contain costs. >> i think he was smart in saying that, "if i get in early, i can make a deal that my members can live with." >> narrator: he proposed a complicated formula which he said would cut drug costs by $80 billion over ten years. white house aide jim messina took the deal to the oval office. emanuel and obama believed there was an implicit threat attached. if they didn't agree to the deal, billy tauzin could do real damage. >> frontline is made possible by contributions to your pbs station from viewers like you. >> from the point of obama and the finance committee, it's a thank you. and by the corporation for huge advantage to have this public broadcasting. interest group on your side. >> phrma certainly had deep major funding is provided by the john d. and catherine t. enough pockets to do some real macarthur foundation-- damage, advertising-wise, if it committed to building a more wanted to. just, verdant and peaceful world. >> if you can stop $100 million and by reva and david logan-- from being spent to attack your committed to investigative journalism as the guardian of plan, that looks very, you know, the public interest. that's not such a bad deal. additional funding is provided by the park foundation-- >> narrator: but taking the deal committed to raising public meant the president would back

awareness. and by the frontline journalism off his campaign promise to dramatically cut drug prices. fund. with a grant from scott nathan >> we talked about it. and laura debonis. it's always been my practice not to reveal conversations i've had with the president or people in the white house. >> fired up! >> narrator: tom daschle ready to go! continued to visit the oval >> tonight on frontline... office in an unofficial >> your voice can win an capacity. election! >> he promised change. >> the president saw it as an >> your voice can create the opportunity to seize the moment, you know, to get signatures on kind of america we dream about. the line, to say, "this looks >> then he took on one of like an opportunity we haven't had before. washington's toughest issues. so let's lock them in, to the >> let's be the generation that extent we can. says, "we will have universal health care in america." i'm going to seize the moment." we can do that. >> they brought stuff to the table and were willing to work with us. >> what happened next surprised and the president said that everyone. >> the only way they could get having people at the table is it through was to bribe their members. >> hundreds of millions of better than having them throwing stuff at the table. dollars spent on lobbying. >> very political, very >> interviewer: but not an easy thing to do? >> no, certainly not. aggressive at creating deals. certainly not. and went in with full eyes open >> those deals can be pretty that there are going to be smelly. people in our party who would be >> another day, another headache critical of that. for president obama. >> is this just the dirty >> narrator: the president reality of politics? accepted the deal. >> news of a back room deal. >> there's always two sides of obama. >> all those back room deals, it's just wrong and we can do you have to have the sort of better. inspirational message, you have >> there was a wake-up call that

president obama wasn't to have something to lift up people. everything that they thought he but at the end of the day, when was. you're passing legislation, it >> the president has sta>> the s is about deal-making. entire first term on this. there's no other way to do it. >> there's always two sides of obama. >> narrator: in june, the you have to lift up people, but at the end of the day, it is president announced the broad outlines of the phrma deal. about deal-making. >> tonight on frontline, >> good morning, everybody. >> what's at stake right now is not just our ability to solve >> narrator: he did not mention this problem, but our ability to solve any problem. what he had given up to get it. >> this is a significant breakthrough on the road to health care reform, one that will make the difference in the lives of many older americans. >> narrator: it didn't take long for the secret to leak. >> another day, another headache for president obama. >> is this just the dirty reality of politics? >> it's the inauguration day of >> news of a backroom deal riled fellow democrats. the nation's first african >> narrator: once again, it was american president. >> narrator: barack obama had promised change. the liberals in the president's own party who began to criticize >> he spoke of no less than the deal. remaking america. >> narrator: his signature >> there's also growing concern issue: universal health care. that the obama administration secretly made concessions to >> in this effort, every voice drug companies. has to be heard. >> the liberals were watching what was going on with increasing alarm, because what >> this is a huge issue the president is taking on now. >> every idea must be considered. they saw was the new white house >> everybody loves the idea of

health care reform. getting in bed with the people >> every option must be on the that they thought they had been table. there should be no sacred cows. fighting against for all these years. >> the question is, could health >> obama's rewarded the drug reform really happen? companies in a big way. >> narrator: from the very >> what did the pharmaceutical industry get in return? beginning, even inside his own >> i think people who thought west wing, the issue would test that the pharmaceutical industry was still reaping profits that president obama. were excessive were unhappy with >> the white house had a debate about whether they should that deal, and were particularly actually go forward with it. unhappy that it got cut behind closed doors. >> narrator: no president had ever made headway on comprehensive health care reform. >> it was a wakeup call, really, >> first, it became, "let's not do health care." to a lot of liberals, that then it was "scale health care president obama wasn't everything that they thought he back." was. >> vice president biden was >> narrator: for months, the opposed to do it, absolutely president had been doing deals-- opposed to doing health care. biden had seen too many insurance and pharmaceuticals. universal health care programs now, it was time to write a die in his long time in washington, and he warned obama bill, and to fulfill another and his aides not to do it. >> the economic team was saying, campaign promise-- to create a "oh, listen, we've got to spend washington beyond partisan politics. all our energy on fixing the recession. we can't launch a big spending >> a bipartisan outcome, even in program at this time." a minimalist sense, was certainly a very, very high priority of president obama. >> narrator: the president took it all in, and then it was chief of staff rahm emanuel's turn. >> narrator: again, max baucus would have to be the point man. >> he's a brilliant political getting through his senate strategist-- hard-nosed, finance committee would be the profane, just a force of nature. crucial test.

>> if they could get five, ten >> very political, very republicans, that would have been enough. aggressive at creating deals. and max baucus was, they thought, their key to getting that. in fact, probably more so than >> narrator: baucus had a close one would anticipate someone relationship with the ranking from the obama administration republican, chuck grassley. being. >> senator baucus and i were >> narrator: obama's choice of still working on what we thought an inside dealmaker like ought to be, not just a emanuel had surprised many of bipartisan bill, but a kind of his supporters. consensus bill. in other words, something that would get 75 or 80 votes. >> he's sort of the opposite of obama in a lot of ways. it was an immediate indication >> narrator: but others said that this white house was not they saw nothing for the going to be about "kumbaya" and republican party in baucus' getting along and trying to do proposals. everything they could to win republican votes. >> i found myself coming out of they were going to try and win. those secret meetings, those private meetings, and >> narrator: emanuel told obama criticizing virtually everything they were doing. so i talked to max, i talked to to win, he needed to move fast. chuck grassley and others and >> he recognized that the moment said, "look, i don't think i can support this." obama was going to be at his strongest was the beginning. >> narrator: and from the beginning, grassley was under >> narrator: in the end, the president decided to go for intense pressure from his own party. health care right away to make a larger point. >> charles grassley is in line for a committee chairmanship. >> we were sitting in the oval the republican party plays office, and we were sort of hardball with its members. having a debate around health i think the message got through that he was jeopardizing his care at one point, and the standing in the party by playing president said, "it's about health care, but it's not really about health care. too nice to health care reform. it's also about proving whether

we can still solve big problems in this country." >> it became clear that the and this was going to be the test case for that. republican game plan was going ( sirens ) to be just to say no, to deny >> narrator: in his first this president any victories. address to congress, the president wasted no time putting health care on the nation's agenda. >> there was enormous pressure from the republican leadership. >> let there be no doubt: health care reform cannot wait, it must they did not want to be part of this. not wait, and it will not wait they did not want to make a another year. deal. the word went out. ( applause ) >> you had the senate leadership in mitch mcconnell and john kyl saying, "don't get involved. this is going to be the >> the president has staked his president's waterloo. entire first term on this. it's our way to win back the congress." >> there's no bigger priority >> narrator: and as the summer than health care. wore on, winning grassley over became harder and harder for >> we can no longer afford to baucus. put health care reform on hold. >> the process, particularly in we can't afford to do it. the finance committee, just felt ( applause ) like that race that was being >> narrator: at the time, it looked like an easy victory for run, starting on january 20, all the president. >> failure to do this would be of a sudden hit some mud, and viewed as a failure to govern, people's shoes got pretty... pretty soggy and pretty heavy. an inability to use the 60-vote >> everything kind of bogged down. i mean, here we were on this... majority that we have in the this march to produce this bill senate and the significant margin we have in the house. and at least get it through the ( applause ) house floor before the august >> i don't think anyone in the white house or on capitol hill recess, and all the wheels came off. >> narrator: impatient, emanuel

believe that failure's an option here. began a campaign to convince the they have to be successful in president to change course, to getting health care reform done, or they'll pay a tremendous scale back their ambitions. political price. >> rahm emanuel is all about, as >> narrator: rahm emanuel knew about the political price an he says, putting points on the board. administration pays when it loses the battle for health care reform. just get a deal and get it over with. 16 years ago, he worked in the >> rahm was the guy who was clinton administration. skeptical about trying to go for major comprehensive health care reform. >> the clinton effort to do he saw what happened... he was there during the clinton debacle. health care was sort of a he knows how much it takes out of a presidency. classic "smart people will solve >> it was entirely a conversation of feasibility. your problems" approach to an option a: pass the comprehensive enormously complex, messy political issue. bill; option b: smaller bill; >> bill clinton delivered a, you and option c, which no one would know, thousand-page plan unto entertain, would be to do nothing. the doorstep of congress after a >> narrator: the president made year and said, "my wife came up the final decision. with this. it's a really good plan. pass it." >> obama weighed in and said, at which point the chairman, "no, i want to try and get what i campaigned on. who'd been there longer than i want to try and get the full bill." them and were going to be there longer than them, basically tossed it aside and killed the bill. >> narrator: but congress was in no hurry. >> i remember patrick moynihan, >> some members of congress the senator from new york, telling the president to slow down, don't push so hard. telling me in his very thick >> they don't like timetables over there at the finance irish accent that he just got committee, rick.

this document-- a 1,273 pages-- describing how health care reform should be done and >> narrator: by august, as congress headed home for the basically says, "i'm not even summer recess, there was still going to read it." no bill. some in washington wondered >> narrator: the clinton white whether health care reform could house also angered powerful survive the recess. special interests. >> heading into the summer >> the ama opposed them. the insurance companies opposed recess is a period of great them. frustration for the white house. the doctors, across the board, everything was getting stuck, everything was sort of slowing hospitals, you name it, they down. were on the other side, and the and as they head in to august, clinton administration they don't recognize what's understood that there was little about to hit them. hope that they would ever bring them around. >> but this was covered under our old plan. >> narrator: they buried the >> you want to kill my administration in an avalanche of negative tv commercials. grandparents, you come through me first. >> the government may force us >> god will take care of health care. >> you dirty thieves! to pick from a few health care plans designed by government >> yes, we can! bureaucrats. yes, we did! >> we can't afford it! >> afro-leninism! >> having choices we don't like is no choice at all. >> narrator: angry citizens, >> they choose. >> we lose. stoked by economic fears, >> the harry and louise ads cost outraged about bailouts and expanding government... and cost and cost us in the clinton years. >> the things that obama's doing >> it is clear that health are the exact things that hitler insurance reform cannot be did. >> no public option. enacted this year. >> narrator: ...focused their rage on the healthcare bill.

>> boom, the summer town halls >> narrator: they were handed a devastating defeat. literally blow up in our faces. emanuel had seen it all. 16 years later, as president >> radical, communists and socialists. >> the fat really hit the fire when we went home in august for what usually is a fairly obama's chief of staff, he would try do things differently. >> what did he do that's leisurely stroll through the different from what bill and hillary did? everything. district... everything. >> yes, we can! >> the great lesson that everyone shared, both folks like >> you're pathetic! >> ...to town hall here... ( yelling ) rahm who were there and >> baby killer. historians, is you need abortion is murder! congressional buy-in on the >> ...a summer parade there, an front end. ice cream social here. >> narrator: the white house no, it was all health care all the time. would hold congress' hand every and people were... were red hot step of the way. obama and emanuel had stocked about it. the west wing with an all-star it was a radioactive issue all summer. lineup of former congressional insiders. >> we won't pay for murder! we won't pay for murder! >> he's got pete rouse, who served as both daschle and then senator obama's chief of staff. >> the surprise is just how out >> the head of management and of hand these town hall budget, peter orszag, was the meetings are getting. head of the congressional budget office. >> there is an ugliness with these fringe people who are comparing the president to >> melody barnes, who is the hitler. head of the domestic policy >> this opposition was real. council, was for years a top and this opposition rose up, and this opposition let individual aide to ted kennedy. >> phil schiliro, who was the members of congress from across the country know that they had top staff guy for henry waxman. problems with this health care plan. >> in the communications department, robert gibbs, who

worked in the senate, who's now the press secretary. >> in that first week of august, the anger was spilling out. >> so they had a very, very it was spilling out so much that strong team of people who knew guns were spilling out of the hill, knew how to work the hill, knew how to have success people's coat pockets at town hall meetings. on the hill. >> i'm not a lobbyist with all >> narrator: and to run it, they kinds of money to stuff in your brought back the quintessential pocket!didn't like what they wee washington insider, former senate majority leader tom daschle. >> it was an enormous signal that this really is a priority for the administration. they're not messing around. they're bringing in the pros, they're bringing in the big guys to get this done. >> narrator: obama decided he would stay in the background. he would encourage congress to come up with a plan, fast-track it, relying on good will and personal relationships to get it passed. but the idea of hiring insiders almost immediately hit a snag. >> abc news has learned of problems faced by another of president obama's cabinet reading. choices, tom daschle... >> democrat or republican for >> tom daschle is trying to save whoever, senator or congressman vote for this bill, we will vote his nomination to become... you out.

>> an unwanted distraction for ( cheers ) the obama administration... >> suddenly, the idea of cutting a deal with president obama no >> and i think that just shows a problem with integrity, and we longer looked like it was good cannot afford that in our government right now. politics, no longer looked like it was good policy. >> narrator: the once powerful senate majority leader had made >> there's a bill out of the enemies. house of representatives put together under speaker pelosi's leadership. the finance committee chairman, i'm a... max baucus, a democrat from ( booing ) montana, was an old rival. >> daschle was not helped by the i'm... i'm a... fact that max baucus was not necessarily a close friend or i would not vote for that. ally. ( applause ) >> it's not a profile in >> narrator: baucus allowed courage. republicans on the committee to tear into daschle's personal it's someone who becomes finances. convinced that health care, if >> you had a very rigorous he supports it in any version, senate finance committee staff that was scrubbing the tax will, you know, end his career politically down the road. returns of the nominees that >> thank you all very much for coming. were going through that committee that's unlike anything >> once they sort of lost that i think we've seen in many grassley, they lost, arguably, years. >> narrator: senate their last chance to really get a bipartisan bill. investigators found income tax problems. >> kill the bill! daschle had left the government kill the bill! and cashed in, making millions kill the bill! at a washington law firm. kill the bill! along the way, a client had kill the bill! provided a limo for daschle's personal use. >> narrator: just as the town hall anger was reaching it's eventually, he paid more than boiling point, the president received more bad news.

$140,000 in taxes and penalties on the gift. ( phone rings ) >> senator edward moore kennedy, >> to this day, i think there the patriarch of the kennedy clan, has died. are people in the greater daschle universe who say that the reason that tom daschle did >> the last in the line of this extraordinary american dynasty not make it through the confirmation process is because is gone. max baucus gave him such a hard >> last night, an american time dragging out the political era came to an end. confirmation, and the details, and all the financial disclosures. >> there is plenty of drama in washington at the moment. >> republicans taing about >> hut. "limousine liberals" who don't even pay taxes on their hut. limousines. >> narrator: the most passionate advocate of health care reform >> it's a very bad cloud over was dead. this nomination. >> it's disheartening. but some believed kennedy's death might change the tone of obviously, it frustrates me. the debate. >> does this really represent the kind of change that mr. obama said he would be >> ted kennedy's life work was bringing to his administration. not to champion the causes of >> narrator: daschle had been around long enough to know he had become a liability for the those with wealth or power or new president. special connections; it was to give to give a voice to those who were not heard. >> obama quickly, calmly accepted the resignation offer. >> it was an emotional rallying point for democrats for a did not pause, did not look while-- "win this for teddy" back. kind of thinking. >> narrator: he'd campaigned as >> some people thought, "well,

a political outsider, but gosh, maybe in memory of senator kennedy, some of these old surrounded himself with insiders, and watched as one of republican friends of his would them was taken down in a rejoin the effort." political knife fight. >> narrator: the president would redouble his efforts to achieve kennedy's dream. seven weeks into his presidency, >> after consulting with a in march of 2009, the new numb of people, including senator daschle and others, i president gathered in one room think the president concluded, "i need... i need to take back control of this." at one time, friends and potential enemies alike. >> madam speaker, the president >> you're talking about of the united states! lawmakers, doctors, nurses, hospitals... ( cheers and applause ) >> bringing together lawmakers and interest groups, cabinet >> they know that their most officials, members of congress, the white house team, powerful tool is barack obama-- always has been, probably always will be. conferring on how to overhaul health care. >> i know people are afraid >> his audience, really, in that we'll draw the same old lines in speech wasn't the public in general, it was the people the sand, give in to the same sitting in that chamber. entrenched interests and arrive >> the time for bickering is over. back... >> many of these players, for years, if not decades, had a the time for games has passed. record of opposing any sort of ( applause ) health care reform efforts. now is the season for action. >> narrator: rahm emanuel engineered this strategy. now is when we must bring the everyone remembered how special best ideas of both parties

interests had sabotaged the together and show the american clinton plan. people that we can still do what >> they want to get people to we were sent here to do. the table. they don't want this to be-- at >> it was an attempt to sort of first, at least-- a fight recapture the high ground. against the insurers, a fight it was an attempt to, you know, against the medical industry, bring the debate back to a they want... the pharmaceutical loftier level. industry. they want to get buy-in. >> more security... >> i'm going to switch gears and get some groups in here... >> narrator: but the tone >> narrator: obama's advisors immediately sunk to a new low. had told him that many of the >> there are also those who lobbyists in the room were epared to cut a deal. claim that our reform efforts would insure illegal immigrants. >> ignani? this, too, is false. >> narrator: karen ignani is the chief lobbyist for the insurance industry. the reforms... the reforms i'm >> why don't you wait for a mic, karen? >> we entered this year being proposing would not apply to those who are here illegally. committed to change, being >> you lie! committed to restructuring, and committed to actually helping to ( gasps ) get this done. we hear the american people >> that's not true. about what's not working. >> a lone congressman says, "you we've taken that very seriously. lie!" you have our commitment to play, to contribute, and to help pass >> you lie! health care reform this year. >> narrator: it was republican >> good. representative joe wilson from thank you. south carolina. karen, that's good news. that's america's health insurance plans. >> it crystallized this... this moment in washington. ( applause ) >> this was really astonishing. it crystallized the anger, it crystallized the fervor of the here she was, on record, saying, opposition. "we're going to help you," and >> i was in the chamber when the so, too, were the drug companies.

speech was being given, and >> karen ignani wanted to be there was a gasp on both sides sure that she was at the white of the aisle. house, representing the industry >> i was upset with that. in its most positive way that she possibly could. that was inappropriate. it was part of the industry's i was sitting there and i charm offensive, as i call it. thought, "what in the world? why would anybody do something like that?" the industry knew that it was going to be under attack this >> an outburst that continues to reverberate across the country. year, or at least the legislation would focus very heavily on the insurance industry. >> totally disrespectful, no place for it. >> and you know, look, they >> he is lying. could read the political tea president obama is, from the leaves. moment he opens his mouth until you know, the saying in washington was, "you can be at he ends the speech. the table, or you can be on the >> how did we get to a point menu." where it's okay to yell "you >> narrator: privately, ignani lie" at the president while he's speaking to congress? was playing hardball. she said she'd support the bill >> narrator: the effort to forge only if everyone was required to a bipartisan agreement was, for all practical purposes, over. buy health insurance. >> they said, for the first now, the president would turn to the democrats. time, they would support universal coverage with one they pressured max baucus. caveat, and that is that we have emanuel wanted a bill asap. an individual mandate requiring people to buy insurance, so it's >> they just ignored max in the not just the sick that buy insurance, but everybody. end. that was the quid pro quo. they just felt they could ram this right through to heck with >> narrator: obama had campaigned against the mandate. republicans, to heck with conservatives. ignani was insisting he reverse

himself. >> i don't think that rahm emanuel ever worried much about >> they want to make sure that bipartisanship. they get a requirement that all he was focused on winning. of us buy health insurance. they want to make sure that we >> narrator: senate majority are all forced to buy products from them, and they want to make leader harry reid would take sure that there's no alternative control of the bill. other than the private insurance talk of a public option was market. back. the mandates the insurance that's why they're so adamantly industry had fought for were watered down. opposed to the public option. karen ignani didn't like what >> narrator: obama had also that might mean for the bottom line. supported the public option, a government health plan. >> i was concerned about what we were seeing from our actuaries, and ignani wanted him to walk away from that, too. what we were seeing from our economists. >> it is not wiping out the we were very concerned about private insurance industry; it's what was happening. just creating a public insurance plan that would compete with >> and the insurance companies private insurers. at that point decided, "we've got to fight back on this." but they wanted no part of that. >> narrator: emanuel would keep >> america's health insurance obama away from direct deal-making with ignani. plan said the finance bill but with tom daschle gone, and could result in dramatically health care's most powerful higher insurance premiums. >> the insurers are trying to advocate, ted kennedy, dying of scuttle the health care bill. cancer, the negotiations would >> white house officials today have to be handled by that said they feel broadsided. these are the... powerful chairman of the senate >> narrator: at the white house, finance committee, max baucus. they decided a war with the insurance industry was just what the doctor ordered. in his weekly internet address, >> who do they get after losing the president let them have it. tom daschle and, largely, ted

kennedy? >> the insurance industry is max baucus. rolling out the big guns and breaking out their massive war chest to marshal their forces not the first choice of most of for one last fight to save the the people in the west wing. status quo. >> it's always great to have an >> he's not glamorous. enemy in politics, there's no question about that. he's one of the senior-most senators. very few americans know anything however, we didn't pick the about him. insurance companies as the enemy; they decided to play that role when they decided to spend >> he's from montana, a more tens of millions of dollars to conservative democrat than a lot defeat health reform. of people in the white house. worked with the bush >> they're flooding capitol hill administration on things like with lobbyists and campaign tax cuts and issues that are an contributions, and they're anathema to a lot of the liberal funding studies designed to base. mislead the american people. >> narrator: cutting deals with health care industry groups was right down max baucus' alley. >> in 2008, during his >> i have a hearing disability. i wear a hearing aid, and i reelection campaign, which is didn't have my hearing aid in. really when this debate began, and i thought to myself, "this can't be true." he raised well over a million i ran around looking for my hearing aid, because i was sure dollars only from the health that i was mishearing, not insurance sector. hearing it correctly. that's a pretty astounding >> it's smoke and mirrors. amount for somebody who's going to have a central role in this it's bogus. debate. and it's all too familiar. >> narrator: karen ignani and >> narrator: in all, baucus her allies fought back. >> new hidden taxes that congress wants on your health the health industry. care. hidden health care taxes on >> what the campaign medicines, medical devices and health insurance. contributions often do is that

they open doors. >> narrator: they secretly they give industries entree to funneled millions of dollars to a tough ad campaign by the chamber of commerce. important congressional staffers and lawmakers.u >> call congress. tell them no hidden health care taxes in a recession. >> narrator: privately, ignani >> narrator: and powerful pushed baucus for a bill that senators stepped up to support would include the mandate to buy her cause. insurance and kill the public option. >> there were still some-- that didn't sit well with the senator lieberman was one, senator nelson of nebraska was president's liberal supporters. another-- who still said there's >> the senate bill, you know, frankly, is just an insurance merit to what the insurance company bill. industry is saying. the insurance companies, and those were critical swing actually, literally, did write it. votes. there were senior staffers-- one >> narrator: emanuel and harry reid were now doing deals just who used to work for wellpoint-- to win over democrats. who wrote the bill. it was a great bill from the%;iñ insurance companies' point of they killed the public option, pleasing senator lieberman and view. others. it doesn't happen to do a whole lot to change the system and to they lowered proposed taxes for bring reform. medical device makers for evan bayh. >> narrator: the left counterattacked at a hearing in may. the final holdout was the >> going to take you live to a democrat from nebraska, former insurance executive ben nelson. senate finance committee hearing looking at health care. >> ben nelson is one of the more ( gavel pounds ) conservative members of the democratic caucus in the senate, >> the committee will come back to order. and they needed his vote, they >> narrator: liberal outrage had to have his vote. arrived in baucus' own hearing

room, as health care activists, >> that meant sitting down and one after another, shouted him hammering out a deal, really down. giving him almost what he >> with all respect to senator baucus, this hearing is public, wanted, anything he wanted. but the public is not beings nog heard. >> the focus at the end of a ( gavel pounds ) bill like this is always how you're going to get those last two or three votes. >> you're taking millions from and compromises are made and the insurance industry, the hmos thrown at senators' feet in and the pharmaceutical companies, and you're denying order to get them to vote. the people a voice. >> narrator: in nelson's case, >> we want a seat at the table. the cost was $100 million. >> why are their voices not being heard? the costs of expanding nebraska's medicaid would be every health care lobbyist in america is at the table. covered by the u.s. taxpayers. >> sir, if you'd just... >> to a lot of us, we were very, >> narrator: the activists were very upset about it. especially angry that ignani had it was very poorly done. a seat at the table, but they did not. but the only way they could get it through was, basically, to >> when we received the list of bribe their members. bribe their members. the dates of the hearings and >> narrator: senator nelson denied there was a quid pro quo who was being invited, and we for his vote, saying instead he saw who was invited, we requested that we have one was opening the door for all person invited in the, you know, states to receive similar the series of the three medicaid compensations. hearings. they were inviting 41 people in total to testify, and they said but washington and the media saw it differently. no. they called it the "cornhusker >> committee will be in order. kickback." the committee will stand in recess until the police can restore order. >> prostitution has been legalized in washington, d.c. >> i thought senator baucus did >> is this deal for ben nelson, forever and ever, amen? a spectacular job of handling

>> forever and ever, and onlydm that, not getting rattled in any for nebraska. way, handling it in a not only >> you've got to compliment ben nelson for playing "the price very professional way, but an is right." empathetic way. >> it's not a pretty process. there is deal-making. >> narrator: baucus himself declined to discuss his role that's the way it's been done for a long, long time. with frontline. but those deals that get done in >> five people were arrested at your front parlor can be pretty smelly. a senate finance committee the public was already up to hearing on health care reform here with what they were seeing and charged with disruption of in washington, and i think it congress. just put them over the side. >> so, what chairman baucus has decided, this option cannot be part of the discussion at a senate hearing? i think that's wrong. most people in this country. i don't think it's fair. i think it's... they realized that this was not the way to legislate. ( gavel pounds ) >> narrator: that spring, baucus and the white house were also >> mr. mcconnell. secretly negotiating another no. deal, this time, with the pharmaceutical industry. mr. menendez? >> aye. >> the senate convened to send their top lobbyist was a classic washington character. president obama a hard-fought christmas present. >> mrs. mikulski. >> billy tauzin is a new orleans no. >> it's first roll call vote on politician-- very colorful, christmas eve since 1895. >> mr. nelson of nebraska? lively figure who took over the >> aye. pharmaceutical industry trade >> the ayes are 60, the nays are 39. h.r. 3590 is passed. group, phrma. ( applause ) >> billy tauzin is a... is a formidable negotiator. >> tonight, the ayes have it. and billy tauzin knows how

the senate passes an historic things work on the hill, and he knows how things work in this health care bill... town. >> this was a strictly party >> narrator: his most notorious line vote-- all the democrats voting yes, all the republicans act took place when voting no. then-congressman tauzin and the final tally-- 60 to 39. senator baucus pushed through a medicare prescription drug bill. >> on christmas morning, >> we are about to pass a $400 everyone was sitting around thinking that he was an lbj-like billion insured drug account for genius, because it appeared that these citizens who have no drug insurance today. he was on the verge of >> narrator: in 2003, in the accomplishing what no president middle of the night, tauzin kept had for 70 years. the house voting machine open until he could scrounge and >> they were so close. wheedle just enough votes to they were inches away from pass the controversial measure. getting this bill. >> it was a payoff to two >> they had 60 votes on record industries, the drug industry in the senate. and insurance industry. they had the house bill in hand. there was no question about it. they did very, very well out of the emerald city was right there in the distance. this bill. >> narrator: it meant hundreds of billions of dollars for the pharmaceutical industry. in the distance. >> the comptroller general said >> narrator: the white house when we passed the medicare wasn't paying attention, but up in massachusetts, that "cornhusker kickback" was still prescription drug bill that it hanging in the air. was the worst piece of legislation,iscally, that he it was almost election day. had ever seen. at stake was ted kennedy's and he said, over time, it was senate seat. going to be a disaster. >> narrator: it continues to be >> the polling numbers are all over the place. a classic washington story of

>> this could be a breakthrough money and behind-closed-doors maneuvering. for the republicans. >> i think the headline in the it made tauzin's reputation. >> you know, smart money's boston herald this morning always going to be on billy says it all-- "mass hysteria." tauzin in a negotiation, because he knows what he's doing. >> this is the scott brown campaign. >> narrator: a political newcomer was on the verge of >> narrator: and just over a taking a seat the president was counting on to pass health care year later, tauzin was hired as reform. the pharmaceutical industry's top lobbyist. billy got a very good job with phrma. >> republican scott brown is i think he makes around $2 riding the wave. million a year. at least that's what i've been told. >> brown's campaign language has many of his staff people went the aura of a revolutionary with him or went to work for crusade. pharmaceutical companies. >> business as usual is not the business we like. and billy was the main pusher of and all those back room deals from nebraska and others, it's the bill. just wrong and we can do better. ( cheers ) >> i'm barack obama and i >> scott brown effectively used approved this message. that as a way of saying that >> narrator: in the 2008 change has not come to presidential campaign, the washington. incident became one of barack obama's favorite complaints about the washington political culture. >> narrator: the democrat, >> the chairman of the martha coakley, was sinking in the polls. committee, who pushed the law through, went to work for the pharmaceutical industry making >> only belatedly does it dawn $2 million a year. on the white house what's about to happen. the president's not going to go imagine that. up there to campaign for her that's an example of the same until the friday before the election, when martha coakley old game-playing in washington. calls david axelrod personally, you know, i don't want to learn and says, "i need him to come

how to play the game better; i want to put an end to the up." game-playing. >> president barack obama. ( applause ) ( cheers ) >> narrator: but secretly, one >> they frantically sent obama year later, at max baucus' up to massachusetts the weekend senate office, the obama white before. house was negotiating with billy tauzin. >> he makes it very clear to the >> it's a very rahm emanuel massachusetts electorate what's idea. at stake here is the obama get them at the table, make them presidency, and do they want to agree to something with a threat that something worse could be out there if they don't. hand the republicans the power to stop his agenda on health and once you get this buy-in, that should eliminate pockets of opposition. care and on everything else? >> narrator: billy tauzin knew >> narrator: by election day, that during the presidential the president knew they would campaign, barack obama had lose. promised to slash drug prices. >> january 19, 6:30 p.m., about >> phrma had some real concerns an hour and half before the that there would be an effort by polls close in massachusetts, the democrats to enable the obama calls for pelosi, reid, government to negotiate for its biden and rahm emanuel to come prices on medicare prescription drugs. to the oval office. and this could be a, potentially, very big hit to the >> narrator: they immediately industry. convened an emergency meeting. >> narrator: tauzin also knew >> from the very moment that it the white house was eager for any early deal that appeared to was clear that scott brown was going to win that seat, he began thinking through what the next steps would be to be able to right the ship and get health care done.

>> narrator: the president asked speaker of the house nancy pelosi if she could get the house to pass the senate bill. >> pelosi is annoyed, and quite adamant that there's no way she can sell that to her house members. almost kind of lecturing saying, "you don't understand the realities in the house. this won't work." and obama finally snaps, uncharacteristically for him, and he says, "i understand that, nancy. what's your suggestion?" and there is no suggestion. >> we went from, basically, beginning to plan how and when the president would sign the bill to if we could even resuscitate the bill. >> scott brown is the winner of the massachusetts united states senate race. ( cheers and applause ) >> brown's victory shakes up massachusetts, and it shakes up the nation. >> usa! usa!

>> a republican taking over the seat that ted kennedy held for 46 years. >> usa! usa! usa! >> here he is, the united states senator from massachusetts, scott brown. ( cheers and applause ) >> people do not want the trillion dollar health care plan that is being forced... ( cheers ) >> in one election was a composite of all that ill feeling from the grassroots of america, and if it can be expressed in liberal massachusetts, they know it's a lot worse in montana and wyoming. >> if they replace the so-called kennedy seat with a republican, then, my gosh, you'd better wake up. >> narrator: the president's super-majority was gone. the republicans now had their 41st vote. the worst blizzards in history buried washington in february.

>> getting a health care billq passed now looks more difficult than ever. >> all of the options for health care get very ugly. >> narrator: it closed the government. >> i don't see any way you go forward from here with health care. i'm not saying... >> they're shell-shocked. they're going to need a whole new strategy on health care reform. >> narrator: barack obama was coming to terms with what looked like his first significant failure as president. >> this is a complex issue, and the longer it was debated, the more skeptical people became. i take my share of blame for not explaining it more clearly to the american people. >> the process was messy, and so it turned people off. it ended up being behind closed doors. it was filled with a lot of partisan wrangling, people yelling at each other across the table. we ended up having a process that represented a lot of what the american people hated about washington.

>> the president is, in some ways, kind of re-balancing himself. the year had been very hard on him. the massachusetts defeat, symbolically, was terrible and, practically, had a devastating effect. >> the president admitted he's made some mistakes in his first year in office, but said he won't quit. >> a chastened u.s. president barack obama concedes he's made some mistakes in his first year in office. >> he's got an uphill fight here. >> narrator: while the country waited, obama formulated a new plan. he would personally sell the bill to congress and the american people. >> the president said to us that he would do anything, he will call anyone, meet with anyone. he will speak anywhere. he will do whatever it takes to make the case. he was going to have to be the primary spokesperson for health reform. he was going to have to force action. >> narrator: he deployed rahm emanuel to work with speaker pelosi. they would try to get enough democrats on board to push

through the senate bill. >> they realized that their political operation had come way off the tracks, and they needed to quickly right that operation. >> mr. president! >> narrator: they began their comeback by staging a showdown with the republicans, out in the open, on national television. >> looking forward to listening. >> the president is gathering house and senate leaders, democrats and republicans, to try to save health care reform. >> it's a high-stakes gamble that could be all or nothing for the president. >> everybody please have a seat. >> the summit was an opportunity to hit the restart button on how people viewed the process, to do it all on live on tv, open for the american people to see, make them feel more comfortable with the process. >> here's the bottom line-- we all know this is urgent. >> suddenly, the president was in the driver's seat. >> this became a very ideological battle. >> they needed to show that obama was back in charge.

>> narrator: political theater-- one by one, he took on republicans. >> the congressional budget office report says that premiums will rise. >> no, no, no, no. this is an example of where we've got to get our facts straight. let me respond to what you just said, lamar, because it's not factually accurate. >> that was, i think, the moment that he stepped up in a way that he hadn't before. >> let me just make this point john, because we're not campaigning anymore, the election's over. >> i'm reminded of that every day. ( laughter ) >> yeah, um... >> there's no question that there was a change in his style. he took ownership of this health care issue. he challenged everybody on this front. >> ...of how we actually get a bill done. >> narrator: and then, for a month, barack obama the campaigner hit the road to sell the bill. >> do not quit! do not give up!

we keep on going! ( applause ) we are going to get this done! we are going to make history! we are going to fix health care in america with your help! god bless you! and god bless the united states of america! ( cheers and applause ) >> narrator: on sunday, march 21, the president waited to see whether he had convinced just enough members of his own party to push the bill through. >> down to the wire on health care reform. the house votes just hours from now. >> after months of rancor in the streets, the vote takes place in just a few hours. >> members will record their votes by electronic device. >> sitting in the roosevelt room, the president, the vice president, we sat there, and there was a small bit of anxiety as we watched the votes tick up. >> it is a 15-minute vote. >> we've had victory snatched from us before. >> on this vote, the yeas are 219, the nays are 212.

the motion is adopted. ( gavel pounds ) ( cheers and applause ) >> the 216th vote comes over, a big cheer erupts. >> 219 to 212. no votes from republicans. >> all democrats, no republicans. >> this is a huge victory for this president. >> for decades, they've been trying to do it. >> good evening, everybody. this legislation will not fix everything that ails our health care system. but it moves us decisively in the right direction. this is what change looks like. >> narrator: it was victory, but experienced washington knew the president would pay for it. >> it came at a high price. the entire first year, basically, dedicated to this. having their hopes for bipartisanship dashed. and the white house still is not certain how this will sell in the country.

>> there is a realism that it has come with a cost. we don't know what's going to happen in the november elections. we don't know what's going to happen in 2012. but there is no question that this health care battle has put his party at risk.s and how they deal with that is the next chapter. but this was a historic moment. >> there's more to explore on our website. >> health care reform will not wait another year. >> watch the program again online. read the extended interviews... >> it was the process. it represented a lot of what the american people hated about washington. >> ...more details on the lobbying, deal-making... >> it's not a pretty process. >> ...and key turning points on the road to reform. then join the discussion at pbs.org.

>> next time on frontline, four confessions... >> i grabbed michelle... >> ...forced her to have intercourse. >> i was there... >> ...raping her. >> i stabbed her. >> ...four men... >> he got me to confess. >> i broke, and... >> ...told them... >> ...whatever they wanted... >> ...to hear. >> ...one case... >> four people interrogated coercively... >> ...that cracks open the justice system. >> ...confessed to a crime they didn't commit. forget the truth. forget justice. >> "the confessions." captioned by media access group at wgbh access.wgbh.org

>> frontline is made possible by contributions to your pbs station from viewers like you. thank you. and by the corporation for public broadcasting. major funding is provided by the john d. and catherine t. macarthur foundation-- committed to building a more just, verdant, and peaceful world. and by reva and david logan-- committed to investigative journalism as the guardian of the public interest. additional funding is provided by the park foundation-- committed to raising public awareness. and by the frontline journalism fund. with a grant from scott nathan and laura debonis.

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