By placing Sens. Max Baucus and Patty Murray on the debt supercommittee, Majority Leader Harry Reid opened the door for special interests to play an outsize role in the upcoming debt battle. To see why, go back to an April 15, 2009, meeting on Obamacare that included White House officials, Senate Democrats, union leaders and drug lobbyists. Senior White House official Jim Messina (now Obama’s campaign manager) and Baucus’ Chief of Staff Jon Selib hashed out a deal that day with representatives from leading drug committees and the Pharmaceutical Research and Manufacturers of America, the largest single-industry lobby in the country. The meeting, tellingly, took place at the headquarters of the Democratic Senatorial Campaign Committee.
Out of this meeting were born Healthy Economy Now and Americans for Stable Quality Care, two PhRMA-funded political groups that would run ads not only touting Obamacare, but also supporting endangered Senate Democrats who voted for the health plan. Reid and other “reformers” squeaked out victories in 2010 with support from the industry-funded groups.
In exchange, Baucus passed out of his Senate Finance Committee a bill that formed the template for the final legislation. It gave the drug lobby a raft of subsidies, protections and profitable mandates. And it protected the special favors for the drug industry that Obama had promised to abolish. It was a win-win for Pharma and Senate Dems.
It looks like Senate Democrats are taking a similarly transactional approach to the debt crisis. Reid has put Baucus at the table again, along with the DSCC, this time in the person of its chairwoman, Murray.
The combination of the famously industry-friendly and artful dealer Baucus with the Senate Democrats’ top fundraiser Murray is unnerving for anyone looking to the debt supercommittee for serious legislation in the public interest.
The 12-person committee, consisting of three Republicans and three Democrats from each chamber, is empowered by the August debt deal to craft a plan of spending cuts and possibly tax increases to reduce the 10-year deficit. If they fail to pass a plan, this triggers automatic cuts in defense spending and other items.
Big business will have lots of skin in the game.
Drug companies, hospitals and doctors fear they could face serious haircuts if federal subsidies for health care are reduced. This leaves these companies rooting for a stalemate, thus defaulting to the automatic cuts, which make only a small dent in Medicare. “A lot of provider groups and health care groups would take a 2 percent cut to providers [and] no cuts to Medicaid — and would find that much easier to live with,” Max Richtman of the National Committee to Preserve Social Security and Medicare told Reuters.
Baucus was tight with the health care industry even before he and the DSCC cut the Obamacare deal with PhRMA. His former tax counsel Roger Blauwet lobbies for drug giants Merck and Sanofi-Aventis. Former Baucus chief of staff and K Street titan David Castagnetti lobbies on behalf of the American Association for Homecare, Astra-Zeneca, Forest Laboratories, Merck and other providers. Former Baucus legislative director Michael Evans claims the Biotechnology Industry Organization as a client.
But with Murray on the supercommittee, the health care providers will have to compete with the defense industry. Murray, of Washington state, has inherited the nickname of her predecessor Scoop Jackson: “The Senator from Boeing.” The aircraft giant, perpetually a top-five defense contractor, bases its manufacturing in the Puget Sound region, and is historically one of Murray’s top donors. Elsewhere in the industry, recent Murray aide Carrie Desmond is now a Lockheed Martin lobbyist.
If the supercommittee doesn’t pass a deficit reduction plan by Thanksgiving, the “trigger” would slash $500 billion from the defense budget. So Democrats might not be so happy to simply blame the Republicans for obstruction and allow the trigger to be pulled. But maybe if Baucus and Murray can reprise April 2009, and get Boeing and Merck in the same room (perhaps even at the DSCC), they could arrive at something mutually agreeable to the industries and the Democrats.
Health care and defense aren’t the only two industries with close ties to the supercommittee, and Republicans on the panel are almost as cozy with K Street as Murray and Baucus. But given the history of Baucus, the DSCC, and industry deals over major legislation, these two senators are the ones to watch if you’re looking for the influence of special interests in the debt negotiations.
Timothy P.Carney, The Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Monday and Thursday, and his stories and blog posts appear on ExaminerPolitics.com.
