Daschle to Become Health Secretary

The former Senate leader is expected to become Obama's point man on health-care reform and will oversee a $707 billion federal bureaucracy

By Keith Epstein

A fresh sign of a possible early attempt at health-care reform by President-elect Barack Obama emerged on Nov. 19 with word that former Senate leader Tom Daschle accepted Obama's offer to become Secretary of Health & Human Services. In that job, Daschle will oversee the government's sprawling medical benefits bureaucracy, but perhaps more importantly, he may guide the new Administration's health-care reform effort.

Within minutes of the announcement, longtime advocates for far-reaching changes in the way the nation receives and pays for drugs and medical services applauded the Obama transition team's announcement that Daschle would oversee a health-policy working group. The group is developing a health-care plan.

Ron Pollack, executive director of Families USA, said the selection is "the best news possible for those who want to achieve meaningful health-care reform" and it "confirms that the incoming Obama Administration has made health-care reform a top and early priority for action in 2009."

Daschle's views seem to parallel more closely those of Hillary Clinton, who advocated universal coverage during the 2008 Presidential campaign and who failed as a crusader for sweeping health-care reform in 1993. Obama, on the other hand, said during the campaign he would reduce the average family's costs of health care by $2,500 and extend coverage to uninsured children.

In Washington, many suspect Obama may include at least some incremental steps toward health-care reform in a package designed to stimulate the economy that he is likely to advance soon after his January inauguration.

"Fresh Thinking"

Daschle, a longtime Democratic Senator from South Dakota, has also been something of a mentor to Obama. He was initially considered as the President-elect's chief of staff—another sign that the top health job would loom more significantly in an Obama Administration than in some past Administrations.

In his new book, Critical: What We Can Do About the Health Care Crisis, published in February, Daschle suggests creating a "Federal Health Board" that would operate in a similar fashion as the Federal Reserve bank system. He also urges blending Medicaid, Medicare, and employer-based plans with the current benefits program enjoyed by federal employees, thus lowering costs in a way that would more efficiently provide universal coverage. In a blurb for the book, Obama praised Daschle's "fresh thinking."

The Department of Health & Human Services is a sprawling bureaucracy of some 65,000 employees. Daschle, if confirmed, would manage a budget of more than $707 billion, and he'd oversee not just Medicare and Medicaid but numerous public health programs, federally sponsored research, and the Food & Drug Administration, which weighs the safety and efficacy of pharmaceuticals.

Daschle, Senate majority leader from 2001 to 2003, has been working for Washington law firm Alston & Bird as a "public policy adviser" to the firm's commercial clients on financial services, health care, and energy—three big challenges for the President-elect. Daschle also gives advice on trade, telecommunications, renewable energy, and taxes, according to the firm's Web site. He is not an attorney and is not a registered lobbyist, either.

However, Daschle's wife, Linda Hall Daschle, a former deputy administrator at the Federal Aviation Administration and aviation industry executive, is widely regarded as one of Washington's more influential lobbyists. Her current clients include American Airlines (AMR), Boeing (BA), and Lockheed Martin (LMT), as well as large airports and aircraft manufacturers. She represents companies before both executive agencies and Congress, and sometimes she gives advice to companies looking for strategic partners.

Epstein is a correspondent in BusinessWeek's Washington bureau.