News Analysis: "Exchange of interests" in U.S. health care reform a dangerous approach

U.S. President Barack Obama came to Washington with a vision to change U.S. politics, which have been entrenched with special interests for centuries.

However, in order to advance his health care reform plan, he has been cutting deals with various interest groups in exchange for their support.

But that strategy contains a lot of risks and may backfire.

Moreover, Obama's approach to seek certain interest groups' backing on domestic issues such as health care reform at the price of harming international trade relations appears short-sighted and unwise, analysts warned.

EXCHANGE OF INTERESTS

In public, Obama often rails against special interests, accusing them of trying to jeopardize health care reform.

In fact, it is evident that he has been adopting a strategy of "exchanging interests" to make many interest groups jump on his bandwagon.

At a public rally for health care reform at the University of Maryland on Thursday, the president told his audience that support for his reform is growing even as some "special interest groups" oppose it.

However, he also explicitly said that an "unprecedented" pro-reform coalition of hospitals, doctors, nurses and drug makers was on his side. All these groups are interest groups.

To avoid the fate of the former Clinton administration's failed attempts at health care reform, Obama has been cutting deals with drug makers and other key interest groups in the health care system.

U.S. drug companies, the first interest group to reach an agreement with the Obama administration, agreed to give the administration 80 billion U.S. dollars to cover some costs of the health care reform.

The U.S. Hospital Association, which represents the interests of major hospitals around the country, followed suit by offering to pay 155 billion U.S. dollars for Obama's health care reform.

In exchange, the Obama administration promised the two groups that it would reject any attempt from Congress to seek further reductions in federal payments to drug makers and hospitals under the government-run Medicare and Medicaid programs.

The American Medical Association, an interest group of doctors, offered their support for the reform on the condition that Obama would make sure payments made to them under the Medicare program wouldn't be cut by a big margin.

The American Nurses Association secured a similar deal.

As a result, insurance firms are virtually the only key interest group still firmly opposed to the reform.

But Obama has plans for reaching out to that group.

The president recently changed his mind and agreed to require individual Americans to buy health insurance. He had opposed the individual mandate during last year's presidential elections.

The new approach, which requires some 45 million Americans currently without health insurance to purchase insurance plans, would open up a new market for insurers.

KOWTOWS TO SPECIAL INTERESTS

Joe Klein of Time Magazine pointed out that to obtain more support within his party, which was divided on the specifics of the reform plan, Obama was also wooing interest groups which are allied with the Democratic Party. One such group was the labor unions.

Although labor unions now only account for 7.5 percent of the private-sector workforce, they still have enormous clout in the Democratic Party.

Recently, Obama has been stepping up his efforts to court labor unions' support for his health care reform.

Many U.S. observers have noted that the president's decision last week to impose punitive tariffs on tires imported from China was aimed at kowtowing to labor unions in exchange for their support for the health care reform and other issues on Obama's domestic agenda.

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said that to win the political battle on health care, Obama "may need concessions from pro-labor Democrats who support a strong stand against China."

The tariff decision came in response to a complaint filed by United Steelworkers, which represents tire makers.

The union claimed that the growth of Chinese tire imports amounted to a "market disruption."

Former U.S. President George W. Bush rejected the union's case four times, but Obama came to a different conclusion.

Cokie and Steve Roberts, a couple who are both well-known journalists, wrote in a recent commentary that there was only one plausible explanation for Obama's decision on the Chinese tire case. "He decided he needs union help pushing his health care plan through Congress. He needs his own special interest to fight all the other special interests," they concurred.

DANGEROUS APPROACH

Although Obama's strategy to woo interest groups in the health care reform battle may help him earn certain political capital, many analysts regard it as a dangerous approach which may backfire.

A new survey conducted by the Lombardo Consulting Group showed that Americans are losing confidence in Obama's health care reform plan as 78 percent of participants felt that the deals cut between Obama, drug makers and other special interests have "seriously compromised efforts to enact real reform of the health care system."

That is bad news for Obama, especially at a time when a majority of Americans still oppose or are unsure about his reform plan.

In the case of Chinese tire imports, the implications go beyond the borders.

As many economists would agree, his decision does nothing to relieve the conditions of U.S. workers, but could even trigger a new wave of trade protectionism in the United States.

U.S.-China trade relations would suffer, while pending U.S. trade deals with South Korea, Panama and Colombia could also be put at risk.

The Roberts have pointed out that as the United States needs China's help on a range of critical issues, such a decision is hurting U.S. core interests. "Should all of these vital national interests be jeopardized by one special interest? The answer is loud and clear: No," they concluded.