By Dana Priest
Washington Post Staff Writer
Tuesday, September 27, 1994; Page A01

Senate Majority Leader George J. Mitchell (D-Maine), blaming the "total obstructionism" of Republicans, yesterday ended a historic, high-risk campaign to enact comprehensive health care reform this year.

"The combination of the insurance industry on the outside and a majority of Republicans on the inside proved to be too much to overcome," said Mitchell. He said he could not muster the 60 votes needed to stop a promised Republican-led Senate filibuster on any of the health care bills Democrats had proposed. The House had all but abandoned efforts to pass its own health care bill in August.

The announcement ended a year-long campaign by the White House, led by First Lady Hillary Rodham Clinton, to sell the country on a complex plan to solve the twin problems of 37 million uninsured Americans and budget-breaking medical inflation.

Supporters argued that the White House plan and its Democratic congressional siblings would complete the unfinished business of the New Deal. Critics -- including Republicans, the health and insurance industry and major portions of the business community -- argued the Democrats' plans amounted to government planning that would lower the quality of medical care and raise the price for many Americans and businesses.

"This journey is far, far from over," President Clinton said in a statement.

"Some Republican leaders keep saying: 'Let's put this off until next year.' I am going to hold them to their word ... we are going to keep up the fight against the interests who spent $300 million to stop health care reform," Clinton said. "We will fight for campaign finance and lobby reform so the special interests do not continue to obstruct vital legislation, and we will return to the fight for health care reform. There is too much at stake for all the American people and we have come too far to just walk away now."

White House sources said Hillary Clinton held her first high-level meeting last week with health advisers to discuss options for next year. "She was surprisingly buoyant," said Irwin Redlener, a New York pediatrician and advocate for poor children who met with her last week. "This wasn't a person who acted like she's given up. This is not a dead issue and many problems will get worse."

During the past several weeks, Republicans have claimed credit for killing a bad bill and have said that voters would thank them in November.

"For all the right reasons, health care reform did not happen this year," said Senate Minority Leader Robert J. Dole (R-Kan.). "The American people said, 'Slow down'."

"I think America rejoices that the president's health care plan is dead," said Sen. Phil Gramm (R-Tex.), who led the opposition to all Democratic plans. "This is American democracy at its best."

While Mitchell and other Democrats tried to cast blame on Republicans yesterday, the slow death began months ago for the Clinton bill and all the Democratic versions of it that were debated in Congress.

Many participants in the health care reform fight, including Clinton's most loyal supporters on health care, said that the issue died from the weight of many complicating factors, among them an overly bureaucratic plan, impaired presidential leadership, record campaign and media spending by opponents and rocky relations between the White House and Congress.

Added to these were a series of sweeping changes in medical care taking place in the private sector, driven by managed care companies and a slow-down in the rate of medical inflation that gave some businesses hope that the cost problem would turn itself around without government intervention.

But at the heart, many members of Congress believe the task may have been too much too soon for a public distrustful of government.

"Where we might have been naive is to actually think we could get it done in two years," said Sen. John "Jay" Rockefeller IV (D-W.Va.). "I'm not sure the middle class was there for us."

"Most Americans are relatively satisfied with their health coverage, and in the end, they preferred the status quo to a radical shift that might give them something worse than they have now," said Charles N. Kahn III, executive vice president of the Health Insurance Association of America (HIAA). "Congress reflected the public in not being able to reach consensus."

On the impact of special-interest lobbying, he said, "Whether it was the small business lobby or the insurance companies or others, we played a role in informing the public on what was going to be considered. But in the end, it was the rational public that decided the plans were not what they wanted." The HIAA sponsored a $14 million "Harry and Louise" ad campaign that cast doubt on the Clinton plan's workability.

Dick Davidson, president of the American Hospital Association, said, "I think everybody has a piece of responsibility {for killing reform} including the White House, the Congress, the media and the special interests.

"It died largely because of its overreach -- we reached further than the American people were ready to go" on federal controls and requirements.

"One of the things we learned was that there was no free lunch -- no matter how you played the issue of reform out, you can't provide access to 38 million Americans and finance it with mirrors."

Larry Atkins, lobbyist for the Corporate Health Care Coalition, representing 24 multistate corporations, said the issue was "purely partisan" from the start, with Republicans seeing little advantage in compromise. "They saw it working to their disadvantage in the election," he said.

Over the year, the politics of health care actually flip-flopped. Once considered an election-winner for the Democrats and a must-do in public opinion polls, it became a political liability and people with health insurance became fearful of what the plan would do to their medical care.

Republicans continually moved to the right at each new stage of the process. No place was this more evident than in the evolving position of Senate Minority Leader Robert J. Dole (R-Kan.) and the fiery rhetoric of House Minority Whip Newt Gingrich (R-Ga.).

Dole, who is considering entering the Republican presidential race, first backed a plan to require individuals to purchase insurance, then proposed a barebones bill repudiating any sort of requirement that everyone be covered by insurance and embracing a package of insurance market reforms. As of a few weeks ago, however, Dole was backing away and scaling back further on what he would accept.

In the House, Gingrich advised Republicans in the committee process not to cooperate with Democrats. And last week he and Dole told the White House they would hold up other legislation, such as the General Agreement on Tariffs and Trade (GATT), if Democrats brought up health care.

Mitchell said the White House meeting with Republicans, which he also attended, was a turning point in his decision give up on legislation this year.

The Republicans, Mitchell said, had "a policy ... of total obstructionism" and the threat made at the White House meeting last week "clearly endangered every aspect of the legislative agenda."

But, Mitchell added almost as an aside, "prospects weren't good {for passage} in any event."

Staff writers Michael Weisskopf and Spencer Rich contributed to this report.