"Taking Out The Trash" Gets A Whole New Meaning

by Pejman Yousefzadeh on July 20, 2009

White Houses like to bury bad news by releasing it at the end of the week, or on the weekend, when the bad news in question is not likely to get that much attention from the media and the public. But while there are designated bad news dump days, it appears that the Obama Administration has decided to make August a bad news month:

The White House is being forced to acknowledge the wide gap between its once-upbeat predictions about the economy and today’s bleak landscape.

The administration’s annual midsummer budget update is sure to show higher deficits and unemployment and slower growth than projected in President Barack Obama’s budget in February and update in May, and that could complicate his efforts to get his signature health care and global-warming proposals through Congress.

The release of the update—usually scheduled for mid-July—has been put off until the middle of next month, giving rise to speculation the White House is delaying the bad news at least until Congress leaves town Aug. 7 on its summer recess.

The administration is pressing for votes before then on its $1 trillion health care initiative, which lawmakers are arguing over how to finance.

The White House budget director, Peter Orszag, said on Sunday that the administration believes the “chances are high” of getting a health care bill by then. But new analyses showing runaway costs are jeopardizing Senate passage.

“Instead of a dream, this routine report could be a nightmare,” Tony Fratto, a former Treasury Department official and White House spokesman under President George W. Bush, said of the delayed budget update. “There are some things that can’t be escaped.”

The administration earlier this year predicted that unemployment would peak at about 9 percent without a big stimulus package and 8 percent with one. Congress did pass a $787 billion two-year stimulus measure, yet unemployment soared to 9.5 percent in June and appears headed for double digits.

Obama’s current forecast anticipates 3.2 percent growth next year, then 4 percent or higher growth from 2011 to 2013. Private forecasts are less optimistic, especially for next year.

Any downward revision in growth or revenue projections would mean that budget deficits would be far higher than the administration is now suggesting.

Setting the stage for bleaker projections, Vice President Joe Biden recently conceded, “We misread how bad the economy was” in January. Obama modified that by suggesting the White House had “incomplete” information.

I recall the glory days of the Obama Administration, when we were promised greater transparency in government. Instead, it appears that the degree of secrecy is only being augmented under this President and his team. Promises to have bills remain online for public inspection for five days before a Presidential signature have already gone by the wayside. Now this.

Note that the story also discusses the fact that the President’s approval rating on the issue of health care reform has slipped under 50% for the first time. I guess that it is now even more important than ever for the Obama Administration to hide the bad news. They must fear that Barack Obama’s approval ratings may slip further still.

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