The biggest obstacle President Obama faces in selling his health care agenda could be the albatross of his own economic stimulus package.
During its last major sales push, the Obama administration promised the $787 billion stimulus legislation would create up to 4 million jobs over the next two years, serve as a model of transparency, and be free of earmarks. But those claims haven’t held up so well.
In the months since Obama signed the bill in February, more than 1.6 million jobs have been lost. His own vice president, Joe Biden, tasked with overseeing the implementation of the stimulus package, declared last week that “We know some of this money is going to be wasted.…Some people are being scammed already.” Meanwhile, USA Today reported that lawmakers were working behind the scenes to make sure that money gets directed to their own pet projects, such as “$5 million for the removal of pine trees killed by bark beetles in Colorado.”
There are signs of a growing public skepticism about the stimulus package. A Rasmussen poll released on Wednesday found that 45 percent of Americans favor canceling the rest of the stimulus money, compared to just 36 percent who disagree and 20 percent who aren’t sure.
A single poll should be taken with a grain of salt, to be sure. But the fact that the public relations-savvy Obama administration felt the need to begin the week with a media blitz rebooting the stimulus effort suggests White House officials sense Americans are getting antsy.
Monday’s campaign-like stunt featured a cabinet meeting, a new website, and a special report dubbed “Roadmap to Recovery.” The administration claimed to have “created or saved” 150,000 jobs within the first 100 days of the stimulus bill being signed, and promised 600,000 more over the summer, in the second 100 days.
Biden, in a conference call with reporters on Monday, said it was “above [his] pay grade” to explain in detail the methodology the White House uses to estimate the number of jobs created or saved by the economic stimulus legislation. He said that the Council of Economic Advisers makes its estimates based on measuring what the U.S. employment level would have been without the stimulus, and then comparing it to the nation’s actual employment level.
“I’m sorry I’m not an economist,” Biden said as he was trying to describe the methodology. “My background is foreign policy and the constitution.”
He added, “the fact is that there has been no challenge to the methodology the Council of Economic Advisers has come up with, known to national economists as being reasonable to the estimates we have as to the actual jobs saved or created.”
But the administration’s employment estimates have already proven to be way off. In selling the legislation, the administration projected that if the stimulus package were passed, unemployment would be about 8 percent right now. In reality, it’s 9.4 percent. Even Biden’s own chief economic adviser, Jared Bernstein, concedes they made a boo boo.
“[A]t the time our forecast seemed reasonable,” Bernstein said in a Monday press conference. “Now, looking back, it was clearly too optimistic.”
Now, the same team that brought us the stimulus is embarking on a campaign to remake the nation’s $2.4 trillion health care sector with a new set of bold promises.
In making its case, the White House has argued that the government can provide everybody with health care coverage while saving money, and that it can do so while improving the quality of care and without rationing. President Obama advocates a system in which individuals are offered government subsidies to purchase insurance on a government-run insurance exchange, allowing them to choose between a government-run plan and “private” plans that are designed by the government. And yet we’re supposed to believe that this won’t lead to a government takeover of medicine.
A health care bill along the lines of what Obama promised during the campaign has been estimated to cost upwards of $1.5 trillion over ten years, but his budget only identified $635 billion available to pay for it. Of that money, the budget proposed raising $326 billion by capping the tax deductions for charitable contributions for the wealthy and closing other loopholes, an idea that was rejected by the Democratic Congress. The other $309 billion consists of proposed savings by cutting overpayments to Medicare Advantage as well as the old standby of “cutting waste, fraud and abuse” in government health care programs.
In a letter to Democratic Senators Ted Kennedy and Max Baucus last week, Obama said he would support finding ways to reduce Medicare and Medicaid spending by an additional $200 billion to $300 billion, though he did not specify how those savings would be generated.
Americans should be asking themselves whether they can trust the health care claims of the same administration that projected an 8 percent unemployment rate and ended up with a 9.4 percent rate, and claimed to be creating (or saving!) 150,000 jobs during a period when more than 1.6 million were lost.
“You can’t just make stuff up,” candidate Barack Obama declared last fall, in responding to Sarah Palin. Now, with health care as with the stimulus package, his administration is doing its best to test that hypothesis.