We won’t know for months whether an attempt at major health care reform will come to fruition next year. But the massive undertaking already is starting out better than a similar effort in 1993-94.

At that time, we also had a newly elected president and substantial Democratic majorities in the House and Senate. But even the best-laid plans of then-first lady Hillary Rodham Clinton for universal coverage ran into trouble from the start. The key problem was that she conducted much of the work of her health care commission behind closed doors.

The process this time around is transparent. It is being led by two titans of the Senate—Finance Committee Chairman Max Baucus, D-Montana, and Health, Education, Labor and Pensions Committee Chairman Edward Kennedy, D-Massachusetts.

On November 12, Baucus released an 89-page policy paper that outlined the areas that he believes must be addressed in comprehensive reform.

The paper was the product of several health care hearings—and an all-day event at the Library of Congress in June—that Baucus has headed.

On a different track, Kennedy has been leading wide-ranging discussions on health care reform for months with Capitol Hill colleagues and others with a stake in the issue. He likely will introduce his own bill. 

Just because Baucus and Kennedy are taking separate routes at the beginning doesn’t mean that they will wind up in conflicting places. On Wednesday, November 19, the Finance and Health, Education, Labor and Pensions committees held a joint meeting in which they agreed on a process for moving health care reform forward.

Baucus and Kennedy have pledged to follow “regular order.” That means there will be subcommittee and full committee hearings, committee votes on bills, Senate floor action and a conference committee to reconcile Senate and House measures.

This ensures that every voice in the health care reform cacophony will be heard. It also means that there will be plenty of opportunity for the effort to hit serious snags.

One of the first challenges will be a debate over how to pay for reform. In a statement prepared for a November 19 hearing, Sen. Charles Grassley, R-Iowa and ranking member of the Finance Committee, pointed out that the federal budget deficit is already at least $400 billion and heading much higher if you factor in the $700 billion financial markets bailout package.

He warned that the deficit could reach $1 trillion before health care reform is factored in. Paying for the changes that Baucus suggests—or agreeing not to pay for them initially—will require a heavy legislative lift.

“That issue is going to be an 800-pound gorilla in every negotiating process,” Grassley said after the Finance and Health, Education, Labor and Pensions leadership meeting on Wednesday.

Baucus argues that major health care reform cannot wait for the economy to improve and that Congress can’t get hung up on what are called “pay fors” in Capitol Hill parlance.

“There are going to be upfront investments that are necessary,” Baucus said. “We have to invest today to reap the rewards later.”

Baucus is passionate—more so than his low-key Mountain West personality can convey—about doing health care reform immediately when the next Congress convenes in January.

“Some say that we will have to choose between fixing the economy and enacting comprehensive reform health reform,” Baucus said in a statement. “I reject that false choice. Comprehensive health reform legislation must be part of any successful economic recovery plan.”

The chairman is off to a good start. He has Republicans and Democrats talking about achieving consensus. It looks as if he’s serious about listening to everyone, including the budget hawks.

President-elect Barack Obama did not stop campaigning on Monday, November 3. After he cast a vote for himself in his Chicago precinct on Election Day, he traveled next door to Indiana for one last push.

While in Indianapolis, he visited a United Auto Workers union hall, where volunteers were making get-out-the-vote calls on his behalf. Obama picked up a phone and participated himself.
 
Obama ended up winning Indiana by about 26,000 votes. He was the first Democrat since President Lyndon Johnson in 1964 to carry the state.

The help Obama got from organized labor in Indiana was replicated in other Midwestern battleground states. In fact, the AFL-CIO was quick to take credit for being the “firewall” that helped Obama secure Indiana, Ohio, Michigan, Minnesota and Wisconsin.

At a post-election press conference, AFL-CIO leaders made it clear that they were going to push hard for their top priority, the Employee Free Choice Act, a bill that would make unionization easier. It was stymied by a Senate filibuster last year—and would have been vetoed by President Bush if it had gotten through. 

Unions are stoked about Obama winning the White House and Democrats increasing their majorities on Capitol Hill. They can taste victory on the so-called card-check bill.

“The environment for promoting the labor agenda is going to be as good as it can be,” says Steve Raetzman, a senior consultant at Watson Wyatt Worldwide in Arlington, Virginia.

Unions argue that company intimidation prevents workers from organizing and bargaining for higher wages and better benefits. The card-check bill is anathema to the business community, which says that it would foster union strong-arming.

Obama’s Election Night victory speech gives business hope that he might listen to their misgivings. Here are the lines that warm their hearts: “And to those whose support I have yet to earn, I may not have won your vote tonight, but I hear your voices. I need your help. And I will be your president, too.”

Groups like the Chamber of Commerce and the National Association of Manufacturers are urging Obama and Capitol Hill Democrats not to put the card-check bill at the top of the legislative agenda and ram it through.

They say the fight that would erupt in the Senate, where there likely will be just enough Republicans to make a filibuster possible, is not a good way to start a relationship between business and the Obama administration.

They also assert that the union bill would not help the country recover from what is now likely a recession. They say it would add to the cost of doing business.

Supporters of the card-check bill say it would give employees the leverage they need to get their fair share of productivity gains and the corporate profits that soared—prior to the downturn—while their wages stagnated.

This debate will give Obama an opportunity to demonstrate that he is an agent of change. If Obama can forge a compromise between management and labor on the card-check bill, it might be a harbinger of cooperation between the normally warring sides.

Obama’s chief of staff, Rahm Emanuel, seemed to indicate that Obama is looking for the middle ground on many issues. “Our challenge is to work to solve the actual problems that the country is facing, not work to satisfy any constituency or ideological wing of the party,” Emanuel said in a Wall Street Journal interview.

But it’s too early for companies to breathe a sigh of relief about the union bill. It’s likely to be approved in some form. Besides, they still need to address the underlying problem: Helping employees cope better with the harsh realities of the global economy.

“After a generation of spending millions (billions?) on union-busting consultants, anti-union lobbying, and anti-union PR, executives might find it a better investment to use such funds to proactively address workers’ concerns regarding wages, benefits and working conditions,” Skip Mendler, a consultant and a Workforce Management reader, wrote to me in response to a story about the union bill.

After I cast my vote early the morning of November 4, I passed a group of giddy supporters of Democratic nominee Barack Obama. They held up signs saying, “Honk for Obama.” In my heavily Democratic neighborhood, horns blared.

As I write this, I’m not certain who won. Although Election Day is a time to look to the future, it’s also a moment to remember that we have only one president at a time. Until January 20, President Bush will hold sway in one crucial area: regulations.

Rule-making in the waning days of the Bush administration could have a big impact on Workforce Management readers. Even as speculation swirls about the president-elect’s Cabinet, the current leadership of government agencies wields power.

For instance, it’s likely that the Bush administration will promulgate a final rule modifying the Family and Medical Leave Act. It will be the first time since it was enacted in 1993 that any changes have been made to the controversial statute.

When the regulation was introduced earlier this year, I wrote a story outlining how businesses thought it was a step in the right direction but didn’t go far enough. Advocates for leave maintain it undermines work/life balance.

The Department of Homeland Security also is busy on the regulatory front. A couple weeks ago, it released a supplemental final rule on so-called Social Security “no-match” letters. The business community can’t stand this one because it makes the receipt of such notices evidence of a knowing violation of immigration law.  

The problem, according to employment lawyers, is that the Social Security database is rife with mistakes. Resolving a mismatch can take much longer than the deadline contained in the regulation. If a company can’t take care of the discrepancy in time, it has to fire the employee in question.

Another regulation in the works from the DHS would force all federal contractors to sign up for the government-run electronic verification system called E-Verify.

The Society for Human Resource Management and other groups criticize this rule as a back-door route to making the voluntary E-Verify program mandatory. Currently, about 90,000 employers use the system. SHRM, however, wants to overhaul E-Verify, which it calls inefficient, ineffective and a potential choke point in the labor market.

Finally, the Treasury Department is in the middle of shaping regulations that will govern the $700 billion financial markets rescue package that Congress passed in early October. That means it will have enormous influence over how tough, or how lenient, the executive pay strictures will be for companies participating in the program.

Already, members of Congress from both parties are warning the Treasury not to let banks and other institutions use tax dollars to fund hefty executive severances and bonuses. Capitol Hill leaders want to assuage constituent outrage about Wall Street titans feathering their nests while retirement savings vanish.

Congress approved pay restrictions at companies that sell toxic assets to the government. But now the Treasury has come up with a new twist on the bailout: It is buying stock in failing banks through the Capital Purchase Program.

House Speaker Nancy Pelosi, D-California, and Senate Majority Leader Harry Reid, D-Nevada, sent a letter to Treasury Secretary Henry Paulson on October 29 saying that the interim final rule on golden-parachute limits at the Capital Purchase Program institutions was too weak. It doesn’t block parachutes “unless they equal or exceed three times [an executive’s] base pay.”

“We are concerned that such lavish severance packages could weaken public support for your critical efforts to stabilize the economy,” they wrote.

House Minority Leader John Boehner, R-Ohio, expressed similar sentiments in his own letter to Paulson. “Mr. Secretary, funds made available under the economic rescue package should not be used to pay for bank acquisitions, raises and executive bonuses,” he wrote.

The Center on Executive Compensation, which is hosted by the HR Policy Association, also lobbied Paulson. The center wants him to use his discretion to allow companies ample room to offer severance packages that will lure top executives.

“The goal of this program is to restore the performance and economic viability of these institutions, thus allowing them to repay shareholders and taxpayers,” the center said in a statement. “An absolute prohibition would serve only as an impediment to attracting and retaining the talent needed to accomplish this essential and monumental task.”

Paulson will continue to get a lot of attention from Capitol Hill and others in Washington between now and January 20, Inauguration Day. Until then, he and other Bush administration officials are in charge and will be regulating.