Senate ‘Odd Couple’ Overcome Enmity to Take On Medicare

Both men were ridiculed after making brief but inept bids for their party’s presidential nomination. Aside from sharing the same workplace for the last eight years, the only other thing that Sens. Bob Kerrey and Phil Gramm had in common was this: They truly despised one another.

But earlier this year, they buried the hatchet. And no one seems to be laughing now.

Together, Kerrey (D-Neb.) and Gramm (R-Texas) have provoked the most serious attempt yet by Congress to address Medicare’s long-term financial crisis. Even though they failed, for now at least, to raise Medicare’s eligibility age and require wealthy beneficiaries to pay higher premiums, their unlikely collaboration has dramatically transformed the politics of Medicare, perhaps for good.

Their unexpected success in thrusting the issue to the top of the nation’s agenda has revealed the extent to which Congress may be willing, at last, to enact Medicare reform. That has increased the likelihood that policymakers will act relatively soon to help preserve Medicare for the 50 million baby boomers who will reach retirement age in the next 20 years.

That Kerrey and Gramm are working so closely together is especially striking because of how utterly different they are. Observes Gramm: “Someone has likened us to oil and water.”

A centrist Democrat, Kerrey, 53, is a handsome, decorated Vietnam War veteran who once dated actress Debra Winger. An avid hunter, he is a gun-control advocate. He is known for being mercurial--spectacularly so in 1993, when he agonized publicly for days before casting a cliffhanger vote on President Clinton’s first budget.

A dogmatic conservative, Gramm, 55, is a family man who enjoys yard work and jokes self-deprecatingly about being ugly. He avoided military service on an exemption but loves to shoot quail and turkey--and then relive every gory detail. Even in a chamber with 100 colossal egos, Gramm’s cocky self-assurance stands out.

Despite such differences, “we’ve discovered we shouldn’t hate each other--we don’t want to end up like Prince Ranariddh and Hun Sen,” Kerrey said, referring to the warring prime ministers of Cambodia.

If this alliance endures, it could have implications well beyond Medicare. In separate interviews, Kerrey and Gramm not only expressed new resolve to press for long-term Medicare reform but disclosed their intent to take on Social Security reform as well.

It was Gramm who took the first step in the little-known detente. One afternoon last winter, he loped over to Kerrey’s office and said in his Texas drawl: “Whatever the source of our conflict, I’d like to end it. And I would like us to work together, first on Medicare and then Social Security.”

Kerrey was gracious beyond Gramm’s expectations. “I’d thought about coming to see you and saying the same thing,” he responded.

They reached that juncture having traveled very different paths.

Gramm came to town in 1979 as a conservative House Democrat who flunked third, seventh and ninth grades, but went on to earn a Ph.D. and become an economics professor at Texas A&M; University.

He quickly landed a seat on the House Budget Committee and became a national figure. Something of a loner, Gramm backed a number of GOP initiatives, most notably the 1981 Reagan tax cuts. Two years later, then-Speaker Thomas P. “Tip” O’Neill kicked Gramm off the committee because Democrats believed he was passing confidential information to Republicans.

Gramm quit his House seat and ran as a Republican. He easily won. A year later, Texas voters promoted him to the Senate. There he helped write the Gramm-Rudman deficit-reduction law, which required automatic budget cuts if the deficit were not reduced to specific levels. (The act was later repealed by Congress.)

It was Gramm, more than anyone else, who led the fight against President Clinton’s plan to restructure the nation’s health care system, declaring that such reform would occur “over my cold, dead political body.”

In two terms as head of the National Republican Senatorial Committee, Gramm proved to be a prodigious fund-raiser, helping Republicans win seven seats in 1994 as they gained control of the Senate.

Gramm did less well for himself in 1996. Pursuing the GOP presidential nomination, he spent millions of dollars but got nowhere. He dropped out before the New Hampshire primary.

Similarly, Kerrey has headed the Democratic Senatorial Campaign Committee. In 1996, he stumped all over Texas for Gramm’s challenger, schoolteacher Victor Morales, which did nothing to ease the enmity between Kerrey and Gramm.

Kerrey’s penchant for combat is well known.

After earning a pharmacy degree in 1966, he volunteered for the Navy SEALs. In 1969, after just three months in Vietnam, a grenade exploded at his feet. Despite massive injuries, Kerrey continued directing his platoon’s fire, allowing his men to escape. After the battle, Kerrey lost his right leg below the knee. For his heroism, he won the Medal of Honor.

After returning to Nebraska, Kerrey started a chain of restaurants and health clubs--and then served a term as governor, a tenure enlivened by his courtship of Winger.

More jaws dropped in 1986 when Kerrey decided not to seek reelection despite approval ratings above 70%. But two years later, Kerrey was elected to the Senate.

In Washington, he strongly opposed the Persian Gulf War. And barely six months after the war’s end, Kerrey abruptly decided to challenge President Bush, whose popularity was at an all-time high.

National health care reform was Kerrey’s big issue, but he never caught on. And while other vanquished rivals of then-Gov. Bill Clinton endorsed the Arkansan, Kerrey refused, saying that Bush would “open him up like a soft peanut.”

The ill will between Kerrey and Clinton festered, providing special drama in the summer of 1993 as Kerrey emerged as the make-or-break vote in the Senate for Clinton’s budget. After much Hamlet-like public musing, Kerrey finally cast the tying vote, thus allowing Vice President Al Gore to push Clinton’s budget over the top.

As a quid pro quo, the White House named Kerrey co-chairman of a presidential commission on entitlement reform. Although the panel’s recommendations were ignored, Kerrey emerged as an expert on Medicare and Social Security reform--a reputation that Gramm knew well after taking over this year as chairman of the Senate Finance subcommittee on health, on which Kerrey also sits.

Working together after putting aside their mutual dislike, Kerrey and Gramm scored a stunning triumph late one night in June by persuading the Senate Finance Committee to include, as part of a balanced-budget bill, an increase in Medicare eligibility and in premiums for well-to-do seniors.

The Senate later ratified the committee action with a bipartisan 80-18 vote, signaling that Medicare reform is perhaps no longer the untouchable “third rail” of American politics.

“I think that having on board a politically prominent Democrat--and a former and possibly future presidential candidate--caused many other people to take a more serious look at the issue,” says David Mason, a Heritage Foundation analyst.

The controversial Medicare provisions were dropped during subsequent negotiations between the White House and congressional GOP leaders at the insistence of House Republicans. Instead, the negotiators agreed to create another commission to study the matter.

But Gramm and Kerrey are unwilling to wait for more blue-ribbon recommendations. “We don’t need another commission,” Kerrey snaps.

Gramm says he intends to hold Medicare hearings “as soon as we get back” from the August congressional recess, with the goal of reporting out a bill in October.

“Any time you’re trying to do something that’s this hard, you’re going to be subject to criticism for it,” says Gramm. “I knew it when we started. But the criticism will be greater four or five years from now if we [do] nothing and let Medicare go broke. And that’s not something I intend to let happen.”

“This,” Kerrey adds, referring their now-defunct Medicare proposals, “is building a bridge to the future”--a barbed reference to the Clinton-Gore reelection theme. “Compared to what we’re trying to do, building a bridge to the 21st century is easy--that’s [just] three years away.”