Daschle in the thick of health-care overhaul

WASHINGTON — Six months have passed since the morning Tom Daschle, the former Senate Democratic leader, under fire for not paying certain taxes, called President Obama to withdraw his nomination as health secretary and overhaul czar.

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

He speaks frequently to the president, who met with him as recently as Friday in the Oval Office. 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.

Moving to blueprint

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 two months 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, such as 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 said the interests of Alston & Bird's clients have no influence on his views. They said 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 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.

Daschle is not registered as a lobbyist and recently told U.S. News & World Report that he preferred to describe himself as a "resource" to those in government and industry.

Ex-officio role

Critics said his ex-officio role gives Alston & Bird's health-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.

Clients of Alston & Bird say Daschle advises them, sometimes indirectly through the firm's registered lobbyists, about the personalities of his former colleagues and about strategies to achieve their policy goals.

"He would tell us, 'Make sure you present the value proposition of home care with as great detail as you can, so Congress understands that home care is part of the solution rather than a cost to be cut,' " said William Dombi, a lawyer at the National Association for Home Care and Hospice.

Some of the health-overhaul bills would make deep cuts in Medicare payments for home health services, but Daschle has argued for an increase. And though he does not lobby, he took that message to Capitol Hill last month, giving a paid speech at a meeting for congressional employees convened by a group of home-health-care-equipment businesses.

"My mother's quality of life is a hundred times better given the fact that she can live at home rather than be institutionalized at 86," Daschle told the audience.

Daschle's friendship with the president goes back to Obama's first days in the Senate. An early and important backer of Obama's presidential campaign, Daschle also sent a steady stream of former aides to Obama's Senate office and White House staff. Obama's senior adviser Pete Rouse was Daschle's chief of staff. Jeanne Lambrew, a top White House adviser on health care, was the co-author of Daschle's 2008 book, "Critical: What We Can Do About the Health-Care Crisis."

Daschle's Cabinet nomination was torpedoed by the disclosure that he failed to pay taxes on the use of a friend's car and driver while making millions of dollars advising Alston & Bird's clients.

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 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.

As a backstop, their plan provided that if state co-ops or other programs failed to meet certain cost and coverage goals in five years, the president could create a public plan on a fast track without threat of a Senate filibuster.

That feature, known as a "trigger," was briefly acknowledged as another possible compromise by White House chief of staff Rahm Emanuel. Though it was little discussed, Sen. Olympia Snowe, R-Maine, one of the Finance Committee's group of six, has recently expressed support for the concept, and committee aides say the idea is again under consideration.

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.