Effective Presidential Strategies: the Case of the Health Care Reforms of Bill Clinton and Barack Obama

Beatriz Rey

Introduction How do presidents negotiate and enact policy reforms in a difficult legislative environment? What strategies do they use and which political and economic actors do they privilege during negotiation? How does the content of policy reform determine (and is determined by) presidential strategy? This essay considers the case of Health Care Reforms of Presidents Bill Clinton (1993-1994) and Barack Obama (2009-2010). Compared to their Latin American counterparts, American presidents are endowed with little formal legislative power. Therefore, one should expect them to be especially prone to informal negotiation with other important political actors. Though the literature on American presidential power is vast, I argue that there is still a contribution to be made by analyzing how presidential negotiation occurs on different levels of the policymaking processes particularly the policy, political, and problem streams defined by John Kingdon. My approach therefore privileges this discussion through the analysis of Presidents Bill Clintons and Barack Obamas Health Care reform bills. Though they were both liberal presidents operating in a political environment full of economic and political veto players, Clinton and Obama differed immensely in their informal negotiation strategies or lack thereof. The first section briefly describes Kingdons theoretical model and presents the method utilized to analyze the content of Clinton and Obamas proposals. Sections II and III describe the two presidential strategies in turn, while Section IV analyzes the content of their proposals and the results of their informal negotiation strategies. Section V concludes.

I) Literature and method Literature on public policy in the field of political science is divided into two manners of approaching the subject. The first, represented by Lowi (1964) and Kingdon (1995), considers all of the processes and agents involved in the approval (or not) of a law. The second, presented by Neustadt (1960) and Edwards II (2009), states that presidential strategies are responsible for defining a public policy. This article seeks to establish an association between the aforementioned theoretical approaches using a specific case study, namely the health care reforms of Presidents Bill Clinton and Barak Obama. The theoretical model used herein is that of Kingdon, which presents the concepts of the streams of policy, political and problem, meaning that presidential ability, incentives given to legislators, the content of proposals and other factors are responsible for the implementation of a public policy. In this essay, the number of alterations suffered by the proposals in question during the legislative process defines the concept of an efficient presidential strategy. Did the president give in too much or was he too rigid in the negotiation of his plan for health care reform? For this reason, analysis will focus on the proposals and speeches of both presidents as representations of the stream of alternatives (policy stream) generated by the Executive during health care reform. Ten issues related to health care and the alternatives proposed by each president were selected: i) Medicare; ii) Medicaid; iii) how to reduce the systems high costs; iv) how to pay for the plan; v) patients rights; vi) the uninsured; vii) the insured; viii) quality of services; ix) medication; and x) model. The selection of these themes is justified by their recurrence in both Administrations1. The following speeches, given by Mr. Obama and Mr. Clinton, were analyzed: presidential candidacy speech, inaugural address, first address to Congress, address to Congress on Health Care Reform and State of the Union address. Furthermore, this article analyzes President Clintons Health Care Reform Bill, presented in 1993, in addition to the House of Representatives and Senate proposals for Health Care Reform under the Obama Administration (2009), President Obamas own proposal, presented in March 2010, and the Reconciliation Bill (2010).

There are certain aspects of the system that only one President chose to cover, such as the idea of a personal card to record health care benefits for a patients entire life (Clinton) and the creation of the public health care option (Obama).

It is also essential to understand the presidential strategy adopted by each president, which generally include the three streams laid out by Kingdon. For example: the option to not seek political agreement is part of the political stream. To ensure standardization, the following aspects of presidential strategy will be considered: i) seeking support from legislators of the opposition party; ii) seeking support from legislators of their own party; iii) preparation of a plan within the Executive Branch or the Legislative Branch; iv) creation of an extra-congressional commission to study the issue; v) close relations with agents involved in the process; vi) willingness to negotiate alternatives to the proposal; vii) establishment of a timetable for reform; and viii) strategy to introduce the bill to Congress. An analysis of the Clinton and Obama proposals will help identify which president was more willing to compromise. Therefore, facing any given scenario, the president would opt for strategy X. Facing another scenario, the president would opt for strategy Y. During this process, the president will either reach a compromise with legislators and interest groups, or will remain uncompromising. The words liberal and conservative used in the final analysis are related to the American sense of the words. The level of government participation in the countrys matters defines whether a proposal is liberal or conservative. Therefore, if the proposal is liberal leaning, the government has a more direct role in the health care system. If the proposal is conservative, the government plays a lesser role in the health care system.

II) Clintons Strategy On January 25, 1993, shortly after his inauguration as President, Bill Clinton announced the creation of an extra-congressional commission, known as the Presidential Task Force, tasked with the preparation of a health care reform proposal. This proposal was to be submitted to Congress at a later date. The preparation process was set to last one hundred days, to allow the law to be submitted to Congress with the Budget Proposal, also under preparation by the Presidents Administration. President Clinton nominated the First Lady, Hillary Clinton, as head of the Task Force, a decision that indicated the importance of the issue but also created a number of difficulties in the discussion of proposals. Economic advisors and others involved in the project did not feel they had the liberty to question the Presidents own wife. Bok (2003) states that President

Clintons choice silenced a number of voices in the health care reform debate. Despite having heard from members of several interest groups, legislators and specialists, the group was unable to assimilate the myriad of opinions inherent to such a debate. The plan was not only prepared by the Executive Branch, but also came to carry the Presidents own name. House or Senate proposals were only presented after September 1993, once the President bill had already been presented to Congress. At more than one thousand pages, the bill proposed that health care coverage would be linked to the Americans place of employment and that plans would be acquired through competitive Health Maintenance Organizations (HMOs) regulated by the government. Given that the plan was composed of a number of opinions, it was already believed to contemplate all points of view on the matter. Furthermore, there was a very minimal consensus that the moment was right for reform. Paul Starr states that an error was made in gauging Republican leaders and interest groups. The Administrations strategy, according to Mr. Starr, was to force a debate that, once resolved, would bring Republicans to the Presidents side. The Presidents team, however, placed their faith in backers of certain aspects of the reform, who they thought would fight to defend it. Even so, Starr tells us that there was another strategy among the Presidents advisors:
(...) The administration should go to Congress with a big program intentionally including elements that we would have to bargain away later. In exchange for support, some benefits could be cut, the caps relaxed, the alliances scaled back or sacrificed entirely.

Not building a minimum of political consensus at the moment was, therefore, part of the strategy adopted by President Clinton. The Presidents first setback came a month after the creation of the task force. An advisor had already warned Mr. Clinton that his strategy to tie health care reform to the budget proposal through a mechanism known as budget reconciliation2 would not be well received by members of Congress. At the beginning of March 1994, the Democratic Senator Robert Byrd stopped the President from moving forward with his plan, stating that the Administrations strategy would be tantamount to prostitution of the process, by forcing a very complex, very expensive and little understood bill through Congress. The introduction of Clintons plan to Congress marked the beginning of a very disorderly process within the policy stream. Instead of a single Democratic proposal and
2

A mechanism that would allow the President to pass the Bill in the Senate with a mere 50 votes.

a single Republican proposal, there were several proposals. Bok (2003) points out that 27 different bills were introduced to Congress, identified by the media by 110 distinct names. Moreover, the Administration was unclear with regards to the President's proposal. An internal memo from the White House said: "Whatever you do, do not offer details into the plan" (Bok, 2003). Lobby groups and legislators that opposed the plan pounced on this lack of both clarity and strategy. The President and his team only began to invest in political support in the months leading up to Congressional elections, which were set for November 1994. The first targets were democratic legislators and their electors, all of which were unsatisfied by the creation of competitive, government-regulated HMOs. With elections, the debate became heated. In June, Senators Patrick Moynihan and Bon Packwood warned President Clinton that they would not have the votes needed for universal coverage or HMOs. They stated that Republicans were certain they would win the elections in November. The President then held one-on-one meetings with moderate Republican Senators, such as John Chafee, Dave Durenberger and John Danforth. In the following month, Senate Majority Leader George Mitchell warned the President and the First Lady that they would need to create a new plan that excluded proposals for universal health care and employer mandated coverage. Mr. Mitchell also tried working on a new bill, which would carry his name, only to have Democratic leaders of both chambers of Congress give up on health care reform on August 25. Neither the House of Representatives (where the Democrats held a 257 to 176 majority) nor the Senate (where Democrats held a 56 to 44 majority) came to vote on any of the bills introduced to Congress. Table 5 presents the aspects of President Clintons strategy for health care reform. It is possible to assert that he focused on the preparation of a plan through the creation of an extra-congressional commission. The President also invested in the construction of proposals within the Executive Branch, with the indirect participation of legislators in the debate. As previously pointed out, the President only sought support of Democratic and Republican Congressmen once the bill was introduced to Congress. Furthermore, as shown by Paul Starr, the Presidents team was open to negotiations of the proposal, but only after it reached the House of Representatives and the Senate. In the end, the agenda laid out by the Presidential team was not followed the bill was to

be proposed to Congress one hundred days after the election, but was only presented nine months later. Table 5 Strategies of Barack Obama and Bill Clinton in Health Care Reform Aspects Sought support from members of the Congressional opposition? Sought support from members of their own party in Congress? Proposal prepared by the Executive or Legislative Branch? Created an extracongressional committee to review the issue? Worked closely with others involve in the process? Willing to negotiate alternatives to the proposal? Established a timetable for reform? Yes, but the timetable was not followed Yes, and the timetable was followed To a certain extent Yes To a certain extent Yes Yes No Executive Legislative To a certain extent Yes Clinton No Obama No

III) Obamas Strategy On March 5, 2009, two months after his election, President Barack Obama took part in a discussion on health care reform held by the White House. At the event, he stated that reform was not merely a moral imperative, but a fiscal one. In the budget planned for the year, he requested that Congress allocate an additional US$600 million to reforming

the health care system over the next ten years. At the same time, the Presidents team began to encourage Democratic Congressmen to initiate a reform. In May, the President warned Democrats: if not passed by the end of the year, the moment would be lost. On June 14, Democratic Representatives introduced a bill on the theme. In addition to adopting the public option of health coverage, they included efforts to decrease Medicare spending, a tax on high-income individuals and punishments of companies that did not provide health coverage to their employees. Even with the revolt of the Blue Dog conservative Democrats, the plan was adopted by three commissions without Republican support. In the Senate, the Health, Education, Labor and Pension commissions began preparing a bill without the public option for coverage. The Financial commission, led by Democratic Senator Max Bacus, tried to prevent consideration of the proposal to ensure the possibility of bipartisan support. The approval of the proposal by the Health commission on July 15, also without Republican support, laid out a bill to be adopted by the Senate at a later date. This decision was made after the White House launched a television campaign pleading for support on a theme that spearheaded President Obamas domestic agenda. The Congressional recess in August gave way to a wave of conservative protests about the debate. To reaffirm the principles of his campaign proposal (the public option being one), Obama spoke to Congress in September 2009 and was able to rescue momentum for the reform. During the event, the Republican Representative Joe Wilson yelled to the audience that Obama was lying when he said that illegal immigrants would not receive coverage. Representative Wilson later apologized for his actions. After months of intense negotiation and political infighting, the House of Representatives approved its version of health care reform on November 7. To ensure the number of votes required, Nancy Pelosi, the speaker of the House, had to give up on specific taxes for the public health care plan (to be taxed as private plans) and include anti-abortion measures. On Christmas Eve, the Senate also approved its own version of a bill. To reach the 60 votes needed to pass, the Senate Majority Leader, Democrat Harry Reid, gave up on the public option and the expansion of Medicare. Furthermore, Democrats had to add specific provisions, including one granting extra Medicaid funds

to the state of Nebraska, demanded by Senator Ben Nelson. Republicans once again used all tactics at their disposal to prevent approval of the bill, but were unsuccessful. The election of Scott Brown to the seat of deceased Senator Ted Kennedy in 2010 placed the Executive branch in a delicate position, leading to the loss of the 60vote supermajority needed to prevent a filibuster. The Presidents team spend weeks hammering out a new strategy, finally deciding to present its own version of the bill that considered a number of aspects found in the House and Senate bills, including the removal of the public option. On February 25, Obama took part in a debate with Congressmen from both parties that was transmitted on television and lasted an entire day. The White House sought to reach a compromise on the differences between the two bills. In the days leading up to the final vote on the bill, the President pressured Democrats to vote in favor of the reform, in addition to meeting with a number of individual Congressmen. Through this marathon of individual meetings, Nancy Pelosi managed to secure support from members of the House. Republicans in both houses of Congress, however, remained steadfast in their opposition during this phase. Table 5 presents the aspects of President Obamas strategy, the first two rows of which highlight the partisan effort made by the President and his team, clearly demonstrating that the Republican opposition was essentially excluded from the discussion. The exception to this was the debate on February 25, which brought both parties to the bargaining table. Compared to Clinton, President Obama gave freedom to the Congress in the construction of their proposals he only directly interfered in the process after the election of Scott Brown, which put the reforms chances of approval at risk. Obama had to reaffirm the urgency of the plan and moved to introduce a consolidated version of the proposals to both houses of Congress in an attempt to reconcile their differences. Obamas close ties with the leaders of the process were clear during the first discussion at the beginning of 2009 and the bipartisan debate during February 2010. As I will later discuss, the President, his team and Democratic Congressional leaders were very open to negotiation Obama eliminated an item he held to be quite important: the public option for coverage. Finally, the White Houses timetable was almost accomplished, with health care reform taking three months longer than planned. IV) Analysis of Proposals

From the moment he announced his candidacy in October 1991 to the presentation of his health care reform plan to Congress, Former President Clinton maintained essentially the same proposals, including the universal model, which was one of his first promises. During his speech to accept the Democratic nomination (July 1992), Clinton said, a health care plan should be a right and not a privilege. The population only came to receive more details on the plan during his speech to Congress on the health care system, at which point Clinton introduced the controversial employer mandate (to force companies to provide their employees with health insurance), fines for companies that did not do so and managed competition (private health care companies that compete within a government-regulated market). During his speech, President Clinton promised that rates would not increase under his plan, while also laying the foundations for a tax on cigarettes. During his State of the Union speech, one of the most important in the country, Clinton would once again mention the cigarette tax, even though the tax would be included in the final bill as a sin tax. This sin tax was the single change between Clintons speeches and his proposals, the rest of which remained unchanged in the face of opposition. As mentioned, this was the strategy that the Presidents team had decided upon. They would be open to negotiations after the bill was introduced to Congress. However, until that moment, Clinton would not give in on two controversial measures included in the proposal (employer mandate and managed competition). Obama, however, proved to be far more flexible. Obama, while still a Senator, first proposed universal health care coverage in February 2007. Upon accepting the Democratic nomination in August of the following year, Obama promised that premiums3 would be reduced and, in addition to providing access for all Americans, coverage would be available at accessible prices. At his speech to Congress in September 2009, Obama presented the most polemic measure of his proposal: the public health insurance option. Furthermore, the President included an idea taken from his presidential rival, Senator John McCain: patients without coverage due to pre-existing conditions would be afforded access to low-cost plans. The creation of a health care market, through which individuals and companies could acquire services at competitive prices, was also included in the proposal.
3

Premiums represent the amount of money that an insurance company charges to provide health coverage.

The proposal offered by the House of Representatives included more clarifications than outright alterations, including the closing of the donut hole4 created by Medicare Part D, a 0.3% tax on couples with income of over US$1 million, an 8% fine on the payroll of companies that fail to provide coverage for their employees and another 2.5% fine on the income of individuals that do not obtain health care coverage. The Houses plan maintained the creation of a health care market, as well as the public option. The Senate, however, made a number of significant changes to the proposal. Senators only granted a 50% discount on prescriptions that were causing the donut hole problem. The state of Nebraska would be the only state in the Union to receive 100% of federal funds needed to expand Medicaid, while other states would receive only 57%. Health care plans known as Cadillac plans (with premiums of over US$8,500 for individuals and US$23,000 for families) would be taxed at a rate of 40%. Furthermore, the Senate moved to impose a 10% tax on artificial tanning. Fines levied on companies with more than 50 employees that did not receive health care coverage would be US$750 per employee and US$3,000 per employee that received federal subsidies. The Senate also removed the public option, one of the most important clauses for President Obama. In the presentation of his new plan in 2010, President Obama opted to remove the public option, as well as the funds for the state of Nevada, instead deciding that all states would receive significant funding for the expansion of Medicare. The Senate bill was approved by the House of Representatives, which prepared a set of alterations for final approval by the Senate. The reconciliation bill included measures from the Houses original proposal and Obamas second proposal (without special privileges for the state of Nebraska and the end of the donut hole, among other points). The final proposal also included two significant changes: an increased fine for individuals that do not obtain health care coverage and a larger tax credit for low-income families and individuals. Graph 2 presents a comparison between the Clinton and Obama plans. The first Obama proposal, which contained the public option, is known as Obama 1, while Obama 2 refers to the plan that excluded the measure.
4

In 2003, President George W. Bush signed the Medicare Modernization Act, known as Medicare Part D. The bill generated the problem of the donut hole: a beneficiary that exceeds the cost of medications prescribed (the limit is $ 2.830) becomes responsible for the total cost of these drugs until the costs reach the catastrophic coverage level ($ 4.450).

Graph 2 Proposals for Health Care Reform (1993/1994 and 2009/2010)

Final Bill (Obama)

Obama 1

Clinton

Obama 2

Liberal Trend Conservative Trend

The graph makes it quite clear that Clintons plan tended more towards liberal policy than that of President Obama. Universal coverage, the employer mandate and managed competition, which is based on state interference in the market, are all liberal aspects. These proposals, with some alterations, were accepted by the Obama administration and it is possible that Clintons plan would be better accepted under the Obama Administration than it was during his time. Nonetheless, the lack of the public option in Clintons plan makes it more conservative than the plan originally put forward by President Obama. It could be said that Clinton remained resolute during his reform, due to the lack of changes to his proposal. The lack of willingness to negotiate, part of President Clintons strategy, ensured the preservation of his plan. This position, however, ensured that the plan gained little support in Congress. Graph 3 provides a timetable of Obama, the House of Representatives and the Senate over the last two years. Obama 1 marks the Presidents most liberal position, as well as the House proposal, which maintained the public option. The Bill approved

by the Senate is the exact opposite of Obama 1, with the exclusion of the most important liberal element. In opting to give in to the Senate, the President moved to Obama 2, at which point he removed the public option. Both Obama 2 and the final bill are more conservative for this very reason. Graph 3 Proposals for Health Care Reform (2009-2010)

Final Bill

Obama 1

House Proposal

Obama 2

Senate Proposal

Liberal Trend Conservative Trend

Obama remained open to negotiation during the entire process, suffering an important setback when he lost one of the main pillars of his proposal, even though he did manage to advance the bill through Congress. Furthermore, the President also managed to push an important improvement to the American health care system through Congress: universal coverage, even if through the acquisition of private health insurance. In both 1993 and 2009, health care was a relatively important part5 of the public agenda that garnered a great deal of mobilization and a favorable political climate. The strategies adopted by both Presidents were very different and led to varying outcomes with regards to the preservation of the initial proposal. It is clear that Clintons unwavering position was not at all efficient, having provided for very little progress in Congress. The bill simply did not gain enough momentum to move forward. Obama, however, made a very important concession and gained approval for his proposal with
5

During the Clinton Administration, the issue was discussed to a marginal degree.

the inclusion of an essential measure. Coverage for all Americans certainly was on the list of offensive interests of the President, since the high costs of health care is largely explained by the non-universal coverage. In conceding to the removal of the public option, Obama signaled that this measure was not among the most costly concessions. The cost of failure to approve the reform, however, would have been immense. Failure to gain approval for health care reform would have done immeasurable damage to the President, the population and the federal deficit. Obama preferred to make concessions rather than risk not gaining approval for the reform. Based on this analysis and in comparison with Clintons strategy, it is clear that Obamas tactics were far more effective. What elements were essential in making Obamas strategy so effective? Willingness to negotiate cannot be considered the sole factor, given the fact that the three streams and their actors have an important impact on the final result. To skirt the difficulties caused by weak legislative power, the President turned to a number of creative resources, including participating in debates on the issue and decisive intervention when the processed seemed to stall (Obama 2). The President was persistent, sought to make his voice heard, worked his political connections and, in giving Congress its own freedom, inverted the logic used by previous Administrations in their attempts to pass health care reform. In other words, one could say that Obama was a policy entrepreneur. Kingdon defines this actor as by a number of different qualities, such as the capacity to make themselves heard, negotiating skills and persistence. Policy entrepreneurs play important roles in the process to unite the policy, political and problem streams. Policy entrepreneurs also unite solutions to problems, proposals to political moments and political events to policy problems. For Kingdon,
Without the presence of an entrepreneur, the linking of the streams may not take place. Good ideas lie fallow for lack of an advocate. Problems are unsolved for lack of solution. Political events are not capitalized for lack of inventive and developed proposals. (2003; 182)

This argument proves very useful in the quest for an explanation of the success of Presidents with weak legislative powers. When these leaders are creative and act as policy entrepreneurs, they are able to overcome the veto power created by the institutional and electoral mechanisms found in the American political system.

V) Conclusion This work sought to analyze the effectiveness of Presidential strategy during the health care reforms of Bill Clinton (1993-1994) and Barack Obama (2009-2010), considering concessions made regarding the content of the proposals in question. The arguments of Kingdon and, to a lesser degree, of the institutionalist discourse, that focus on the legislative power of a President, were the driving forces of this work. In the case of the United States, the political process ensures that the President has less legislative power. Therefore, American Presidents are forced to appeal to differentiated and creative strategies to overcome the veto power of the Legislative body and the American people (Immergut, 1922). Kingdons streams (policy, political and problem) were applied to both cases. In focusing on the Presidents proposals, this work focused more on the policy flow and the process of creating alternatives to a problem. It becomes clear that Clinton remained unwavering in his proposal and had little success in Congress. Obamas proposal, however, was more liberal, in the American sense of the term. President Obama opted to make a number of significant concessions, ensuring greater success in Congress. He began with a liberal proposal and was able to pass a moderate bill, centered between the right and the left. None of the concessions were considered to be of great importance, as Obama gave the utmost priority to passing the reform. In doing so, President Obama adopted a more effective strategy than Former President Clinton. The main point of this essay is that Presidents with little legislative power must be creative in pushing their proposals through Congress. In Kingdon terms, the President must act as a policy entrepreneur. Future studies might focus on other aspects of Presidential proposals for the health care system, in addition to applying the argument employed herein to other areas of public policy.

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