Truth about the public option momentarily emerges, quickly scampers back into hiding

Tom Daschle confirms, then denies, what has long been clear: Obama secretly negotiated it away early on

Published October 5, 2010 8:06PM (EDT)

(updated below)

As I've noted before, the column of mine which produced the greatest level of hate mail and anger in the last year -- both in terms of intensity and quantity -- was this one from August, 2009, when I compiled the evidence strongly suggesting that the White House, despite Obama's multiple statements to the contrary, had secretly bargained away the public option with corporate interests early in the negotiation process and therefore did not intend to push for its inclusion in the final bill.  That produced so much anger because it contradicted the central Democratic orthodoxy at the time that Obama -- as he claimed in public -- was trying as hard as he could to have a public option in the health care bill, but . . .  gosh darn it, he was unfortunately stymied by his inability to get 60 votes for it, despite his best efforts (the fact that the health care bill ultimately passed via reconciliation, whereby the public option would have needed only 50 votes, was a separate issue).

Illustrative of the backlash was this post from The New Republic's Jonathan Chait:

I don't agree with Greenwald's positions on foreign policy and civil liberties, but he does have a valid beef with Obama in these areas. But when he insists that Obama secretly opposed the public option and has never wanted more stimulus, in the face of overwhelming evidence that the administration pushed the Senate as far left as it would go on those bills, he is revealing himself as a fanatic.

At the time Chait wrote that, there was already ample evidence that the White House had, in fact, secretly negotiated away the public option early on in the process, including confirmation from a New York Times reporter of the existence of such a deal, as well the fact that Russ Feingold said as clearly as he could that the reason there was no public option in the final bill was because the White House never pushed for it, because the final bill -- without the public option -- was the "legislation that the president wanted in the first place."

But now, definitive evidence has emerged that this is exactly what happened:  a new book by Tom Daschle.  As Igor Volsky of ThinkProgress expertly documents -- both by citing to Daschle's book and by interviewing him -- the White House had negotiated away the public option very early in the process (July, 2009), even though Obama and the administration spent months after that assuring their supporters that they were doing everything they could do have a public option in the bill:

In his book, Daschle reveals that after the Senate Finance Committee and the White House convinced hospitals to to accept $155 billion in payment reductions over ten years on July 8, the hospitals and Democrats operated under two "working assumptions." "One was that the Senate would aim for health coverage of at least 94 percent of Americans," Daschle writes. "The other was that it would contain no public health plan," which would have reimbursed hospitals at a lower rate than private insurers.

I asked Daschle if the White House had taken the option off the table in July 2009 and if all future efforts to resuscitate the provision were destined to fail:

DASCHLE: I don’t think it was taken off the table completely. It was taken off the table as a result of the understanding that people had with the hospital association, with the insurance (AHIP), and others. I mean I think that part of the whole effort was based on a premise. That premise was, you had to have the stakeholders in the room and at the table. Lessons learned in past efforts is that without the stakeholders' active support rather than active opposition, it’s almost impossible to get this job done. They wanted to keep those stakeholders in the room and this was the price some thought they had to pay. Now, it's debatable about whether all of these assertions and promises are accurate, but that was the calculation. I think there is probably a good deal of truth to it. You look at past efforts and the doctors and the hospitals, and the insurance companies all opposed health care reform. This time, in various degrees of enthusiasm, they supported it. And if I had to point out some of the key differences between then and now, it would be the most important examples of the difference.

[VOLSKY]:  Despite being "taken off the table" as a result of the "understanding," the White House continued to publicly deny claims that it was backing away from the provision even as it tried to focus on other aspects of the bill. "Nothing has changed," said Linda Douglass, then communications director for the White House Office of Health Reform in August of 2009 and many times thereafter. "The president has always said that what is essential is that health insurance reform must lower costs, ensure that there are affordable options for all Americans and it must increase choice and competition in the health insurance market. He believes the public option is the best way to achieve those goals."

What Daschle said here -- in his interview with Volsky and, apparently, in his new book -- is crystal clear, and is consistent with what has long been clear:  despite its stream of public statements to the contrary, the Obama White House made no efforts to have a public option in the bill because their secret, early agreement with "stakeholders" was that no public option (and thus no real mechanism of competition with private industry) would be created. 

One can reasonably argue that entering into secret, backroom deals to please industry interests was a "pragmatic" thing to do, notwithstanding how often Obama railed against exactly such transactions during his campaign (remember the I'll-put-all-health-care-negotiations-on-C-SPAN pledge?).  One can also argue that the public option would never have gotten 60 votes even if Obama and the White House had pushed for it.  But one cannot argue that the White House did push for it, or even that they wanted it, since it was part of their deal with industry and its lobbyists from the start that it would not be in the final bill.

Quite amusingly and predictably, this ThinkProgress post was up for a very short period of time when Daschle suddenly emailed them a "clarification," which said this (see the Update):

"In describing some of the challenges to passage of the public option in the health reform bill, I did not mean to suggest in any way that the President was not committed to it. The President fought for the public option just as he did for affordable health care for all Americans. The public option was dropped only when it was no longer viable in Congress, not as a result of any deal cut by the White House. While I was disappointed that the public option was not included in the final legislation, the Affordable Care Act remains a tremendous achievement for the President and the nation."

But that directly contradicts what Daschle told Volsky (the Public Option "was taken off the table as a result of the understanding that people had with the hospital association, with the insurance (AHIP), and others"), as well as what, apparently, is in his own book.  As soon as the ThinkProgress item was up, a controversy begun to erupt, for obvious reasons.  We'll never know what prompted Daschle to issue this "clarification" -- Daschle is, let's recall, exactly what Matt Taibbi so memorably described him as being -- but it's painfully clear that the actual truth about what happened with the public option finally emerged quite clearly, albeit for a few short moments.  Is Daschle going to retract his not-yet-released book, too?


UPDATE:  David Dayen has an excellent post on this matter.

By Glenn Greenwald

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