Healthcare reform backlash: Americans angry over earmarks

Healthcare reform legislation often means cutting 'deals,' but public anger over earmarks may further gridlock healthcare reform.

Forget the old saw about the perils of knowing too much about how sausages or laws are made. Americans, it turns out, wanted to know a lot about the backroom deals that went into the healthcare bill.

Stung by months of criticism of a $300 million deal over Medicaid payments, dubbed "the Louisiana purchase," Sen. Mary Landrieu (D) took to the Senate floor yesterday to set the record straight. The deal – an agreement to lower Medicaid charges to the state due to per capita income figures artificially inflated by post-Katrina relief payments – was not secret, she said. Nor was it offered in exchange for her vote on healthcare reform.

"I don't want to see what has been said inappropriately or erroneously to jeopardize the healthcare bill in the future," she told reporters after the speech.

President Obama has acknowledged that these deals helped turn the public against the legislation. "With all the lobbying and horse-trading, the process left most Americans wondering, 'What's in it for me?' " he said in his State of the Union address.

For many Americans, those "sweetheart deals," tucked into the legislation for certain states or groups, became a flash point.

Terms for these deals – including the Louisiana Purchase, the Cornhusker kickback, and the Cadillac tax exemption – went viral over the Internet. Newspapers and broadcast media also picked up reports about the deals – accurate or not.

The public came to see the process as corrupt and self-serving. "The volume of viral e-mails attacking healthcare has really been remarkable," says Brooks Jackson, director of the Annenberg Public Policy Center's "Ninety percent of what we see is false," he adds.

Of course, Congress is no stranger to making deals that benefit a state or district. The practice of targeting funds to member projects in spending bills – also known as earmarking – took off in the 1990s (see chart).

But in recent years, there's been a backlash to the backroom deals of Congress. Public-interest groups set up a cottage industry in tracking and drawing attention to earmarks, and Americans have become more vocal in objecting to them. The public uproar in 2005 over a $223 million "bridge to nowhere" in Alaska stunned lawmakers: They hadn't expected people to dig into matters so arcane.

The response to reports of backroom deals in the healthcare legislation was even more surprising. As Senate majority leader Harry Reid began drafting a compromise bill in secret, every whisper of a deal was amplified.

"People are tired of political manipulation, regardless of the dollar amount," says David Williams, vice president of policy at Citizens Against Government Waste, which produces an annual "Pig Book" to track earmarks. "People see the Nebraska, Louisiana, Florida deals and say, 'They're doing the same exact thing they've been doing for years: They're buying votes and trying to manipulate the system.' "

When it came down to it, Senate Democrats were working against a tight deadline to complete their bill in 2009. Senator Reid met with holdout senators, including centrists facing opposition to healthcare reform at home. Those last off the fence often drove tough bargains.

In what may have been a fateful move, some touted what they had won for their states. For example, Sen. Mary Landrieu (D) of Louisiana announced that reports that she had won $100 million for her state in exchange for a healthcare vote were inaccurate. "It's not a $100 million fix. It's a $300 million fix," she said on Nov. 21.

Pressed to respond to mounting public criticism of these deals, Reid defended the practice of senators looking after their states' interests.

"There are a hundred senators here, and I don't know if there is a senator that doesn't have something in this bill that was important to them," he said in a Dec. 21 press briefing. "And if they don't have something in it important to them, then it ... doesn't speak well of them. That's what legislation is all about: It's the art of compromise."

That comment went viral, too.

Sen. Ben Nelson (D) of Nebraska held out the longest before promising his vote. He negotiated a deal that exempted his state from paying the costs of expanding access to Medicaid. A new federal mandate involving Medicaid would cost Nebraskan taxpayers $450 million over 10 years, state officials said.

But Nebraskans reacted sharply to the news that their state had been singled out for special treatment. "We don't like special deals," Gov. Dave Heineman (R) told Fox News. The governor's office reports that it was overwhelmed with phone calls on the issue, mainly opposing the deal.

In an unusual move for a lawmaker not up for reelection, Senator Nelson ran television ads explaining his vote in favor of the bill. Now back in Washington, Nelson says he is discussing with Senate leaders and others how to change the bill to make sure all states are treated equally.

"This was never just about Nebraska," he said in comments to the Monitor. "It was to be a placeholder to try to get [the Medicaid extension] fully funded for all states. My priorities are Nebraska first, Nebraska always – not Nebraska only."

Senator Landrieu, too, said on Thursday that the deal worked out for her state could also help others that in the future face Katrina-scale disasters.

"This is not a special day for Mary Landrieu. This is a fair deal for the people of Louisiana, and it was never a condition for my vote," she said in an interview.

When the White House got involved in brokering compromises with key stakeholders, it also roused public anger. Facing rebellion in trade-union ranks over the Senate bill's tax on high-end insurance plans, the White House negotiated a deal exempting union workers from the so-called Cadillac tax until at least 2018. Critics characterized it as special treatment for a key Democratic constituency. Union officials say it's standard practice.

"It's typical when a federal law goes into effect that makes a major change that affects workers and workplace practices to provide for a transition period for collective-bargaining agreements," says Gerald Shea, a spokesman for the AFL-CIO. At least a dozen major bills in the past five years have had similar provisions, he adds.

On the other hand, some reports about healthcare deals for a particular state turned out to be false. Sen. Bernard Sanders (I) of Vermont faced a wall of complaints that he had secured $10 billion for his state in exchange for his vote. Earlier, Senator Sanders had threatened to vote down any bill that did not include a robust public option.

In fact, the $10 billion was to expand government funding nationwide for community health centers and the National Health Service Corps. The provision, which had some bipartisan support, benefited underserved rural and urban areas.

"Still, it somehow got out that this was part of the plain, ugly deal cutting and logrolling on Capitol Hill," says Sanders spokesman Michael Briggs.

So why all the special scrutiny of healthcare reform? It's the size and scope of the legislation, affecting individual lives and one-sixth of the US economy. "We have never seen the process of complex legislation viewed as upfront and personal until now," says Sen. Patty Murray (D) of Washington, a member of the Senate Democratic leadership. That's "because it's personal," she adds. "Every single person in America is affected by this healthcare bill."


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