Daschle has ear of White House, health industry in overhaul

WASHINGTON — Six months have passed since the morning when Tom Daschle, the former Senate Democratic leader, under fire for not paying certain taxes, called President Barack Obama in his study off the Oval Office to withdraw his nomination as health secretary and czar of the health system's overhaul.

But these days it often seems as if Daschle never left the picture. With unrivaled ties on both ends of Pennsylvania Avenue, Daschle still talks constantly with top White House advisers, many of whom previously worked for him.

He still speaks frequently to the president, who met with him as recently as Friday morning in the Oval Office. And he also remains a highly paid policy adviser to hospital, drug, pharmaceutical and other health-care industry clients of Alston & Bird, the law and lobbying firm.

Now the White House and Senate Democratic leaders appear to be moving toward a blueprint for overhauling the health system - centered on nonprofit insurance cooperatives - that Daschle began promoting twomonths ago as a politically feasible alternative to a more muscular government-run insurance plan.

It is an idea that also happens to dovetail with the interests of many Alston & Bird clients, like the insurance giant UnitedHealth and the Tennessee Hospital Association. And it is drawing angry cries of accommodation from more liberal House Democrats bent on including a public insurance plan.

Friends and associates of Daschle's say the interests of Alston & Bird's clients have no influence on his views. They say he sees no conflict in advising private clients on the one hand, and advising the White House on the other, because he offers the same assessment to everyone: Though he has often said that he favors a government-run insurance option, the Senate will not pass it.

"The message I deliver to labor unions and business leaders is the same one I share with doctors, hospitals and insurance companies," Daschle wrote in a brief e-mailed statement. "I do not tailor my views to any specific group or client."

Critics, though, say his ex-officio role gives Alston & Bird'shealth care clients privileged insights into the policy process. They say Daschle's multiple advisory roles illustrate the kind of coziness with the lobbying world that Obama vowed to end. If he had been confirmed as health secretary, Daschle would have been subject to strict transparency and ethics rules.

Daschle's position, some liberals say, raises at least an appearance of a conflict of interest. "I hope the president can make a decision based on what the country wants, not what a handful of Daschle's clients want," said Rep. Lynn Woolsey of California, a leader of the progressive caucus.

Daschle both recommends and predicts an incremental approach.

"We are not going to see this happen overnight. It can't. It is too big a shift in the economy," Daschle told a biotechnology trade group in May. If the legislation can begin to "ramp up" coverage for all, health-information technology and some cost controls, "we will have succeeded," Daschle said.

After he withdrew his Cabinet nomination, Daschle threw himself into preparing a bipartisan proposal for a health-care overhaul with two former Republican Senate leaders: Bob Dole, a colleague at Alston & Bird, and Howard Baker, now at another law and lobbying firm. Their proposal, released in June, was among the first to spell out the idea of helping states establish health insurance "co-op plans with consumer boards."

Sen. Kent Conrad, D-N.D., one of Daschle's closest friends, began pitching the idea at about the same time and has become its champion. He is one of six members of the Senate Finance Committee working on their own compromise proposal that aides say looks increasingly like the Daschle-Dole-Baker report.

To address doctors' fears of lawsuits, Daschle and his collaborators proposed a "safe harbor" from legal liability for doctors who follow certain rules. Obama took up the idea in a mid-June speech to the American Medical Association.

The spokesman said that after Daschle left the Oval Office on Friday, a White House spokesman described the meeting as a "quick check-in" on the overhaul process. The two "agreed to stay in touch over the coming weeks and months."