in 2008 because enough Democrats used their campaign primaries and caucuses to express a preference for “change we can believe.”  She has served her country, its president, and her party extremely well since then.  Were she to win in 2016 and be awarded the Nobel Prize for Peace in 2017, she would have deserved it.

Republicans have a plethora of “rising stars.”  Plus they have another Bush.  Former Florida Governor Jeb Bush should have been the party’s Bush in 2000. No Bush understands the role of government in America today quite as well as Jeb Bush.  No “star” has the character-testing experience of policy reform leadership that he has.  Whether it’s Clinton or Bush, the 2016 election will likely be shaped by three people:  Barack Obama, Hillary Clinton, and Jeb Bush.

WILL WASHINGTON D.C.  EVER CHANGE?

The answer is “yes it can.”  It looks very much like D.C., once known as the “murder capital” of America, will record fewer than 100 murders in 2012.  It’s at 78 near the end of November.  Compared to an average of 457 a year from 1989-93.  What would it take to reduce the time and election influence  of  lobbyists for every single issue, special interest, living-off-deficit spending corporate and association group, to the point where “the middle class” felt as equally represented as they now feel safe in the capital city.

COMINGS AND GOINGS

Several months ago George Halvorson of Menagha and Sunfish Lake, MN, and Sausalito, CA, announced his retirement as CEO of Kaiser Permanente, the Oakland CA nonprofit healthcare system, effective the end of 2013.  The KP board last week announced that a Halvorson protégé, Bernard Tyson, current President and COO, will take over the CEO job from George in six months and become chair of the board at the end of 2013.

A year ago, Tomi Ryba left Allina Health, where she was CEO of its United Hospital in St. Paul.  She became the $695,000 a year CEO at 361-bed El Camino Hospital in Mountain View, CA.  During a labor dispute earlier this year, an initiative to cap nonprofit hospital executive salaries at twice the $165,000 salary of the CA Governor, was placed on the Nov. 6 ballot.  It passed.  So the board, which spent $179,000 to defeat the initiative and which, on Nov. 14,  gave Ryba a $137,850 performance bonus, will fight the issue in court.

Two years ago Cong. Michele Bachmann (R-MN6), demanded a leadership position among House Republicans and was ignored.  After barely defeating challenger Jim Graves in a re-election race she was forced to buy, Bachmann was ignored by her colleagues in Congress once again when the Republicans chose to elect four women to their seven-person leadership team, but not Michele.

Newt Gingrich, the policy entrepreneur, created The Center for Health Transformation in Washington, D.C., after being forced to leave as Speaker.  He sold memberships to health companies who wanted his involvement in their own entrepreneurial policy efforts for anywhere from $20,000 to $200,000 a year.  By the time Newt decided to become president, the company was taking in tens of millions of dollars a year.  But the campaign was expensive and the company filed for bankruptcy.  Last month, Wellstar Health System of Marietta, GA, bought it out of bankruptcy for $20,000.  A spokesman said of the decision, “we are going to be more action and results driven.”

GOODBYE GEORGE AND ARLEN

George S. Pillsbury died at 91 after a lifetime packed with contributions to those of us in Minnesota.  This, in the tradition of his marvelous family and of the enterprising Yankees who came to Minnesota in the 19th century to combine their entrepreneurial business talents with the hard work of socially conscious northern European immigrants.  George, and his wife Sally Whitney Pillsbury, were at the heart of the Minnesota Republican Party until it was hijacked by those whose disdain for government and impatience with bipartisanship made it not worth supporting.  It is because of Minnesota pioneers such as George Pillsbury that our state has been one of the most progressive in the country.  And with the exception of three famous DFL Senators, pretty much a progressive Republican state throughout its 154 years.

ARLEN SPECTER

I first met Arlen Specter during his 1980 election campaign to replace Sen. Dick Schweicker (R-PA).  It was in Lancaster, PA, a town that reminded me a lot of the MN dairy country in which I was raised, to which I'd been sent by the Senate Republican Campaign Committee. I was with him when he left a fund-raising event to check into a hospital ER for what turned out to be his first successful fight against brain cancer.  His last, this year, ended his 82 years.  And I spent most of a night with him and his infamous martinis before being arraigned in 1992.  I saw him last as he packed up his Senate office in 2010 after losing a primary re-election. He was interviewing me for his latest book on his kind of politics.  Arlen Specter always seemed to be spoiling for a good fight which made him a very special U.S. Senator, and a man who always told you what you needed to hear.

AND SOUTH CAROLINA SENATOR STROM THURMOND

Anyone who ever spent time in the U.S. Senate and its family of employees since 1955 has Strom Thurmond stories. As do I. Joseph Crespino, a professor of history at Emory University in Atlanta, has written an historical biography of Thurmond.  Entitled Strom Thurmond's America, it promises to be not as kind as I might be considering Strom was already 75 in 1978 when we became colleagues.  But I noticed recently that some things never change in South Carolina politics.

The South Carolina Supreme Court allowed Strom and Nancy's son Paul Thurmond's name to remain on the ballot for state assembly even though 200 other names, a third of whom were black,  were removed because of a quirk in filing requirements applicable to Thurmond as well.  A three-judge federal district court panel was due to decide the case, but to a political science prof in SC "this is just the good old boys network protecting themselves."

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