Rumors and whispers

by Ken Feltman

updated February 1, 2009

The stimulus package passed by the House includes an important – and thus far undebated – healthcare reform provision. The bill provides for a Comparative Effectiveness Research Council. The Council would identify medical procedures determined to be ineffective or too expensive. Those procedures would no longer be reimbursed under federal healthcare programs and Congress could remove the tax favored status of private plans that did not also ban them. This would be a dramatic step toward rationing of healthcare.

Tom Daschle, President Obama’s choice for Secretary of Health and Human Services, has advocated something quite similar – a Federal Health Board – that would determine which medical procedures would not be eligible for reimbursement in post-healthcare reform America. Something so important as rationing healthcare should be debated, not slipped into a bill designed to stimulate the economy.

Daschle’s appointment is in jeopardy because, like Treasury Secretary Timothy Geithner, he has a tax problem. On January 31, 2009, a key Republican senator told me that rumors are circulating that the Obama administration knew weeks ago about the Geithner and Daschle tax problems. Chief-of-Staff Rahm Emanuel determined that Daschle’s situation would appear to average Americans to be much more serious than Geithner’s. He calculated that as a former majority leader of the senate, Daschle would be able to count on old friends and fellow “Senate Club” members to vote for him, regardless of the tax trouble.

Emanuel argued, therefore, that if Daschle’s confirmation proceeded first, he would be approved but Geithner would be sacrificed because the public would not permit two tax-tarnished cabinet secretaries. So Geithner went first and survived. Supposedly, White House Democrats have been praising Emanuel for the shrewdness of this strategy. Because of Emanuel’s high-handed treatment of Republicans, the Senate Republicans may overcome their reluctance to oppose a former club member.

Emanuel denied any part in developing this strategy. But it is a measure of his power – real and imagined – that Republicans see him as the mastermind. Obviously, if Daschle is brought down, Emanuel’s stature will be diminished.

Emanuel will take credit for the likely appointment tomorrow of Republican Senator Judd Gregg as Secretary of Commerce. Gregg is the key economic policy authority among senate Republicans. He is one of the two or three most influential Republicans in the senate. So Obama can remove an important GOP resource from the senate and probably get a Democrat in that seat, either through appointment by New Hampshire’s Democratic governor now or in an election in 2010.
Gregg’s leaving the senate, coupled with Minnesota finally going Democratic after court challenges are decided, could give Obama his filibuster-proof senate.

While the new Obama administration seems off to a good start, the Republican minority has been given reasons to grumble and obstruct. When Emanuel thumbed his nose at Republican members of Congress at the inauguration ceremony, he rubbed salt in a wound that may fester. Why did he gloat?

Soon, Obama confronted some of the resulting anger when he gathered the GOP House and Senate leaders to try for bi-partisan support for his economic recovery program. The Republicans, expected to be compliant, balked and the president reminded them that he would not compromise because he had won the election: More salt in the wound.

The Republicans resolved to stand tough and by the next day, Obama had backed off and all but admitted that tax cuts would be part of the recovery plan. Emboldened, the Republicans decided to keep resisting. In a show of solidarity, not a single House Republican voted for the stimulus package.

Senate Democrats are growing concerned. If the Democrats cannot get Senate Republicans to support the stimulus bill, Obama will “own” the bill as soon as he signs it. Any problems later will be tied to Obama and the Democrats. This is quite a risk so early in a presidency. Obama was at least initially willing to work with Republicans. It was House Speaker Nancy Pelosi who larded up the bill with pork and social policy provisions (formerly called “earmarks”), losing Republican support.

No matter what happens now, Obama has lost ground in his first major legislative test. Emanuel has had a shaky start. He alienated Republicans with his arrogance and got rolled by Pelosi. Look for the White House to retool quickly to avoid further slips.

An association that consults in the development of the software used to prepare returns is outraged at the testimony by Treasury Secretary Timothy Geithner. They believe he knew he was evading taxes and suggest that other Geithner shoes may drop.

New York Governor David Paterson’s ineptness in naming a senate replacement for new Secretary of State Clinton angered all three of the state’s Democratic political families and their supporters. The Kennedys, the Clintons and the Cuomos all felt abused by the process. Look for Paterson to be challenged in a primary and rate a Republican as the favorite to replace new Senator Gillibrand in the House.
Speaker Pelosi is angry that she was not consulted before Paterson moved a popular-back-home, right-of-center House Democrat to the senate, leaving a GOP-leaning district likely to switch back to Republican. In addition, Gillibrand will be challenged in a primary from the Democratic left. So Paterson created a mess, not a solution.

About Radnor Reports

Ken Feltman is past-president of the International Association of Political Consultants and the American League of Lobbyists. He is retired chairman of Radnor Inc., an international political consulting and government relations firm in Washington, D.C. Know as a coalition builder, he has participated in election campaigns and legislative efforts in the United States and several other countries.
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