Even as new reports show the unemployment rate fell 0.1 percent to 9 percent in October, economic growth, or the lack thereof, is at the forefront of the frustration with the political establishment. Jobs and the economy were the defining issues in the lead up to the 2008 election, and four years later these problems remain the focus. However, now a share of the anger is directed at the Obama administration that many believe has failed to deliver on its promises to improve opportunities for middle and lower class Americans.
Frustration over the increased profits of corporations and the wealthiest portion of Americans has fueled so called “Occupy” protests in hundreds of cities. Despite these events and the calls for a variety of governmental action, there are misunderstandings about the efficacy and influence of the consequences of government action and widespread public distrust.
“There is this misconception that we [the federal government] have much more control over the economy than we do. This idea ‘get back and work on jobs’ as if it was a car up on blocks in your front yard is not actually how it works,” said Helen Levy, a health economist who returned to Ann Arbor in August after a year working as part of President Obama’s economic team.
Levy shares the popular frustration, but doesn’t believe that a drastic change in U.S. economic policy would greatly speed the economic recovery. “The constant onslaught of bad jobs numbers is very discouraging for everyone, but there is nothing to be done but to keep trying to improve the situation in whatever ways we have some control over,” she said.
Levy worked as a staff member on the Council of Economic Advisors (CEA). Her primary focus was reviewing the policies set in motion by the Affordable Care Act, the health care reform law championed by President Obama. As the bill addressed many different facets of the health care system its implementation is spread over a period of multiple years. Levy wrote and reviewed the regulations that make the laws passed by Congress into enforceable policy. “They [regulations] get drafted by the agencies like Health and Human Services or the Treasury that actually run the programs but before they become public they come to the White House for review,” she said.
Working in Washington D.C. gave Levy a greater appreciation for the steps that occur before economic decisions get turned into policy. “I learned a lot about how things actually work. There is sort of what researchers think is happening with policy and then there is what is actually happening with policy, so I now have a much more nuanced understanding,” she said.
Even if the White House team believed an idea was sound and would assist in the recovery effort, there were other considerations to be made. “I would find myself saying things like ‘What about policy X?’ which from an economic standpoint makes perfect sense and the people who had spent time on the hill would… list either a political objection to it or say very specific things like ‘that was introduced in the following legislation,’“ said Levy.
During an economic crisis, a proposal must be deemed politically viable no matter its potential to create jobs or provide consumer assistance. Adjusting to “short-term, quick turn-around, stressful” media driven cycles that so often make or break public opinion was new for Levy. “It was not my idea of a good day when health was the thing in the news and we were having to respond to questions from the communications staff,” she said. “You can think that you are going to come into the office and work on one thing and by 9:15 it is something completely different and then by 10:00 at night it is probably blown over because stuff is driven by what’s in the paper,” said Levy.
This coverage could result in good publicity for an Obama administration move or necessitate back-pedaling and explanation to justify a decision. “It was sometimes frustrating because there were things that were sometimes news but they were things that had been going on for a long time but suddenly hit the press,” said Levy.
However, Levy did find reading the news coverage of issues on which she worked helpful. This helped her better explain health economics issues to people both at the White House and in the general public who didn’t have a technical vocabulary. “I both got frustrated with the media but I also gained a new appreciation for how hard what journalists do is, and how good the good ones are at it,” she said.
Levy came to know the Affordable Care Act, often misrepresented by the media, very well. Carrying around her copy of the more than 2000 page bill with her at work, Levy described it as pieces that “had existed and even been introduced as legislation separately before they all got folded up and binder-clipped together and called The Affordable Care Act.” The common theme was that they are all ways to improve the health care system, but that is kind of all they had in common besides the binding,” she said.
In addition to her responsibilities working on the Affordable Care Act, Levy and her peers also advised the President’s Chief Economic Advisor, Austan Goolsbee, recently succeeded by Alan Krueger, who counsels the President on all economic topics. When Goolsbee needed information or advice about a health-related economic issue, Levy would recommend a course of action or warn against possible problems.
The Council of Economic Advisors is unique in that it does not push a particular political agenda. Its members are concerned with advising the President on economic policy, regardless of whether or not that policy is presented to Congress or turned into law. “CEA is unusual in that we don’t run any programs, we don’t have turf we’re trying to protect… I think of it as the economic embassy in Washington,” said Levy.
This means that the CEA is somewhat removed from the political wrangling that influences what they do. Levy and the rest of the CEA don’t spend their time counting votes in Congress or wondering how a new policy will play with the general public.
“The CEA is probably the least political part of the White House, if not the government… but I think CEA in a Democratic administration [is] farther to the right than most people, and I am guessing that it is the case that in a Republican administration they are farther to the left because most economists tend to be—not exactly centrist—but your views are about good economic policy or not and those tend not to be political issues,” said Levy.
In fact, many issues that seem to be economic, Levy said, are actually solely political debate. One such event was the threat of government shutdown earlier this year. If a budget resolution was not passed by the deadline all government services would be put on hold until an agreement was reached. “This is one of those things that sounds kind of economic because it’s about a budget but it’s not. It is a purely political thing,” said Levy.
“It was just such political dysfunction at such close range… Everyday you would pick up the Washington Post to get an estimate of when we were going to get another email. In March we actually got so close that literally we had this meeting on a Friday about turning in your Blackberry, secure ID… You have to be prepared to do that on Monday morning if they don’t pass something by midnight,” she said. The Republican House of Representatives and the Democrats, led by President Obama, did reach a deal with minutes to spare and a shutdown was avoided.
However, this debate led to the downgrading of U.S.’s credit rating by Standard and Poor’s in early August. Even though a deal was eventually made, the chaos that preceded the agreement caused lasting damage and sparked further argument. “Given the current state of discussions over the issue of deficit reduction it is obviously not something that was resolved. The difficulties they are having are political. They are fundamentally not questions about economics… the dispute they are having now is basically a political one,” she said.
It was political crises that took Levy out of her day-to-day work reviewing the regulations of the Affordable Care Act.
At the beginning of her time in Washington, Levy worked with other members of the government that specialized in healthcare, but when Congressman Paul Ryan announced his budget proposal in lat March of 2011, her involvement shifted to include a wider range of economists and political advisors.
“Suddenly the link between health and deficit reduction, since the Ryan plan basically took a big scope and aimed it at healthcare… At that point I spent much more time than I had with the guy who had been doing budget, taxation, kind of deficit reduction issues,” said Levy.
She and her colleagues were in charge of evaluating and reporting on the possible results and consequences of the proposed plan. Levy read the bill and compiled facts for Goolsbee to inform the President.
Levy was also involved when Goolsbee testified on the Affordable Care Act before the House Ways and Means Committee. Levy briefed Goolsbee for the task and sat behind him while he spoke. “It was so terribly acrimonious and not about content,” she said. “Neither party has a monopoly on good or bad behavior on that one… Five different Republicans asked the same question of him about this one provision of the health reform law that everybody knew, sort of agreed, was not what anybody liked… But the Republicans still kept asking about it because they just wanted to be on the record making the point…”
Coming to Washington as an outsider Levy had to adjust to the fast-paced, politically charged, environment. She isn’t yet sure if what she did while she was there will make a significant impact. “I was one of maybe 50 people, probably more than 50, making changes to this monumental document that is going to change the lives of millions of people. In an organization that is so complex it takes a while to see if the stuff you do has an effect,” she said.
As for the Affordable Care Act, the full effect of this historic piece of legislation has yet to be seen. “I don’t think we know yet whether the things in the Affordable Care Act that are intended to reduce the growth of Medicare spending in particular [will work]. We don’t know how well they are going to work,” she said. “I think about the cost control elements of the Affordable Care Act as a chance to do this right and save money by doing it right. Let’s see if that can work before we just make cuts without regard for what is better care or what is more valuable care… I’m optimistic that it will work because I think it would be better for everyone if they did.”
