Wonkbook: The good news for Obamacare is that the White House knows the bad news

October 23, 2013

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(Photo by Karen Bleier/Getty Images)
(Photo by Karen Bleier/Getty Images)

The best news for President Obama's health-care law is that almost everyone -- including the Obama administration -- realizes the crucial online portal is currently a disaster.

That's not a universally held view. Salon's Joan Walsh chides those reporting on the law's failure, arguing that problems with the HealthCare.gov Web site "are real, and disturbing, and must be fixed asap," but "the president knows that without my telling him."

Actually, that's been the problem: Obama didn't know that. Nor did White House chief of staff Denis McDonough. Nor did Health and Human Services Secretary Kathleen Sebelius, who will be testifying to that fact next week.

It would be one thing if problems with the government's new health-care Web site had been unknowable. But they weren't. Staff at HHS and CMS saw this coming for months. Insurance companies began predicting a mess long ago. But the bad news was shaded and spun as it made its way up the chain of command. The alarming failures seen in the (inadequate) load tests were written off as bugs that would soon be fixed.

As Lena Sun and Scott Wilson reported, "Days before the launch of President Obama’s online health ­insurance marketplace, government officials and contractors tested a key part of the Web site to see whether it could handle tens of thousands of consumers at the same time. It crashed after a simulation in which just a few hundred people tried to log on simultaneously."

But staff was terrified to speak on the record, or even on background. Some of the concerns slipped out, like in this Wall Street Journal story. But in general, reporters, myself included, got a wall of denials from White House staff. Worse, the White House actually believed those denials. That meant they weren't able to muster the resources to fix the problems, triage the system, or even lower expectations for the launch. As Jonathan Cohn writes, "the management failures here were real and took place on multiple levels."

The new health-care law has a chance because those management failures are over. The White House now has a brutal clarity about the depth and extent of the system's problems. Top staff -- up to and including McDonough -- have made clear that tough, even pessimistic, assessments of the system are welcome. Hope is no longer the plan.

Data is now the plan. A daily dashboard measures speed and completion rates across the system. Insurers who once felt ignored now report working closely with the White House to solve problems. Managers up and down the chain realize their careers are in jeopardy if they deliver sunny reports that prove false. And even if those managers fail, now that outside companies and agencies are routinely interacting with HealthCare.Gov, it will be much easier for the press to report on how well the Web site is really functioning and whether improvements are evident.

Core to the White House's repair strategy, of course, is the "tech surge,' though so far, the only participants they've revealed are ex-OMB staffer and NEC nominee Jeff Zients and members of CTO Todd Park's "presidential innovation fellows" program. That's not exactly the outside expertise many are hoping, and the White House is implying, they've brought into the game.

For all that, no one actually knows whether the system will be fixed in the next few weeks -- the crucial window, experts think, before the problems begin to degrade the risk pool and raise premiums.

So far, there have been huge improvements in the number of Americans able to get into the site and create accounts. But insurers aren't reporting much improvement either in successful enrollments or in the more serious data transcription errors.

The White House is optimistic that the problems will be solved in time. Of course, they've been optimistic before. If there's a reason to believe them this time, it's that they've learned how dangerous unfounded optimism is.

Wonkbook's Number of the Day: 120,000. That's the number of jobs that Jason Furman, the chair of the Council of Economic Advisers, estimates we lost due to the shutdown. That's about a month's worth of job creation flushed down the drain.

Wonkbook's Graph of the Day: The Council of Economic Advisers now computes its own weekly economic index.

Wonkbook's Top 5 Stories: 1) we're taking a bad economy and making it worse; 2) the mess at HealthCare.gov continues; 3) green energy update; 4) the Supreme Court is back in black; and 5) reefer madness.

1) Top story: Can this economy survive this government?

Middling September jobs report another sign that a robust recovery will, again, have to wait. "New government data released Tuesday showed that business hiring slowed significantly last month. The Labor Department reported that the economy added 148,000 jobs, well below analysts’ expectations and down from nearly 200,000 jobs added in August. The unemployment rate dipped to 7.2 percent. The data were collected before the federal government shutdown and the fight over the debt ceiling this month, and economists say the picture has gotten gloomier since then." Ylan Q. Mui in The Washington Post.

Graphs, graphs, graphs: 8 more charts from the jobs reportMatthew Phillips in Quartz.

...How has the economy done since then? Well, we can't really tell. "Unlike the delayed jobs data released on Tuesday, figures for unemployment and job creation in October and November, experts say, will be skewed as hundreds of thousands of government workers and contractors disappear from the work force and then reappear in next month’s survey." Nelson D. Schwartz in The New York Times.

@ObsoleteDogma: #ff to @CEAChair & @CEABetsey on this once-in-a-lifetime Jobs Tuesday. You'll tell your grandkids about this.

How Wonkblog's Neil Irwin sizes up this jobs report. "It wasn't terrible by any stretch...But it is far short of the kind of robust jobs recovery that Americans have been waiting for these last four long years...[T]here's every reason to think this should have been a good year for the American economy. Yet here we are back in the doldrums, experiencing the same ambling pace of recovery that has been all too common since the technical end of the Great Recession in the summer of 2009. Americans can probably look to Washington to assign blame -- and that's before the tumultuous last few weeks exact whatever toll they will exact on growth." Neil Irwin in The Washington Post.

The employment rate remains stuck. "Job growth continued to keep pace with population growth in September, leaving the share of Americans with jobs stuck at 58.6 percent, basically the same low level this “employment rate” has maintained since September 2009. Before the recession, about 63 in 100 American adults had jobs. Now, fewer than 59." Binyamin Appelbaum in The New York Times.

@JimPethokoukis: Jobs data suggest the bigger problem isn't part-time employment but long-term unemployment

Furman: Shutdown cost 120,000 jobs. "The partial government shutdown this month trimmed 0.25 percentage point from fourth-quarter economic growth and cost the U.S. 120,000 jobs in October, President Barack Obama’s chief economic adviser said. An analysis of daily and weekly economic data through Oct. 12 showed weakness in such areas as retail sales, economic confidence and mortgage applications, some of which was directly related to the 16-day shutdown, said Jason Furman, head of the Council of Economic Advisers." Margaret Talev and Lorraine Woellert in Bloomberg.

@JustinWolfers: Bottom line: Today's jobs report tells us the economic recovery persists, but it's fragile. Who knows if shutdown pierced that fragility.

When will the Fed taper? Probably not soon. "This time five weeks ago, markets were ready and waiting for the Federal Reserve to begin its "taper," the beginning of the end of its program of pumping billions of dollars into the economy by buying bonds. Not only did Fed leaders elect to sit on their hands at that meeting; now the smart money thinks they won't even start to slow their bond buying until this coming spring! That's all the more remarkable given that there has been no radical shift in the tenor of economic data, just a series of mild disappointments, of which the September jobs report issued Tuesday morning was the latest example." Neil Irwin in The Washington Post.

@EconomistLake: The government shutdown, debt ceiling standoff and today's jobs numbers validate the Fed's decision not to taper in September.

U.S. construction spending climbs. "Construction spending increased 0.6 percent to an annual rate of $915.1 billion, the highest level since April 2009, the Commerce Department said on Tuesday. Construction spending in July was revised to show a 1.4 percent rise instead of the previously reported 0.6 percent gain." Reuters.

How the furloughed will be counted in jobs numbers. "The jobs report is based on two different surveys — one of households, and one of employers — and it turns out that furloughed federal government workers will be treated as unemployed in the first survey but employed in the second. In other words, the temporary layoff of federal workers will probably increase the unemployment rate, but not (at least directly) depress the payroll job growth numbers. The key reason that furloughed federal workers affect the results of one survey but not the other has to do with the different ways the two surveys categorize workers who ultimately receive back pay." Catherine Rampell in The New York Times.

@EJDionne: How many jobs reports will it take to persuade deficit hawks the focus now should be on growth & jobs? And slow growth makes deficits worse.

IRS says tax season will start late due to shutdown. "The Internal Revenue Service plans to delay the start of tax-filing season by a week or two because of the government shutdown, the agency said on Tuesday. But taxpayers will still have to turn in their 2013 returns by April 15 as usual...Under the delay, the I.R.S. would start accepting returns between Jan. 28 and Feb. 4, the agency said, and would make a final determination in December on when the filing season would start." Annie Lowrey in The New York Times.

BERNSTEIN: A discouraging picture. "The monthly jobs data are notoriously noisy, so let’s take advantage of the fact that we now have data for the first three quarters of the year. We can thus smooth out the bips and bops of monthly changes over three months. That leads to the picture below, showing average monthly payroll gains over each quarter of the year for both the total job market and the private sector...Private payrolls expanded by only 129,000 a month on average last quarter, well down from the average monthly gain of 212,000 (itself just a moderate pace of employment growth) in the first quarter of the year." Jared Bernstein in The New York Times.

Music recommendations interlude: Andrew Bird, "Imitosis."

Top opinion

EMANUEL: How to fix the glitches. "What went wrong? My diagnosis is that there were three big mistakes. First, the Obama administration acted too slowly. It waited too long to release specific regulations and guidance on how the exchange would work. It also waited too long to begin building the physical Web site...The president should create a new position: an independent chief executive of the federal exchange." Ezekiel J. Emanuel in The New York Times.

PORTER: A new front on infant mortality. "Pregnant women, across the country and anywhere along the income spectrum, will for the first time have guaranteed access to health insurance offering a minimum standard of care that will help keep their babies alive. The benefit may seem narrow. But it offers the best opportunity in a generation to tackle one of the United States’ most notorious stigmas: an intractably high infant mortality rate that hardly fits one of the richest, most technologically advanced nations on earth." Eduardo Porter in The New York Times.

The incredible depths of conspiracy theorists interlude: Glenn Beck decides to tar Grover Norquist as an Islamist and ally of the White House.

2) The mess at HealthCare.gov drags on and on

Two key parts of online health insurance exchange will take longer to fix than expected. "A senior health official said that the insurance exchange, HealthCare.gov, is still unable to perform one of its basic functions: making it easy for low-income Americans to enroll in Medicaid electronically. Days before the exchange opened three weeks ago, the administration said that feature was not ready but would be available by Nov. 1, at the latest. But in a phone call Tuesday with the nation’s state Medicaid directors, Marilyn Tavenner, director of the Centers for Medicare and Medicaid Services, the agency overseeing the exchange, said that this part was still not working and she did not predict when it would be ready, said Matt Salo, executive director of the National Association of Medicaid Directors...Officials at the Health and Human Services Department, which oversees CMS, confirmed that the enrollment portion of the Spanish-language version of the online exchange was not working." Juliet Eilperin and Amy Goldstein in The Washington Post.

Senior HHS official to brief Democratic lawmakers Wednesday on Obamacare. "Mike Hash, who directs the Office of Health reform at the Department of Health and Human Services, will brief House Democrats Wednesday about implementation of the Affordable Care Act. The closed-door session, which will start at 8:50 a.m., marks the first time the administration will have briefed members of Congress on the online enrollment system since its troubled rollout on Oct. 1." Juliet Eilperin in The Washington Post.

Explainer: These two paragraphs say everything about HealthCare.Gov’s problemsSarah Kliff in The Washington Post.

White House enlists Jeffrey Zients to help fix HealthCare.gov. "Carney said Zients, who is slated to take over the helm of the White House National Economic Council, would take on a "short term assignment: at the Department of Health and Human Services...Zients, who served as acting director of the Office of Management and Budget, is known for his focus on making government function more efficiently. He also served as the administration's chief performance officer." Juliet Eilperin in The Washington Post.

White House to meet with insurance CEOs. "The White House is meeting with CEOs of health plans on Wednesday, according to two insurance industry sources. The insurance executives are meeting with Obama adviser Valerie Jarrett and chief of staff Denis McDonough, the sources told POLITICO on Tuesday evening. The White House didn’t immediately confirm the meeting." Joanne Kenen in Politico.

HHS chief: President didn't know of Obamacare website woes beforehand. "In an exclusive interview with Health and Human Services Secretary Kathleen Sebelius, CNN's Dr. Sanjay Gupta asked when the President first learned about the considerable issues with the Obamacare website. Sebelius responded that it was in "the first couple of days" after the site went live October 1." Greg Botelho in CNN.

Watch: Part one of the interview here and, for part two, hereCNN.

Jeanne Shaheen calls for open enrollment extension. "She is also asking the administration to clarify whether Americans will get fined for not getting insurance when the site is not working properly. The move makes Shaheen, of New Hampshire, the first Senate Democrat to come out for extending the open enrollment period, which is scheduled to end on March 31." Jennifer Haberkorn in Politico.

Oversight report: HealthCare.gov registration change made last minute. "The Obama administration told contractors one month before HealthCare.gov went up to make consumers register before they see prices, according to information gathered by the House oversight committee. Republicans on the committee say the information suggests that the White House made political decisions to hide prices instead of industry “best practices.”" Jennifer Haberkorn in Politico.

Primary source: HHS Sec. Kathleen Sebelius posts on HealthCare.Gov's "tech surge." HHS.Gov.

It might take a long time to get HealthCare.gov working, no matter what Obama does. "Adding more programmers to the team trying to fix the site is unlikely to speed up the process, and might even slow it down. During my internship, I spent the bulk of my time reading code and documentation to help me understand how Google's existing software systems worked. When I got stuck, which happened fairly often, I'd ask my supervisor to help me out. Sometimes it took her more time to guide me to the right answer than it would have for her to simply write the code herself. Indeed, if you add up all the time she spent training and supervising me, it's not clear my net contribution to the organization was even positive." Timothy B. Lee in The Washington Post.

Why it’s almost impossible to find out how much HealthCare.gov actually cost. "Even with slick tools like USASpending.gov and the FederalITDashboard, contracts like the one CGI Federal got to produce HealthCare.gov aren't actually awarded on a project-by-project basis. Instead, they're wrapped up within "indefinite delivery, indefinite quantity" vehicles with a bunch of different task orders that are vaguely labeled by what they're paying a company to do. Manually counting up the task orders for HealthCare.gov yields about $70 million, which is substantially less than the $93.7 million that the Government Accountability Office says had been obligated to CGI back in June" Lydia DePillis in The Washington Post.

Interview: Clay Johnson on how the lessons of HealthCare.Gov stretch far beyond Obamacare. Ezra Klein in The Washington Post.

Little sign of jobs impact from healthcare law. "Is the Affordable Care Act causing a surge in part-time employment? According to the September jobs report, no – at least not yet. The number of part-time workers for economic reasons increased ever so slightly, to 7.93 million from 7.91 million. But that’s down from 8.6 million a year ago. Indeed, there’s still little sign that the Affordable Care Act has had much of an impact on employment one way or another." Annie Lowrey in The New York Times.

Health co-ops, created to foster competition and lower insurance costs, are in danger. "One co-op, however, has closed, another is struggling and at least nine more have been projected to have financial problems, according to internal government reviews and a federal audit...Congress saddled its new creations with onerous restrictions that, experts say, doomed the co-ops to failure...[W]hile the program was meant to be nationwide, only two dozen co-ops have begun selling insurance on the new health-care exchanges." Jerry Markon in The Washington Post.

I can't watch this without getting incredibly motion sick interlude: Canyon bike ride.

3) Green energy update 

U.S. carbon emissions fell sharply in 2012. But don’t expect that to last. "U.S. carbon-dioxide emissions from energy sources dropped 3.8 percent in 2012, and hit their lowest point since 1994. Why? Cars and trucks kept getting more fuel-efficient. Electric utilities used less coal to generate power, turning to cleaner natural gas and wind instead. And a mild winter in 2012 meant that Americans needed less energy to heat their homes." Brad Plumer in The Washington Post.

Why do humans discount future lives so significantly? "American and German researchers led by Jennifer Jacquet of New York University put together a collective-risk group experiment that is centered around climate change...[T]he more delayed the payout was, the less likely the experimental groups would put enough money away to meet the goal to stop climate change. Even among those who knew they’d get the payout the next day, only seven of 10 groups invested sufficient funds, while none of the 11 groups who knew their endowment would be invested in planting trees gave enough money to “stop” climate change." Bryan Walsh in Time Magazine.

U.S. climate envoy calls inflexibility the 'enemy' of a 2015 global deal. "U.S. Special Envoy for Climate Change Todd Stern is calling for a "creative and flexible" global warming deal in 2015 that allows countries to declare their own emissions targets and attempts to bridge a 20-year-old division between rich and poor nations. Speaking in London today to the Chatham House think tank, Stern will warn that "rigidity is a potential roadblock" when it comes to a new global warming agreement. He will argue that meeting greenhouse gas targets should be motivated by “norms and expectations” instead of strict compliance, rules and penalties, according to a copy of the speech provided to ClimateWire." Lisa Friedman in ClimateWire.

Is China the last hope for carbon capture technology? "[C]arbon capture hasn't fared well in the years since. Since 2008, world governments committed at least $25 billion to fund large-scale demonstration projects, the Financial Times reports. And we have remarkably little to show for it so far." Brad Plumer in The Washington Post.

Wonkbook PSA interlude: A real-life example of what drug addiction does to your life. It gets you fired from your job.

4) Back in black

Justices return to the death penalty. "More than a decade after the Supreme Court banned the execution of the “mentally retarded” in 2002 in Atkins v. Virginia, the justices agreed on Monday to clarify how states should determine who qualifies...A Florida law enacted not long before the Atkins decision created what Mr. Hall’s lawyers called an “inflexible bright-line cutoff” requiring proof of an IQ of 70 or below. Last year,the Florida Supreme Court ruled that Mr. Hall was eligible to be executed because his IQ had been measured at various times as 71, 73 and 80." Adam Liptak in The New York Times.

Supreme Court to get reporter's privilege plea. "Lawyers for Times national security reporter James Risen filed a motion Tuesday with the U.S. Court of Appeals for the 4th Circuit, asking that the court halt the effect of its decision requiring him to testify in the expected trial of Jeffrey Sterling. Sterling, a former Central Intelligence Agency officer, has been indicted for leaking Risen information about a CIA operation to provide Iran with flawed nuclear designs as part of an effort to set back that country's alleged nuclear weapons program." Josh Gerstein in Politico.

Game concepts interlude: Typography explorer?

5) Reefer madness, political edition

First majority ever in poll found for legalizing marijuana. "For marijuana advocates, the last 12 months have been a period of unprecedented success as Washington and Colorado became the first states to legalize recreational use of marijuana. And now for the first time, a clear majority of Americans (58%) say the drug should be legalized. This is in sharp contrast to the time Gallup first asked the question in 1969, when only 12% favored legalization." Art Swift in Gallup.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Is China the last hope for carbon capture technologyBrad Plumer.

U.S. carbon emissions fell sharply in 2012. But don’t expect that to lastBrad Plumer.

Is America a good investment? Here’s what Wonkblog readers are sayingNeil Irwin.

Why it’s almost impossible to find out how much HealthCare.gov actually cost. Lydia DePillis.

The lessons of HealthCare.Gov stretch far beyond ObamacareEzra Klein.

When is the Fed going to taper QE? Probably not soonNeil Irwin.

The jobs report was totally blech. And it may get worseNeil Irwin.

Here are America’s most popular CEOs — as ranked by their employeesLydia DePillis.

Et Cetera

Europe pushes NSA-blocking rulesJames Kanter in The New York Times.

Could JPMorgan have to pay out even moreDan Fitzpatrick and Julie Steinberg in The Wall Street Journal.

Capitol dome set for repairsSeung Min Kim in Politico.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.

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Lydia DePillis · October 22, 2013