Q&A: Governor Howard Dean

by James Dwinell. We interviewed Governor Howard Dean at the Hotel de Ville (aka City Hall) in Paris. We were in a deep window seat overlooking the Notre Dame Cathedral. The Hotel de Ville has been on this same location, though not the same building, since the 14th century. Dean works with a law firm in Washington and is a board member of the National Democrat Institute (NDI), an organization formed by President Reagan to promote democracy around the world. (There is also a Republican institute, IRI, the International Republican Institute.)
Howard Dean with Senator Leahy at the Democrats' Unity Rally August 25 in Burlington. Photo by Anne Galloway, vtdigger.com
Dean was in Paris for a panel entitled ‘The United States Mid-term Elections’ at the 43rd annual meeting of the International Association of Political Consultants. He has recently had a hip replacement, the need for which was surprisingly discovered during a routine medical check up when an x-ray of his lower back showed that his back pain came from his hip. Dean has suffered back pain since high school, which turned out to have been caused by a congenital hip issue, just discovered. He has lost considerable weight in the process and is now quite thin. Dean is co-chair of Governor-elect Shumlin’s transition committee.
Vermont Biz: Are you living in Washington, DC, full time?
Dean: No, I still live in Burlington, but I have multiple jobs, including working with a Washington law firm, basically giving their clients political advice.
Vermont Biz: Do you enjoy your NDI work?
Dean: Yes, their work is wonderful. NDI is headed by former Secretary of State Madeline Alright. It gives me a chance to travel the world supporting democracy projects. I was very active in the recent Bosnian election for example.
Vermont Biz: Peter Shumlin is about to become governor.
Dean: Yes, he is. He will be smart and innovative, especially in budget area which remains under much pressure. I think that he is taking the transition very seriously and that he wants a bi-partisan cabinet. I think that he will be a good governor.
Vermont Biz: How will Shumlin deal with the shortfall in state revenue?
Dean: I don’t think that he will raise taxes. And I don’t think that revenue will go up until the economy gets better. It is improving though it does not seem so to many people. Peter has thoughts about increasing agriculture. However, it will be a long slog back. But remember, Vermont is better off than most states.
Vermont Biz: How do you think a Governor Shumlin will treat the business community?
Dean: Much better than most people think. He is smart. He owns a small business, Putney Student Travel, that he and his brother have built up, and it is a very lucrative business. He understands small business and its needs. He will be very helpful to small business.
If he succeeds in health care reform, it will be an enormous help because small businesses bear the brunt of the constant increase in health care costs.
Vermont Biz: Can he advance Vermont’s health care with ‘Obama care’ coming?
Dean: I think that he can. President Obama followed the Romney health care plan which was created when (Mitt) Romney was governor of Massachusetts. One of its best features is the health insurance exchange. You can go on the Internet and look at as many as 10 approved health insurance plans which you can buy according to your income, from a Cadillac plan to a Chevy plan, where you chose the benefit and the accompanying price. There is a minimum benefit plan that insurance companies are not allowed to go below.
One of the possibilities is that there may be a public option offered as well. Shumlin is interested in doing this and he has already had a conversation with President Obama about making it happen. If that happens and we can divorce health insurance from employment, it will be enormously helpful for small business as they are the front line folks most vulnerable to cost increases.
Vermont Biz: Are the health insurance exchanges in conflict with Vermont’s history of community rating? Were there not many insurance companies which left Vermont after community rating was adopted?
Dean: Yes, the number of insurance companies offering product in Vermont decreased when we adopted community rating, but they were the fly-by-nights like Golden Rule which were taking a 50 percent profit. Our market is no worst than others and better than most. It is not ideal but we do have three or four good providers in both the group and individual markets.
Vermont Biz: What doesn’t work in Romney care?
Dean: The biggest problem with the president’s plan and Governor Romney’s plan is that there is no cost control. That is something that has to be dealt with and if we do not deal with the cost, we are going to continue to have huge cost inflation. I think that President Obama and Governor-elect Shumlin recognize that if everybody is not in the system, we do not have a system. Massachusetts does have everybody in the system and it is providing some hopeful signs of cost control.
The biggest driver of health care costs is fee for services. If the system pays a medical provider for doing a particular service, whether it is successful or not, whether it is necessary or not, the medical provider will provide lots of services. That is why our health care system is 70 percent more expensive than any other country. Massachusetts is now talking to all the players about captivated care. This is when you or an insurance company pays a medical provider a certain amount of money which would then cover all your health care.
Health care will be more like Kaiser is today, where you pay a fixed amount of money and the hospital will provide all the care that is necessary, and you sign a waiver that you will not use the court system but an arbitration system to resolve any problems.
Vermont Biz: What about the long-term relationship between the trial lawyers and the Democrat Party. Will the party be able to support this?
Dean: If you make it a choice of the consumer, I think so. It exists today if you live in California where you can sign such an agreement. The problem for fee for services is that the health care system is influenced by the bottom line and not good medicine.
All systems evolve by accidents of history. In the United Kingdom after World War II, more than half of their health care system was destroyed by the bombing blitz so they nationalized the system. Here, wage controls during World War II made it hard for employers to differentiate themselves so they began offering free health insurance to attract new employees. Medicare and Medicaid grafted on to a fee for services system which has made the problem worse.
Vermont Biz: What will Governor-elect Shumlin’s biggest problem be?
Dean: It will be the budget issue. There is a very substantial budget deficit. This has been going on for a couple of years. I am proud that Vermont has managed very well for a long long time, through Democrat and Republican administrations. Our banks were far better behaved than the national banks, and we did not have a big housing bust. We have had a slowness in the market and maybe a little decrease, but it is nothing like what has gone on elsewhere. Our unemployment rate is below 6 percent. I am proud of Vermont, it is a well run state, people have run their own lives well, the banks did a great job, and the government ran its life well. So, yes, we have serious problems but they do not compare to what is going on in California, New York, Florida, Nevada, and Illinois.
Vermont Biz: What about Shumlin’s style. Can he change his president pro tem style to the one that fits a governor?
Dean: It will take some time. I came out of the Legislature. There you want to always do your own deal making, and he cannot do that anymore. He is a very strong legislator and I think that he will be a strong governor.
Vermont Biz: Will he be able to manage the House and the Senate?
Dean: Peter!! Yes, but eventually that is up to the Speaker and Senate pro tem.
Vermont Biz: Shumlin has said that there is no more tax capacity in the state. Do you agree?
Dean: I think that he is right. The first place you look is not raising taxes at this point. I actually cut the income tax. It is not that I am against income taxes, but if you have the highest marginal tax rate in the United States, you can’t attract or grow jobs. Peter, being a small business person, understands that taxing our way out of this is not the right thing to do.
Vermont Biz: What are the problems in recruiting business to Vermont?
Dean: The problems are overblown during the rhetoric season, the political season. It takes a special kind of business to invest in Vermont, but we are a special kind of state and we do get the particular type of business which we need in Vermont. We like small businesses, we like entrepreneurial businesses, and we like cutting edge businesses, such as Green Mountain Coffee Roasters or Ben and Jerry’s. Even IBM helps as whenever there is a lay off, half of those folks don’t want to leave Vermont and move to Poughkeepsie. They choose to stay and create new, smaller, more nimble high tech businesses and in the end more jobs are created than were lost.
It is a little known fact that Vermont on a per capita basis is the ninth most dependent on high tech. That is mostly because of IBM spin-offs.
There are a lot of great things going on in Vermont business. I know that for years political opponents have run down the business climate in Vermont. But for the most part, we get what we want: environmentally sensitive people who are not going to try to run us over. Will we get a Ford Motor Company? No, because they will make demands which we do not want to meet. Vermonters are pretty wise. They know that the big rewards in life are not just in the paycheck; it is in the lifestyle. We have a good school system, we have a safe state and this gives us a recruiting edge.
As Peter said during the campaign, ‘I never made a sale by saying how lousy my product was.’ The governor is the salesman-in-chief which I enjoyed enormously. I loved trying to find companies and convince them to move to or expand here in Vermont. We have some really good jobs in Vermont. We are in the middle in terms of per capita income in the United States and we are number one over the rest of the country in lifestyle. This is not a bad place to be.
Vermont Biz: Do you think that we have international recruitment opportunities?
Dean: We do have. Bill Stenger has been a star at Jay Peak with the EB-5 investment program. We should do more of that.
Vermont Biz: Do you intend to participate in the Shumlin years?
Dean: If I can play an informal unpaid adviser role, I would be happy to. But I am not looking for a job. Peter is very capable being governor. But it is always a transition from being a legislator to being a governor and if I can be helpful in that as this is my experience, I certainly am going to be.
Vermont Biz: Any question which you would like to answer that I did not ask?
Dean: That was pretty thorough. You won’t get enough inches to print all this already, that is for sure.
Vermont Biz: Great, thank you.
Dean: Thank you, it was my pleasure.
James Dwinell lives in Norwich.