Friday, July 10, 2009

Obama Can't Be Trusted With Numbers

So why should we trust him with health care?

In February, President Barack Obama signed a $787 billion stimulus bill while making lavish promises about the results. He pledged that "a new wave of innovation, activity and construction will be unleashed all across America." He also said the stimulus would "save or create up to four million jobs." Vice President Joe Biden said the massive federal spending plan would "drop-kick" the economy out of the recession.

But the unemployment rate today is 9.5% -- nearly 20% higher than the Obama White House said it would be with the stimulus in place. Keith Hennessey, who worked at the Bush White House on economic policy, has noted that unemployment is now higher than the administration said it would be if nothing was done to revive the economy. There are 2.6 million fewer Americans working than Mr. Obama promised.

The economy takes unexpected turns on every president. But what is striking about this president is how quickly he turns away from his promises. He rushed the stimulus through Congress saying we couldn't afford to wait. Now his administration is waiting to spend the money. Of the $279 billion allocated to federal agencies, only $56 billion has been paid out.

Mr. Biden has admitted that the administration "misread" the economy. But he explained that away on ABC's "This Week with George Stephanopoulos" on Sunday by saying the administration had used "the consensus figures and most of the blue chip indexes out there" to draw up its stimulus plan. That's not true.

The Blue Chip consensus is an average of some four dozen economic forecasts. In January, the consensus estimated that GDP for 2009 would shrink by 1.6% and that unemployment would top out at 8.3%. Team Obama assumed both higher GDP growth (it counted on a contraction of 1.2%) and lower peak unemployment (8.1%) than the consensus.

Instead of relying on the Blue Chip consensus, Mr. Obama outsourced writing the stimulus to House appropriators who stuffed it with every bad spending idea they weren't previously able to push through Congress. Little of it aimed to quickly revive the economy. More stimulus money will be spent in fiscal years 2011 through 2019 than will be spent this fiscal year, which ends in September.

On Sunday, Mr. Biden, backpedaling from his drop-kick comments, said that "no one anticipated, no one expected that the recovery package would in fact be in a position at this point of having to distribute the bulk of the money."

This fits a pattern. The administration consistently pledges unrealistic results that it later distances itself from. It has gotten away with it because the media haven't asked many pointed questions. That may not last as the debate shifts to health care.

The Obama administration wants a government takeover of health care. To get it, it is promising to wring massive savings out of the health-care industry. And it has already started to make cost-savings promises.

For example, the administration strong-armed health-care providers into promising $2 trillion in health savings. It got pharmaceutical companies to promise to lower drug prices for seniors by $80 billion over 10 years. The administration also trotted out hospital executives to say that they would voluntarily save the government $150 billion over 10 years.

None of this comes near to being true. On the promised $2 trillion, everyone admits that the number isn't built on anything specific -- it's an aspirational goal. On drug prices, a White House spokesman admitted that "These savings have not been identified at the moment." It is speculative that these cuts will actually be made, when they would begin, or whether they would reduce government health-care spending.

None of this will stop the administration from arguing that its "savings" will pay for Mr. Obama's $1.5 trillion health-care plans. By the time the real price tag emerges, it will be too late to do much more than raise taxes and curtail spending on urgent priorities, such as the military.

The stimulus package is a clear example of how Mr. Obama operates. He is attempting to employ the same tactics of bait-and-switch when it comes to health care, only on a much larger scale.

Mr. Obama has already created a river of red ink. His health-care plans will only force that river over its banks. We are at the cusp of a crucial political debate, and Mr. Obama's words on fiscal matters are untrustworthy. His promised savings are a mirage. His proposals to reshape the economy are alarming. And his unwillingness to be forthright with his numbers reveals that he knows his plans would terrify many Americans.

Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.

Karl writes a weekly op-ed for The Wall Street Journal, is a Newsweek columnist and is now writing a book to be published by Simon & Schuster. Email the author at or visit him on the web at

Or, you can send him a Tweet @karlrove.

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