Archive for the ‘Politics’ Category

The Epic Fail of HealthCare.gov

Wednesday, October 23rd, 2013

Picard Face PalmLike many, I’ve been following the news reports of the launch of the Affordable Care Act’s website HealthCare.gov with great interest. The launch has been described as “unacceptable” by just about everybody in the media and politicians from both sides of the aisle. Though I’m not sure we all have the same understanding of what “unacceptable” means. But I’ll come back to that in a minute.

I have a background that allows me to provide some insights into the epic failure of HealthCare.gov. I have managed the launch of several dozen websites including custom-built, database-driven e-commerce solutions. Nothing as complicated as what’s needed for HealthCare.gov, but enough that I understand the process, the pitfalls and the traps.

And yes, I’ve been an outspoken critic of the Affordable Care Act a.k.a. ObamaCare. I’ve also been the one warning fellow critics for weeks not to gloat about the technical problems that have plagued this website. The failure of the launch is not because ObamaCare is bad policy. It failed because the development of the site was poorly managed.

 So What Happened?
Imagine this scenario: You’ve decided to build one of the biggest and most spectacular homes ever built. And you decide to be your own general contractor. The problem? You’ve never built a home. Certainly nothing of the magnitude you now intend to build. And you’re in over your head.

The administration decided they would act as their own general contractor for HealthCare.gov, possibly the most complex and robust website that has ever been built. From Megan McArdle on Bloomberg:

The Centers for Medicare & Medicaid Services inexplicably decided to take on the role of central project manager itself, assuming responsibility for integrating all the various software pieces they’d subcontracted, rather than assigning that role to a lead contractor. CMS is not known to maintain a pool of crack programming talent with extensive project management experience that can be deployed to this sort of task.

A lead contractor would have been responsible for overseeing that the contractors were fulfilling their duties and responsibilities, and developing adequate testing procedures for the site. But this still may not have mattered. The administration would still have been running the show.

Why did they decide to do this internally? Megan speculates on this as well. I’ll let you read her article. It’s a must read. (And yes, I borrowed her general contractor analogy. I was going to use the analogy that you’ve decided to film the movie Titanic without a director. I liked hers better.)

I’ve been critical of the Obama administration for years for what I’ve seen as a lack of leadership and a lack of understanding for how to get things done. Speeches seldom solve problems. And the problem with always thinking you’re the smartest person in the room is that you don’t feel the need for input from others. When you think you know all of the answers, you fail to ask the most important questions.

The first thing the administration should have done was pull together experts from the online community — CEOs and tech leaders from companies like Facebook, Amazon, Dell and Twitter. Meet with them, give them all a beer, and ask: What do we need to know before we do this? How do we manage this? Not only would these people have provided invaluable advice, I can almost guarantee you that they would have recommended bringing in an outside director to manage the project. What the administration needed was not only somebody knowledgeable and experienced, but somebody who could be the liaison between the administration and the development teams. Somebody who would coordinate the efforts of all of the outside contractors. Provide adequate testing procedures. And just as importantly, manage the administration’s expectations for what could be accomplished within a certain amount of time.

Why Did This Website Go Over Budget?
It’s hard to nail down the numbers, but it appears that this website was initially estimated to cost less than $100 million, and that we’ve already spent several times that amount of money. Reuters runs through some of the numbers here:

In addition, said CGI spokeswoman Linda Odorisio, there were three one-year options, bringing the total potential value of the contract to $93.7 million. By August 2012, spending on the contract was already close to that limit.

This year, the bills skyrocketed. The government spent $27.7 million more in April, an additional $58 million in May and, in its latest outlay, $18.2 million in mid-September.

According to the government records, that brought the total spending for CGI’s work on Healthcare.gov to $196 million. Adding in potential options, the contract is now valued at $292 million.

Why do projects go over budget? Typically one of two reasons. One, the client (in this case the federal government) doesn’t provide full information to the contractors upfront. Or two, the client changes the scope of the project.

Back to our analogy of building a home. Imagine that you’ve dug the foundation, poured the concrete, and started framing the house. Then your spouse says, “No, I think the garage should go on the other side of the house.” So you tell your sub-contractors to move the garage.

When we worked with our clients, we would develop full designs and specs for approval before a single letter of code would be written. Once a customer approves the project, and then later updates the requirements of the project, we would sit down with them and explain how these changes would impact the budget and development timeline.  Some changes may be minor, but some may require scrapping days, weeks, and in this case, possibly months of work. The administration was constantly updating and changing the specs for HealthCare.gov. From some reports, as late as last month! From Reuters:

CGI officials have also told committee staff the widely criticized design feature requiring visitors to create accounts before shopping for insurance was implemented in late August or early September, barely a month before the October 1 start of open enrollment.

This gets us back to the need for an outside director who would have stopped the constant changes to the site in time to test it properly, or not allowed the site to have been launched when it wasn’t ready.

How Much Time Did They Need?
This is a great question, and one I don’t have the answer to. Kathleen Sebelius, the Secretary of Health and Human Services, and the point person for the Affordable Care Act, has been questioned repeatedly this year on whether or not HealthCare.gov would be ready to launch on time. Rumors continued to spread that the exchanges were not ready. She repeatedly said that they were on track for development and testing. As late as September 20th, she said: “Testing is being done. We are very much on track to be ready Oct. 1.” Any “bumps in the road” would be fixed before opening day, she said. See more of her comments here in IBD.

Clearly this wasn’t true. Alarm bells have been going off for months that the exchanges were not ready to be launched. From Forbes:

Back in March, at an insurance industry conference in Washington, the problems were apparent. Henry Chao, chief information officer at the Centers for Medicare and Medicaid Services, openly fretted that the exchanges wouldn’t be ready by October. “I’m pretty nervous—I don’t know about you,” he told the crowd. “Let’s just make sure it’s not a third-world experience.”

Testing either hadn’t been done, or what little had been done, had yielded very poor results. Most accounts have been that testing didn’t begin in earnest until five days before the launch. And according to the Washington Post, just days before launch, the site failed during a simple simulation:

Days before the launch of President Obama’s online health ­insurance marketplace, government officials and contractors tested a key part of the Web site to see whether it could handle tens of thousands of consumers at the same time. It crashed after a simulation in which just a few hundred people tried to log on simultaneously.

Despite the failed test, federal health officials plowed ahead.

I added the bold for emphasis. The site didn’t crash because it was overwhelmed with traffic, despite this continued line from the administration. The site crashed because it was rushed by the administration, poorly managed, largely untested, and not ready for prime time.

This Is Unacceptable!
We have heard from just about everybody that this epic failure of a launch is unacceptable, including from President Obama and Nancy Pelosi. And typically when something is unacceptable, that would mean that somebody will be held accountable. Don’t hold your breath. I’m sure the administration would love to blame the GOP, but that’s a tough argument to make. They can’t blame a lack of budget, though there have been some who have tried, as they’ve gone way over the original budget. Somehow they’ve managed to find several hundred million dollars to fund this project. I’ve been expecting them to throw the developers under the bus, but then this comment from Sebelius appeared in the Wall Street Journal:

After two weeks of review, the HHS secretary concluded, “We didn’t have enough testing, specifically for high volumes, for a very complicated project.”

The online insurance marketplace needed five years of construction and a year of testing, she said: “We had two years and almost no testing.”

You can’t throw the developers under the bus when you’ve now admitted they needed five years to accomplish this project properly. Though I find this conclusion as bogus as her earlier claims that the site would be ready on time. While complex, they do not need five years to develop and test this website.

Sebelius Will Testify In Front Of Congress
I’ve watched these Congressional investigations many times. The grandstanding from the politicians drive me crazy. They either spend their time making a speech or asking all of the wrong questions. At this point, there are only a few relevant questions.

1. Mrs. Sebelius, you’ve stated that you needed five years to develop and test this website. When did you come to this conclusion?

This question is important, though I would not expect a truthful answer. She would either have to admit that she knew before the launch and she lied to Congress about the readiness of the site, or she didn’t know until after it was launched that the site didn’t work. And if that’s true, they’re even more incompetent than I imagined.

2. When did you convey to the President that to do this project correctly, you needed five years of development and testing?

Clearly this would require a truthful answer to the first question for her to truthfully answer this second question. Which will never happen. What I can tell you is this: There’s no way that they didn’t know there were significant problems months ago. There were too many rumors to the contrary. I can guarantee you that the developers were expressing concerns EVERY time the administration changed the specs of the project.

3. Obviously you knew before the launch that the site had not been fully tested and had failed the few tests that had been implemented. Who made the decision to launch the site knowing that it wasn’t ready? And why?

The most obvious reason I can come up with, and this has been speculated by others, is that the administration was afraid to postpone the launch because this would give their critics more ammunition to use against them and ObamaCare. Though I’m unclear how delaying the launch would have been worse for them than launching a site that doesn’t work, was poorly developed, was largely untested and came in way over budget. As it is now, even the talking heads on MSNBC have called out the administration on this one.

4. When will the problems be fixed?

Nobody seems to know, and the administration isn’t saying. I’m sure she won’t give any specifics to Congress. The fact that they’re calling in outside assistance, a “tech surge” as the President called it, would indicate they don’t know. The speculation is that they won’t know the underlying problems until they can fix and test the obvious problems. If they thought they were close, there would be no need to bring in “the best and brightest” for their input. Which makes me wonder, if they’re bringing in the “best and brightest”, who was overseeing this project in the first place? Clearly not the “best and brightest”.

A Parting Shot
And to lighten the mood, if you haven’t seen this from Jon Stewart, you need to watch it. Jon is a funny man.

And a Final Thought
Sooner or later they’ll get HealthCare.gov in a workable condition. A few weeks or a few months? Who knows? At some point soon the administration will have to consider extending deadlines for compliance for the individual mandate, or eliminating the penalties for this next year. The longer this takes, the worse the repercussions will be for all of us.

New Norm or Obamanomaly?

Friday, November 9th, 2012

Yes, I am still licking my wounds after predicting a Romney win 52-47. An election I thought would be like 1980 with the challenger Reagan beating Carter, ended up more like 2004 with the vulnerable incumbent Bush beating the unlikable Kerry (old rich white guy from Massachusetts).

I’ve spent a little time reading opinions about the election, but not much. Everyone likes to assign blame. Pundits like to make bold points about the winners and losers. Me? I’m just left with a bunch of questions.

In 2008, Obama won with a strong showing from democrats where they outvoted republicans by seven points (D+7). Those of us skeptical about the polls thought the electorate would reflect something closer to its historical numbers. According to exit polls, here’s how party ID has broken down in recent elections (not including independents):

2010: Even
2008: D+7
2006: D+2
2004: Even
2002: R+1
2000: D+4
1998: D+2
1996: D+4
1994: D+1

Even in years where the republicans have done very well, such as 1994 and 2010, party ID is fairly even. I believed that at best the democrats could expect a D+3, which would have won it for Romney. But instead, President Obama wins with an impressive D+6, even though he lost independents by 5 (45/50).

So my question is this: Is this the new normal? Or just an Obamanomaly?

Yesterday, Austan Goolsbee tweeted: “if demogr is the new destiny, are we in for wild 08/10 swings every midterm b/c turnout drops frm 70 to 40 and demo composition shifts?”

I had already decided to write this post before reading Goolsbee’s tweet, but this is the right question to ask. Are we going to continue to see strong showings from democrats in presidential election years on the scale of D+6, and even support for both parties in the mid-term years? If so, don’t be surprised if republicans take the Senate in 2014.

Losing exposes vulnerabilities. And winning masks weaknesses. I’m not sure either party should leap to conclusions about what will happen in future elections.

The Exit Polls

You know I’m a stats geek. Just a few quick thoughts about the exit polls.

Latinos: Obama won with Latinos 71/27. This is a number that the republicans need to take seriously. They can’t lose the Latino vote by such large margins and expect to win national campaigns. The important questions become why did they lose the Latino vote by so much, and what should they do about it? I’m not sure it’s an easy answer.

The War on Women: Much has been made about the war on women. Obama won women by 11 points (55/44). Romney won men by 7 points (52/45). A gender gap exists, but probably not in the way that many of the pundits will explain it to you. Romney won married women (53/46 = almost identical to the “man” vote), but lost single women (31/67). Married women voted on the economy. Single women did not. The big gap wasn’t between men and women, but between married and unmarried women.

The Young Vote: Obama won 18-29 year old voters 60/37 which accounted for a margin of 5.1 million votes. Romney won the 30+ age group by 1.8 million votes. Obama won the election by about 2.5 million votes. Which means that kids in their 20s with little life experience picked the president. (No offense to kids in their 20s. I was there once upon a time, and thought I knew everything, too.)

The White Vote: You probably already know that whites overwhelmingly voted for Romney (59/39). What this stat doesn’t tell you is that millions of whites who voted in 2008 chose not to vote in this election. Whites who voted for Obama stayed home. Whites who voted for McCain stayed home. The republicans thought they had enthusiasm on their side. They did not.

Read more about exit polls here on CNN.

Final Thoughts Election 2012

Thursday, November 1st, 2012

This is likely to be my final post before the election on Tuesday. I am looking forward to the end. Or the beginning.

Mitt RomneyState of the Polls
We’ll have an answer on Tuesday about the polls with the only poll that really matters. In case you’ve missed it, there’s been a considerable disturbance in the force. And I’m not talking about Disney buying Lucasfilm. Pollsters and pundits have fallen into one of two camps, and it’s all about voter turnout and party ID. In 2008, democrats outvoted republicans by seven points and swept President Obama into office, along with significant majorities in Congress. In 2010, democrats and republicans voted evenly, and the GOP was swept into Congress, making huge gains in the House, and modest gains in the Senate.

So what will the turnout be in 2012? My guess has been somewhere in the middle, probably two to three points favoring the democrats. Many of the state polls from companies such as Marist and Quinnipiac continue to show democrats with equal or even greater turnout than 2008. This makes little sense to me. Based off of these polls, the left’s polling guru Nate Silver is predicting a 79% chance that Obama will win the election, and take 300 electoral votes in the process. Those on the right question the polls and cite the underlying numbers. The GOP is more enthusiastic about this election, and independents have swung from Obama to Romney in fairly significant numbers. A few of the pollsters such as Gallup and Rasmussen are expecting a turnout that more resembles 2010, or possibly even a republican advantage.

One more anomaly I’ve seen in the polls, then we’ll move on. Polling likely voters is more predictive than polling registered voters. And pollsters attempt to determine if a person is a likely voter, or just a registered voter. On some of theses state polls, they’re filtering out very few voters — they’re considering 96-99% of the registered voters to be likely voters. Enthusiasm for the election may be high, but that’s just ridiculous.

President ObamaEarly Voting
In 2008, Obama crushed McCain in early voting by nearly 20 points. And this was to be one of Obama’s great strengths against Romney. The numbers don’t reflect that. Gallup came out with an article a couple days ago that Romney is beating Obama in early voting 52-46. And if you don’t believe Gallup, Pew came out with similar numbers with Romney ahead 50-43 among early voters. That’s a very bad sign for the President.

The Electoral College
Since the election of 2000 when Al Gore won the popular vote but lost the election, many on the left have wanted to dump the electoral college in favor of the popular vote. There certainly is a scenario where Romney could win the popular vote, lose Ohio, and lose the election. Will these same people scream about the unfairness of the electoral college? Will they claim Obama to be an illegitimate President like they did Bush? My guess is no.

Wednesday Excuses
If Obama loses, what excuses will be made? I wrote an article two months ago detailing why it will be difficult for Obama to win. But for months, some on the far left have set the table full of excuses ready to be used.

Voter Suppression: If you don’t think some on the left will use this as an explanation for Obama’s loss, think again. MoveOn.org has already released a web ad to this point. You can watch it here. May not be appropriate to watch this in an office or around children.

Money: I understand the frustration of those wanting campaign finance reform. There’s a lot of money in politics. And where there’s money, there’s corruption. A few months ago we were seeing articles from the mainstream media about the huge amounts of money raised by Romney and the Super PACs. But with Obama and the democrats raising $181 million in September, it’s difficult to make an argument that Obama didn’t have enough money to compete. And for the most part, these stories have disappeared. In 2008, Obama outraised and outspent McCain by a significant margin. Is that why he won the election? No. Obama was the better candidate, and positioned himself as the agent of change. (Which is what Romney is doing to Obama this time around.)

Racism: I’ve made this point before, and I’ll make it again. There’s a group on the left who believe that if you oppose the President, you must be racist. I’m a fiscal conservative. I oppose the President on many issues because I’m a fiscal conservative, and he’s not. You would think that since the President won by a significant margin in ’08 that this argument would go away. But it hasn’t. If Obama loses, it will be because moderates and independents who voted for him four years ago changed their vote this time around.

Prediction
I see nothing to change my mind about my prediction from August. I still believe Romney will win 52-47, and win the electoral college.

What’s Next?
And even though I believe that Romney will win, and that he’s the right choice, President Obama easily could have won this election. And if he loses, next week I’ll tell you how.

Romney’s Path to 270 Electoral Votes

Saturday, October 13th, 2012

It’s interesting to watch the political winds change. A year ago, experts discussed that the election would come down to 12 swing states. For months, the mainstream media and liberal pundits have talked about Obama’s path to victory, and that there was little chance of Romney making the electoral math work in his favor. Two months ago I wrote a post titled “Can Obama Win?” where I discussed the headwinds President Obama would face in the upcoming election. From studying past elections and current factors, I predicted that Romney would win the popular vote 52-47. I wasn’t overly concerned about the electoral math. It would be nearly impossible to win 52% of the vote and not win the electoral college.

Real Clear Politics is one of my favorite sites. They list the top political stories of the day, but they also track all of the major polls and provide an average of the polls. This week they show 12 states in the “toss up” column between the two candidates. The same 12 states that the experts had said would be the swing states that would decide the election. So despite the ebb and flow of the campaigns, we are exactly where we thought we’d be.

Real Clear Politics - Electoral College

As of today, with leaners, Real Clear Politics has Obama winning 201 electoral votes, and Romney winning 181 electoral votes. I don’t see any of these states changing sides. It takes 270 electoral votes to win the election, and there are 156 up for grabs in the 12 swing states. This is the closest I’ve seen the electoral map since the election began — typically they’ve shown the President with a fairly commanding lead.

The 12 states that make up the swing states are (with their number of electoral votes): Colorado (9), Florida (29), Iowa (6), Michigan (16), Missouri (10), Nevada (6), New Hampshire (4), North Carolina (15), Ohio (18), Pennsylvania (20), Virginia (13) and Wisconsin (10).

I’m going to chop off two states for each side. All along the numbers have looked good for Obama in Pennsylvania and Michigan. And Missouri and North Carolina have been widely considered states that would end up in the Romney column. That puts Obama ahead 237-206.

This week, David Paleologos, the director of the Suffolk University Political Research Center, said that they were going to stop polling Florida, Virginia and North Carolina. “In places like North Carolina, Virginia and Florida, we’ve already painted those red. We’re not polling any of those states again,” he said. “We’re focusing on the remaining states.”

So let’s add the electoral votes from Virginia and Florida to the Romney side of the ledger. That puts Romney ahead 248-237.

The polls show Ohio as very close. RCP shows Obama with a slight lead, though that’s largely because of one outlier — the NBC/WSJ poll has Obama up by 6. It will be close, but I’m predicting a Romney win in Ohio. That puts Romney up 266-237 with Colorado, Iowa, Nevada, New Hampshire and Wisconsin still undecided. Romney only has to win one of these states to hit 270 and win the election. In other words, if Romney wins Ohio, Obama must sweep the remaining five states. We’ve discussed before that the undecided voters break heavily for the challenger. Here’s the current breakdown of these five states according to RCP:

Colorado: Romney up 47.7 to 47.0
Iowa: Obama up 48.6 to 45.4
Nevada: Obama up 48.2 to 46.6
New Hampshire: Obama up 48 to 47.3
Wisconsin: Obama up 50 to 47.7

Romney will win at least one of these, and win the election.

The Big Lies

Tuesday, October 9th, 2012

I don’t want to spend much time discussing the recent presidential debate. It’s been analyzed to death. Though the analysis has been entertaining. And mostly it’s been skewed by misconceptions. Before the debate, polls showed a large majority of voters believed that President Obama would win the debate. The theme had been that Romney is not a very good politician, and that Obama is bright and articulate. How could Obama not win the debate handily?

Obama gives a great speech, and he’s good on the stump. That doesn’t make him a great debater. Romney delivers a decent speech, and is not inspiring on the stump. That doesn’t make him a bad debater. Matter of fact, Romney is a smart debater. He navigated through the minefields of the republican debates intelligently. I agree that Obama was not at his best, and that Romney won the debate. I just think the analysis is tainted by pre-debate conceptions that Obama would win big. And when he didn’t, the press couldn’t help themselves by overreacting and over-analyzing the Romney win.

Overall, I thought the two candidates presented their different visions to the country effectively. They each had their share of misstatements and distortions. Most of them relatively minor. I’ve read through the fact checkers, and this piece from the AP does a pretty good job of breaking down the inaccurate statements. But there were two outright lies that bothered me the most.

Mitt RomneyThe Romney Lie
I have been a proponent for healthcare reform for 20 years. I have also been highly critical of Obamacare. I’m in agreement with repeal and replace. My problem is that Romney does not have a good plan to replace it. And during the debate, Romney claimed: “Pre-existing conditions are covered under my plan.” When pressed on this by Obama, Romney went on to say, “In fact, I do have a plan that deals with people with pre-existing conditions. That’s part of my health care plan.”

But his plan (from his website) only says people “should be guaranteed the ability to retain coverage” if they have “maintained continuous health insurance coverage.” This does not extend to people who do not currently have health insurance. PolitiFact details it here, and rates Romney’s claim as mostly false. I’d call it a lie.

To their credit, the Romney campaign came out right after the debate and clarified their plan. From CNN (read full story here):

Eric Fehrnstrom, a top aide to Mitt Romney, suggested in a Thursday interview with CNN that the GOP presidential candidate’s health plan may achieve his goal of covering individuals with pre-existing conditions through “state initiatives and money.”

At least they didn’t double down on the lie. Unlike the Obama campaign.

President ObamaThe Obama Lie
President Obama came into the debate with one central point to pin on Romney — that his tax reform plan will add $5 trillion to the deficit, and necessitate income tax increases on the middle class. Obama returned to this point repeatedly during the debate. But he’s wrong, and he knows it. Romney’s plan calls for lowering tax rates for everybody, and eliminating deductions and loopholes in the code. Romney claims that his plan is revenue neutral. There’s room to debate whether or not the plan is deficit neutral, but it’s a lie to say that it will add $5 trillion to the deficit.

Take this exchange as an example. This is between CNN’s Erin Burnett and Stephanie Cutter, Obama’s deputy campaign manager:

Erin Burnett, CNN host: So you’re saying if you lower them (tax rates) by 20% you get a $5 trillion tab, right?

Stephanie Cutter: It’s a $5 trillion tab.

Burnett: But then when you close deductions it’s not going to be anywhere near $5 trillion, that’s our analysis.

Cutter: Well, okay, stipulated. It won’t be near $5 trillion but it’s also not going to be the sum of $5 trillion in the loopholes that he’s going to close.

I added the bold for emphasis. Cutter has just openly admitted that their central point is a complete lie. It will not add $5 trillion to the deficit. But the President has continued with this line of attack all week in his stump speeches. And there’s ample evidence that it’s possible to reduce rates by 20%, eliminate deductions, and end up with deficit neutral tax policy, though it does require a small increase in GDP to get there. Princeton economics professor Harvey Rosen has written a paper detailing how it’s possible. I’ve read it. I’m guessing that Stephanie Cutter has not. From Rosen:

The main conclusion is that under plausible assumptions, a proposal along the lines suggested by Governor Romney can both be revenue neutral and keep the net tax burden on high-income individuals about the same. That is, an increase in the tax burden on lower and middle income individuals is not required in order to make the overall plan revenue neutral.

The Results
Polls are showing surges for Romney nationally and in the swing states. And yes, some polls are still oversampling democrats. Don’t live and die with the polls. And don’t read too much into articles that proclaim “if the election were hold today”. The election is not today. It’s in a month. The race is a marathon, and reminds me of the old story about the tortoise and the hare. And yes, Romeny is the tortoise who will win in the end.

5 Questions I’d Ask President Obama

Wednesday, October 3rd, 2012

President ObamaThe debates are about to begin. I wish I could ask the President the questions the media will refuse to ask.

Q1: The size of the government is typically stated as a share of the economy. In modern history, the size of the federal government has averaged approximately 20% of GDP. What is your vision for the right size of government over the next five, ten and twenty years?

Q2: You have not released a federal budget since 2010, and it’s been even longer since democrats in the Senate have released a budget. What is your specific budget plan for the next ten years? (UPDATE: I provided misinformation here. See note at the bottom of the post.)

Q3: You have passed a series of short-term tax cuts that are about to expire. The Bush-era tax cuts are ready to expire. What is your long-term tax plan?

Q4: Medicare and Social Security are on a path towards insolvency. You have said that Medicare is “unsustainable”. What is your plan to reform Medicare and Social Security?

Q5: In what year do your plans achieve a balanced budget?

You’ll notice a theme among these questions. Many, including myself, have accused the administration of not having plans to deal with our most significant structural problems. Even the President’s treasury secretary Tim Geithner said to Paul Ryan and Congress: “We’re not coming before you to say we have a definitive solution to our long-term [debt] problem. What we do know is that we don’t like yours.”

But to say that the President doesn’t have a plan is probably incorrect. He just hasn’t shared it with the American people.

Size of Government
As far as I know, the President has never said what the size of government should be. Not only is this a fair question, but it gets directly to the point of the President’s vision for the country, and the role of government. Paul Ryan passed a budget in the House that restrained government spending to the traditional average of 20% of GDP and was labeled a radical by the left. The Simpson-Bowles debt commission recommended restraining government to 21% of GDP and was ignored by the President.

So what does the President believe? Larry Summers, who was the Director of the President’s Economic Council, has released a series of articles and comments that last couple of years about the size of government. He believes that the government will need to be bigger. Significantly bigger. Here’s his article in the Washington Post from August of this year (click here). And here’s an excerpt from it:

But there is a widespread view in both parties that it is feasible and desirable that in the future the federal government should be no larger as a share of the overall economy than it has been historically. Unfortunately, this is unlikely to be achieved. For structural reasons, even preserving the amount of government functions that predated the financial crisis will require substantial increases in the share of the U.S. economy devoted to the public sector.

I added the bold for emphasis. He goes on to say:

But for the next three decades the United States will confront the reality that major structural changes in its economy will compel an increase in the public sector’s fraction of the total economy…

What are “substantial increases” in the size of government? Does the President agree with this? We deserve to know.

Federal Budget
It is appalling to me that the President has not presented a budget since 2010, and that the democrats in the Senate have not presented a budget in more than three years. The last time the President released a budget it was basically laughed out of Washington as un-serious. Why has he not presented a budget? Because he has no intention of restraining government spending. (UPDATE: I provided misinformation here. See note at the bottom of the post.)

Tax Reform
I’ve been on the tax reform bandwagon for decades. Seriously. Decades. Our tax code is a complete mess. I have visited the President’s website. His ONLY mention of tax reform is the Buffet Rule. But the Buffet Rule is only a drop in the bucket. From Forbes:

The Joint Committee on Taxation (JCT) says that the Buffett Rule as proposed by Senator Sheldon Whitehouse (D-CT) would increase revenues by $47 billion over the coming decade, assuming that the 2001-2010 tax cuts (on the rich) expire as scheduled.

We’re running trillion dollar yearly deficits, and the President’s solution is to generate an additional $4.7 billion per year from the Buffet Rule. We need real and significant tax reform in this country. And we need it now.

But the real reason the President hasn’t presented a tax plan? If your intent is to “significantly increase” the size of government, eventually you will also have to significantly increase tax revenues. And it’s impossible to tax the rich enough to make up the difference. Taxes are going up on the middle class, and probably significantly. When? Obama’s planning for that to be the next President’s problem. He just wants to push us down the path towards a significantly larger federal government.

Entitlements
It’s impossible to achieve long-term financial stability, and eventually balanced budgets, without tackling our toughest problems — Medicare and Social Security. The President has put forth no plan to fix either of these programs. Why? Because I don’t believe he has any interest in changing the programs. If left as they are today, they will soon make the federal government significantly larger.

Balanced Budgets
All of these issues tie together. Our country spends more money every year that it collects in revenues. Even the Clinton surpluses were illusory, and created by payroll tax revenues that exceeded expenditures on Medicare and Social Security. I think you probably know my thoughts on this one. The President has no intention of putting together a plan to get us to balanced budgets. He’s counting on a significantly larger government necessitating significant tax increases in the future.

So where does the President stand on these issues? I think I know. I’d just like to hear him say it.

UPDATE: Just saw this in the USA Today of all places. Seems like we’re pretty much on the same page, though the President has already answered the first question on multiple occasions, stating that the situation was much worse than they expected. Read it here.

UPDATE 2: Made a mistake on this one. The President DID propose a budget this year. You can read it here. I had it in my mind that it was just a budget framework, but it is an actual, scorable budget. It should be noted that it was voted on in the House, and lost 414-0. And it was voted on in the Senate, and lost 99-0. Not a single democrat voted for it.

Are The Polls Skewed?

Monday, October 1st, 2012

Just a quick post today. I’ve said for nearly a couple months that I believe many of the polls to be skewed. That democrats are getting oversampled compared to republicans, especially in some of the recent state polls. It’s become a big enough story in recent weeks that virtually all of the pollsters have been posting columns detailing why their polls are not skewed.

For instance, read this article from Frank Martin of Gallup. The defenders of the polls make several insightful points. That doesn’t make them right.

Some on the right, such as Dick Morris, have gone so far as to accuse the pollsters of distorting their polls on purpose to dampen republican enthusiasm. I don’t believe this. I do believe that much of the media is rooting for President Obama to win a second term, and are happy to report that the polls are showing Obama with a clear advantage in many of the swing states. And are just as happy to ignore the potential oversampling of democrats in the polls.

I made two points a few weeks ago about why the polls might be distorted. One, I believe that liberals are more inclined to share their opinions than conservatives. This has only been a personal belief, and not one that I’ve researched. And two, that it’s likely that republicans are declining poll requests as they are suspicious of the pollsters and the media.

This morning I happened upon an article by Michael Barone on AEI’s website. You should read the full article. Here are a few excerpts:

In addition, it’s getting much harder for pollsters to get people to respond to interviews. The Pew Research Center reports that it’s getting only 9 percent of the people it contacts to respond to its questions. That’s compared with 36 percent in 1997… Are those 9 percent representative of the larger population? As that percentage declines, it seems increasingly possible that the sample is unrepresentative of the much larger voting public. One thing a poll can’t tell us is the opinion of people who refuse to be polled.

While this doesn’t specifically back my point that republicans are refusing to be polled, it’s an interesting stat. And if you’re a reader of my blog, you know I love stats.

Barone went on to explain:

It may be that we’re seeing the phenomenon we’ve seen for years in exit polls, which have consistently skewed Democratic (and toward Barack Obama in the 2008 primaries). Part of that is interviewer error: Exit poll pioneer Warren Mitofsky found the biggest discrepancies between exit polls and actual results were in precincts where the interviewers were female graduate students. But he also found that Democrats were simply more willing to fill out the exit poll. Which raises the question: Are we seeing the same thing in this month’s polls?

Which would seem to support my point that liberals are more likely to share their point of view than conservatives. Especially if there’s a female grad student asking the questions. :)

And I wish I had saved it, and now I can’t find it, but last night I saw a poll that showed a majority of republicans (I believe the number was 66%) believe that the polls are intentionally skewed to favor democrats. Conservatives don’t trust the media, and apparently don’t trust pollsters either.

WaPo Poll: Obama Up By 1

Tuesday, September 11th, 2012

President ObamaI watched speakers from both conventions. And I’ve watched the main stream media narrative about the conventions. It’s interesting, to see the least. Apparently, Obama got a bounce in the polls. Romney did not. Both the Gallup and Rasmussen polls have shown momentum for the president. But the Obama bounce is already fading. This morning, the Washington Post trumpeted “Among likely voters, Obama-Romney close”. In the Post’s latest poll following the two conventions, they have Obama up by one with likely voters, 49-48. They go into great detail explaining how Obama leads on many of the issues.

Not once do they mention the sampling of the two parties in the poll.

One phenomenon I mentioned in my post “Can Obama Win?” is the over sampling of democrats in most of the polls. In 2008, Obama beat McCain by seven points, and democrats outvoted republicans by seven points in the election. But in 2010, an election that resulted in a republican tsunami into the House of Representatives, the two parties were equally represented in the election.

Why are these numbers important to understand? Because in the Post’s most recent poll, they have oversampled democrats by ten points (33-23) compared to republicans. And Obama is only up by one. (See poll results here.)

What should we expect in 2012? I won’t be surprised if the democrats outvote the republicans by a small margin, but there’s little chance that they’ll match their seven point advantage from the 2008 election. Let alone outvote republicans by ten points.

So why are these polls so heavily weighted towards democrats? I have a theory.

Republicans don’t want to be polled.

Assuming that the polls start from a truly representative base of people, either people are lying about their party affiliation, or republicans are refusing to be polled (hanging up on the polling company). I think it’s much more likely that the republicans are hanging up on the pollsters. Why?

I’ve always believed that liberals are much more likely to want to express their opinions than conservatives. They post on blogs. They post on Facebook. The put bumper stickers on their cars. They join politically active organizations. While about twice as many people self-identify as conservatives compared to liberals, it’s been my experience that liberals are much more likely to voice their opinions than conservatives. For the most part, conservatives would like to be left alone.

But I think there’s another issue at play. When conservatives express views in opposition to the president’s agenda, they’re often labeled as racists by liberals and some members of the media. Are there still racists in this country? Absolutely. But it’s incredibly insulting to suggest that fiscal conservatives are only voicing opposition to the administration’s policies because Barrack Obama is black. Some people don’t want to fight that fight.

And lastly, conservatives are skeptical and distrusting of the media. They likely view these polling companies as extensions of the media.

I’ve often made comparisons of this election to the 1980 election between incumbent Jimmy Carter and his challenger Ronald Reagan. As late as October 28th, Gallup had Carter ahead 45-42. And in Gallup’s final poll, they had Reagan with a slim lead of 47-44. Much like the current race, the media said that the Carter-Reagan race was too close to call.

Reagan ultimately won 51-41, with John Anderson getting about 6.6% of the vote. Not very close at all.

Can Obama Win?

Saturday, August 11th, 2012

Today we’re going to take a look at the upcoming presidential election from a different angle. We’re not going to talk about Paul Ryan, political agendas, fundraising or the campaigns. We’re not going to talk about personalities or character. We’re not even going to talk about the two candidates. Today, we’re just going to look at recent elections, supporting data and how understanding the past helps us to predict the future.

Reagan and Carter

Reagan vs Carter
We’re going to start with something a little more anecdotal. In the summer of 1980, the polls had President Carter beating challenger Ronald Reagan. These same polls showed ex-President Ford beating Carter. The republican establishment was concerned. They wanted Reagan to pick Ford as his vice president. Basically a co-president. Reagan declined and picked the first George Bush. Reagan ran on a platform of conservative values and American greatness. He went on to beat Carter. In hindsight, did Carter have a chance? The economy was bad. Unemployment was rising. Interest rates were high. People were concerned about the future. This is not the type of atmosphere where voters reward a president with four more years.

Unemployment
A friend asked me about a year ago if Obama had a chance at winning. My initial response was that it all depends on the unemployment numbers. An oversimplification, but still a valid point. Presidents don’t get reelected with high unemployment. I commented that if unemployment was above 8.5%, that Obama would lose. And if unemployment fell below 8%, he could make the case that his policies were working. Unemployment sits at about 8.25%. But that’s just the official number. Real unemployment is much higher — closer to 10.6%. Millions have been fleeing the workforce. The economy is flat. It’s been the movement from people leaving the workforce that has moved the official unemployment rate down from 10.2%. I wrote about this here. And you can read more about this from James Pethokoukis here.

Here’s a portion of James’ article:

Only in a world of lowered, New Normal expectations was the July jobs report anything less than another disaster for U.S. workers.

– This continues to be the longest stretch of 8% or higher unemployment since the Great Depression, 42 straight months.

– If the labor force participation rate was the same as when Obama took office in January 2009, the unemployment rate would be 11.0%.

– Even if you take into account that the LFP should be declining as America ages, the unemployment rate would be 10.6%.

– If the labor force participation rate hadn’t declined since just last month, the unemployment rate would have risen to 8.4%.

– The broader U-6 unemployment rate, which includes “all persons marginally attached to the labor force, plus total employed part time for economic reasons,” ticked up to 15.0%.

Incumbents Lose the Undecided Vote
In presidential elections, the undecideds rarely vote for the incumbent. Why? Because if you haven’t made up your mind about the president after four years, you’re probably not going to vote for him. In elections where the incumbents have won (such as Reagan in 1984 or Clinton 1996) or when they’ve lost (such as Carter in 1976 or Bush in 1992), approximately 80% of the undecideds vote for the challenger. So if you see a poll that shows Romney and Obama each at 45%, what you really have is a Romney win of 53-47. Polls typically show 3-5% of people supporting “some other candidate”, but most will end up voting for one of the two primary candidates anyway. In the last two presidential elections, only about 1% of the vote has been cast for a third party candidate.

Likely Voters
One of the keys to look for in the polls are if they’ve polled likely voters. Some poll adults. Some poll registered votes. When polling adults or registered voters, the results tend to favor the democrats. But polling likely voters tends to be the most accurate predictor of elections. Rasmussen Reports polls likely voters, and as of today, they have Romney leading 47-43. And if you follow the 80% rule from above, then you’ve got a Romney win of 55-45.

Barone Table 2

Mid-Term House Elections Predict Presidential Elections
This is an interesting chart comparing mid-term elections in the House of Representatives to the following presidential elections and House elections. Notice how the House votes in 1998, 2002 and 2006 almost perfectly predict the results in 2000, 2004 and 2008. If this trend holds true, then Romney will beat Obama by something close to the seven-point margin that republicans beat democrats in the House in 2010.

Approval Rating
President’s don’t typically win reelection when their approval rating is below 50%. One exception was George W. Bush who had an approval rating of 48% with registered voters in 2004, but was above 50% with likely voters. As of today, Rasmussen has Obama’s approval/disapproval ratings at 45-53, and Gallup has them at 43-51.

Over Sampling of Democrats
This has been an interesting phenomenon this year. In 2008, Obama beat McCain by seven points, and democrats outvoted republicans by seven points. But as we’ve seen, the mid-term election is probably a better predictor of turnout than the past presidential election. And in 2010, republicans and democrats voted in fairly equal numbers. So you would think that pollsters would weight their polls according to expected participation. But they do not. Many of the national polls have been sampling democrats by anywhere from 6-19 points higher than republicans. And they’re not weighting the results. With democratic enthusiasm down, it’s unlikely that democrats will outvote republicans by a significant margin. If at all. These polls are not likely to be indicative of how people will actually vote.

This is also going on in the state polls. For instance, a recent CBS/NYT poll showed Obama with a six point lead over Romney in Florida. In 2008, democrats outvoted republicans by 3 points in Florida. In 2010, they were an even split. So what’s a realistic expectation for 2012? Probably a slight advantage for democrats — maybe a point or two. But the CBS/NYT’s poll oversampled democrats by nine points. And they still only have Obama up by six.

The Future’s Not Bright
In just about every poll, Americans are pessimistic about the future. Economic confidence is down. People are pessimistic about jobs. The majority feel that the country is headed in the wrong direction. Similar to what Carter faced in 1980, this is a difficult atmosphere for an incumbent president.

Pethokoulis And More Stats
If you really want to read some more, check out this article from James Pethokoukis. He explains five stats and how Obama stacks up. All five show Obama with a tough mountain to climb.

Parting Thoughts
My prediction at this point is that the presidential election will feel similar to the recent Wisconsin recall election. Polls will be close till the end. Exit polling will show the election too close to call. Then in the end, it won’t be very close at all. I’m predicting a Romney win 52-47.

Hey Jack, It Only Takes a Simple Majority to Pass a Budget in the Senate

Tuesday, February 14th, 2012

This weekend, Jack Lew made the rounds on the Sunday talk shows to discuss the President’s budget. If you don’t know who Jack Lew is, he was the White House budget director under both President Clinton and President Obama, and now serves as Obama’s Chief of Staff.  This is the exchange that took place on CNN (copied from Politifact):

On the Feb. 12, 2012, edition of CNN’s State of the Union with Candy Crowley, the host said to Lew, “I want to read for our viewers something (from) Sen. Harry Reid, the Democratic majority leader in the U.S. Senate, who said, we do not need to bring a budget to the floor this year. It’s done. We don’t need to do it, talking about last year’s two-year agreement and saying that, you know, … it’s already done.”

Lew responded, “Well, let’s be clear. What Sen. Reid is talking about is a fairly narrow point. In order for the Senate to do its annual work on appropriation bills, they need to pass a certain piece of legislation which sets a limit. They did that last year. That’s what he’s talking about. He’s not saying that they shouldn’t pass a budget. But we also need to be honest. You can’t pass a budget in the Senate of the United States without 60 votes, and you can’t get 60 votes without bipartisan support. So unless Republicans are willing to work with Democrats in the Senate, Harry Reid is not going to be able to get a budget passed. And I think he was reflecting the reality that that could be a challenge.”

Here’s the exchange from “Meet the Press” (this transcription comes from Real Clear Politics):

David Gregory, moderator of “Meet the Press” on NBC: Here’s a stat that a lot of people may not know but is pretty striking: The number of days since Senate Democrats passed a budget is 1,019. Can you just explain as a former Budget Director, how do you fund the government when there’s no budget?

Jack Lew, Obama’s Chief of Staff: Well, one of the things about the United States Senate that I think the American people realized is that it takes 60, not 50 votes to pass something. And there has been Republican opposition to anything that Senate Democrats have tried to do. So it is a challenge in the United States Senate to pass legislation when there’s not that willingness to work together.

Congress didn’t do a great job last year. It drove right to the edge of the cliff on occasion after occasion. I actually think it’s unfair to blame the United States Senate for that. A lot of that was because of the extreme conservative approach taken by House Republicans.

Gregory: Your party controls the Senate, does it not?

Lew: Yeah, but the positions that ended up tying the Congress in knots came out of the House, came out of the Tea Party wing in the House.

I’m not sure if I’m more shocked by Lew’s statement, or the fact that Gregory didn’t call him on it. It only takes a simple majority to pass a budget in the Senate. It can not be filibustered by the minority party.

From Politifact who gave his statement a “False”:

On the specific question he was asked — about the congressional budget resolution — Lew said you need 60 votes to pass it. That’s flatly wrong.

From the Washington Post who awarded Lew with “Four Pinocchios”:

We might be tempted to think Lew misspoke, except that he said virtually the same thing, on two different shows, when he was specifically asked about the failure of Senate Democrats to pass a budget resolution. He even prefaced his comment on CNN by citing the “need to be honest.”

He could have tried to argue, as some Democrats do, that the debt-ceiling deal last year in effect was a budget resolution. Or he could have spoken more broadly about gridlock in the Senate, after acknowledging a traditional budget resolution had not been passed. Instead, the former budget director twice choose to use highly misleading language that blamed Republicans for the failure of the Democratic leadership.

We wavered between three and four Pinocchios, in part because the budget resolution is only a blueprint, not a law, but ultimately decided a two-time budget director really should know better.

It’s been a personal pet peeve of mine that the Democrats in the Senate have failed to present a budget in more than 1,000 days. It’s also difficult to believe that as the budget director under both Clinton and Obama, that Lew didn’t know exactly what he was saying. The problem is that you reach way more people on CNN and NBC with the lie than you ever will with organizations like PolitiFact and the Washington Post calling him on it.