Home inFocus Ideas for a New Congress (Winter 2015) The Next Two Years

The Next Two Years

An inFOCUS Interview with Dr. Tevi Troy

Dr. Tevi Troy Winter 2015

As Deputy Secretary of the Department of Health and Human Services during the George W. Bush Administration, Dr. Tevi Troy was CEO of the largest civilian department in the federal government, overseeing all operations including Medicare, Medicaid, public health, medical research, food and drug safety, welfare, child and family services, disease prevention, and mental health services. He also served as Deputy Assistant and then Acting Assistant to the President for Domestic Policy. In the latter position, he ran the Domestic Policy Council and was the White House’s lead adviser on health care, labor, education, transportation, immigration, crime, veterans, and welfare. His book, What Washington Read, Eisenhower Watched, and Obama Tweeted: 200 Years of Popular Culture in the White House, is a Washington Post bestseller. inFOCUS caught up with him recently to discuss a variety of domestic issues.

inFOCUS: Following the change of parties controlling the Senate, and in light of Republican victories in Washington and elsewhere, issues of both politics and policies arise. First, how lame is a lame-duck President? Does the responsibility for “reaching out” lie with the ins or with the outs?2014_0128_hudson_headshots_1447

Tevi Troy: Lame duckedness is overstated. As long as a president remains invested with the powers of the office, the opportunity remains to secure significant accomplishments. Ronald Reagan’s 1986 tax reform and George W. Bush’s surge in Iraq were both second term developments. It is, however, hard to work with Congress when you have invested little effort in reaching out to Congress. While both sides have the responsibility to work together, it is typically the president, who has a limited time in which to accomplish his legislative goals, who needs to make the greater effort to reach out to the legislative body.

Reaching out to Congress is not as hard as it sounds, and many presidents have done quite well at it. Lyndon Johnson was famous for reaching out to individual members and using his impressive bulk to intimidate members into voting his way. Bill Clinton even called Trent Lott after Lott said that Clinton was “acting like a spoiled brat” on one of the morning shows. Lott warily asked Clinton, “Are you here to chew me out?” Clinton disarmed him by saying, “Yeah but not for the reason you think. You worked hard last week, didn’t you? And you agreed because someone suggested you do those Sunday morning talk shows. And you woke up exhausted with a headache. You were mad you had to go, they baited you when you got there and you took the bait.” Lott said, “That’s exactly what happened! How did you know that?”

George W. Bush certainly had his disagreements with Congress, especially with Congressional Democrats, but that didn’t stop him from reaching out when he had to. As I point out in my book, when Bush was trying to pass No Child Left Behind, he invited Ted Kennedy to the White House to watch the film 13 Days, about John F. Kennedy and the Cuban Missile Crisis. He also allowed Kennedy to bring his dog to the White House. Bush told Kennedy that they wouldn’t agree on everything, but that they could work together on this issue. And they did: No Child Left Behind was a bipartisan victory for Bush that would not have happened without his own personal outreach efforts.

iF: Polls show the top two concerns for voters in November were jobs and healthcare. How do you assess the domestic priorities of the incoming Congress? Are there points of agreement with at least some Democrats? The Keystone Pipeline, perhaps?

TT: When divided government limits the ability of Congress to accomplish big things, budgets take on paramount importance, as they are one of the few “must pass” Congressional actions. Expect a lot of robust discussion about the budget and attempts to address larger issues, such as health care, through the budget process. As for priorities, the top four domestic ones are likely to be tax reform, health care, energy, and infrastructure. At the broadest levels, each one of these issues has the potential for bipartisan agreement. On infrastructure, for example, there are many Democrats and Republicans alike who agree on the need to fund major road and bridge initiatives. There are disagreements over spending levels as well as whether the projects must be unionized, but the bottom line is that there is general agreement about the need for these issues, but the details will need to be worked out.

As for Keystone Pipeline, it failed under a Democratic Congress during the lame duck session, but it should be able to make it through Congress once the Republicans take control. President Obama is threatening to veto it, but I suspect he will be willing to trade it for one of his priorities in the new year.

iF: Since the new Congress will be able to pass legislation without minority support — as Obamacare was passed — will it be able to both exercise its Constitutional prerogative of oversight of the Executive Branch and keep avenues to the White House open?

TT: I don’t believe that the GOP will have the opportunity to pass legislation without minority support. Assuming that the Republicans reinstate the filibuster in the Senate, they will need 60 votes, including Democratic votes, in order to pass non-budgetary pieces of legislation (Note: budget items can be passed via the reconciliation process, with only 51 votes). In 2009, the Democrats had 60 votes, which let them advance many pieces of legislation, and they managed to pass health care, controversially, via the reconciliation process. But the Democrats also controlled the White House, which meant that they did not have to worry about the possibility of a presidential veto. The fact that President Obama has the veto pen means that there will indeed have to be some level of cooperation, or at a minimum agreement, between the GOP Congressional majorities and the Democratic White House.

As for oversight, this is an area where the GOP majorities give them full control. But having this power and using it wisely are two different things. The use of oversight needs to be measured, thoughtful, and strategic. The Obama administration has given the oversight committees a host of targets, including IRS abuse, the response to the Benghazi attacks, the abysmal Affordable Care Act rollout, and, more recently, the hundreds of thousands of dollars paid to MIT economist Jonathan Gruber for finding ways to fool the American people regarding the impact of the ACA. Well-done hearings can bring about political advantages but also, more importantly, improvements in the way the government handles a variety of challenges. Hearings bring about vulnerabilities as well. We saw this last Congress when Chairman Darrell Issa turned off the microphone of Ranking Member Elijah Cummings during a hearing. No one would have ever paid attention to Cummings’ comments if Issa had not turned off the microphone, but the apparent “suppression” of Cummings gave his comments a national airing. Oversight is a great tool, but Republicans will have to manage hearings effectively in order to maximize the effectiveness of that tool.

iF: You are one of the foremost experts on health care policy in Washington. Americans consistently express concern that their own insurance is becoming LESS affordable, or they’ve been dropped from coverage, or they believe one of those two things will happen to them. In addition, the administration’s own estimate is that millions fewer than the 13 million necessary to make the system solvent will be signed up by the end of 2015. What is a good strategy for getting better health care for more Americans?

TT: Despite GOP unhappiness with the ACA, the GOP currently lacks the capacity to repeal the law. The filibuster in the Senate, combined with President Obama’s veto pen, mean that Democrats have the mechanisms for blocking a repeal effort. Nevertheless, expect both the House and Senate to vote on repeal and try to advance it to the president’s desk.

Following this effort, the GOP will then look at the most unpopular parts of ACA. At the top of their list will be the medical device tax, which a number of Democrats oppose, and which incoming Majority Leader Mitch McConnell noted was “deeply, deeply unpopular with the American people.” Given that Democratic Senators like Amy Klobuchar and Al Franken also oppose this tax on innovation, a device tax repeal does have a chance to make it out of the Senate and onto President Obama’s desk.

Another issue is the definition of the work week. The ACA’s definition of 30 hours as full time employment provides incentives to employers to reduce the number of hours worked so as to avoid the ACA’s employer mandate, the requirement that employers provide health insurance or pay a penalty. Raising the limit to 40 hours a week would end this incentive to reduce the numbers of hours worked. This issue also is likely to garner bipartisan support.

A third issue could be the excise tax, which both business and labor have concerns with and will be hitting an increasing number of plans over time, with implications for lower wage workers. The threshold for paying this tax, designed to hit high value, “Cadillac” style health plans, grows according to the Consumer Price Index and not according to medical inflation. As a result, an increasing number of plans will trigger the excise tax over the next two decades; in 2031, the average family health care plan is expected to hit the excise tax threshold. The impact that the excise tax will have on lower income workers, as well as opposition to the tax from both labor and business, could help generate bipartisan support for getting an excise tax repeal through Congress.

A fourth issue, which is not included in the ACA, is tort reform. A Congressional Budget Office analysis found that reining in out of control medical lawsuits could save over $50 billion over ten years. Tort reform passed the House a number of times during the George W. Bush administration, but could not make it through the Senate. The GOP Congress might want to take a look at this issue as well.

Even if the GOP cannot repeal the ACA in the upcoming Congress, they will want to show the American people that giving them control of the Senate did bring about appreciable benefits to the American people, so expect these key health care issues to be on the GOP’s agenda in the new Congress.

iF: You have written about the length and intrusiveness of the Senate confirmation process – although you write that you “snuck in” (which I suspect is just being humble) before a recess. In 2005, then-Sen. Majority Leader Bill Frist accepted a compromise rather than the nuclear option, which was installed in 2013. Should Republicans undo the change or instead use it for their own aims?

TT: My view when it comes to Senate confirmations is that the Senate should generally give deference to the president’s picks, assuming that the nominees are both qualified and ethical.

The Senate tends not to share my view. The lengthy Senate confirmation process often leaves key posts empty for months or even years and is an assault on both presidential effectiveness and orderly government. Furthermore, such vacancies can have serious consequences. When a swine-flu outbreak occurred in April of 2009, President Obama did not have a single confirmed HHS appointee in place, from the secretary on down—a leadership vacuum that could have been devastating had the outbreak been more severe.

For this reason, I believe that the Senate should not filibuster qualified and ethical presidential nominees. I also support reforms of the confirmation process, including a commitment to having the relevant Senate committee hold a confirmation hearing for all presidential nominees within two months of nomination and to an up-or-down vote on the Senate floor within one month of a positive committee vote. That said, the White House also needs to make some changes of its own. It should dramatically streamline nominee paperwork requirements. To avoid unnecessary duplication, nominees should have to fill out only one disclosure form and questionnaire, which could be completed electronically and would be made available to the relevant executive branch vetting agencies, as well as to the relevant Senate committees. The new form should be as simple as possible, asking questions primarily about the candidate’s education, relevant experience, accomplishments, and any criminal history or direct financial conflicts. In addition, the White House should commit to producing its own nominees in a timely manner, at the risk of losing access to an expedited Senate process.

The system will only get better if both sides agree to reforms that place obligations on both the White House and the Senate, and also reforms that apply to both parties, regardless of who sits in the Oval Office or holds the Senate majority. In practice, this would mean that the Senate Republicans would not shut down confirmation of President Obama’s nominees, which some might view as a unilateral surrender. But taking responsible action now on nominees will help get Republican nominees through the process the next time the Republicans control the White House, hopefully in 2017.

iF: There is an essay in this issue of inFOCUS on Federalism and the idea that government in Washington was never designed to be the nanny of the States. Isn’t there also a limit to how much Congress can have on its plate to even begin to be thoughtful about the exercise of authority?

TT: As a result of the 2014 elections, there are over 30 Republican governors across the country. This fact, combined with the Republican control of both Houses of Congress, gives the GOP opportunities to pursue more reforms at the state level. It is likely that divided government, combined with the looming presidential election of 2016, will limit the amount of legislation coming out of Washington over the next two years. This will accelerate the need for policy reform to take place at the state level. Furthermore, Washington’s budget challenges will further promote the need for state-based policy experimentation. States, which unlike Washington are for more likely to have to produce balanced budgets, will not be able to count on the federal government to bail them out from financial difficulties. For this reason, on a host of issues, including health care, welfare, and education, the next two years could prove to be a fruitful period of federalist-style state reforms.

iF: There has not been a budget passed since the 2014 deal. This produces uncertainty both in the domestic and national security spheres and makes future planning — and deficit reduction — difficult. How can the Republican leadership best write an operative budget?

TT: The budget issue will require more GOP unity than any other issue. If the Republicans can stick together and present unified budgets to President Obama, the system gives them leverage to win the budget battles. If they cannot pass budgets, it becomes that much more difficult to get the job done.

The budget process is arcane, but Republicans would be well-served to master the process and send unified conservative budgets to the president. Budgets are among the few must-do actions for the Congress and passing them will give the GOP rare opportunities to promote conservative goals. Even though it is unlikely that we will see many new laws passed in the next two years, both sides must come to some kind of agreement on budgets, and the Republicans should make the most of these budgetary opportunities.

iF: While this issue of inFOCUS is entirely domestically focused, how can a Republican Congress impact foreign policy? Specifically, do you think Congress will be able to affect how the President approaches Israel, Iran, the “war” on ISIS, Russia, or other foreign policy challenges?

TT: Having Republicans in charge of both Houses of Congress is good news for the State of Israel. While we are fortunate to have a situation in which majorities of both parties in Congress are generally pro-Israel, Republican support for Israel is stronger in a number of ways. First, polls show that GOP voters are more likely to support Israel than Democratic voters. This means that Republican politicians do not have to worry about alienating their voters when backing Israel. Second, while Congressional Democrats are largely supportive of Israel, President Obama’s record has been more mixed, and I am phrasing that generously. Republicans do not have to worry about contradicting the White House when making statements supportive of Israel.

iF: Tevi Troy, on behalf of the readers of inFOCUS Magazine, thank you for a clear and informative look into the transition in our government, health care and so many issues of importance to the American people in the coming days and months.