Blake Rutherford, Kevin Washo, and Howard Schweitzer, of Cozen O'Connor Public Strategies, discuss the events that have unfolded since the president's speech to the joint session of Congress.
Blake: Thanks to everyone for joining us today. My name is Blake Rutherford with Cozen O'Connor Public Strategies. I'm joined today by Howard Schweitzer, the managing partner of Cozen O'Connor Public Strategies, and Kevin Washo, government relations principal in our public strategies group, and hopefully a more frequent visitor to our calls. Mark is off in the mountains, allegedly working but probably skiing. We will miss him today, but we're happy to have you, Kevin.
Kevin Washo: Thank you.
Blake: Thanks for joining us. Howard, great to be with you as well.
Howard: Thanks, Blake.
Blake: I begin these calls pretty much the same way, which is always in a state of surprise and at times curiosity with what is happening in Washington. There is certain a lot going on. When we were together last week, we talked about the President's speech, the success of that speech. It certainly was well received by all polling accounts. It was characterized very favorably among the press.
Lots of people said that Trump finally became President the night that he gave that speech, only to have those notions called into question about three days later, when the President took to Twitter upon the news of his Attorney General recusing himself from the Russia investigation. We've been in a state of flux ever since.
That's really where I want to begin our discussion is post-speech. Howard, we all agree that it was a political home run, but in the days that followed, circumstances seemed to take a turn I'll characterize for the negative and political, in a political context, but what are your observations as to the President's posturing after the speech?
Howard: A couple of observations. One is I'm not sure Mark thought that the President did such a great job in his speech, but he's not here to defend himself, so I'm very happy about that. On a serious note, it turned into an abysmal week for the Trump administration, but I think we have to look more deeply at what's going on here.
What I think is going on is a war within our government, a war by the intelligence bureaucracy against the Trump administration. Obviously, the Sessions stuff was timed to go along with the speech. It was timed to counteract the positive energy that was out there as a result of the joint address to Congress. Trump had made a decision very early on, before he was sworn in, to take on the intelligence agencies and the intelligence bureaucracy. He made that choice, and he's paying the price. This is the price that we knew, we predicted, he would pay because of the way he was choosing to run his campaign and run his transition.
I think right now what they're wrestling with is whether they want to fight that fight or advance their agenda, because they've got an ambitious agenda that can be advanced, but every time the war with the intelligence agencies takes another turn, it sets that agenda back, and there's only so much of that that his agenda can sustain.
Blake: Kevin, what are your reactions? Because Democrats were by and large caught flat-footed after the speech, although Mark had his criticisms. By and large, the messaging in the hours after the speech was just disjointed. Chuck Schumer couldn't figure out what to say any more, then I personally thought Steve Beshear's rebuttal was perhaps one of the most asinine political decisions in Presidential political history. In the days that followed, Democrats found themselves back in the game, thanks to the President's tweets. What are your reactions to life after the speech?
Kevin Washo: Blake, as you know, my Democratic credentials are pretty solid, but I will tell you, I texted a former colleague right in the middle of the speech, probably about 35 minutes in, and I sent him a text and I said, "I think Trump's hitting a home run with this speech." I think if you took away the name Trump and you just focus on the issues, I think most people would be like, "Well, this all makes a lot of sense." Maybe they disagree with how you're going to make the sausage. I think for the most part he did a great job.
I like it, it's the old adage, when a quarterback throws four interceptions in a game and somehow the other team has no yardage. They can't move the ball at all, but the other team is winning, but they keep throwing interceptions. They get them back in the game. I feel like the Trump, to Howard's point, the Trump administration basically threw five to six interceptions that week, or at least in the lead-up, where they just totally stepped on their stuff, because I thought the Democratic response was pretty pathetic.
I thought the way a lot of them handled themselves in the hall was pretty pathetic. I think when you panned on the camera and you did a wide shot of the Democrats, they were to your point, dumbfounded and wholly caught flat-footed. I think deep down they can't say this and go on TV, but I think they probably had the same reaction that I had listening to his speech halfway in, of like, "Oh, this isn't that bad. This may play pretty well." I think obviously with the lead-up afterwards, going into some of the pundits, it was pretty universally praised across the board from the national pundits, at least, and I think the Democrats should be sending some fruit baskets over to the White House thanking them for the week and how it ended.
Blake: Yeah. Howard, our clients are particularly interested in what it means when there is a war within our government and the dysfunction that at least we perceive exists within this White House. I don't say that from a partisan fashion. News reports are characterizing what's going on in the West Wing as really, really dysfunctional, and at times just paralyzing, especially when the White House Chief of Staff is under such extreme scrutiny. What do you make of the perception versus perhaps the reality of what's happening inside the White House, and the challenges that presents for our government?
Howard: Blake, that's normal dysfunction, if there is such a thing. Every administration that I've been a part of takes time to get up and running. There's infighting in the White House. It certainly was there during the Bush administration when I was an appointee. It was there in the Clinton administration. There's always some dysfunction and infighting inside the executive branch. By the way, some of that is very healthy from the point of view of differing perspectives factoring into key decisions.
What I think is going on is at a much deeper level, and it's the war that's being fought with top secret information and leaks to the press, and that war against the Trump administration, and that's something that is of a historic nature. These guys don't have a plan for dealing with it, and until they get one, they're going to be crippled in terms of their ability to achieve their political objectives and policy objectives.
Blake: What do you make of that, Kevin? You've spent time in Washington. You've certainly operated in politics for a long time. This, to Howard's point, it really has crippled this administration out of the gate. Right or not, they did, again to Howard's point, wage this war with the intelligence community, and it seems to be presenting real problems. You've also counseled people out of trouble, as well. What does this White House do? How do they deal with the challenges Howard's identified?
Kevin Washo: I think it's going to be pretty brutal, because I think, to Howard's point, the Trump campaign, the President himself, transition, really themselves up, as Howard said, to pick a fight when I don't think he needed to pick this fight. Let's take a step back really quick. If you look back over the history of the last 60 years, you think about what President Nixon had to go through, and obviously with the intelligence community, what President Kennedy had to go through with the military brass early on in his administration, and he had to take them on. This is not abnormal, but what I think is really not normal is the fact how aggressive he was on the campaign front. I think every President has had to handle the bureaucracy in their own way, but he was so out in front in this, I think the chickens are coming to roost.
I think it's going to be very tough. You would think it could have been a kick-start. He had a restart for about 24 hours, and you would think if you could just get back to work, and we haven't even touched on the tweet that he said about the former President Obama that I think almost exacerbated the whole point. You would think if the Trump administration could figure out a way, and it may take some time. There's only an adage in [scran 00:11:02], pick and shovel work. It's going to take some time, but if they could really just focus on the issues, and focus on the things that got them to this point, and less about the tweets and less about the conspiracies, I'm not saying it's going to go away, but I think it would be their best bet to focus on the work.
I think President Clinton, when he was going through his issues in the mid 90s, the thing that he said that he needed to do was get back to work for the American people. I think the Trump team needs to put their heads down and focus on the infrastructure, focus on the rollout of the repeal of Obamacare, and I would actually go even further, when they're looking at some of the things they want to do with the immigration bill. Remember, Democrats in the Senate voted for a fairly comprehensive immigration reform bill. Maybe they could take a part of that, where it wouldn't be so aggressive, but start getting some legislative wind. I think they need to do that quick, and I think they need to be pragmatic about it. My sense would be a four yard run's a lot better than a Hail Mary touchdown for these guys right now, because I don't think it's going to come. I don't think many people want to give it to them. That's my take. It's going to be a long, hard slog, I think.
Blake: We'll dedicate that spot to John Cheney, the offense coordinator of the Panthers or the former offensive coordinator of the Panthers, I can't remember if he's still there, for all the football analogies, but Howard, what are your reactions to that? I think you have preached getting down to business for a while, yet this administration just seems, to Kevin's analogy, keep throwing mindless interceptions rather than blocking and tackling and doing the things that would pragmatically make sense.
Howard: I think they need to bring in a heavy-handed and experienced White House Chief of Staff, and Trump needs to basically turn the reins of the White House over to that person and let him or her run this thing. They need to get ahold of ... They need to corral, in some respects at least, his tweeting, and the messaging, and bring it all together. What they really need is ... Okay, I think there are reasons not to be optimistic, but this is going to happen. I was much more optimistic. Clearly going into the speech last week, not to regurgitate our call from last week, but they clearly prepared and practiced, and thought about the messaging, and were strategic. That's the way they need to run the White House day to day.
Blake: We've seen, in the aftermath of the speech, movement on two policy prerogatives, one being a reissue of the travel ban, and the second the rollout of what, at least a Congressional draft, of a repeal and replace, it would look like. I want to spend more time on the Affordable Care Act because of the nature of that and the premise, but what do you make, Howard, of the fact that after the speech they pulled back on issuing the new travel ban, hoping to take advantage of the positive attention paid to the speech, and then the President comes out on Saturday morning with a barrage of antagonistic tweets towards President Obama, something Kevin alluded to and we should talk about, because in that context relatively unprecedented in terms of not only what the President alleged but its purpose. Any thoughts as to what motivated that activity Saturday morning?
Howard: Distraction, obviously. I don't think it's that unprecedented for a President to try to distract the country from whatever the issue of the day is, if it's bad for the President. I think it's highly unusual for the President to do that by making up facts.
Blake: Right. Kevin, what's your reaction to the President's Twitter barrage on Saturday morning? Because to Howard's point, certainly motivations seem to distract from the Sessions news and what that means in the context of this Russia investigation, but no one rallied around him here. As we like to say where I'm from, the loneliest number is one
Kevin Washo: I get trying to change the cycle. I get trying to focus on something else, but I think in the end, the Sessions thing will work itself out. I don't think he's going to resign. I could be, I may be in the minority of my former colleagues. I don't know if there is a lot of there there. I haven't read the testimony verbatim, but I think in the end, a member of the Foreign Relations Committee, people meet with ambassadors all the time. Hell, this Russian ambassador is on Washington Life magazine all the time, going to cocktail parties and opportunities.
We're very naïve to think that people don't talk. Half the ambassador corps, to go and put my old job on as the creative director of the host committee for the DNC, half the ambassadors to the United States were in Philadelphia for the convention. Half of the ambassadors were in Cleveland for the convention. They were talking to people. They were talking to members of the media.
I think, in the end, the Sessions thing, he would have taken some hits, and he would have had to do a mea culpa, and there would have been a few things, but in the end, why he had to go, why the President had to go to that extreme over an issue that I think in the end is really essentially at least will take care of itself, is beyond me. Anyone who thinks that President Obama ordered wiretapping on President Trump is I think gravely mistaken, but I will say this. Let's look at history, and I think sometimes we always forget history in this country, that this is the first time anything's ever happened. Going back to the 60s, the FBI were tailing Martin Luther King. They had his hotel rooms tapped. The bureaucracy and the intelligence community have done things in the past. That doesn't mean the President of the United States knows everything that's happening. It just was remarkable that he had to go that nuclear, that quick, on a Saturday morning. It just created [inaudible 00:18:11].
Howard: Two things. First of all, when I was in government, I was actually involved in a couple of matters where there were wiretaps put in place on different people. They were federal employees. The bar is so unbelievably high for doing that stuff, there's no way that the FBI or the traditional federal bureaucracies for implementing those kinds of things, there is just no way that they did this. There's just no way.
The other thing is, and what I keep hearing from people who actually know Trump the man, and have done business and dealt with him, is that he is really only capable of thinking in the present. He doesn't think about what happened in the past. That's why he'll do something like interview Mitt Romney for Secretary of State. He doesn't really think about the future. He reacts to things based on what's happening in that moment. He's not a guy who thinks six steps ahead and factors what's going to happen into his decision-making.
I think something like what happened Saturday with the tweets about Obama and wiretaps, I think that's his reaction in the heat of the moment to feeling exasperated by everything that's happened with respect to Sessions, and just lashing out. Washington is all about thinking six steps ahead, and if he doesn't ... He's not going to be able to bash and tweet his way through to accomplishing his agenda. If he doesn't get somebody in that White House who can rein him in and think six steps ahead, and factor that into the messaging that's put out and the moves they make, he isn't going to last four years.
Kevin Washo: Just to add on Howard's point, I think that's a really good thought. To call for an investigation into this, he may get what he wants, but what happens when nothing, when they bring everyone else in front of Congress, and they raise their right hand and take the oath, and basically everyone refutes everything that he alleges? The embarrassment would be unbelievable. I think it would probably be, Howard, pretty unprecedented. That's never happened. It would be remarkable. Your point, living in the present, really doesn't think about what the outcome would mean with some type of investigation, where he was just shooting from the hip, would be something [inaudible 00:21:03].
Blake: Or, consider the alternative, which is, and I think that it does demonstrate, to Howard's point, a need for a very strong White House Chief of Staff who's also politically savvy. I'm not entirely sure that this one is either, but it's be careful what you wish for in a different context. Have the investigation, which gives every moderate Republican the cover to say, "We need an investigation because the President calls for it," and it backs every hyper-conservative who was willing to stonewall this thing into a corner, because the President and his press secretary, who's by all accounts now not doing press briefings on camera anymore, have called for it.
I think that we're in this interesting position, Howard, of this administration really being truly rudderless 50 days in, mind you, to your point, every administration suffers these challenges. You have lived through them directly and specifically at times of arguably much greater peril than today, but I think the President does have a need to figure this out, because, and this is a transition to the bigger issue, we've now got repeal and replace on the table. It's a plan that I want to break down here in a minute, but this administration's got to decide, if it's seen, Howard, whether their position to be able to engage in what is going to be a robust and national debate over the future of healthcare once again. Do you sense that this administration is ready for that debate? What are your thoughts?
Howard: No, clearly they're not, but neither was the Obama administration. You can't let perfect be the enemy of the good. The time is now. The Republicans have to make good on their promises with respect to Obamacare. It's not going to be easy, but they've got to press ahead with their agenda. I think the White House is going to try to get its sea legs while Congress really drives the repeal and replace package, but it's not just that. It's things like tax reform. The expectations, as reflected in things like the stock market but also just the voters' expectations, are high as far as what they expect Washington to accomplish in the Trump era. Again, if they can right their ship, if they can focus and think multiple steps ahead, if they can get an adult into a position of really running things inside 1500 Pennsylvania Avenue, they can get some of this stuff done, but they've got to move quickly.
Blake: Let's talk about at least the House bill, which is significant insofar as it begins the debate. It's certainly not the end of the debate, but Kevin, you've certainly been close to this administration. Mark spent a lot of time working to ensure passage of the Affordable Care Act, and it has been one of the things that not only Republicans for the last six years but President Trump during his campaign said, "Look, we're going to repeal and replace this thing."
The House Republicans have put forward a bill under lots of scrutiny, but here are some of the big issues that the bill addresses. It repeals the individual mandate, which is something that we've been debating for a long time. It repeals the employer mandate. It repeals subsidies for out-of-pocket expenses. It changes some of the premium subsidies and the way subsidies will be distributed. It changes Medicaid expansion, which is actually a big issue for lots of Republican governors, including my own state governor, where Medicaid has literally kept rural hospitals afloat, which matters a great deal. It allows the states to keep Medicaid expansion, and allows those states who expanded Medicaid to continue getting federal funding into 2020, but it also caps federal funding based on what per enrollee each state was spending in 2016. It changes it, but doesn't eliminate it, which I think will be good news.
Changes to health savings accounts issue, and changes some of the dynamics for older Americans, but it keeps some of the popular stuff. Dependent coverage until 26, still in. Pre-existing conditions, still in. Essential health benefits, there are 10 essential health benefits that every plan had to offer, including maternity care and preventative services, still in, and prohibitions on annual and lifetime limits, which was a huge problem, especially for people in need of catastrophic care, is still in. This is an interesting bill. One of the reasons I think, for the things I just ticked off, why conservatives are not happy with it.
Kevin, what do you make of the beginning of this healthcare debate?
Kevin Washo: One of the things that I found very fascinating about the immigration debate, and that's taking away from an important public policy decision, but in my head, if anyone was going to get up in arms about anything, I thought the healthcare debate was going to be even more critical to this country, because really it affects every facet of American life from college students to seniors to governors, to your point, rural health clinics, the whole bit.
I think the Trump administration and members of Congress, to their credit, realized there were certain things that they had to keep going that are very popular, the pre-existing conditions, 26. There's a whole host of things that they needed to do. Thank God they did it, because I think there would have been major backlash if they didn't, but I think going back to our previous point, I just don't think the administration is going to be able to carry the water on this like you would need to do on a national effort. If you think about what happened during the healthcare debate way back in I guess it was [inaudible 00:28:05], you think about all the town halls that every member of Congress had, both Democrats and Republicans. You think about what President Obama did on the stump. Literally it was a full-fledged campaign in every single state, and he took some hits at some of those events, and he obviously got some praise for some of those events, but you think about what you need to do just to sell something of this magnitude. I think it's going to be a big challenge.
I think initially, I'll give him a C plus for the rollout, because they kept some of the popular things. I think there's a lot of details that have yet to be explained that I don't think anyone really understands, because they don't live it every day. We're not living it every day, like the rural health clinics. It's so massive. I think everyone is for a more streamlined, productive, efficient healthcare system. You think about it, even back when it passed way back when, people said there were things that needed to be tweaked. Let's see if Congress can come together to see if some of the things that could be tweaked can be improved.
Blake: Howard, what are your initial reactions to the House's rollout of the Affordable Care Act? Then I do want to get into the details just a little bit, because we know this is of interest to lots of our clients and lots of people on the call. What are your initial thoughts to what we're seeing on the House?
Howard: I think they were smart about making sure it was committee-driven as opposed to driven by the Speaker's office, which is something that the rank and file Republicans wanted to see changed from the Boehner era. That was smart. They've certainly been coordinating with the White House and the Senate on this, so I think that from that point of view, I think they've been smart about it. The devil's in the details, of course, but I think from a political point of view, I think it has a reasonable chance of getting done.
I'm hearing that Mitch McConnell is basically telling the Republican caucus in the Senate that they will vote on the House bill, and that they're not going to mess around with it. They're going to vote on the House bill, and if you don't vote for it, you're the member of the United States Senate who wouldn't make good on the Republican promise to repeal and replace Obamacare.
I think they're set up and orchestrated better here than meets the eye. I think choosing somebody like Milk Mulvaney and putting him at OMB, somebody that used to be part of the Freedom Caucus, that's putting him in a position where he can push his former colleagues, at least enough of them, to come onboard is key. I think they're being smarter and more strategic, and by them I mean the Republicans as a whole, than meets the eye.
Blake: It's interesting. I want to talk about the individual mandate, because the headline'll be it repeals the individual mandate, but what it replaces the individual mandate with is what's called a continuous coverage incentive, which changes people in the individual market a 30% penalty for any lapses in health insurance coverage, which, if we go back to Justice Roberts's reasoning in the litigation over the individual mandate in the current Affordable Care Act, is a tax. It will be construed legally as a tax, I suspect.
Howard, I want to stick with you because that's going to challenge the Freedom Caucus a little bit. We know that the virtue of the individual mandate, not the political virtue, the actual, practical virtue of the individual mandate is that it propels healthy people into the system. Which presumably keeps costs low without some form of a penalty for healthy people buying in, premiums go up. We know that to be a fact. What do you make of the shift from an individual mandate as a term of art to a continuous coverage incentive? Do you think it's enough to keep Republicans aligned?
Howard: I think a lot of this is about rhetoric, Blake and Kevin. It's about messaging as opposed to the substance. It's form over substance. Yeah, in any piece of legislation, you increase the chances of passage by everybody feeling some pain. This isn't going to be perfect for anybody, and I think there's enough in there that you can get over the Freedom Caucus hurdle.
Blake: It's interesting, Kevin, because one of the other pieces of this is the subsidy. One of the things that we debated for a long time as the Affordable Care Act was coming in, and then its aftermath, was the subsidies to encourage people, especially young people, to buy insurance. One of the criticisms of course has been that the penalty wasn't large enough to offset the costs, and you certainly ... The rationale for more young people in the system is presumably that they're just a lot healthier than older people, and that's a good thing. You need more of them in the system.
This changes the subsidies in a way where it's not ... It will distribute subsidies based on age, not by income, presumably that young people make less money, a greater need for a subsidy than if you're older and certainly making more money. A person under 30, the subsidy would be $2000 a year. For people over 60, it's $4000 a year. It does expand the type of plans that'll qualify for subsidies. In the context of what we're doing to subsidize healthcare, do you think that this is [vact 00:35:03] enough, because that's the big issue for Democrats, that continuing to talk about subsidies is going to be something the Democrats are going to have to assent to, that they're going to have to look at this bill and say, "Yeah, there's stuff I don't love," but to Howard's point, we're never going to get a perfect bill. We're still subsidizing healthcare, which I like. What are your thoughts?
Howard: I think that's a good point. I think like anything else it's going to be a negotiation. Who knows if that number will go up or down? I think in the end, for especially younger people, I think the option of having more choices within that type of plan, people like options. It's just the way young people think. I think they'll feel better about that. Then they can make their decisions based on what's out there for them. I think the Democrats are going to have to come around to that point.
I think one of the things that has probably been lost in a lot of the polarization in the country is the fact that you still need to negotiate. You're not going to get everything you want, and that's part of our system, right?
Kevin Washo: That's so right.
Howard: Sometimes it's not. I think both sides, for at least the last 10 years or so, maybe even a little bit longer than that, feel like it's a winner take all, which is gridlock, but I think the reality is, people are going to get some stuff they want and they're not going to get other stuff they want, but hopefully it could be attractive enough where they can get some details. I think people at this point in the country, they just need to see people working together at some point. If the President could tone down the rhetoric a little bit, if Congress could work together a little bit, like I said before, pick and shovel work, to Howard's point, put your head in the sand and start working, I think people will be feeling a lot better about where the country goes, and hopefully that's where everyone can go, but I don't know if we're going to get there.
Blake: Yeah, Howard. As we dissect this, and I think it's really important, I want to finish with one small point before we get to Medicaid expansion, which is a huge issue for the states, and certainly our national footprint, advocating not only in Washington but in all 50 states. It's going to be an issue that state legislatures and governors are going to have to deal with. One of the things that will be interesting is, as the American population ages, and as Americans live longer, which is of course a great thing, one of the challenges of the Republican bill, and Republicans are often criticized about attacking Medicare and Medicaid, and older Americans really feeling like that they're under political siege at times, but an older population was a pro-Trump population.
This plan allows for states to charge the elderly five times as much as younger participants, which I think is going to be an issue, especially for people who are now caring for their parents and beginning to manage their own healthcare needs, and trying to forecast what that's going to be like from a cost perspective. I sense that we might have a different kind of debate on our hands, and that older Americans may perk up a little bit around this bill.
Howard, I want to pivot to Medicaid expansion, which has been a huge issue and a bipartisan issue. 30 states expanded Medicaid after the passage of the Affordable Care Act. We have seen many Republicans, Republican governors, and encourage not only the House but the administration to leave Medicaid expansion in some form in some place. This bill does that. It keeps Medicaid expansion. If you're looking beyond Washington, Howard, to the states, what are your thoughts from a Medicaid expansion perspective in terms of how Democrats and Republicans look at this issue, because their core issue is represented in this legislation?
Howard: I think they look at it in terms of, sadly, but it's in terms of who votes for who. That's where a lot of this decision-making is coming from, and the posturing is coming from. Things like Medicaid expansion obviously impact certain populations and not others. In some ways, they're arm-wrestling for future votes.
Blake: Yeah, it's interesting, because if we were to perhaps unfairly capture what the House bill does, it turns certain things upside down in terms of who you think your political allegiances are. This would appear to disadvantage the elderly more than poor, low-income Americans, which is interesting. While it obliterates the hot-charged individual mandate term of art, it creates a different form of entitlement, if you consider what we consider entitlements to be, and it continues to impose a tax, which anyone who's studied this understands. I think you've got a Speaker of the House who is tax reform, health reform. He clearly understands these issues, the interplay of these issues, and no one suggests that he's not a very intelligent guy, but this is how, if you're going to make healthcare reform stand up in the United States, you've got to ... These things have to be present, otherwise we're just back to a system that wasn't working for anybody. Even Republicans would agree with that, Kevin.
Kevin Washo: No, absolutely. I think, Blake, you've done a really good job over the last two minutes of laying out some of the benefits or some of the stipulations of the bill, but think about this. How do you sell this politically? It's a lot. It's complicated. There's not one system for everyone. There's a lot of different things that will affect different populations at a variety of levels.
Just from a purely political standpoint, I've been trying to get my head around who sells this. Is the President going to have enough discipline to go out on a barnstorming tour of America and sell this proposal, and get in the weeds? Are members of Congress going to go back to their districts? Because we've seen what's been going on with members of Congress in their districts.
To your point politically, how does it play out? That's the question that I've been struggling with, and I think as more people see it and hear about it, it's a little bit confusing. Granted, healthcare's a confusing topic. I just am very curious how the continued rollout's going to be when things really get into a mix, people go back to their districts for the summer. How do you handle that, because it was pretty contentious in 2009?
Blake: Howard, let's throw Kevin's question to you. Again, it's early. The devil is in the details. A lot of this is very much about positioning and what you deal with, but as you said, and your insights, you're on Capitol Hill every day, you're talking to leadership and staff at the committee level constantly, and to your point, Mitch McConnell in the Senate has begun to telegraph that he is going to call a vote for this and there's not going to be a lot of tinkering. What do you think the politics of this ultimately are for Republicans in swing districts and for Democrats in swing districts?
Howard: In the House, this is a negotiation. Trump even said that in his tweet this morning. The bill's set up for a negotiation. I think that there should be a vigorous negotiation around something that's 20% of the U.S. economy. That's fundamentally what's going to go on here.
Blake: Yeah, I tend to think, just to weigh in Kevin, to build upon your question, which I think is the right one, and how this thing will ultimately play out, I tend to certainly agree with Howard's point that the rollout was smart, doing this up through the committee system rather than it being leadership-driven. I think it's also smart politics for Paul Ryan to not necessarily be the face of this yet. He may very well end up being the face of the compromise, to Howard's point, but being the face of the bill itself, and I think smart politics for Trump too, to say, "Look, this is the beginning of a negotiation." I think we'd all agree the Republicans know, politically they've got to get something done.
This, unlike Trump's budget, gives you the means to negotiate, and I tend to think that Democrats look at this ... I look at this pragmatically and I think, "All right, I can have a conversation about we're going to get rid of the individual mandate, but we are going to penalize people for not getting health insurance, because we know we need them in the system. We're going to have a ... Let's have a discussion about that. We can have that discussion. We're not going to burden small businesses with having to provide people with health insurance because they can't afford it. We're going to shift this burden to the individual and make the individual deal with it. Let's have a conversation about that. We're going to deal with subsidies in a different form. We're going to keep Medicaid expansion. We may cap the amount of money we can give you, but we're going to keep it. I want to talk to governors about that."
There are lots of things to have a conversation about, and I think as long as the White House doesn't railroad this in some negative form, Howard, my impression is we are at the beginning of a very reasonable conversation among decision-makers. The ether, the town halls and the far left and the far right, are going to hate this, but they're going to hate anything.
Kevin Washo: Sorry, go ahead.
Blake: No, I was going to get your reaction to that. It seems like we're on a tack to that reasonable negotiation.
Kevin Washo: Politics is all about ownership. Who owns a particular issue? Who's accountable to the public, to other people holding public office on any given issue? That's where the rubber hits the road in terms of politics. The Republicans are acutely aware of the fact that they own this bill. They're also acutely aware of the fact that for the last eight years they've been able to shellac the Obama administration for having passed this in the first place, having considered it and passed it. That has been a winning political hand for them.
I'll tell you, they don't want to be ... What I'm hearing is, they are acutely aware of not being on the receiving end of that which they've been dishing out for the past eight years. I think while this is not going to be a bipartisan bill, they're going to be careful to do this in a way that they don't set themselves up for eight years of bashing by the left. I just think they're going to be smart about it.
Blake: Yeah, certainly I think this will be interesting, Howard to your point, and I think you're right, and for everyone on the call in the healthcare space, obviously we're intimately involved, if you can't tell, in the ramifications of this, but at the same time, the House has a pretty comfortable Republican majority. Absent something really tricky from the Freedom Caucus, you can certainly envision the House being able to shepherd something very close to what we're seeing through, but in the Senate, until the rules change or until we see something different, there is still that 60 vote threshold, which is going to be interesting. You've got Democrats up next year who are going to have to think about what this means.
I'm fascinated by this, in the same way that I was fascinated with the first time that we dealt with the Affordable Care Act. I think it makes for both really interesting policy and really interesting politics, and in our business, that's always fun. We have spent a lot of time on one particular issue, but I think it's an enormous issue. The politics of Washington are, as I say, never dull. We will look forward to not only a continued discussion and analysis of what's going on with the Affordable Care Act, but other issues as they evolve. Tax reform certainly appears to be on the horizon. We will be tracking that closely, and communicating about that.
As always, if you have questions or comments, or anything at all, you can email us at firstname.lastname@example.org. Kevin, it's been great to have you join us today.
Kevin Washo: It has.
Blake: I think you've certainly stepped into Mark's shoes admirably, as his feet rest in ski boots on a slope somewhere. Howard, of course as always, great to be with you. Thanks, guys, and thanks to everyone for listening.
Howard: Thanks, Blake.
Blake: We look forward to talking to you next week. Thanks a lot.