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Shutdown political results; lobbyist involvement; perilous prediction

October 18th, 2013 at Fri, 18th, 2013 at 10:25 am by stevewehrly

blog – 10/15/13

6. As predicted in this blog six months ago, despite getting a standing ovation from his caucus as the House capitulated and ended the shutdown, John Boehner will probably relinquish the gavel as Speaker of the House – either by deciding to retire before being removed by his own fellow Republicans at the start of the 2014 congressional session or in November, 2014, by the voters, who may take away the current Republican majority in the House of Representatives in the 2014 elections.

Boehner has done his damnedest to get something out of this for his caucus. But he failed. Neither tea partiers nor regular Republicans want to go back to their districts to face voters who will be reminded constantly to blame John Boehner “and the Republican candidate” as leaders of a failed strategy.

Even if Boehner stays (and he may not want to), Republicans are facing real electoral problems in both tea party districts and “moderate” Republican districts. Possibly including in Boehner’s Ohio district if, as rumored, he doesn’t run for reelection

In tea party districts, extremists are already facing primary challenges, some from the very Republicans they beat in primaries in 2010 or 2012 and some from ambitious moderates who are perhaps state legislators, school district directors or local government officials. In district where “moderate Republicans” have survived previous primaries, tea party Republicans are promising to challenge incumbent Republicans who “abandoned true conservative principles,” giving Democrats an opening to pick up independent voters who now are decisive in local and national elections. Plus, primaries require major spending that might better be spent against their general election opponents.

Whoever wins will have spent the primary season being pilloried as an extremist by their moderate opponent or as an apostate RINO (Republican in name only) by their tea party opponent (which charge will require the RINO in the primary to campaign as a conservative in the primary and a moderate in the general. Then he or she (you can bet there will be a record number of women running for Congress in 2014) will face a Democrat in the general election (quite possibly a woman) who will paint any Republican as a supporter of the government shutdown and debt ceiling fiasco.

Granted, many of these races will be in safe Republican districts. But Democrats only have to win 17 Republican-held seats in 2014 to regain the majority. Republicans won 60 Democratic seats in 2010, then lost 10 in 2012.

The question is not whether the Republican brand has been damaged by the shutdown fiasco, but how much.

7. My other prediction of six month ago – that Spokane Congresswoman Cathy McMorris Rodgers would emerge as a possible Vice-Presidential candidate in 2016 – is a lot shakier after the recent debacle. Rodgers, a member of Boehner’s leadership team, was often seen, and sometime spoke, at Boehner press availabilities during the shutdown. Those photos and videos would now be a real problem for Rodgers, who quite possibly could move up in House leadership. My new darkhorse vice-presidential candidate: Jon Huntsman.

8. As a lobbyist who represented insurance companies and health care providers in Olympia and D.C. for 30 years, I am impressed that the insurance industry left no recognizable fingerprints on their involvement in the fiasco of the last three weeks. A successful strategy or tactic gets bonuses and more clients; failure, especially if it’s public, gets a lobbyist fired.

So now, after doing everything they could to repeal or defund Obamacare (and defeat or delegitimize Obama), some insurers and their allies (Heritage Action, Freedom Works and Americans for Prosperity are three) have started to distance themselves from tea party conservatives. Some business interests are now supporting less-conservative challengers to tea party conservatives they helped elect in 2010 and 2012. One very dangerous result for tea party Republicans in 2014 is that political action funding will now dry up for tea party Republicans in contested primaries.

From numerous news reports, we know that Speaker Boehner didn’t think the Obamacare-motivated shutdown tactic was a good idea from the get-go. But since Obamacare was passed and signed, the insurance industry and their allies have spent hundreds of millions of dollars to try to repeal, defund or at least amend the signature achievement of Obama’s presidency. When insurance company executives (or any corporate or association executives) spend that much money on a project, they don’t give up easily. And their lobbyists have stuck their necks out, telling their employers, “We can do this. Boehner listens to me.”

During the thirty years I lobbied in Olympia and D.C. for the insurance, health care provider and tobacco industries (and others), business lobbyists used tactics analogous to the shutdown numerous times – usually to stop tax increases, but often to advance particular bills that clients “had to have.” In most cases, the leadership of both parties would do what they could to help. In all cases, at the very least I was given full opportunity to talk with leadership behind closed doors about the issue and how to handle it.

Insurance company and corporate health care lobbyists would have had “five-minute” direct access to Boehner and other key Republicans (including tea party leaders) at every stage of the fiasco. Lobbyists know that absolutely anything is possible if you “have” leadership on their side; they, like their superiors, never give up.

The insurance industry hates Obamacare even more than Social Security, Medicare and Medicaid. All four programs, to insurers and many other Americans, are essentially “socialist” ideas that redistribute wealth and extend government power over business – and threaten the existence of health care insurance as we know it.

Health insurance providers know they cannot compete with government: they think, correctly, that the exchanges are nothing more than a stalking horse for “single payer,” the Canadian system, or “medicare for all.”

My first lobbying supervisor, the corporate general counsel of a very large national insurance company, told me early on that the company was basically an investment company, not an insurance company. Insurance premiums provide cash flow, he told me. The cash flow is invested, and corporate profits (and the executive’s income) are dependent on earnings from investments, not on how much the company makes from retailing insurance contracts, which are highly regulated.

To increase cash flow (and thus, the size of the investment portfolio), insurance companies must increase their premium rates. To increase rates, which must be approved by insurance regulators, companies must show regulators that health care costs have increased. Insurance companies thus have no incentive to keep health care costs down and every incentive to have health care costs rise, which is exactly why they keep increasing year after year after year (and why doctors became rich).

One important reason the crisis of the last 90 days happened is that insurance companies want to insure healthy people; another is that insurers don’t want to insure everyone. (This is also why insurance companies were so opposed to mandatory auto insurance, even though mandatory insurance laws require everyone to have insurance.)

9. Another perilous prediction: the jig is up on government-by-crisis; no more shutdowns. Don’t expect Republicans to do much about the rest of Obama’s agenda (except perhaps the farm bill, which has strong Republican support for its corporate agriculture and rural development giveaways), but the polling horror for Republicans the past month ensures that they won’t try it again next year.

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