On the Sunday shows this week, the White House sent out their wonky economic front-line team to explain the administration's thinking on the state of the economy. Having been burned before -- having detected green shoots that turned out to be mirages -- the operative phrases of the day included plenty of caveats and parentheticals and qualifiers. Didn't stop National Economic Council chair Larry Summers from predicting that (yes, yes, in the minds of most economists), the unemployment rate would begin to decline by the spring. Embedded in this pseudo-prediction is actually a range of guesses. Some in the administration think that the UI rate trend will begin to reverse itself as early as March; if they've gotten a handle on the actual state of the economy, it will almost certainly have begun to trend in the right direction by May. Hence "the spring."
Summers, on This Week Soon To Be Without George Stephanopoulos: "They will bounce from month to month, but I believe that, as do most professional forecasters, that by spring, employment growth will start to be turning positive." Summers would not be pinned on the cost of the president's jobs initiatives, aside from noting that the infrastructure improvements would cost around $50 billion. Summers insisted that it doesn't cost a penny to pressure banks to renegotiate mortgages or to increase lending.
On health care, a bit of a qualification from the administration. Reducing costs... what does that mean? Obviously, if you're gonna expand health insurance coverage to more people, absolute costs are going to rise in the long-term. The administration wants costs in the future to be lower -- and to grow at a slower rate -- than they would if (a) the quality of care remained the same for the given population and (b) the system itself did not change. This puts the White House in a position of having to define health care cost savings in terms of its overall effect on the deficit, not in terms of its absolute effect on health care costs. (The idea is to get better health care for more people while slowing the growth rate of costs.) Said Summers "The criterion for passing a bill is what happens to the budget. That's our budget process. I am telling you that we are very confident that the bill will reduce health care costs in whatever form ultimately emerges from Congress."
On a deficit reduction commission and reports of a disagreement in the administration about what it ought to consist of, said Summers on State of the Nation: "We're prepared -- we're prepared to work with others, but we live in a country with an executive branch and with a legislative branch, with two parts of the legislative branch, the House and the Senate, and any approach to be viable has to be an approach that works for both of them, statutory commission, executive commission, direct action through the appropriations process."
Eric Cantor, the minority whip, takes a different approach to risk. Where Summers asserted that irresponsible risk-taking was responsible for the collapse of the economy, and that industry ought to shut its yap and not complain about presidential pressure to increasing lending to small businesses and bonus, Cantor gave the GOP view that Wall Street was being pressured too cautious. When POTUS addresses big bank CEOs tomorrow, says Cantor "I hope that the discussion center on what seems to be a real overreaction, if you will, on the part of some auditors in the regulatory arena that are looking at risk taking as something that just shouldn't be done at all." More Cantor: " Right now, investors, small business people are standing on the sidelines. They are not expanding. They are not hiring, there's a reason for that. They can't seem to understand where Washington goes next."
On Face the Nation, Sen. Joe Lieberman (I-CT) predicted that health care reform could be passed by Xmas if the Medicare buy-in were removed: " "We've got to stop adding to the bill. We've got to start subtracting some controversial things. I think the only way to get this done before Christmas is to bring in some Republicans who are open-minded on this, like Olympia Snowe... You've got to take out the Medicare buy-in. You've got to forget about the public option. You probably have to take out the Class Act, which was a whole new entitlement program that will, in future years, put us further into deficit. And you've got to adopt some of the cost containment provisions that will strengthen cost containment, that all of us favor. If you did that, you'd have an enormous accomplishment.""
NE Sen. Ben Nelson's comments suggest that he's more skeptical of the Medicare buy-in than he was, calling it a "first step" toward single payer health care reform.
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