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Extortion

1:59 PM, Sep 2, 2009 • By MICHAEL GOLDFARB
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Jonathan Cohn has a piece in the new issue of TNR that makes a rather serious allegation. Specifically, Cohn accuses PhRMA (the drug industry group that happened to buy the ad space on the back page of TNR this week) of extortion:

It's the kind of quid pro quo that generally raises eyebrows, as more than one conservative was quick to note: "The press and congressional Dems would have gone nuts if we had tried anything remotely like this," said Tevi Troy, who was a health care official in the Bush administration. And, in fact, a few congressional Democrats have gone nuts. "We have all been focused on the debate in Congress, but perhaps the deal has already been cut," Representative Raul Grijalva, co-chairman of the Congressional Progressive Caucus, told The New York Times, which first broke the story. Beyond Capitol Hill, the reaction from liberals was even harsher. "When an industry gets secret concessions out of the White House in return for a promise to lend the industry's support to a key piece of legislation, we're in big trouble," former Labor Secretary Robert Reich wrote on his blog. "That's called extortion."

Extortion is a harsh word, but not an inaccurate one. By almost any reckoning, the drug industry demanded--and got--a sweetheart deal in exchange for its support.

Did PhRMA extort the President of the United States, or did the President of the United States extort PhRMA? I think Cohn has it backwards. Wikipedia has a pretty good definition of extortion: "'Extortion', outwresting, or exaction is a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion."

So who obtained money, property, or services in this deal? The White House did. Obama obtained $80 billion in savings that he could herald as a major breakthrough in the still struggling effort to keep health care reform deficit neutral. He also obtained financial support for his reforms in the form of advertising to be paid for by PhRMA (and to be produced by Axelrod's own firm). And PhRMA agreed to provide services, too, in the form of lobbying support for the president's efforts.

Extortion is usually associated with organized crime -- mobsters shake down local business in exchange for protection. Obama doesn't wear a fedora, but he does have the power of coercion and he did get the better end of this deal. Indeed, Cohn goes on to say that the government might come back for more money and concessions from PhRMA: "Besides, it's not as if the administration and its allies can't seek more concessions from PhRMA later on--a possibility the White House itself seemed to encourage, after the August Times report, by pointing out that the deal was only about health care reform legislation and not future acts of Congress." So the White House is going to go back to PhRMA to get extorted again? No, of course not. The White House will be going back to squeeze a little more out of an industry that already paid for protection.