Trying to read body language and parse rhetoric is a popular game in Washington. It’s also a dangerous one for people who aspire to make insightful predictions that have a good chance of coming true. In politics, you never know who will be able to persuade whom on which issue—or, more important, when.

Having said that, I’m going to predict the House Ways & Means Committee will take a less stringent approach to 401(k) fee legislation than their colleagues on the House Education and Labor Committee.

The latter panel is led by Rep. George Miller, D-California, who has introduced a bill requiring itemization of at least 12 expenses for each investment option. It would also mandate that an index fund be offered as an alternative in each plan. Miller argues that such steps are necessary to protect middle-class retirement savings from being eroded by opaque fees.

Industry advocates say Miller’s approach could overwhelm participants with too much information and potentially scare them away from retirement products.

Now it looks as if a different option may be offered in the House Ways & Means Committee. That panel held a four-hour hearing on 401(k) fees Tuesday, October 30. The crucial exchanges came early.

Chairman Charles Rangel, D-New York, and the senior Republican, Rep. James McCrery of Louisiana, pledged to work together on the topic.

“These complex issues require a comprehensive analysis,” McCrery said. “Pension issues have always been bipartisan.”

Rangel, who has emphasized the importance of reaching across the aisle since the Democrats took over Congress in January, responded in kind.

“If we act in a cooperative way, a bipartisan way, I’m sure the American people will feel we’re trying to do the right thing,” Rangel said.

It’s true that Rangel and McCrery have pledged bipartisanship before and then split when it came time to draft and vote on legislation. Sometimes, they don’t even start on the same page, as was the case last week when Rangel introduced a massive tax reform package.
 
But on 401(k) fees, it feels as if bipartisanship, at least in the first hearing, was the real thing. Republicans likely will resist Miller’s bill as being overbearing. It looks as if Rangel will take their concerns to heart.

For one thing, he indicated that a simple fee report would be effective. “All we want to know is: Are we getting a good deal?”

More important, Rangel seemed willing to let the Department of Labor complete its process of drawing up new 401(k) fee rules before moving on legislation. The 401(k) fee rules are due to be promulgated next year.

Unlike other Democrats at the hearing, who chafed at the DOL’s timetable, Rangel had an open mind.

Tellingly, he asked the DOL official who testified whether a legislative remedy is necessary in addition to the upcoming regulatory changes. “Or should we stay out of it?”

Such a question must have fallen pleasantly on the ears of business lobbyists in the audience. They want the DOL, rather than Congress, to establish new 401(k) fee rules because it’s easier to revisit a regulation than to change a law.

During the hearing, Rangel didn’t mention an alternative bill to Miller’s written by Ways & Means member Rep. Richard Neal, D-Massachusetts. It imposes fewer disclosure requirements than Miller’s measure. In fact, the only person who brought it up was Neal.

This may indicate that Rangel—and McCrery—have their own ideas about 401(k) fee legislation. At least in the hearing, they didn’t posit and pursue a hypothesis about fees damaging retirement nest eggs, as Miller has in his hearings.

Their rhetoric Tuesday lent credence to a prediction made a few weeks ago by James Delaplane Jr., a partner at the Washington law firm Davis & Harman.

“We’re going to see Rangel and McCrery build a bill together from scratch,” Delaplane said at a Pensions & Investments defined-contribution conference in San Francisco. “That gives our community some hope on this issue.”

One week ago, I was experiencing excruciating pain thanks to a kidney stone attack that lasted—on and off—for four days. If you’ve never had a kidney stone, be thankful. It is as close as a man can come to experiencing childbirth.

Now that the stone has passed and the trauma is a fading memory, what sticks out in my mind is the issue of health care information technology. I’ll explain in a moment.

One joke about journalism is that the definition of news is anything that affects an editor. I guess the definition of a blogworthy item is that it is something that affects a blogger.

I have been covering for several months the effort by business organizations to get Congress to approve legislation that would usher in widespread adoption of personal digital health records. A bill has been approved by a Senate committee.

Things have been moving more slowly in the House. But earlier this month, two members of the House Energy and Commerce Committee introduced a bill. Still, we’re a long way from seeing final legislation that can be sent to the president.

But for me, health care IT became a personal issue when I arrived at a local Washington hospital after the onset of my kidney stone attack last week. I have high regard for the service provided by the hospital’s emergency department. It’s where I’ve gone for each of the three stones I’ve had while living in Washington.

So, I am not going to name the facility because I don’t want it to be Googled after I make the criticism I’m about to outline. I will say, however, that this is the same hospital that treated Ronald Reagan when he was wounded in an assassination attempt.

First, the good news: When you’re doubled over in pain from a kidney stone, there’s nothing better than getting an injection of pain killers shortly after you arrive at the hospital. I commend the facility I visited for quickly alleviating my pain.

However, before that happened, I was asked to fill out forms in the waiting room. There is no worse request while you are writhing in pain from a kidney stone. I was a bit miffed because my primary doctor works for the same medical institution. I wish they could have just accessed my files on a shared, secure server within the hospital system.

It was equally discouraging, while my pain persisted, to have one of the emergency doctors tell me that the hospital had no record of my two previous visits for treatment of kidney stones.

That made me think: Perhaps health IT advocates are on to something when they say that each of us should have our medical records put on a chip or a flash drive that we can take to each hospital and doctor we visit. No more forms. No more blank stares from  doctors regarding our medical history.

The next time I cover health IT legislation, I’ll have a whole new context from which to view the issue.

On Thursday, October 18, the House Education and Labor Committee votes on legislation banning workplace discrimination against homosexuals. But the bill being taken up is not the original one introduced last April.

The panel will be considering a version that does not include policy toward transgender individuals. Rep. Barney Frank, D-Massachusetts and the bill’s author, filleted the measure because he and other House leaders were not able to find enough votes to get it passed if it included the gender identity provisions.

Frank walked reporters through the realpolitik of the situation last week in a forthright press conference that mostly consisted of a 40-minute soliloquy about the state of American politics.

The first rule is that in a nation whose political plurality is so evenly divided, it is necessary to reach into the middle to get things done. For Democrats, that means they cannot simply put together coalitions of liberals and hope to ram bills through Congress.

If they try, they’ll almost certainly be stopped in the Senate by Republicans, who have a large enough minority to conduct a filibuster. But Frank’s sexual orientation bill proved that getting conservative Democrats in the House on board can be a challenge as well.

Many of the Democrats who have helped form the majority that took over the House last November come from districts that President Bush carried in 2004. I know these kinds of districts well, because several can be found in my home state of Indiana.

Asking Indiana Democrats to take a stand for gender identity might ensure that they become targets for right-wing attacks in their 2008 re-election campaigns.

Here’s how it works: When a bill that includes gender identity comes up for a House vote, Republicans will introduce what is called a motion to recommit. This parliamentary maneuver is designed to highlight a controversial part of a bill and recommend that it be sent back to the committee level to change that piece.

The motions can be complicated and tricky. But they also can force Democrats to take difficult, politically awkward votes that are then turned into campaign commercials by their opponents next fall.

Frank, who strongly supports including gender identity in the sexual orientation bill, will take out that provision to ease its passage. It may still be a close vote, but Frank has a better chance of getting three-quarters of a loaf than the whole loaf this time around.

With Senate approval unlikely and facing a potential presidential veto, at least Frank will be able to get the House to pass a bill that has been near the top of the homosexual community’s agenda for a long time.

After building momentum this year, they can return after conservative Democrats have had some experience voting for the sexual orientation bill—and surviving a re-election.

“Getting that passed now is going to put us in a better position in 2009,” Frank said. “I don’t think any discrimination bill in the history of this country has been passed on its first effort.”

For now, the sexual orientation bill would help a lot of people immediately. Trying to include gender identity may have to wait for another day.

“The transgender issue is a relatively recent vintage,” Frank said. “It’s a higher hill to climb. We don’t have the votes for a transgender-inclusive bill.”

But many gay advocates won’t accept that answer. They would rather see lawmakers hold the sexual orientation bill until it can move forward with gender identity included.

Frank took exception to that tactic. “It is a lot easier to add to an existing [bill or law] than not to do anything at all,” he said. “Moving the goalposts is good, but after you scored the goal.”

Anticipating that answer, homosexual groups have attacked Frank and House Speaker Nancy Pelosi, accusing them of being sellouts.

That brings us to another reality of today’s politics: The winner-take-all mentality courses through left-leaning groups just like it did through right-leaning groups for the 12 years that Republicans were in control of Congress.

Frank argues that attitude undermines the ability to reach out to the other side, or at least to those who are wary.

“There is a failure to understand reality” demonstrated by interest groups, Frank said, “because people talk too much to each other.”

Getting potentially controversial legislation passed like the sexual orientation discrimination bill requires compromise and, well, politicking. Stridency isn’t helpful.

“The anger is very counterproductive,” Frank said. “It’s going to make it harder for us to mobilize support in the future. This is a moment of truth for responsible liberals in the Democratic Party.”

This blog entry turned out to be a soliloquy itself. Sorry to make you scroll so far. But I thought it was worth going into some depth on the Frank exegesis. He crystallizes why it’s so hard to govern in Washington.

I have worked in Washington for 15 years. Of course, we insular Washingtonians believe that the United States—well, OK, the world—revolves around what we do in the nation’s capital.

That may be true. But sometimes you have to travel far away to get a sense of what could be percolating here. For instance, the Pensions & Investments Defined Contribution Conference in San Francisco last week provided insight about the potential path of a bill that would increase the transparency of 401(k) fees.

The luncheon keynote speaker on October 8 at the P&I conference was originally supposed to be Rep. George Miller, D-California and chairman of the House Education and Labor Committee. Miller’s speech was highly anticipated because he would be discussing his 401(k) fee legislation to the industry that would be directly affected.

It would have been a skeptical audience. Earlier in the day, James Delaplane, a partner in the benefits group at Washington law firm Davis & Harman, criticized the Miller bill for being too stringent on its disclosure mandates and a threat to investor confidence.

Well, Rep. Miller sent his regrets and asked Rep. Robert Andrews, D-New Jersey, and chairman of the subcommittee on pensions, to take his place. Andrews, one of Miller’s key allies on the panel, did stand in for the chairman—but he didn’t exactly stand with him. Perhaps this is a sign that there is wiggle room on the bill.

Andrews was supportive enough that his speech could not have been delivered by Rep. Howard “Buck” McKeon, R-California and ranking member of the labor committee. But Andrews’ remarks may have drawn a few “amens” from McKeon.

Andrews didn’t give Miller’s bill a big bear hug. He sort of patted it on the shoulder. “Bills are the beginning of a legislative process, not the end,” Andrews says. He described the Miller measure as “only a starting place.”

He said that a bill “should not be a solution in search of a problem.” Instead, “any legislation should go forward if we build the record of a need for legislation.”

So far, Andrews isn’t convinced that there is systematic overcharging of 401(k) fees. “My initial reaction is there isn’t,” he says.

He also expressed skepticism about mandating that an index fund always be an option in 401(k) plans—another key component of the Miller bill. “I favor investment advice, not favoritism,” Andrews says.

The New Jersey congressman, who seemed to indicate his interest in running for the Senate one day, denied that he is splitting with Miller on the 401(k) fee issue. “What he did was initiate a process,” Andrews says. “We’re going to need bipartisan support. The chairman shares that view and there is no daylight [between Andrews and Miller].”

Perhaps not. But by declining to fully embrace and defend Miller’s approach, Andrews may have been signaling that negotiations are possible on a bill that, as currently written, would require itemization of at least 12 expenses for each investment option.

Industry advocates say Miller’s approach could overwhelm participants with too much information and potentially scare them away from retirement saving.

“It takes a very granular, line-item, disaggregated approach to fees,” Delaplane says.

Andrews, like most people representing the industry at the conference, agreed that greater 401(k) transparency is needed. He outlined the key questions for legislation to address:

• What should be disclosed?
• To whom should it be disclosed?
• What should be disclosed as opposed to what should be made available if requested?
• Should an index fund be mandated?

But Andrews did not frame 401(k) fee legislation in the language that Miller often uses. The California Democrat asserts that opaque fees are undermining retirement security and contributing to the “middle-class squeeze.” Andrews never uttered a word about the “squeeze” during his San Francisco speech.

Andrews, Miller, their Democratic and Republican colleagues and many, many industry lobbyists will be weighing in on the questions Andrews posed over the next few months in Washington. Perhaps we’ll see some compromising on both sides, if Andrews’ presentation thousands of miles outside the Beltway is any indication.

One reason clichés become clichés is that there is an element of truth in them. That’s why they’re repeated so often.

I’ll use one in describing the machinations surrounding a bill that would ban employment discrimination based on sexual orientation: Politics makes strange bedfellows.

The measure, the Employment Non-Discrimination Act, includes a provision that addresses gender identity. This has caused consternation among employment lawyers, who say that the bill is creating a new protected class, which could make companies vulnerable to new types of lawsuits.
 
Another group that is apparently concerned about the gender identity dimension of the bill, for a different reason, is conservative Democrats. Those who are in Republican-leaning districts don’t relish the idea of being attacked on the issue in 2008 campaigns by right-wing groups.

That must be why proponents of the bill have delayed action in the House. They say they need time to build support.

This means they don’t have enough Democrats on board. If they did, they could move forward fairly easily. House rules enable the majority to approve anything it wants.

So, I would guess that what is stalling the bill is a lukewarm, or negative, response from Democrats like those from my home state of Indiana. They have to maintain a fairly conservative voting record in Washington, or they could suffer in their districts.

In effect, they are aligned with employment lawyers, who don’t like the gender identity provision, either. On the other side are homosexual advocates, who have attacked Rep. Barney Frank, D-Massachusetts and the bill’s author, and House Speaker Nancy Pelosi for contemplating moving forward with a streamlined bill that would remove gender identity.

The homosexual community sees the new Democratic Congress as a fertile ground to achieve what it has waited so long for—a comprehensive discrimination bill that includes transgender policy.

About 46 large companies have endorsed the ENDA bill that includes gender identity. This is a reflection of the fact that most Fortune 500 companies have inclusive employment policies that are necessary to attract and retain the best talent.

So, what you have is the HR departments rallying for the bill while their counterparts in the legal office are waving a yellow caution flag. This split within the corporation also manifests itself in the lobbying community.

Everyone wants homosexuals to be treated fairly and to have the same rights on the job as anyone else. However, the legislative process is one that focuses heavily on details. In any bill, including ENDA, there can be complicated—and sometimes unintended—consequences.

That’s probably why groups like the U.S. Chamber of Commerce are remaining neutral. They know that their constituents must hire and retain the best talent, regardless of race, ethnicity or sexual orientation. But there may be legalities in complex legislative language that could ultimately drag companies into court and cost them money.

Throw the vagaries of politics into the mix, and you have unusual alignments—legal counsels and conservative Democrats versus HR and the Fortune 500 C-suite.