GWEN IFILL: Uncertainty rules the day on the economy, on the politics of health care and on what to expect as elections approach, tonight on “Washington Week.”
How to measure this economy? Unemployment numbers are down, so today the stock market shot up; more jobs but not enough of them. Plus, a new report shows the health care law could actually shrink the workforce.
SENATOR JOHN BARRASSO (R-WY): (From tape.) The CBO report today – devastating. Two million fewer jobs as a result of the Obama health care law.
REPRESENTATIVE CHRIS VAN HOLLEN (D-MD): (From tape.) This is an example of when one misinterpretation gets out of the box early and goes around the world, it takes the truth an awful long time to catch up.
MS. IFILL: And it won’t be the last time politics gets in the way of reality. From health care to immigration to debt ceiling debates, it’s mid-term election time.
REPRESENTATIVE NANCY PELOSI (D-CA): (From tape.) The campaign is a time when you talk about contrast.
REPRESENTATIVE JOHN BOEHNER (R-OH) [Speaker of the House]: (From tape.) Listen, there’s widespread doubt about whether this administration can be trusted to enforce our laws.
MS. IFILL: How are the red and the blue sides of the argument shaping up? Covering the week: Jim Tankersley of the Washington Post, Janet Hook of the Wall Street Journal, Beth Reinhard of National Journal, and Doyle McManus of the Los Angeles Times.
ANNOUNCER: Award-winning reporting and analysis, covering history as it happens, live from our nation’s capital this is “Washington Week with Gwen Ifill.”
ANNOUNCER: Once again, live from Washington, moderator Gwen Ifill.
MS. IFILL: Good evening. To get a sense of what’s happening with the U.S. economy, it helps to be able to follow the bouncing ball, from jobs numbers to a correcting stock market to a brand new Fed chair with ripples being felt around the world. The answers to the questions all this uncertainty raises will affect our pocketbooks, our leaders and our national debates. This was the president today.
PRESIDENT BARACK OBAMA: (From tape.) Even though our economy has been growing for four years now, even though we’ve been adding jobs for four years now, what’s still true – something that was true before the financial crisis, it’s still true today – is that those at the very top of the economic pyramid are doing better than ever but the average Americans’ wages, salaries, incomes haven’t risen in a very long time.
MS. IFILL: So, Jim, let’s get to the bottom of that, beginning with today’s January jobs’ report.
JIM TANKERSLEY: Right. Well, it was an interesting report in that there were some news in it kind of for everybody. On the good side, the unemployment rate fell down to 6.6 percent, which we like; and we gained jobs, 113,000 but that was fewer jobs than we had hoped to get and than forecasters had said that we were going to get. And we still, as the president said, don’t have any real wage growth. Inflation was about the same last year as salary increases, same last month. We’re just stuck in this economy where workers aren’t getting ahead.
MS. IFILL: If you’re the Congress and the president and you’re looking at reports like this, what kind of flashing light do we see here?
MR. TANKERSLEY: I think it’s a yellow. It says caution; we need some more help, probably. I mean, it would be really great if the economy had reached this point where it was growing faster – and we’ve seen some better growth numbers in the last couple of quarters – and where Congress could say, OK, we can step out of the way and think about other things. I just don’t think we’re there yet. The numbers here, still 113,000 jobs a month just isn’t enough to put the 10 million people still in this economy who want to work and can’t find a job back to work.
DOYLE MCMANUS: Jim, one of the things we’ve had to learn in the last couple of months, I guess, of this semi-recovery is that sometimes when the unemployment rate comes down, it’s not always for a good reason. It’s because people are leaving the labor force. Is that what we were seeing here?
MR. TANKERSLEY: Actually, the good news is it’s not. So to get a little technical on you, the unemployment rate is calculated by something called the household survey. That’s a survey of people, not businesses. And this time, the household survey showed a huge increase in both people in the labor force and people getting jobs. So we’re seeing a drop for a good reason this month. We’ll have to see if that’s a sustained reason. This often is a kind of noisy survey. But hopefully we’ll see more of that to come.
JANET HOOK: So this report is kind of a welcome mat for Janet Yellen. She’s coming in as Fed chairman right now. And I’m wondering how does this affect how the economy that she’s now going to work on, does it point to any kind of change in the sort of policy she’s inherited?
MR. TANKERSLEY: That’s a great question. I think Janet Yellen has to look at this report and see probably nothing that’s going to change the direction of the Fed policy right now, which is tapering off their asset purchases, which have been stimulating the economy.
On the other hand, there are absolutely questions about the thresholds that the Fed had set. They had set sort of – when we get to 6.5 percent unemployment, we’re probably going to stop or start thinking about doing different things. We’re almost there. And the economy still doesn’t look great. So, clearly, there’s some problems bigger than just the actual unemployment rate that the Fed’s going to need to think about.
BETH REINHARD: Jim, are there actions that the president or Congress can take to address some of the deficiencies that the report pointed out?
MR. TANKERSLEY: Yeah. Well, for one, we’re still seeing a drop in government employment. So private sector employment actually increased faster than the headline number would suggest because we had a little drop in government employment. So there’s still room here for fiscal policy to get a little bit looser for the government and maybe to spend a little bit more money or to find ways to put more people back to work if you believe that that’s a positive force for the economy. They should not worry about that overheating and pushing the economy way too far ahead right now.
MS. IFILL: So let’s step back for a moment. So we are watching the economy mostly by looking at our – if you have a little money, at your stock portfolio. If you don’t have any money, you can’t get into the job market and you’re a low-wage earner, you’re looking at it in a completely different way. So if you’re these two extremes in the economy, how are you reading any of this, larger, not just the unemployment numbers?
MR. TANKERSLEY: Yeah. Well, one thing we’ve seen over the last year in consumer confidence numbers is that the people who are making more money in this economy feel pretty good about it and the people who are making less don’t. And this just doesn’t feel like a recovery for huge swaths of American workers.
The people who are out of jobs, people who are in jobs but are afraid to leave them because there’s nowhere better to go and the people who are in jobs, maybe they like their jobs but they just haven’t had a raise in a long time. I think we’re going to see more of that, I mean, until we get a lot faster job growth. You know, full employment is the sort of thing that really lifts everybody. And we’re really nowhere near that.
MS. IFILL: Is that why we keep hearing Republicans and Democrats talk so much about whatever phrase you want to choose – mobility, inequality, closing the gap –
MS. HOOK: Opportunity.
MS. IFILL: Opportunity. You’ve heard them all by now. And I wonder if that’s why everyone is talking about it because they’re focusing on the people who don’t see things changing fast enough.
MR. TANKERSLEY: It’s a bunch of different ways, which are different things; they’re all different things but they are really different ways of vocalizing the idea that, hey, things aren’t getting better for me. And by me, I mean, the majority of Americans.
And so this is something that really – we go back to the Fed or we go back to Congress, the thing you need to be thinking about, how do we help people all across the economic spectrum and not just folks who own stocks, who have seen big gains, you know, over the last several years?
MS. IFILL: Exactly. That’s who everybody is now trying to speak to, especially in an election year. Let’s move on. It’s hard to remember a time when a normally dry and dusty report from the venerable Congressional Budget Office created such a stir, even in Washington, where we like venerable, dusty reports.
But this week’s cost and benefit assessment of the Affordable Care Act unleashed the political dogs. Most of the uproar was over interpretation. The report declared that there will be two million fewer full-time workers by 2017 and that the health care law is the reason why. But how you read those numbers had a lot to do with how you feel about “Obamacare.”
SENATOR MITCH MCCONNELL (R-KY) [Senate Minority Leader]: (From tape.) They estimate up to two million fewer jobs will be created as a result of “Obamacare.” And the tragedy of it all, in addition to the loss of jobs, is you’ve got once again an estimate from CBO that when all is said and done, if it all kicks in, you’ve still got 30 million uninsured.
SENATOR HARRY REID (D-NV) [Senate Majority Leader]: (From tape.) With “Obamacare,” no matter what it is, their goal is to repeal it. We have the CBO report, which rightfully says that people shouldn’t have job lock. If they – we live in a country where there should be free agency.
MS. IFILL: I love that. No surprise that Mitch McConnell and Harry Reid don’t agree, but that one says it’s disaster and the other says it’s job lock, a new term for me, by the way, what is true about what the CBO report said, Janet?
MS. HOOK: Well, you got it right when you said this is a big old, dusty old report because this was in the context of the CBO’s annual outlook on the budget and the economy, a real dry-as-dust kind of report that you don’t associate with blockbuster conclusions.
But there was this eye-popping number that said that over the course of the next decade, as a result of the health care law, the size of the workforce will shrink by about 2.5 million – the equivalent of 2.5 million jobs. That’s not jobs. That’s the size of the workforce, the number of people working that number of hours. And so the Republicans grab on that, and they say, oh, that means that, you know, 2.5 million jobs are going to be lost.
Well, actually, what the report said is the reason why the workforce shrinks is because with the new availability of affordable health care, health insurance outside of the workplace, many more people will leave their job rather than stay in the job simply to hold on to their health insurance.
MS. IFILL: Many of them the low-wage workers like we were just talking about.
MS. HOOK: Right. Low-wage workers but also think about this: if you wanted to – if you were 62 and wanted to retire early, and you say, well, I can’t do it until I qualify for Medicare, people like that might choose to dial back their hours or leave their job. So that’s the phenomenon known as job lock – people who don’t want to leave their job because they need it for health insurance.
MS. IFILL: So, OK, but the Republicans saw an opportunity here because “Obamacare” is the cudgel, it’s the way – and if they can find a way to come back to it, they will. And that’s what we saw happen a little bit.
MS. REINHARD: Sure. They – as Janet said, they really seized on this. And I think the White House tried to explain what this report really meant, but, you know, like we see – have seen repeatedly on “Obamacare,” they just don’t quite know how to explain it in a way that people will get it. And so you have the White House trying to explain it and then a lot of silence from other Democrats, from those in Congress, from folks who are running for governor, just a reluctance to kind of get into that debate.
MS. HOOK: Well, and Beth is – it’s so true that this is just the latest example in the rollout of “Obamacare” where the Democrats have been and the White House has been kind of caught flatfooted by the way it’s rolled out, you know, the glitches in the website, the fact that independent individual insurance policies were being cut off, just one bad piece of news after the other. And they’ve had a very hard time stepping back and saying, OK, fine, this is – this is – these are the benefits of the program. You just don’t hear so much of that.
MS. REINHARD: Right. And I actually looked into that to see, well, is there anyone out there kind of touting the success stories? I mean, there an estimated four million people who have health insurance now that didn’t have it a few months ago.
MS. IFILL: You don’t hear those stories.
MS. REINHARD: We’re not seeing those stories. You see – you can see them online with some non-profits that are trying to, you know, get the word out, but you don’t see candidates or the parties putting money behind it on television.
MR. TANKERSLEY: Isn’t it a little earlier for health care ads or any ads like that?
MS. REINHARD: It is early but Americans for Prosperity, the sort of new big super PAC of the cycle funded by the Koch brothers, you know, jumped on the bandwagon very quickly in October. Once the law launched and we had all those website troubles, they saw an opportunity. And that group has actually spent $27 million just since October, which – you know, I don’t – that’s unprecedented.
MS. IFILL: Is this approach a political approach or a policy approach, which is to say do these ads and do these efforts, do they say, don’t vote for this guy because you can’t trust him, “Obamacare” is terrible? Do they say, this is what’s wrong, this is what’s wrong, that is what’s wrong?
MS. HOOK: Well, a lot of these outside ads that Beth is referring to are oriented towards framing how people view the law itself and then associating a candidate with it. And probably the more interesting and potentially damaging thing is that the Democratic ads that are being run that are related to “Obamacare,” as often as not, it’s – if it’s a vulnerable Democrat in a swing state, they’re like distancing themselves from the program or, as in the case of this – there’s one congresswoman in a swing state in Arizona who’s run an ad saying, you know that I blew the whistle on this awful website. Or you had a case actually just last week of where Obama got his message in his face when he had a bunch of House Democrats up to the White House, and one of them stood up, and said, you know, I think some heads should roll over this.
MS. IFILL: And that’s a Democrat.
MS. HOOK: And that’s a Democrat. So –
MS. REINHARD: Democrats are sounding a lot like Republicans these days.
MR. MCMANUS: Let me get a little wonky for a minute and go back to the CBO report. I think we all got that it’s not jobs that are being lost. It’s people deciding to leave the labor force. And some Democrats were trying to spin that as that’s a wonderful new freedom; you can retire early; you can go take care of your kids.
But there was something in there about disincentives for low-income people that might cause, if I read it right, some people to not want to work so they would qualify for Medicaid or not even look for a better job? Is there anything – is there a problem there in terms of where the incentives are?
MS. HOOK: You know, I don’t think that the CBO report got into motivation but it did point out that for low-wage workers, if you’re close to the – “Obamacare” provides subsidies for lower-income people. And if you’re about to make enough income that you no longer qualify for the subsidies, you might want to dial back your hours and your income to qualify. And, you know, that’s kind of true with all needs-based federal programs that you could say that providing aid provides you an incentive to qualify for it.
I do think that the broader picture – I mean, it’s kind of really wonky but interesting report. The health care law really changed a huge section, segment of our economy. And this is the first really good look at the many ways that it did. And the incentives for work and for how long you work are just one of them.
MR. MCMANUS: If those incentive breakpoints end up being at the wrong place, well, Congress could come back and fix it, right?
MS. HOOK: They could, but, you know, breakpoints, you can have them everywhere so I don’t know.
MS. IFILL: Well, I’m curious about that because it seems to me that there is – in a report like this, there’s actually – there was good news to be had if you wanted to take it that way. But does the administration not know that a report like that is coming out? Is that how it happens?
MS. HOOK: I don’t know. I was astonished at how prepared the Republicans were to get all over that point. I mean, it was really just right away.
MS. REINHARD: They’ve already been there. They’ve already been saying this is bad for the economy. So now, all they have to do is plug in the number, two million. So this is an argument they have been making for months.
MS. IFILL: OK. So let’s assume for a moment that we know that this is a big problem for the Democrats, that this is – there are polls that show that people don’t like this, whether they know the details, whether they’re right on the details or not. What evidence have you seen that there’s a pushback underway, that there’s – or even an effective effort to change the subject?
MS. REINHARD: There’s definitely an effort to change the subject. I mean, the Democrats that are being attacked right now on “Obamacare” are not necessarily responding with likeminded attacks. Actually, the law is doing this. They’re talking about Medicare instead; they’re talking about Social Security.
MS. IFILL: They’re not talking about preexisting conditions or keeping the kids on your insurance point.
MS. REINHARD: No. No. They’re talking about the minimum wage. These are issues where they feel like they can go on offense on the Republicans as opposed to playing defense on “Obamacare.” And I think there’s general consensus among Democrats that if this election is about – is a referendum on “Obamacare,” that doesn’t bode well for them.
MR. TANKERSLEY: Well, what’s the bigger problem for Democrats right now: “Obamacare” or just President Obama?
MS. HOOK: Well, I think in some of these swing state, the battleground states where they’re having to defend “Obamacare,” it is kind of defending Obama by proxy, that, you know, I have the sense that David Pryor, for example, the senator who’s running for reelection –
MS. IFILL: Mark Pryor.
MS. HOOK: Mark Pryor, yeah, not David Pryor. Mark Pryor is in a state that really benefits very – exceedingly from the “Obamacare” program, but Obama is so unpopular there that he probably has to keep his distance just to avoid the guilt by association.
MS. REINHARD: Well, that’s – you know, that points to something really interesting about the law. A lot of the states that need – that have the worst insurance rates, the lowest insurance rates are the states that have been most resistant to “Obamacare.”
MS. IFILL: You know, one of the things I find most interesting about this also, last week we were talking about the fallout from the State of the Union and the president using the pen and the phone. And what he seems to be focusing more on, rather than defending his signature domestic accomplishment, it’s the change of subject, is to put – they’ve got a press release out right away when CVS decided to stop sending tobacco – selling tobacco in their stores. They’re doing a lot of things or they’re moving a lot toward getting someone else to do the work they may know they can’t get passed in Congress. Am I over-reading that?
MS. REINHARD: Well, even during the campaign, the president spoke very little about “Obamacare.” The one place, interestingly enough, that you did see advertising about the health care law was on Spanish language media because, at that time – this is before the bumpy rollout – support was very high in the Hispanic community. And that may be the one place where we do see ads this cycle is on Spanish language television.
MS. IFILL: Well, they may come back to that. OK. Well, we’ll be watching to see if it ever comes back, if anybody finally ever defends it. Thank you both.
So we’ve talked about the politics of the economy and we’ve talked about the politics of health care. That brings us to the politics of politics. What will this fall’s mid-term elections really be about? We’ve set it up for you, Doyle.
MR. MCMANUS: You’ve covered it all because it’s going to be about the politics of the economy and the politics of health care and the politics of a couple of other issues, too, but it’s notable just here in this discussion we haven’t been debating high policy this week. We haven’t been debating how to fix “Obamacare.” We haven’t really been debating – you know, you take these unemployment numbers; could we boost the – no.
This is all about the next nine months and a campaign and how each of the two parties can position itself properly to look a little better. And even though all of our viewers know this already, we have to remember the context, and that is that it’s a very long shot for the Democrats to take back the House of Representatives, where they need 17 seats, and hardly anybody thinks they can get there, but it’s not a long shot for Republicans to win the net six seats they need to take the Senate.
MS. IFILL: OK. So the rubber is hitting the road. We assume – Jim’s question’s been answered: it’s not too soon. So where is it hitting the road and how?
MR. MCMANUS: Where is it hitting the road? Well, in a lot of Senate races all over the country, which are already stirring. Beth mentioned the ads that are already running in some states, including – I’ll give an example specifically, North Carolina, where that group has already spent $7 million on ads on “Obamacare.” The last time Kay Hagen ran for the Senate six years ago, fun fact, she spent about $8 million in total. A group opposing her has already spent $7 million. So the amount of money we’re talking about is huge.
Let me just stop and look at the Republicans for a minute, though, because they’re having a really interesting debate on what their position ought to be. They kind of started the year thinking, “Obamacare,” Obama, “Obamacare,” they’re unpopular. All we’ve got to do is say, “Obamacare,” “Obamacare,” “Obamacare.” But there’s a debate in the party maybe that’s not quite enough. Maybe we need – for example, you look at the polls, most people don’t like “Obamacare,” but they don’t want to repeal it either. They want to fix it. So now Republicans are saying, we’re going to present an alternative to “Obamacare.” There’s already one in the Senate. The House leadership says they’re working on one in the House. That’s a problem because they keep dividing over it.
On the economy, if you talk to John Boehner’s pollster, David Winston, he will tell you, when they won in 2010, the folklore from that election is they won it because of “Obamacare.” Actually, they won because of the economy. People didn’t think Obama was doing enough to get jobs back. So they’re trying to come up with a message on the economy.
And, finally, they are trying to shake loose from that image they got of being obstructionists – that image they somehow got simply by shutting the government down last fall – and be a more constructive alternative party.
MS. HOOK: One issue that I thought from the way they were talking last June they’d pursue is immigration reform. And just last week –
MR. MCMANUS: Where did you get that?
MS. HOOK: Well, just last week then John Boehner came out after their party retreat and said, these are our principles. And then this week now –
MS. IFILL: Yesterday.
MS. HOOK: Yesterday, he’s just pulled the plug, and said, you know, maybe not.
MR. MCMANUS: Yeah. And that was – that was supposed to be one chunk of this new –
MS. IFILL: Alternative instead of – yeah.
MR. MCMANUS: – constructive alternative, positive alternatives to choose. And the problem is that John Boehner ran into a real buzz saw of opposition in his own party, in his own conference in the House. They never wanted to tackle immigration, certainly before Republican primaries, because there are a lot of people in the Republican base who hate the idea of immigration reform.
Well, it turns out that a lot of Republicans didn’t really want to tackle is this year at all. And so we – and so Boehner came out, and he said, well, we can’t do it – the reason we can’t do it is that we could never trust this president to enforce a bill if we pass one.
MS. IFILL: We’ve pivoted from talking about the issue to talking about the president and whether he’s trustworthy.
MR. MCMANUS: Once again, the problem is the president. There’s kind of a problem with that position though because if you don’t trust this president to enforce an immigration bill this year, then it means you can’t trust him to enforce it next year or the year after. It’s not really solving the Republican’s problem on immigration yet.
MR. TANKERSLEY: So who has the more poll-tested, persuasive message on the economy right now: the Republicans or the Democrats, or anybody?
MR. MCMANUS: Look, I think we all over think this a little bit. The problem on both the economy and “Obamacare” is easy for the Republicans because people are grouchy about the economy and they’re grouchy about “Obamacare” so that’s not too hard. Their challenge is: do we do more? The Democrats have a challenge that’s actually a little tougher and more interesting, and that is, you know, what is our message on these?
You ran that clip of President Obama. He is doing something a little risky. He is beginning to say, the economy is better now, but it’s not better for you so give me credit for the better part and I’ll try to get to work on the other part. That’s tough to do. He tried to do that in 2010. It didn’t work. Where the Democrats are moving on that is this whole –
MS. IFILL: What does he have to lose at this point though?
MR. MCMANUS: Well, he’s stuck with it. And they’re moving toward this whole basket of fairness, equality, opportunity issues, very Clintonian. It’s no accident that Bill Clinton was the featured speaker, the motivational speaker and coach at the Senate Democrats retreat.
MS. IFILL: And I think we’ve lived through this before, right? Whenever they’re in trouble mid-terms, they bring Bill Clinton and he says, wake up, Democrats.
Thank you, everybody. We’ve got to go. We have to stop right here for now, but the conversation is going to continue online. That’s on the “Washington Week Webcast Extra,” where we’ll talk about the debt ceiling debate that never seems to go away. It streams like at 8:30 p.m. Eastern Time or you can catch it all week long at pbs.org/washingtonweek.
Also online, you can read my take on “Journalism, Heroism, and Sherlock.” Keep up with daily developments on the PBS “NewsHour.”
And we’ll see you right here next week on “Washington Week.” Good night.