I wrote on Wednesday that Republicans forced themselves into a corner with seven years of lying and overpromising about healthcare. The fact that nothing they do now will live up to the promises they made before is a big political problem.
That’s on the whole party.
But the specific failure to pass the American Health Care Act — the option Republican leaders had decided was the least-bad way to deal with their healthcare predicament — is on Donald Trump.
Specifically, the bill can’t pass because Donald Trump is a bad dealmaker. We have a president who cannot close. Sad!
I realise Trump and his fans would object to this characterization. How could I malign the dealmaking skill of the author of The Art of the Deal?
Let us count the ways that Trump’s dealmaking deficits have derailed the bill he said was “terrific.”
Trump weakened his negotiating position by showing his hand
Trump’s public comments about the healthcare bill gave individual Republicans in Congress two pieces of information that reduced their incentive to compromise with him about the bill’s contents:
- Trump doesn’t really care what the bill does, exactly, so long as he can sign it and say that it “repeals and replaces” Obamacare.
- Trump really, really wants to sign some bill quickly so he can get past this healthcare chore and move on to fun topics like trade and taxes.
You don’t walk into a negotiation and tell your counterparty that you’re desperate to make a deal fast and on any terms. But Trump did just that, which is why Freedom Caucus members knew the White House was bluffing when they claimed the bill was closed and wouldn’t be amended further.
Trump invited the Freedom Caucus to squeeze him dry. Weak! Bad!
Trump eventually seemed to realise this error, claiming if no bill passed by Friday he wouldn’t participate in future efforts to repeal Obamacare.
But that threat was implausible because of his prior admissions. He should have read his own book:
Trump is too untrustworthy to make credible side-deals
Usually, a legislative negotiation isn’t just about what’s in a bill.
Often, a member of Congress agrees to vote for the president’s pet piece of legislation, and the president promises to advance the member’s favourite regulatory initiative, or to advocate for another piece of legislation later, or to campaign for that member’s reelection.
Trump might be making such promises. But because he has a decades-long reputation for renegeing on his promises to counterparties, members are unlikely to trust Trump when he does so. This limits his negotiating toolbox; because he can’t be trusted, his promises have to be made good in the bill text itself.
Trump’s assurance that the bill’s limitations — for example, its limited impact on insurance regulations under Obamacare — will be addressed through executive action and future legislation do not seem to be convincing enough of his party’s own representatives to get this bill passed.
In a way, this is similar to the way Trump alienated mainstream banks with his reputation for not repaying debts, forcing him to seek increasingly creative means of financing his businesses. Screwing your partner in one deal makes it harder to get the next deal done.
There is an exception that proves the rule that side deals don’t work for Trump.
One of the “no” votes who did flip to “yes” on the AHCA is Rep. Lou Barletta of Pennsylvania. Barletta’s signature issue is illegal immigration (he’s opposed) and he said he couldn’t vote for the AHCA because he didn’t have sufficient assurance that illegal immigrants wouldn’t get insurance tax credits. Barletta changed his position once he was promised Trump would support his legislation to address the issue.
Trump can credibly promise to take punitive action toward illegal immigrants, because that is a passion of his. Beyond that, his lack of credibility is undermining his negotiating position.
Trump’s policy ignorance hinders his judgment about what terms to propose
“Nobody knew healthcare could be so complicated,” Trump declared in February.
Actually, a lot of people did know that, but Trump seems to have been personally unprepared for the interconnected nature of healthcare policy. Moving the wrong piece can cause the healthcare market to crash down like a Jenga tower, and Trump has no idea how to determine which blocks are loose.
This is how the White House apparently ended up offering Freedom Caucus members the repeal of Essential Health Benefits rules from Obamacare, as part of a last-ditch effort to win their votes.
This policy change — which would allow insurers to sell health plans that don’t cover pregnancy, or even plans that don’t cover doctor’s visits at all — moves the bill to the “right” and looks at first glance like something that should help conservative members of the House Republican conference get on board.
But as I wrote on Wednesday, repealing the EHB rules while leaving other Obamacare rules in place would create a huge mess in health insurance markets that doesn’t appeal to anyone. Rep. Justin Amash, one of the sharpest critics of Obamacare’s healthcare regulations in the House, said repealing this specific regulation by itself “makes the bill worse, not better.”
By making the EHB offer, Trump scared away moderates like Rep. Charlie Dent and Rep. Rodney Frelinghuysen, but did not pick up the votes of many Freedom Caucus members who pointed out (not unreasonably) that if you’re going to repeal EHB you also need to repeal Obamacare’s rule that requires insurers to cover pre-existing conditions, as otherwise insurance markets could collapse.
If Trump understood health insurance policy (or asked someone who did) he would have known that Essential Health Benefits rules and pre-existing condition rules go together like peas and carrots, and he shouldn’t offer to repeal one if he’s dead set on keeping the other.
But he didn’t, so he offered something that made the deal all that much harder to close.
Trump has never been good at deals
Donald Trump is a highly successful businessman. But he is not, like he claims, a highly successful dealmaker.
Trump is an incredibly talented, natural marketer. He was very good at convincing people they should want to buy Trump apartments, reasonably good at convincing people they should want to golf at Trump golf clubs, and for a time quite successful at getting people to want to watch Trump fire people on television.
Trump innately understands certain kinds of consumers, and he understood things about the electorate that none of his opponents in the 2016 election did. There are reasons he won an election that nobody believed he could.
He wasn’t very good at convincing people they should want to buy Trump Steaks, but then, nobody bats one-thousand.
We know from what we’ve seen of Trump’s tax returns that he lost a great deal of money in the 1990s and that he was making a great deal of money by the mid-2000s. Not coincidentally, over this period Trump shifted the focus of his professional endeavours away from businesses that were heavy on dealmaking and toward businesses that were heavy on marketing, particularly arrangements where he would rent his name to somebody else who was actually in the business of developing real estate.
Unfortunately, unlike the general endeavour of being a “famous, rich business guy,” there is no way to adjust the presidency so it’s heavier on the marketing aspects and lighter on the dealmaking aspects.
It’s a president’s job to make deals. And Trump’s lack of talent for dealmaking is going to be a major liability for him in office.
This column does not necessarily reflect the opinion of Business Insider.
“The worst thing you can possibly do in a deal is seem desperate to make it.” — The Art of The Deal.
— Donald J. Trump (@realDonaldTrump) November 25, 2013
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