WASHINGTON, DC – Despite saying he had no idea who will become the next US president, former Secretary of Health and Human Services Michael Leavitt was confident Monday that the provider community has little reason to fear any quick dramatic changes to entitlement programs, regulatory oversight or immigration policies after the upcoming election.
Also a former governor of Utah and now the head of his own consulting firm, Leavitt said the odds of a divided government after Nov. 5 are 90% to 95%. The likelihood is greatest that Republicans will gain control of the Senate, while the Democrats will retake the House leadership role, creating a standoff that should temper most moves by whoever wins the White House, he and moderator NBC newsman Chuck Todd agreed at the opening keynote session of the National Investment Center for Senior Housing & Care Annual Fall Meeting.
“The chances of us having either party in the position to dramatically move forward the positions on which they are campaigning is very small,” Leavitt told the standing-room only crowd in a Marriott Marquis hotel ballroom. “The only way you see in a divided government any kind of major change is if there is a center. … I don’t see the formation of a center.”
The HHS leader from 2005-2009 in the George W. Bush administration also said he doubted the political will exists in Washington today to try to curtail entitlement spending, which includes programs such as Medicare and Medicaid funding, the major funders of nursing home care in the US.
“It’s one of those issues that will likely have to be solved in the context of a crisis,” Leavitt said. “Those who care about the deficit have been prudent alarmists so far . . . I’m reminded of one of my favorite country-western songs that says, ‘It’s funny how falling feels like flying — for a little while.’ There’s a point where this catches up and there will be a crisis.”
The career Republican said minus something like the global financial crisis of 2008-2009 or another Black Swan-type event, “the only way we work through the entitlements issue is you see bigger and bigger deficits and you try to inflate your way out of it.”
He added that entitlements could actually expand in the short term, perhaps in the form of family benefits such as for child care and home care for the elderly.
No big Chevron worries
Leavitt was calmly sanguine about the future of regulatory oversight in light of the US Supreme Court repeal of the Chevron doctrine, which peeled away power from the administration. He said SCOTUS will need more time to figure out how and when it and other courts would intervene more, and Congress will eventually figure out how to create more specific laws that will not invite judicial intercession.
“It’s going to mean a lot less regulatory intervention and a lot slower movement of government. I would not worry, were I in their [providers’ and operators’] position and building my annual plan, about any immediate change in any regulation based on Chevron,” he asserted. “It’s not going to happen. It’s going to take a long time. I do expect to see a lighter [regulatory] touch.”
Pressure will bring change
On the topic of immigration, where many providers hope to find staffing relief, Leavitt said he thinks progress might be in the cards
“I’m a little more optimistic on immigration because the practical impact [of current conditions] is beginning to affect all society, and both sides of the political spectrum have dealt with its downsides,” Leavitt said.”The formula of an immigration solution is probably to have a divided government where a center begins to form and pressures begin to come close to an election and people want to solve it and it’s ripe and it happens. It’s a magic moment.”
Leavitt and Todd agreed that a chamber in a divided Congress will not hand a president of another party a win on immigration reform.
“I think the labor market is demanding capacity,” added the former secretary. “So that becomes input to a deal. Part of that is to have adequate pressure. Either it’s a long ways from an election or getting close to an election.”
In the mid-1970s, there were 4.6 workers per Medicare beneficiary, he explained, while today there are just more than 2. That creates pressure where there are growing expenditures, many more beneficiaries but half the workers. “You don’t have to be a math genius” to see the problems that will create, Leavitt noted.
Spreading the power
He said he expects states to pick up influence on policy, and not just because of the Chevron ruling.
“As it becomes harder politically and functionally to do things at the federal level, they’ll routinely be able to move them back to the states,” he observed. “I think that’s a very positive thing because states are substantially more functional than the federal government.”
Leavitt firmly agreed that former President Trump’s tax cuts will remain in some form, whether or not he regains the White House.
Having worked with a presidential transition team, he again emphasized that it is unlikely that any major changes will take place soon after the election.
“If you’re trying to build a business plan, and you’re saying, ‘What’s going to happen to me in the first 100 days?’ I wouldn’t be too worried,” he said. “It’s not going to change a lot. It just takes time.”
