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THE WORKINGS OF WASHINGTON // Better in the "System' than out

The term "Washington insider" used to be a compliment. It referred to people who knew the ropes and could get things done. Not anymore. Now it conjures up the image of a person who is in the pockets of special interest groups or, worse, someone who is simply self-interested.

No wonder political candidates stress their intention to fight the System rather than fit into it. No wonder Bob Dole, the consummate Washington wheeler-dealer, tried to bolster his flagging campaign by dropping out of the Senate and trading his Senate blue suit for leisure wear. A Kansan. An American. Just a man. Who wants to be seen as an insider?

But campaign rhetoric is one thing. The reality of politics is quite another. As a probing new book that chronicles President Clinton's humiliating defeat on health care reform demonstrates, candidates may win elections by attacking the System, but successful leaders are those who know the System well and work it to their advantage once elected. The System: The American Way of Politics at the Breaking Point (Little, Brown, $25.95), by David Broder and Haynes Johnson, in fact, serves as a warning to any politician who is foolhardy enough to try to govern as an outsider.

Broder and Johnson spent three years interviewing dozens of people who had a stake in the outcome of the epic battle over health care reform _ people in the White House, the administration, the Congressional Budget Office, the Senate and the House, as well as lobbyists, consultants and health care officials. The result of their inquiry is a detailed portrait of political ineptitude and missed opportunities. A valuable piece of work, The System is a primer on how not to tackle a complex issue if you want to succeed in the democratic system.

Oddly enough, the authors conclude that the country's failure to enact any form of health care reform was a breakdown of the System. However, in their book they prove just the opposite. The System, in fact, is a fascinating glimpse into just how the System operates and what must be done to work effectively within it. Perhaps this time the democratic process did not produce the conclusion desired by the authors, but that doesn't mean there was something wrong with the process. The System worked just fine _ as Newt Gingrich pointed out to them _ for those who opposed the Clintons' health care reform. Not only were the Republicans able to defeat Clinton's health care plan, they were able to use the issue to propel themselves into majorities in both the House and Senate for the first time in nearly half a century.

The Clintons naively assumed that in Washington mere hard work and a sense of righteousness would be enough to carry the day. They never are. The founding fathers, wary of strong government, purposely designed our democratic system so that major social change would be difficult to make _ and could only be made through compromise and public support. Politics is the art of exploiting your opponents' weaknesses and making the most of your own strengths. It is a nasty business of wheeling and dealing where usually everyone has to give a little to gain a little. And it is this very clash of countervailing forces that makes the system work _ slowly, clumsily, but democratically.

Broder and Johnson contend that "public opinion" during the health care battle was largely an artifact of the groups that mobilized to defeat reform. But the groups that were for reform could also have molded "public opinion" through grass-roots and media efforts. They failed to do so. Instead, after too many closed door sessions and confusing stops and starts, the public was handed a health care reform bill of nearly 1,400 pages. No wonder "Harry and Louise" (the characters in the infamous television commercial that helped sink the Clinton plan) were confused.

Broder and Johnson complain that there can be "no balance of power when business and its allies line up against organized labor, consumer groups and other liberal organizations. The latter are almost always out-organized, out-spent, out-gunned." But who says democracy is easy? Certainly there were formidable forces that lined up against the Clintons to defeat their health care reform package. But with the bully pulpit of the presidency and control of both houses of Congress, it wasn't as if they lacked weapons to fight back.

Other presidents, of course, have tried to reform health care and failed as well, but as The System shows, the Clinton administration had a particularly favorable opportunity to enact "the last great social policy of this century." The majority of Americans clearly wanted some form of health care reform. When Bill Clinton launched his health care battle in 1993, the Democrats not only controlled both houses of Congress, but they "had in the White House in Bill and Hillary Clinton the two most knowledgeable and committed advocates of universal health care coverage in history," write Johnson and Broder. Yet after two years of closed-door sessions, marathon meetings and countless public appearances, Clinton wasn't even able to bring the measure to a vote.

Why did health care reform fail? There were, of course, a number of reasons, but the most glaring are the grave political mistakes made by its advocates. First of all, the authors point out, the Clintons failed to weigh the scale of the reform they were proposing against the political capital needed to achieve it. They mistakenly tackled the issue at the same time as the budget battle was being waged, thereby straining the political clout the president could wield. So intent on dotting every i and crossing every t in the final package, they forgot to sell their idea in simple terms to the public. And meanwhile they did not develop any kind of legislative strategy to pass the bill nor bother to garner any bipartisan support for it.

But the biggest mistake, say the authors, was Clinton's decision to create a special White House task force headed by the president's wife, Hillary Rodham Clinton, and his best friend, Ira Magaziner. That structure defied the System and spelled defeat. It "made other officials with expertise feel circumvented and that cast doubt on the president's claim to policy flexibility," say Broder and Johnson. It gave the whole operation a feeling of us versus them, setting entirely the wrong tone for such a complex battle.

Clinton failed to see the land mines that such an approach would create. "Despite all the warning signals, the Clintons marched ahead, fortified by a belief that the rightness of their cause and the hard work they were prepared to expend on it would overcome all obstacles," the authors write. "They did not. Indeed, the Clintons compounded their problems by the structure they themselves designed."

Even the terminology the Clintons used was off-putting. "The phrase "managed competition' was a loser," a pollster pointed out. It opened the way for the Republicans to raise the specter of a "big government health care bureaucracy."

The Republicans took full advantage of their strengths within the System. And they made full use of the Clintons' blunders. Gingrich, then the minority whip of the House, clearly saw the issue "as a springboard to win Republican control of the House," say the authors. And it was.

To accomplish that goal, Gingrich, of course, was greatly aided by the disarray within the Democratic Party itself. If Clinton had turned around and accepted the Republican's version of reform _ the Towland-Bilirakis bill, designed by lobbyists, House Republicans and some conservative Democrats as a stopgap to Clinton _ Republicans would have been forced to help pass the bill, Gingrich told the authors. But the liberal wing of Clinton's party would never have stood for an endorsement of a minimalist Republican bill, and Gingrich knew it. After years in power, the Democrats had lost their sense of party loyalty and could be counted on to squabble among themselves. Each had become his or her own political entrepreneur, looking out for his or her own political advantage rather than the advantage of the party.

What could the Clintons have done differently? Curiously, to answer that question, Broder and Johnson point to another ambitious proposal enacted in a divided government: the Reagan tax reform of 1986. To be sure, tax cuts are not exactly unpopular bills (but then again one wouldn't think universal health coverage would be either), and the tax reform in no way triggered off the fierce forces of opposition that health care reform does. But still there are a number of lessons the Clintons could have drawn from that bill's success.

First and foremost, it had bipartisan support. Also, very importantly, it was initially shaped far from the White House. The tax bill was first drafted by anonymous faces in the Treasury Department. Then it was modified by the politicians to make it politically palatable. In the health care battle, the Clintons made no such separation between policymaking and politicking. Hillary Clinton not only helped shape the policy, but she also was sent out to sell it politically. The combination was disastrous.

But the most important factor in the success of Reagan's tax reform bill, the authors point out, was Reagan. The Great Communicator presented the plan to the American people in plain language, and won over their support from the get-go. "Nothing has more arcane byways than the tax code," write Broder and Johnson. "But the basic proposition of the Reagan plan was simplicity itself: Eliminate a lot of special interest loopholes and you can reduce rates for everybody, an idea that could be expressed in a single sentence and could be grasped by everyone."

Like Clinton, Reagan "jabbed at "Disneyland on the Potomac.' " as a campaign strategy. But once elected, he "immediately enlisted the insiders, bringing in several consummate Washington players," Broder and Johnson point out. Clinton, on the other hand, actually "began his presidency with no one _ literally no one _ outside the National Security Council staff who had ever worked in the White House." Clinton has paid dearly for his decision to try to stay above the System. His health care battle should be a lesson for all who are enamored by those who claim to be "above politics." The System works for those who know how to use it, and defeats those who insist on staying "outside."