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On Saturday, Jeff Zients, the Obama administration official tasked with rescuing Obamacare, gave his team a telling compliment. The group, he said, was working with “private-sector velocity and effectiveness.”
It wasn't exactly a ringing endorsement of the public-sector's ability to get things done.
HealthCare.gov is recovering from its disastrous launch. But liberals are increasingly worried that public faith in government will not.
"There's a reputational loss that has already taken place about the capacity of government to cope with complexity and deliver services," says Ted Marmor, a leading expert on Medicare. "Whether Obama can recover from that is one thing. But even more, can the discussion about government recover from this sad example?"
Over at Slate, Matt Yglesias is thinking along similar lines. "The public has long been skeptical of the political system’s practical ability to do the things progressives say they want to do," he writes. "A health care website that comes in months late, over budget, and still lacking full functionality confirms all those fears when it was initially meant to debunk them. And that’s true whether or not it in some sense 'works.'"
Taking the longer view, however, the situation is both better and worse for those who want to see government work than these concerns suggest.
Consider the track record of the federal government upon Barack Obama's inauguration. There was the disastrous implementation of the Iraq War. The disastrous launch of Medicare Part D. The disastrous regulatory failures that abetted the financial crisis. The disastrous response to Hurricane Katrina. The disastrous intelligence that led the U.S. government to believe Saddam Hussein was stockpiling weapons. The disastrous security failures that permitted 9/11.
In that context, it's a wonder Americans ever permitted the government to do anything ever again. But they did. And that's because voters don't entrust tasks to "the government." They entrust them to particular administrations, and, righty or wrongly, they tend to extend their faith in the president to the entire federal government.
Obamacare's failures aren't likely to undermine confidence in Chris Christie or Hillary Clinton's ability to manage the machinery of the federal government. They might perversely, enhance it, as a country that's purposefully looking for more effective management is likely to be more desperate to believe they've found it.
But the fact that the public will trust the government to do big things again doesn't mean they should.
The deeper problem progressives (and conservatives!) need to grapple with is that the government's track record really is terrible of late. The implementation of major initiatives, both domestic and foreign, launched under both Democrats and Republicans, has been badly botched. Few believe Congress is legislating wisely, thoughtfully, or effectively. The minority party is actively trying to sabotage laws passed by the majority. Most everyone agrees that federal procurement, particular for the information technologies that are so fundamental to 21st century services, is badly broken. The list goes on.
The Obama administration is planning to try and address some of these concerns in the coming year by launching a major effort to improve the way the federal government manages IT projects. If that succeeds, it will be a start. It is, at least, an effort to address the real problem, which isn't that people don't trust the government to do big things well, but that, at the moment, people actually shouldn't trust the government to do big things well.
Wonkbook's Number of the Day: 100,000. That's the number of people who are thought to have signed up through Healthcare.gov for Obamacare in November. That would be a four-fold increase from October.
Wonkbook's Graph of the Day: What you’ll pay for Obamacare, in one map.
Wonkbook's Top 5 Stories: (1) HealthCare.gov's fixes; (2) Obamacare back in court; (3) the U.S. government declares the unemployment emergency over; (4) Dr. Strangelove gets into to the stock market; and (5) fiscal mini-deal watch.
1. Top story: Is HealthCare.gov's turnaround fast enough?
Why HealthCare.gov's problems weren't flagged in time. "When warning signs emerged earlier this year, the agency running the HealthCare.gov website mostly kept the problems to itself—a decision that now looms large in explaining how the project went so badly astray...The agency in charge of creating the federal health-insurance website, the Centers for Medicare and Medicaid Services, originally served as its own general contractor. It had several warnings between March and July that the project was going off-track, but didn't seek deep White House involvement or change the leadership structure, according to officials, congressional aides and emails from the period." Gautham Nagesh in The Wall Street Journal.
Obamacare signups thought to be near 100,000 in November. "About 100,000 people signed up for health insurance through the online federal exchange last month, a roughly four-fold increase from October even as a team of U.S. government and contractor programmers was fixing the troubled Affordable Care Act website, said a person familiar with program’s progress...Only 26,794 people signed up for private plans in the federal marketplace in October, while 79,391 enrolled through 14 states which, along with the District of Columbia, are running their own exchanges and websites." Julianna Goldman in Bloomberg.
Cost of Obamacare seen as falling. "Over the next few years, the government is expected to spend billions of dollars less than originally projected on the law, analysts said, with both the Medicaid expansion and the subsidies for private insurance plans ending up less expensive than anticipated...[T]he Congressional Budget Office has quietly erased hundreds of billions of dollars from its projections. It now estimates that Medicare spending in 2020 will be $137 billion lower than it thought in 2010, a drop of 15 percent; Medicaid spending will be $85 billion, or 16 percent, lower; and private health insurance premiums are expected to be about 9 percent lower." Annie Lowrey in The New York Times.
Health-care enrollment on Web plagued by bugs. "The enrollment records for a significant portion of the Americans who have chosen health plans through the online federal insurance marketplace contain errors — generated by the computer system — that mean they might not get the coverage they’re expecting next month. The errors cumulatively have affected roughly one-third of the people who have signed up for health plans since Oct. 1, according to two government and health-care industry officials. The White House disputed the figure but declined to provide its own." Amy Goldstein and Juliet Eilperin in The Washington Post.
HealthCare.gov gets 375,000 visitors by noon, forcing some to wait. "The federal health insurance marketplace received 375,000 visitors by noon Monday, HealthCare.gov tweeted, triggering a new system informing some users they can either try again later or receive an e-mail when the system is easier to navigate...Carney added that the "improved queuing system" gives consumers a chance to "return to the site and enroll more effectively and efficiently, and that way [makes] the whole operation more effective and smooth."" Juliet Eilperin in The Washington Post.
Can HealthCare.gov actually handle 50,000 users at a time? "Around 10 a.m. Monday morning, the Obama administration began using queuing software to meter entry into the HealthCare.gov Web site. At the time, the site had fewer than 40,000 users, somewhere in the "mid-30,000" range, as Medicare spokeswoman Julie Bataille put it...With twice as much traffic as the site sees on a typical Monday, error rates and page wait times were higher than normal. By noon, the average page was taking two seconds to load. Web pages also had an error rate of 0.9 percent." Sarah Kliff in The Washington Post.
HealthCare.gov finally works — for some people. "Interviews with shoppers over the past two days show a system working better than it has in recent weeks, although one where some consumers still face difficult obstacles. These types of interviews, while not a perfect measure of success, are arguably one of the better ways to gauge what type of experience shoppers are having online right now." Sarah Kliff in The Washington Post.
HealthCare.gov allows expanded window shopping. "ObamaCare's federal enrollment website debuted an expanded window shopping feature Monday as officials sought to cope with heavy traffic and ongoing errors within the system. Visitors to HealthCare.gov can now access a variety of details about potential health plans that were previously not available to users who had not created an account...Users can now access information about provider networks and out-of-pocket costs under the tool's latest version, giving them a fuller sense of the coverage offered by each health policy. " Elise Viebeck in The Hill.
The site will get a permanent CEO. "President Obama will name a new individual to oversee the ObamaCare website after the departure of Jeffrey Zients at the end of the year, the White House said Monday...Carney was mum on details of what the position would look like in the new year, however, merely saying it was Obama's "intention" to keep someone in the job." Emily Goodin in The Hill.
House Dems to get briefed on HealthCare.gov. "David Simas, a White House deputy senior adviser, and Mike Hash, the head of the Office of Health Reform at the Department of Health and Human Services, are scheduled to be on hand, according to a House Democratic aide." Seung Min Kim in Politico.
@ByronYork: How long until a Republican proposes keeping expanded Medicaid in return for dumping rest of Obamacare--and some Democrats listen seriously?
Obamacare media updates are starting to get tense. "Medicare thinks it has fixed the biggest 834 bug. Medicare spokeswoman Julie Bataille spent most of this call focused on 834 transmissions -- partly because of new information, and partly because reporters kept asking about it (a bit more on that later). The 834 transmissions are the files that HealthCare.gov fires off to insurance companies when someone signs up for their plans. The companies say that some of these files have come in with inaccurate information. Bataille announced Monday that about 80 percent of those errors stemmed from "one bug that prevented a Social Security number from being included. That caused the system not to generate an 834."" Sarah Kliff in The Washington Post.
@MikeGrunwald: Really looking forward to years of dueling cherry-picked anecdotes about whether Obamacare is working.
Insurers are offered assistance for losses. "The administration floated several proposals on Monday to “help offset the loss in premium revenue and profit” that it said might occur if insurers went along with President Obama’s request to reinstate canceled policies...To reduce this risk, the administration said it could provide financial assistance to certain insurers through a program under which the government will share in their losses and profits for the next three years...The administration said it could not immediately determine the cost of the assistance for insurers because it did not know how many people would stay in existing plans or how many would decide to enroll in new policies that provide additional benefits and consumer protections, as required by the 2010 health law." Robert Pear in The New York Times.
Catholic hospitals are growing. What will that mean for reproductive health? "Three years later, Means’s treatment at Mercy, part of a Catholic health system, has become the centerpiece of an American Civil Liberties Union lawsuit against the United States Conference of Catholic Bishops. The suit, filed in late November, argues that the Catholic Bishops' religious directives for hospitals--which generally bar discussion or performance of abortions--result in negligent care for patients such as Means...The lawsuit comes in the midst of a wave of high-profile mergers between Catholic hospitals and secular systems. The partnerships have raised questions about how care will be delivered at institutions guided by religious directives, particularly in rural areas like Muskegon where patients have little choice of where to be seen." Sarah Kliff in The Washington Post.
SEBELIUS: The progress we've made. "For those who prefer to shop online, you may want to visit HealthCare.gov in off-peak hours when there is less traffic — mornings, evenings, or on weekends. Have your information ready when you log on, and comparison shop to get the best deal. And remember, you have until Dec. 23 to sign up for coverage that will start Jan. 1, and until March 31 to get coverage in 2014." Kathleen Sebelius in USA Today.
YGLESIAS: HealthCare.gov has already failed. "With the relaunch this weekend, it looks like the administration has succeeded in doing a lot to address the concerns of universal health care’s enemies, but very little to sooth the concerns of its friends. Essentially they’re delivering a product that’s just usable enough to prevent the underlying program from failing, without doing anything to alter the public’s general perception of government." Matthew Yglesias in Slate.
AARON AND POLLACK: The uselessness of the single-payer-supporting, I-told-you-so-shouting left. "There was and is no alternative to the messy incremental politics that produced Obamacare. Liberals such as then–House Majority Speaker Nancy Pelosi didn’t make unpalatable compromises because they held pallid aspirations for health reform. They compromised because they knew that they could not impose their will on querulous colleagues, because they needed 60 Senate votes, because millions of Americans needed help, and because it is better to win messily than to lose gloriously." Henry J. Aaron and Harold Pollack in The New Republic.
O'BRIEN: The smart way to worry about Obamacare. "Now the concern is whether people will actually get the plans they sign up for. At least that's the insurance companies' concern. The administration has fixed most of Healthcare.gov's front-end problems, so people can pick a plan. But it hasn't fixed all of the back-end problems, so insurers can know who has picked what plan. That customer data isn't always getting through." Matthew O'Brien in The Atlantic.
BENEN: Celebrating the wrong sector. "For one thing, there’s no reason to reinforce the conservative frame about the inferiority of the public sector. It’s wrong and it skews public attitudes in an unproductive direction. For another, looking back over the last five years, some of the Obama administration’s most impressive displays of competence – managing Recovery Act investments, overseeing the rescue of the American automotive industry, responding effectively to natural disasters and terrorist threats, etc. – came without much of a role for private-sector “effectiveness.”" Steve Benen in MSBNC.
YORK: Did Obamacare's tech problems doom immigration reform? "Since the administration has badly mismanaged the creation of a giant new government program, one based in no small part on technology, then why should lawmakers rush to approve another giant new government program, one based in no small part on technology? That is the question Obamacare has created." Byron York in The Washington Examiner.
CHAIT: Obamacare is still alive. "So what are we fighting about? How smoothly the law operates, and how many customers it manages to enroll by the end of Obama’s term, are open questions. Likewise up for debate is whether Obama’s approval ratings will recover. But these are not fundamentally questions about the life or death of Obamacare. They’re about how much political pain Democrats in Congress must endure. We’re not fighting over health-care policy. We’re fighting about the midterm elections." Jonathan Chait in New York Magazine.
MCARDLE: Obamacare's new goal is to stay alive until 2015. "The administration has given up on success, as it might once have defined it. The object is no longer 7 million people signed up through the exchanges, with 2.7 million of them young and healthy, and the health-care cost curve bending back toward the earth. It is to keep the program alive until 2015. The administration's priorities are, first, to keep Democrats from undoing the individual mandate or otherwise crippling the law; second, to keep insurers from raising premiums or exiting the marketplace; third, to tamp down loose talk about the failures on the exchanges; and, only fourth, to get to the place where it used to think it would be this year, with lots of people signed up for affordable insurance. It is now measuring the program’s success not by whether it meets its goals, but by whether it survives at all." Megan McArdle in Bloomberg.
BEUTLER: The repeal movement is dead. "[T]he repeal campaign is burning itself out anyhow. And if Healthcare.gov holds up today and through the end of the year, it’ll be dead. You wouldn’t notice that, if your main point of contact with the right is on Twitter or mass emails from fringe conservative pressure groups. But among elected Republicans, and particularly GOP leaders, “repeal” has become a purely rhetorical posture. Since the end of the government shutdown fight, House Republicans have taken zero repeal, defund, or delay votes." Brian Beutler in Salon.
Music recommendations interlude: Rodrigo y Gabriela, "Tamacún."
COWAN AND KESSLER: Economic populism is a dead-end for Democrats. "On the same day that Bill de Blasio won in New York City, a referendum to raise taxes on high-income Coloradans to fund public education and universal pre-K failed in a landslide. This is the type of state that Democrats captured in 2008 to realign the national electoral map, and they did so through offering a vision of pragmatic progressive government, not fantasy-based blue-state populism. Before Democrats follow Sen. Warren and Mayor-elect de Blasio over the populist cliff, they should consider Colorado as the true 2013 Election Day harbinger of American liberalism." Jon Cowan and Jim Kessler in The Wall Street Journal.
KISSINGER AND SHULTZ: What a final Iran deal must do. "A modest benefit of the Geneva agreement is that it achieves, albeit temporarily, a small lengthening of the "breakout" time Iran would need to construct a nuclear weapon by several weeks, as described by administration spokesmen. American diplomacy in the next phase will need to grapple with the challenge that this gain has come at the price of a subtle but fundamental change in the conceptual basis of the nuclear standoff. Until now, the U.N. resolutions and IAEA directives have demanded an immediate halt to all activities related to uranium enrichment and plutonium production, and unconditional compliance with an IAEA inspections regime as a matter of right. Under the interim agreement, Iranian conduct that was previously condemned as illegal and illegitimate has effectively been recognized as a baseline." Henry A. Kissinger and George P. Shultz in The Wall Street Journal.
BROOKS: The stem and the flower. "In an act of amazing public service, I have not written a column in three months. In the course of that time, I’ve stepped back from politics, a bit, and thought about other things. That naturally raises the question: How much emotional and psychic space should politics take up in a normal healthy brain?" David Brooks in The New York Times.
FOURNIER: Fire your team, Obama. "History also suggests that there are two types of White House shake-ups. The first is mostly cosmetic and is aimed at sending a signal that the president is serious. He fires somebody, anybody, as a sacrificial lamb. The second is deep cleansing--that rare occasion when a president rebuilds his team to change himself." Ron Fournier in NationalJournal.
PAREENE: Why mass transit is doomed in America. "There are certain richer Manhattanites, accustomed to walking, for whom anti-car policies improve their quality of life, but for most of the political class, everyone they know and interact with owns a car. Finding a steady and sufficient revenue source for the local transit system, one that can’t be raided for other purposes and that doesn’t rely too heavily on burdening its users with hefty fare increases, should be an urgent priority for local politicians, but most of them simply don’t care." Alex Pareene in Salon.
SEIB: Why the business lobby wants to get back into Republican politics. "They were stunned to discover, though, that their pleas fell upon deaf ears among several dozen tea-party warriors in the House who steamed toward a shutdown anyway, and were in some cases openly disdainful of the business community's arguments. That experience hasn't changed the business community's traditional preference for Republicans over Democrats. But it has made business leaders care a lot more about which kind of Republicans they are investing in." Gerald F. Seib in The Wall Street Journal.
PONNURU: Max Baucus's self-defeating tax plan. "To pay for the reduction in the tax rate, the Baucus plan slows the rate at which companies can write off the cost of investment. This trade-off may have been made merely to get the numbers to work, but its effect is to favor past investments over future ones...This feature of the plan vitiates much of the purpose of the reduction in the corporate tax rate. Today’s high corporate rate harms the economy by inhibiting investment. To reduce the rate in a way that raises taxes on new investment is self-defeating." Ramesh Ponnuru in Bloomberg.
Contribute to our reporting interlude: Shopping for Obamacare? Tell us about it!
2. ...And is Obamacare going back to court?
A new wave of challenges to the health law. "More than a year after the Supreme Court upheld the central provision of President Obama’s health care overhaul, a fresh wave of legal challenges to the law is playing out in courtrooms as conservative critics — joined by their Republican allies on Capitol Hill — make the case that Mr. Obama has overstepped his authority in applying it." Sheryl Gay Stolberg in The New York Times.
Supreme Court rejects Liberty University employer mandate challenge to health law. "The Supreme Court on Monday declined to wade into the constitutionality of Obamacare’s employer mandate. The high court rejected a petition from Liberty University, which challenged the law’s employer coverage requirements, individual mandate and contraception coverage requirements. A lower court upheld the law in Liberty’s case." Jennifer Haberkorn in Politico.
Just great interlude: Ask a North Korean.
3. Is the unemployment emergency really over?
Unemployment benefits will soon expire for 1.3 million workers. Where will they go? "So, what will happen to all those workers? There's a real possibility they will just drop out of the labor force entirely. That's the conclusion of a new research note from JP Morgan chief economist Michael Feroli, who argues that many of those 1.3 million workers may simply give up looking for jobs once their benefits lapse. That, in turn, could reduce the "official" U.S. unemployment rate by between 0.25 and 0.5 percentage points. But it won't mean the economy is getting any better." Brad Plumer in The Washington Post.
OPEC scrambling to keep oil prices stable (and high) as it meets Wednesday. "OPEC, a 12-member group, has ridden a roller coaster of prices and internal battles since it was founded in 1960. But the Wednesday meeting comes against a backdrop of profound changes in the business and political climate. A decade of rising oil prices has stimulated a wave of capital spending from the Caspian Sea’s huge Kashagan field to Canada’s oil sands, from North Dakota’s shale basin to Brazil’s ultra-deep offshore waters. Those investments are starting to produce more crude. As a result, most analysts are reducing their price estimates for 2014 by about $10 a barrel. Morse said balancing the oil market and keeping prices over $100 could be harder than before." Steven Mufson in The Washington Post.
Global industrial production shows strength. "In the United States, figures released on Monday showed factories operating at the most robust pace since the spring of 2011, and well above the level economists had expected for the month. Separate surveys out Monday in Europe and China also offered encouraging signs in a sector often considered a bellwether for the global economy. Experts attributed the rebound in the United States to demand from a recovering construction sector, as well as rising exports." Nelson D. Schwartz in The New York Times.
Economists are a different breed of person. "The paper, by the Columbia University economist Guillermo Calvo and two co-authors, found “that large inflationary spikes appear to help unemployment to get back to pre-crisis levels” in emerging market economies. They note, however, that real wages generally fell sharply during these episodes. So: More jobs at lower wages. Professor Calvo and his co-authors contrast this pattern with the post-crisis experience of developed countries, which have avoided inflationary spikes or wage cuts and, as a consequence, have struggled to cut unemployment. The findings suggest that countries face a rather bleak choice between fewer jobs and lower wages" Binyamin Appelbaum in The New York Times.
Economists propose tax break to ease the burden for struggling two-worker families. "This, two University of Maryland economists argue in a forthcoming paper, is the difficult math for the low-wage working families barely getting by in the weak economic recovery: Their wages have fallen over the past decade; their anxiety about paying the bills has risen; and if they respond by sending a second spouse into the workforce, the returns are low...Kearney directs the Hamilton Project at the Brookings Institution. In a new paper for Hamilton, she and Lesley Turner propose changing the tax code to eliminate what they call a “secondary-earner penalty” on low-income families." Jim Tankersley in The Washington Post.
The U.S. economy does better under Democratic presidents — is it just luck? "[S]ince 1947, the U.S. economy has grown at an average real rate of 4.35 percent under Democratic presidents and just 2.54 percent under Republicans...[P]erhaps Democrats simply have better economic luck. That third theory is one favored by economists Alan Blinder and Mark Watson in their new working paper, “Presidents and the Economy: A Forensic Investigation”. They argue that random economic fluctuations best explain the differences in growth between 1947 and 2013, and not which party happens to hold the White House." Brad Plumer in The Washington Post.
The connection between robots and property values. "As technology helps with moving goods and people more cheaply, it might seem that urban real estate would give up some of its price premium because distance becomes less of an obstacle to economic transactions. Wouldn’t a driverless car cause some workers to sell their Manhattan apartments and commute to their jobs from more spacious homes in the suburbs or even rural New York State?" Casey B. Mulligan in The New York Times.
Books interlude: Slate's new recommendations.
4. How I learned to stop worrying and love the bubble?
These 17 countries may have housing bubbles. If they pop, God help us all. "Roubini doesn't see bubbles in the places where they were most severe in the pre-2008 period. He doesn't mention the United States or Spain or Ireland. Rather, Roubini sees housing prices getting out of whack in quite a few small and mid-sized nations that are well-governed and managed to avoid the worst economic effects of the financial crisis: Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand and the London metropolitan area in the U.K. He adds some key emerging markets that show the same dynamic: Hong Kong, Singapore, China and Israel, and major urban centers in Turkey, Indonesia, India and Brazil. In this view of the world, a better question might be where in the world is there NOT a housing bubble." Neil Irwin in The Washington Post.
Debate: Is Wall Street too giddy? The New York Times.
CFPB gaining wider clout over student-loan servicers. "Starting March 1, the government watchdog will regulate the seven largest student-loan servicers that process payments for more that 49 million borrower accounts — representing a majority of the market. Sallie Mae, Nelnet, Great Lakes and Ed Financial are some of the firms that will come under the new supervision rule. Examiners at the bureau will begin assessing whether these nonbank student-loan servicers are complying with federal consumer financial law, including providing borrowers with accurate information and disclosures. They also will investigate whether servicers are applying payments as promised and not charging borrowers unnecessary fees." Danielle Douglas in The Washington Post.
Fed clears Goldman and JPM capital plans. "In a surprise move in March, Goldman and JPMorgan were singled out by the Fed for “weaknesses” in their procedures for planning payouts to shareholders. Their ability to continue buybacks and dividends was made conditional on better processes. The capital plans are part of a system of “stress tests” introduced by the Fed after the financial crisis to judge whether banks can withstand a shock and still distribute capital." Gina Chon and Tom Braithwaite in The Financial Times.
Portraiture interlude: The truest-to-life finger painting you've ever seen of Morgan Freeman.
5. Fiscal mini-deal watch
Paul Ryan, Patty Murray closer to budget deal. "House and Senate negotiators are pushing to finalize a small-scale deal to set spending levels and replace sequester cuts for the next two years, a potential respite in the bitter budget wars consuming Congress. The two congressional budget leaders — Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) — are considering a plan that would give relief to some of the domestic and defense programs most burdened by the sequester through 2015 by replacing those cuts with budgetary savings in other areas, according to sources familiar with the negotiations. New revenue through fee increases — not tax hikes — is likely." Manu Raju and Jake Sherman in Politico.
What they're talking about. "An aim is to return "regular order" to the congressional budget process whereby lawmakers approve spending bills and avoid future shutdowns. While there is no agreement yet, two senior Democratic aides told CNN that staff is paving the way for one by determining how it would move through the Capitol." Lisa Desjardins and Deirdre Walsh in CNN.
Reading material interlude: The best sentences Wonkblog read today.
Being a viral genius is going viral. Ezra Klein.
Uber’s path to world domination. Lydia DePillis.
Amazon’s drones and the rise of ostentatious R&D. Lydia DePillis.
Obamacare media updates are starting to get tense. Sarah Kliff.
HealthCare.gov finally works — for some people. Sarah Kliff.
New FCC chairman vows to promote competition. Cecilia Kang in The Washington Post.
Wonkbook is produced with help from Michelle Williams.