On a Saturday morning in the summer of 1994, first lady Hillary Clinton was unnerved as she stood at a lectern in downtown Seattle. Hundreds of demonstrators had infiltrated the crowd at an outdoor rally for a White House plan to redesign the nation’s health-care system, their messages ugly and personal.
The first lady faced signs saying “Heil Hillary,” and she could barely hear her own voice over the boos. Sensing trouble, her Secret Service detail had, for the first time that day, persuaded Clinton to wear, under her crimson jacket, a bulletproof vest.
The charged feelings about Clinton and health-care reform that had spread across the country were part of a spectacular downfall from a hopeful beginning 19 months earlier, when she and her husband, President Bill Clinton, moved into the White House determined to bring health insurance to every American. She seized an unprecedented role for a first lady, taking charge of a main policy initiative. Two months after the Seattle protests, the Clintons’ quest to reform health care was dead, having failed even to get a floor vote in either chamber of Congress.
From the ashes of this defeat emerged a chastened Hillary Clinton whose caution has, over the years and as she seeks to become the nation’s first female president, become a hallmark of her identity.
The 21 months from the dawn to the demise of the Clinton health plan showed the first lady as the Washington neophyte that she was, overvaluing her own ideas, misreading power relationships, crusading for a complex plan that would have disrupted many Americans' health care. She has not attempted anything as daring again.
Years later, she crystallized her more cautious strategy. “I now,” she said during her 1999 U.S. Senate race, “come from the school of small steps.”
Brian Fallon, press secretary for her presidential campaign, said, “While Clinton herself would be the first person to acknowledge that there were missteps along the way, she absorbed key lessons from that experience and has applied them to all the fights she has waged since.”
This article is based on interviews with two dozen insiders within the Clinton administration, on Capitol Hill and at leading interest groups, who interacted with the White House during that time. Some who now support Hillary Clinton are less critical of her today than in the past, and all agree that she alone cannot be held responsible for the failure; competing presidential priorities and a hardening partisan culture on Capitol Hill factored in, too.
To her credit, Clinton worked feverishly, demonstrated policy nimbleness and delivered impressive public performances. Yet, according to many who worked with her, she did not understand or respect the norms of Congress, was more prone to criticize than to negotiate, and allowed the process in the White House to become unwieldy. She first drew criticism for a lack of openness that has dogged her in public life ever since.
Privately, even some admirers of Clinton today view her work on health-care reform as a case study in how not to function in political Washington.
Setting the stage
During his 1992 presidential campaign, Bill Clinton had targeted health-care reform as a top priority. After the election, health policy experts on his transition team fleshed out his approach, called managed competition, to try to slow medical costs and foster universal coverage.
Then, on Jan. 11, nine days before his inauguration, he summoned his health team to Little Rock to meet with him and his economic advisers. Stuart Altman, a health economist at Brandeis University, remembers tripping over golf clubs in the dining room of the governor’s mansion, where they convened. He noticed that the president-elect’s wife was there.
Some team members thought they were in line for jobs leading the health reform effort. Yet as they presented cost estimates and unpleasant options — such as tax increases or government price controls — Ira Magaziner, a longtime Clinton friend who had worked on the campaign, assured Bill Clinton that his experts were wrong. The country, he said, could adopt managed competition without broad new taxes. Before their eyes, the team realized, Magaziner was securing a main White House health reform job — and they were not.
Hillary Clinton asked only a few questions, recalled Atul Gawande, a medical student who had worked on the campaign. Rumors had been hovering that the first lady would have an unspecified role in the new administration. But “it became more apparent to me at that meeting that she was going to be in charge,” said Gawande, now a renowned writer, surgeon, Harvard professor and public health researcher.
Unorthodox as it was, the idea of the first lady taking part in governing flowed from the partnership the Clintons had forged during Bill Clinton's Arkansas governorship. Hillary Clinton had led his effort to improve the state's public schools and, although she was not steeped in health policy, had worked on issues of children's well-being and rural health.
How hard Hillary Clinton pressed to oversee health reform depends on whom you ask.
Dick Morris, a former Clinton adviser who is now a critic, said the idea emerged from "a whole series of phone calls and a meeting at the governor's mansion" with her. He said she first proposed becoming White House chief of staff — an idea Morris said he discouraged. She pondered attorney general or secretary of education, he said. Morris suggested she consider leading an important task force that would boost "her own credentials and her own accomplishments," he said.
However, in her autobiography, "Living History," she wrote that "Bill first broached the idea" of her leading a task force that would write the legislation and that she "didn't run screaming from the room." A Clinton spokesman said she stands by her account.
Both Clintons wanted business consultant Magaziner as the day-to-day manager, said several people familiar with the decision. The huge task force would draft legislation.
Some incoming Cabinet members were skeptical. "I think everybody had a heart attack, because it was so contrary to the way anyone with experience" would set up the effort, Donna Shalala, the secretary-designate of the Department of Health and Human Services (HHS), recalled in a 2007 oral history for the University of Virginia's Miller Center. The task force idea, Shalala said, "was very much both" Bill and Hillary Clinton's. The better arrangement, she said, would have been for the Clinton administration to design broad contours of a plan, then send them to Congress to take ownership and fill in the details. "A lot of us told him it was screwy . . . but when the president and the first lady decide they want to do something . . . unless it's illegal, you support it. . . . They had made up their minds."
Today, Shalala is president of the Clinton Foundation. “Even her critics,” she said through a spokesman, “saw the qualities that make her such a strong advocate on these issues.”
Early optimism
The Saturday after her husband’s inauguration, Clinton convened the first White House health-care meeting with Magaziner and a trio of aides, her daily schedule shows. She already had broken ground, claiming, as no other president’s wife had, a West Wing office.
Two days later, with his wife seated next to him, Bill Clinton announced the President’s Task Force on National Health Care Reform and said it would submit legislation to Congress within his administration’s first 100 days. Its chairman would be Hillary Clinton, who, he said, “can bring people together around complex and difficult issues to hammer out consensus and get things done.”
Early on, her schedule shows, Clinton met with influential members of Congress. Her list one week included moderate Sen. Dave Durenberger (R-Minn.), a longtime advocate of universal health care who co-sponsored a Senate GOP health-care bill. She talked with half a dozen Democrats, among them Sen. Daniel Patrick Moynihan (N.Y.), chairman of the influential Senate Finance Committee, who wanted welfare reform to take precedence over changing the health-care system. And she went to Annapolis to speak at a retreat of the Senate Republican Task Force on Health Care.
“Her skill set, it was like dealing with a thoroughbred horse with her,” said Chris Jennings, a White House aide who attended many of these sessions and now advises her campaign. Members of Congress interacting with Hillary Clinton, Jennings said, were “impressed with her” because of “her ability to know policy but also the history of the policy and the history of the member.”
Christine Ferguson, the health-care aide to then-Sen. John Chafee (R.I.), another moderate Republican who had long worked on health reform, recalled: “At that moment in time, she put out her hand, they put out their hand. The one misstep may have been giving them a sense they would be part of the discussion, and there would be consultation.”
When Clinton called Durenberger for the first time, he decided to help her understand “the nature of the trip we’d been taking since 1979 and what ticks off the partisan side of it.” But he, like others, was mystified by the process she and Magaziner had created, with more than 500 task force members, divided into working groups with “tollgates” to assess ideas.
The first lady and Magaziner offended both Democrats and Republicans on Capitol Hill. They did not invite aides to GOP members to participate, and they showed no deference to committees handling health care — or to members with seniority. The staff of Sen. Edward M. Kennedy (D-Mass.), a health reform crusader, decided to participate anyway. But Rep. Dan Rostenkowski (D-Ill.), the chairman of the House Ways and Means Committee, was among those who declined.
“We didn’t call them up and say, ‘Hey, you turkeys, we are not going to play in your sandbox.’ We just didn’t play in their sandbox,” said David Abernethy, then a committee health-care aide.
Others found the first lady dismissive of expertise. In a memo in his files, Moynihan recounts a comment that health policy expert Paul Ellwood made after meeting with Clinton. He said Ellwood told Moynihan's chief of staff: "He had studied the subject all his life, she had studied the subject for three weeks, and already knows more than he." Ellwood, now 90, could not specifically recall the conversation but said, "It could well have been something that I said."
Kenneth Thorpe, who had served on the transition team, was by then working at HHS and still running cost estimates to present at near-nightly meetings with Magaziner that routinely ran until 1 a.m.
“We would then periodically go in and brief Mrs. Clinton. She was basically the . . . leader of the band, orchestrating a lot of different decisions” in close consultation with her husband.
On the inside, some task force participants questioned their instructions to design “what we thought was the best system and not worry about politics. I have no idea where that came from — whether it was Ira or the president or the first lady. Any of us who had been involved in government or politics before thought it was very crazy,” said a health-policy adviser who was involved and spoke on the condition of anonymity to help preserve working relationships. “We kept waiting for the adults to come in and tell us to stop.”
On the outside, criticism mounted about secrecy. For two months, the White House refused to disclose names of task force members. Three organizations filed suit, alleging that closed meetings were illegal because some participants were not federal employees. The administration contended that the first lady was a "functional equivalent" of a federal employee, but a judge disagreed and ordered that some meetings be public.
From the start, the president’s promise of a plan within 100 days was ambitious. Senate Majority Leader George Mitchell (D-Maine) urged swift action while Congress might be most receptive to a new administration, said Christine Williams, Mitchell’s health-care policy aide. But a plan wasn’t ready. And Sen. Robert C. Byrd (D-W.Va.), the Senate’s parliamentary stickler, said that health-care changes couldn’t be part of budget legislation and would have to wait their turn.
That winter and spring, Clinton privately vented frustrations. Her friend Diane Blair kept notes of their conversations. An April note in Blair’s files says Clinton was finding “Congress a bunch of whiners; no courage.”
By the end of May, the White House had missed its own deadline. The task force disbanded — in part because of the judge’s order. A smaller group, still led by Clinton and Magaziner, began drafting the legislation. The concept of managed competition that the Clintons espoused would create regional alliances through which everyone except older Americans would buy insurance. Many advocates of managed competition believed that competition among insurers inside the alliances would slow medical spending. The Clintons, uncertain that market forces alone would be enough, also called for the government to set an overall cap, if necessary.
David Gergen arrived that summer as a senior adviser to the president. The veteran of three Republican White Houses quickly concluded that “they had misread how to get things done on the Hill,” he recalled. “The political theory was you should start with a proposal that pleases the left . . . and [through later negotiations] move to the center. That ran counter to everything I knew and others knew about how to succeed,” he said.
Shalala, the HHS secretary, was concerned, too. Peter Edelman, who was an assistant HHS secretary, recounted in another Miller Center oral history that Shalala "was constantly going to the White House and saying to Hillary this or that about content and being rebuffed. . . . I remember one time Donna came back and said to me, 'I told Hillary that this thing is just headed for disaster, and she told me I was just jealous that I wasn't in charge and that was why I was complaining." Edelman, a Clinton supporter, declined to comment.
Clinton and Magaziner discounted health-reform work already done by some members of Congress. Rep. Jim Cooper, a conservative Democrat from Tennessee, then still in his 30s, had introduced a bill in 1992 with similarities to the Clinton plan, although it did not compel employers to insure their workers or promise that insurance would be universal.
Rather than reintroducing it, Cooper decided in early 1993 to offer it to the White House and, in June, went to the West Wing to meet with the first lady. He warned her that her approach might not pass the House Energy and Commerce health subcommittee, on which he served. Cooper was quoted nearly a decade ago in the New York Times as saying that Clinton had replied, “We’ll crush you.” Cooper told the newspaper, “I was excoriated.”
Today, Cooper does not dispute the quotes, but his account has softened, and he now admires Clinton. "From her vantage point, she would have been entirely justified to think this junior pipsqueak had no idea what was going on," he said. "I bet everyone else was telling her what she wanted to hear."
Cooper said he thinks Clinton responded by helping to foment opposition to him in an unsuccessful Senate campaign. The president reacted much differently. Without ever lobbying him on health care, Bill Clinton invited him for two runs along the Mall, a round of golf and a visit to the White House residence that lasted so long that Cooper feared he would miss a flight for a speaking engagement in Nashville. The president said he would help out. When the 3 p.m. session arrived, Bill Clinton astonished the attendees — a gathering of Tennessee broadcasters — by phoning in.
In late September, Hillary Clinton helped to lead a two-day “health-care university” at the Capitol attended by hundreds of lawmakers, just before the president introduced the White House’s plan in a televised speech to a joint session of Congress. The legislation still wasn’t ready.
The next week, the first lady made history, testifying before the Ways and Means Committee as the lead witness on a major White House initiative. Within days, she testified before four more panels. Her appearances were heralded as a tour de force.
Off Capitol Hill, Hillary Clinton rebuffed a leading trade group trying to negotiate with her. The Health Insurance Association of America agreed with the Clintons' idea that employers must cover their workers but opposed the idea of people buying insurance through regional alliances. In August, the group began its memorable "Harry and Louise" advertising campaign, with a couple suggesting that "there has got to be a better way" than the Clinton plan. Charles N. Kahn III, then the HIAA executive vice president and now president of the for-profit hospital trade group, said the ads were intended "to get the attention of the administration so they would negotiate."
The strategy didn’t work. The group had had unsatisfactory interactions earlier with Magaziner, and now Hillary Clinton declined to meet. The ads resurfaced and eventually were cited as a reason health-care reform failed.
In late October, the day after her 46th birthday, Clinton spoke along with her husband in the Capitol’s Statuary Hall for the ceremonial introduction of the Clintons’ Health Security Act.
But the legislation still wasn’t quite ready. It was almost Thanksgiving before Mitchell introduced the bill.
The measure was 1,342 pages — so intricate that some health policy experts said they couldn’t fully understand it. Cooper had by then reintroduced his plan. And Congress was about to go home for the year.
A slow death
By 1994, the Clintons’ second year in the White House, the mood was souring as five House and Senate committees began considering bills. Opposition was hardening among some interest groups, including the insurance industry, and Republicans. House Minority Whip Newt Gingrich (R-Ga.) saw an opportunity to end the Democrats’ majority.
In early spring, Senate centrists, Democrats and Republicans alike, formed the Mainstream Coalition to press for a more modest reform. Durenberger, a member of the group, remembers 27 senators taking part, including "people who'd spent a good share of their Senate lives on this."
By May, Senate Minority Leader Robert J. Dole (R-Kan.) handed a note to Moynihan, the Senate Finance Committee chairman, suggesting that they map out a compromise.
Gergen recalled a phone call from Moynihan, urging the White House to loosen in its insistence on achieving universal coverage right away. Moynihan reminded Gergen that great advances in the nation’s social safety net — including Social Security and Medicare — had been passed by large congressional majorities of a kind the Clinton plan simply did not have.
Again, the first lady was reluctant to compromise. On a Sunday night in June, the eve of an appearance by the president on NBC’s “Today” show, Gergen was in the White House Map Room with the president, first lady and other aides to decide whether the president should signal that he was open to a gradual phase-in of universal coverage.
“The question was put to the president and first lady,” Gergen recalled. “She was very opposed to incrementalism.”
Gergen looked at his watch and jotted down: “At 10:22 p.m. tonight, health care died.”
Health-care reform sputtered along for three more months. Conservative radio talk show hosts bashed it — and the Clintons in general. Seattle was not the only city in which bus caravans called the Health Security Express, filled with “reform riders” who supported the White House plan, encountered protests. In Owensboro, Ky., an effigy with a tag reading, “I’m Hillary,” was hung from a wooden frame, doused in gasoline and burned.
Near the end, the White House worked with Mitchell on a compromise, but Congress — even the Democrats — had fractured. Mitchell declared health reform dead in late September.
Republicans, led by Gingrich, used “Hillarycare” as part of their case to win a House majority that fall. Clinton, in “Living History,” recalls meeting with aides to share her disappointment. “Fighting back tears, my voice cracking, I poured out apologies,” she wrote. “I told them I was considering withdrawing from active political and policy work.”
She had canceled an appearance that night at the Mayflower Hotel. At her aides' coaxing, she reconsidered and decided to attend. Then, two days after Christmas, she and her team drafted a letter for the president to send to Gingrich, the incoming House speaker, saying that the White House should work together with the new Congress on health reform's "first steps."
Hard lessons
In 1999, during the final weeks of her campaign to succeed Moynihan as a senator from New York, Clinton sent him a note, according to the book, "Daniel Patrick Moynihan, A Portrait in Letters of an American Visionary."
“If I had listened to you about health care in 1994,” said her handwritten note on White House stationery, “I would be far better off today — but more importantly — so would the nation’s health care system.”
From time to time, Clinton has discussed what she learned. She suggests that she and her husband attempted too much too fast. When she first ran for president, in 2008, she reflected on "some valuable lessons" as she proposed a new health-care plan. Clinton said that change must be less disruptive, allowing those who like their coverage to keep what they have.
Fallon, her campaign spokesman, noted that, after 1994, she “dusted herself off” and worked for the passage of significant but piecemeal legislation to insure children of working-class parents. Her role was largely behind the scenes.
The common wisdom today is that the Clintons’ failure shaped the nation’s next big attempt — the Affordable Care Act that President Obama pressed through a polarized Congress in 2010.
Two years before its passage, Durenberger, the former senator from Minnesota, organized a weekend retreat for some old hands from the Clinton health reform days. It was April, before the 2008 election season had its nominees. The guests, friends and foes of the Clintons’ efforts, traipsed through a late spring snow to a conference center, where they produced “10 commandments for presidential leadership on health reform.”
The commandments do not mention first ladies. But they read like a takedown of Hillary Clinton’s missteps. They urge the White Houses not to get into “the policy weeds,” to delegate legislative details to Congress and to manage partisanship by “fertilizing the middle.”
Durenberger’s wife, Susan Foote, was his health policy adviser during the Clinton days and helped plan the retreat. Several months afterward, with Obama elected but not sworn in, with the Affordable Care Act battles lying ahead, she got a call from Ezekiel Emanuel, one of the new president’s health-care advisers. He had heard there was an unpublished list of how to do better than the Clintons had. He wondered if he might have a copy.
