Politics a type of risk management

By Matt Scroggins

ORLANDO, Fla.—Politics, called by some “the art of the possible,” is also the art of risk management.

Politics is “all about risk and about risk management, about having the right tolerance for risk. You cannot just live in a bunker. But at the same time, if you go too far out there, you're gonna lose your election,” political strategist and CNN political analyst Paul Begala said during a presentation Tuesday morning at the Property Casualty Insurers Assn. of America's meeting in Orlando.

During his engaging, often funny presentation, Mr. Begala offered his take on contemporary American politics, frequently touching on his own experience as an adviser during the Clinton administration.

Noting that President Obama has decided to aggressively pursue health care reform—a historically divisive issue and the “third rail” of American politics—Mr. Begala said, “talk about a guy who is comfortable with a high level of risk.”

He noted that since 1912, “almost every president has tried to do something on health care, and all of them have failed, at least for fundamental, national reform.”

In addition, previous health reform efforts have been damaging to lawmakers, he said, noting that the Clinton health care reform effort in the 1990s cost the Democrats many congressional seats.

“And yet this president, knowing those risks, has jumped in…I believe he would tell you that's because the riskiest thing we can do is to ignore it,” given the problems and rising costs of the current system, Mr. Begala said.

And “despite the very high risk,” Mr. Begala said he thinks it's likely that President Obama's effort will succeed, and he offered three reasons for his optimism.

First, he said, the administration is more pragmatic than President Clinton was during his bid to overhaul health care. Whereas the Clinton administration had an antagonistic relationship with many of the key stakeholders in the health care industry, President Obama has reached out, forging agreements with various sectors, including the pharmaceutical industry, doctors and hospitals. Such efforts have left just “one adversary out there—the health insurance industry.”

“Politically, really smart,” Mr. Begala said. Even though such moves have drawn criticism from some in the president's liberal base, “I just think it is practical risk management…He's divided his opposition.”

In another lesson taken from the failed Clinton reform bid, the administration has not let the “perfect be the enemy of the good.” For example, President Obama is not insisting on the inclusion of contentious provisions such as the so-called public option.

The president's goal, Mr. Begala said, is “progress, not perfection.”

Mr. Begala also cited the “changed nature” of the Democratic majority in Congress compared with that during the Clinton administration. At that time, congressional Democrats considered health care reform “as Clinton's problem, not their problem,” he said.

But Democrats remember what happened after the effort was abandoned, he said.

“They understand that the voters gave us responsibility with power, and when we failed, they quite sensibly said, ‘Well, let's let the other team on the field.”

With that in mind, congressional Democrats are motivated by a belief that “if they fail on health care, they will lose their jobs.”