ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, May 19, 1996 TAG: 9605180001
SECTION: HORIZON PAGE: 1 EDITION: METRO
SERIES: THE SYSTEM
SOURCE: HAYNES JOHNSON AND DAVID S. BRODER
The health care reform fight shows that our mental picture of the lobbying process is badly out-of-date. When it comes to the power of special-interest groups, the health care reform struggle requires us to redraw the pictures in our heads and see the new world as it really is. Part two of a series
More broadly, the health care reform fight shows that our mental picture of the lobbying process is badly out-of-date.
Health care reform may well have been the most expensive lobbying battle in history. Estimates of the total amount spent range from $100 million at the low end of the scale to $300 million. Close to $50 million of campaign contributions came from groups with major stakes in the battle.
In this fight, the interests demonstrated their ability to move far beyond traditional techniques of ``buying'' political access. They showed - at least on the opponents' side - that for the first time, they had learned to use all the tools of modern politics and political communications for their special-interest objectives. Like the officials they were trying to influence, these groups showed they could manipulate public opinion and mobilize Main Street supporters to deliver at the ballot box. Seasoned political operatives ran some of the lobbying campaigns. The same organizational and propaganda techniques that were employed in the campaigns of Ronald Reagan and George Bush were used to kill the Clinton bill.
The interest groups for which they worked were almost indistinguishable from presidential campaign organizations in the scope of their fund raising, the scale of their field organizing, the sophistication of their advertising and public relations skills, and the speed of their electronic communications. But unlike the political parties, which represent broad coalitions of voters who agree on at least a general approach to government, these groups represented narrow interests with very specific economic goals. Together, their combined financial resources and the influence they exerted on legislators exceeded those of the Democratic and Republican parties. And like those parties, they pursued their goals continually, learning from one fight how better to wage the next one.
The success they achieved in 1993-94 emboldened them to use these same techniques, not to thwart a president's initiative, but to advance their own objectives in a new Congress their resources helped to elect. Their operations illuminate how The System operates today - and explain why so many citizens believe that government no longer represents them.
More broadly, the health care reform fight shows that our mental picture of the lobbying process is badly out-of-date. As Walter Lippmann once observed, we are all captives of the pictures in our heads. We think the world we know is the world that exists, and the world that will be. When it comes to the power of special-interest groups, the health care reform struggle requires us to redraw the pictures in our heads and see the new world as it really is.
What happened was nothing less than a war, a war without quarter, waged until one side had thoroughly defeated the other. Unbeknownst to the administration, the opponents had used the time between May, when the Clinton people were supposed to have introduced their plan, and September, to prepare for a political assault the likes of which had never been seen.
The groups that mobilized to fight the Clinton plan included not just those with the most direct economic stake in the outcome, like the Health Insurance Association of America and the National Federation of Independent Business, but such seemingly disinterested organizations as Pat Robertson's Christian Coalition, which became one of the groups meeting privately at the conservative lobbying group, Citizens for a Sound Economy, calling themselves the No Name Coalition. Christian Coalition newspaper ads - featuring a picture of a friendly family doctor preparing to give a child an immunization shot - warned, ``Don't let a government bureaucrat in this picture.'' The Clinton plan, it said, spelled rationing, mandatory abortion options, less choice of doctors and maybe a million lost jobs.
This opposition coalition was further cemented by private meetings its members held with congressional opponents of reform. Soon after the Clinton bill was introduced, William R. "Billy" Pitts, the top assistant to House Minority Leader Bob Michel, began Monday morning meetings in his office with the Republican staff directors and counsels of the key committees. Meeting with them each week were lobbyists working to kill the bill: grocery manufacturers, wholesalers, firms like Pepsico and Burger King with large numbers of franchises hiring part-timers without insurance. They exchanged intelligence, targeted legislators for special attention. Nothing was left to chance.
Long after the battle was won, Deborah Steelman, a Bush administration official who became a major player among the lobbyists opposing reform, enumerated the extraordinary set of circumstances that combined to make victory possible. ``It was just a lineup of the stars you don't get in politics very often,'' she said.
Steelman told us all the major elements of the Republican coalition combined in opposition to reform: the social conservatives, the deficit hawks, and the business groups. They operated with total unity. Their opposition was strongly assisted by The Wall Street Journal editorial page, whose blasts at the Clinton Plan were echoed by Rush Limbaugh, by every small business, and by the combined political power of the conservative Christian churches.
* * *
Eleven days after Bill Clinton's inauguration, HIAA persuaded A. Willis Gradison Jr., a 64-year-old Republican representative from Cincinnati, to leave Congress and become its new president. Bill Gradison had made an enviable record in his nine terms in the House, rising to positions of influence on both the Ways and Means Committee (and its Health Subcommittee) and on the Budget Committee. A slim, soft-spoken Yale College and Harvard Business School graduate with a scholarly bent and a laid-back personality that made him a natural mediator, Gradison was a classic moderate conservative, increasingly rare on the Republican side of the House. In 1992 he was decisively defeated by a right-wing opponent in a Republican caucus election for a minor leadership post. That rejection in the House Republican Conference led Gradison to decide that he might be better rewarded and more influential in shaping health legislation from outside Congress.
HIAA was an organization in turmoil when Bill Gradison became its president. It represented some 270 of the private firms that sold health policies to businesses, groups and individuals. Most were small or medium size, and their clientele represented only a third of Americans with health insurance.
Discussions between Gradison and the Clintons got off to a rocky start - and then went downhill. During the task force months, Gradison's two meetings with [Ira] Magaziner left an indelible mark. ``In the first meeting,'' Gradison said, ``he said to me, `Bill, I'm not a politician but our pollsters at the White House tell us that it will help sell our plan if we identify as enemies the pharmaceutical industry, the physicians and the health insurers.''' Magaziner later claimed that he meant it as a joke, but Gradison left the session convinced the Clintons had ``a plan to demonize the industry.''
Gradison's suspicions were deepened by the cold shoulder he got from the White House. He wrote a letter to the first lady on May 28, 1993, restating HIAA's support for universal coverage and saying, ``We stand ready to help you.'' But he complained of three recent occasions on which Hillary Clinton had attacked the health insurance industry for ``price-gouging, cost-shifting and unconscionable profiteering'' and other crimes. Gradison said, ``The facts about our industry don't support the quotes we have been reading,'' and requested a meeting with her. He didn't get it.
Even before the discussions with the administration turned negative, HIAA was preparing to fight the Clinton plan. In early 1993, two California consultants, Ben Goddard and Rick Claussen, had been placed on retainer for a public relations and ad campaign. Their firm had made a reputation in a California referendum battle the previous November by defeating a state employer mandate plan contained in Proposition 166 and supported by the California Medical Association.
HIAA also retained two able Washington pollsters, Democrat Bill Hamilton and Republican Bill McInturff, to monitor public opinion. And it hired a matched pair of outside lobbyists, Republican Nicholas E. Calio (formerly top congressional liaison for the Bush White House) and Democrat Lawrence F. O'Brien III to handle part of the congressional liaison task.
The decision to launch a major television campaign was not an easy one for Bill Gradison. As an inside player in The System for nearly two decades, he was nervous about HIAA's assuming a high-profile role challenging important aspects of the emerging Clinton plan. But the member-company CEOs who formed the HIAA strategy committee were eager to take on the fight. And as it turned out, Gradison unknowingly supplied the right metaphor. In speech after speech Gradison would say, ``This issue will be settled at the kitchen tables in homes all across America.''
Goddard-Claussen hired two actors, a man and a woman, to play the part of the middle-class couple. The first script identified them merely as ``He'' and ``She.'' In a second script, the first names of the actors, Harry Johnson and Louise Caire Clark, were substituted. When the script was distributed to the press, reporters wrote about the ``Harry and Louise'' ads. The ad campaign focused on one of those themes voters had responded positively to in McInturff's polling: distrust of bureaucrats. ``The government may force us to pick from a few health care plans designed by government bureaucrats,'' the announcer says. Louise: ``Having choices we don't like is no choice at all.'' Harry: ``They choose.'' Louise: ``We lose.'' An American advertising classic was born.
Harry and Louise--and the attacks they drew from the White House-- gave an immense boost to Gradison's fund raising. ``The tone of the criticism unbuttoned pocketbooks of members in ways that we had been unable to do ourselves,'' he said. In the space of a few weeks, the budget for the campaign expanded fivefold from $4 million to $20 million--with $14.5 million of it already pledged to the health battle.
But that was just the beginning. In the end, HIAA raised and spent about $30 million more than its annual operating budget of $20 million--a grand total of almost $50 million. One company alone, according to McInturff, gave $5 million to the lobbying effort.
In terms of numbers of people hired, amounts of money spent, and the use of television advertising to shape a public-policy issue, the battle was unprecedented. Whether it was $100 million or $300 million made little difference. The difficulty in determining the full amount spent reflects the subterranean - and secretive - way in which money now flows through The System to influence events and manipulate public opinion.
* * *
The National Federation of Independent Business and John Motley, its chief lobbyist, played a role in the battle that was even greater than that of HIAA's. In Motley's 24 years with NFIB, waging countless high-stakes political battles, health reform became far and away the biggest single issue with which he and his group had ever been involved. While that battle was still being fought, Motley said, ``We've blown the budget to hell. We continue to do what's necessary.'' If the dollar amounts were extraordinary, the lobbying methods NFIB perfected became models for future business efforts to affect The System - a point powerfully proved by the results of the 1994 midterm elections.
Motley fought on two fronts: first, by mounting a grass-roots campaign in the home districts of members of Congress. He compared that to ``the bombardment before the invasion.'' Then, after the congressional members had been ``softened up'' by pressure from their constituents, he ``sent in the ground troops,'' as he put it, in the form of his lobbyists.
From its Washington Headquarters, NFIB dispatched a constant stream of ``Fax Alerts'' and ``Action Alerts'' to its tens of thousands of small-business owners. The sheer magnitude of the effort was extraordinary - and, as it turned out, extraordinarily effective. More than 2 million pieces of mail were sent to small-business owners. These contained critical dollar-and-cents analyses of the Clinton plan for its members to use in pressuring Congress. Every eight weeks every one of NFIB's 600,000 members was polled on attitudes about the health plan. Results of those polled streamed into congressional offices in big, specially designed packets. Detailed studies making the case against reform as powerfully as possible were regularly distributed to both congressional staff and members of Congress themselves. To command extra attention, the background congressional papers NFIB deemed most important were printed on hot pink or yellow paper.
For NFIB, even more than most of the lobbying groups, this battle was part of a larger plan. And as Debbie Steelman, the Bush administration veteran and health care operative, remarked, these plans ``fitted like tongue-in-groove with Republican strategy.''
The fit was symbolized by one man that NFIB brought onto its staff, Marc Nuttle. Nuttle had held senior positions at the Republican National Committee and in many statewide campaigns and had earned a reputation for his grass-roots organizing skill.
His job was to make a reality of a point NFIB President Jack Faris made in all his speeches to NFIB members. ``If you run a business, you better get involved in politics, or politics will run your business. If you don't get involved politically now, you'll have to spend seven days a week later getting involved because you won't have a business.''
Faris initially asked Nuttle to assess NFIB's operations and its political potential. Faris vividly remembers Nuttle telling him, ``The potential that NFIB has for the free-market economy in America is incredible. It could be more powerful than either political party.''
Nuttle was then hired to head NFIB's new political affairs department. His charge was to erect a new structure to motivate and train small-business owners across America to run for office or help others like them to run.
Long before the health care battle was won, NFIB began formulating a far more ambitious political goal: to have the power, through similar grass-roots operations, to determine the presidential and congressional elections, so that America's elected officials would be guaranteed to be supportive of its goals. This was what Jack Faris began describing privately as NFIB's ``endgame.''
When he first spelled out his plan to us in 1994, he seemed to be indulging in breathtaking hyperbole:
``Our goal for the year 2000 for the election of the president of the United States is to have candidates from both parties who are sold out for small business and free enterprise. That's our goal. In the Senate our goal is to have at least 60 members that either own small businesses or who have proven by their voting records they understand what's good for small business. We want 250 votes in the House of Representatives either to be small-business owners and/or those who supported small-business owners. That's our goal. And we don't care whether they're D's or R's [Democrats or Republicans].''
Much more than ``tomorrow the world'' bombast was behind this boast. When the Republicans captured Congress in 1994, Marc Nuttle's recruiting and training had helped assure that more than half the new members came out of a small-business background: NFIB's dream of exercising greater power over The System came even more quickly than its leaders had hoped. And as the new Congress rapidly rewrote government laws and regulations affecting business, NFIB members saw the return on their investment. | ``The System: The American Way of Politics at the Breaking Point'' by Haynes Johnson and David S. Broder. Copyright 1996 by Haynes Johnson and David S. Broder. Reprinted by permission of Little, Brown and Company Inc.
LENGTH: Long : 252 lines ILLUSTRATION: PHOTO: (headshors) Johnson, Broder.by CNB