Treasury doubted Clinton health plan


WASHINGTON -- From the first weeks of the Clinton administration, Treasury Department officials expressed profound doubts about major parts of the president's plan to overhaul the nation's health care system, White House records made public yesterday show.

The administration released 234 boxes of working papers of Hillary Rodham Clinton's Task Force on National Health Care Reform, after fighting for 18 months to keep the boxes, each containing about 2,500 pages, secret.

In the documents, economists warn that the president's plan had "fatal flaws" that could cause "real-world havoc" and "potential disasters" for the nation's health care system.

The papers were made public at a time of soul-searching within the administration about what went wrong with the president's campaign for universal health insurance. After rejecting several plans with that goal, Congress returns next week to take up more modest proposals.

The records of the task force show that Treasury officials anticipated almost all the criticism later aimed at Mr. Clinton's health plan but that the White House brushed aside the concerns as relatively insignificant.

Harold M. Ickes, deputy chief of staff at the White House, said yesterday that the records showed that Mr. Clinton's policy-making process was open to many points of view.

In the first half of 1993, Treasury officials often contended that Ira C. Magaziner, the coordinator of the task force, was making decisions without consulting Cabinet officers such as Treasury Secretary Lloyd M. Bentsen. The officials expressed concern that Mr. Magaziner had neglected the explosive question of how to pay for universal health insurance.

On Feb. 17, 1993, James R. Ukockis, a senior economist at the Treasury Department, wrote that the work of the task force "has gone from frenetic to frantic" as the White House devised schemes to control health costs and health insurance premiums.

On Feb. 23, 1993, Mr. Ukockis wrote that Mr. Magaziner "was not interested in a balanced evaluation" of price controls but wanted "someone to make the best possible case for a specific price control program."

Then on March 23, 1993, Mr. Ukockis wrote: "Every option has fatal flaws, which, although passed off as problems 'still under examination,' are actually major roadblocks to successful implementation." He expressed concern that Mr. Bentsen would be "confronted by a fait accompli when he is finally brought into the health policy process" by Mr. Magaziner.

President Clinton did propose federal regulation of health insurance premiums as a way to slow the growth of health spending. The proposal was denounced by doctors, hospitals, insurance companies and members of Congress from both parties, just as the Treasury had predicted.

Another official, David M. Cutler of the staff of the president's Council of Economic Advisers, upset White House officials when he challenged major premises of the Clinton plan.

Mr. Cutler argued in August 1993 that the growth of health spending had not done significant damage to the growth of the nation's total economic output. Moreover, he wrote, "Total compensation as a share of gross domestic product has remained remarkably constant since 1947, even as health care spending has increased as a share of GDP."

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