Lobbyists Won Key Concessions in Budget Deal

Even delivered in shorthand, the call’s meaning was clear to Mr. Wyden: a health care plan he had succeeded in getting passed months earlier despite furious lobbying by big business and labor had been pulled out of the blue and killed as part of the broader budget deal struck between the White House and Congress. What was most perplexing was that it had little to do with budgets or government shutdowns.

“I was flabbergasted, just flabbergasted,” Mr. Wyden, of Oregon, said Tuesday in an interview, describing the demise of a plan that would have allowed some 300,000 workers to pick their own insurance coverage through employer-financed vouchers.

With $38 billion in cuts on the line in a $3.5 trillion budget, the clash over federal spending played out in numbers so big that most standard calculators had trouble tracking all the zeros. But in the end, a handful of relatively small-bore line items affecting particular industries attracted some of the most aggressive lobbying behind the scenes, as business interests, health care providers and others fought to hold on to, or kill, proposals that affected their bottom line.

Much public attention focused on the social issues that appeared in the spending bill in the final weeks as social conservatives tried to use it to advance their causes, particularly the unsuccessful effort by abortion opponents to cut the financing of Planned Parenthood. In the end, the budget agreement reached late Friday night banned the District of Columbia from using its own money to provide abortions for low-income women in the city — a measure with a bigger social impact than fiscal.

But there was also intense but ultimately unsuccessful lobbying by General Electric and other military contractors to revive financing for an alternate engine for a costly jet fighter project. Proponents of tougher regulations for the politically influential and beleaguered commercial college industry succeeded, for now, in beating back an effort to block restrictions on how the schools get federal aid.

An analysis by the Congressional Budget Office found that the Wyden proposal had no short-term impact on federal spending and could actually save money over the next four years.

The plan to allow some employees to “opt out” of their employer-sponsored plans and choose their own coverage drew opposition from an unusual alliance of unions and businesses. Supporters said the vouchers would give employees more options and spur competition in the marketplace. Critics contended that younger, healthier employees would leave the plans and make insurance costlier for older, less healthy workers.

The American Benefits Council — a group that represents employers and insurers and spent nearly $1 million on federal lobbying last year — wrote its members that the Wyden proposal would have a “destabilizing” impact on employer insurance plans. The A.F.L.-C.I.O., which employs a formidable Washington lobbying force, warned that the proposal would create a “death spiral” of higher costs.

But the measure also had strong supporters. Charles Kolb, president of the Committee for Economic Development, said Tuesday that Mr. Wyden, in taking a different tack to managing health care costs, “was trying to introduce the type of structural reform that the system is crying out for.”

The measure did make it into the final health care plan signed by President Obama last year — only to be cut at the eleventh hour in Friday night’s budget agreement. “This is a lost opportunity,” Mr. Kolb said.

So who axed the program?

“I wish I knew,” Mr. Wyden said. “Everyone at the table says that someone else brought it up. They all say, ‘It wasn’t me.’ ”

Democrats and administration officials insisted Tuesday in interviews that Republican leaders had moved to get rid of the Wyden plan. They acknowledge privately that were not in a position to fight it that aggressively, given that it was opposed by business and labor, and that agreeing to kill the plan was seen as a way of staving off other possible cuts in health care financing.

“There’s no question that eliminating this provision wouldn’t have been our first choice,” said an Obama administration official who spoke on the condition of anonymity in discussing private negotiations. “But these were tough, tough negotiations, and obviously no one got everything they wanted.”

Michael Steel, a spokesman for Speaker John A. Boehner, said “the program was eliminated because it costs jobs — and jobs are the American people’s top priority.”

Mr. Wyden said that regardless of who brought it up in the White House-Congressional negotiations, he suspects that the group driving the elimination of his plan was the Business Roundtable, a powerful lobbying force made up of chief executives from the country’s biggest companies. The Roundtable, which spent more than $8.2 million lobbying on a range of health care and financial issues last year, had come out strongly against the idea of letting employees pick their own insurance plans.

“This is a textbook case of the special interests prevailing — Exhibit A,” Mr. Wyden said of the demise of his health care voucher plan. “Everyone knows the Business Roundtable wanted this killed, and now they can go back with a trophy to say they protected business as usual.”

Executives from the Roundtable did not respond to voicemails or e-mails on Tuesday inquiring about the issue.

But even as Mr. Wyden was looking for ways on Tuesday to revive his voucher plan, the Business Roundtable was announcing a separate agreement with the Obama administration to sign on to a “Partnership for Patients Pledge” intended to show commitment to health care.

“We applaud the administration,” said former Gov. John Engler of Michigan, president of the Business Roundtable, “for taking this proactive step to bring together a diverse group of stakeholders — all of us committed to, and invested in, America’s health care system — to measurably improve health care quality.”