The New New Deal

by Grunwald, Michael

  277 Obama invited stimulus skeptics to visit Ohio: Obama speech, Columbus, Ohio, March 6, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=85826.

  278 “It certainly doesn’t feel like we’ve accomplished anything, but we have”: Christina D. Romer, “The Case for Fiscal Stimulus: The Likely Effects of the American Recovery and Reinvestment Act,” Speech to the U.S. Monetary Policy Forum, February 27, 2009, http://elsa.berkeley.edu/~cromer/The_likely_effects_of_the_American_Recovery_and_Reinvestment_act.pdf.

  13. Tea Leaves

  279 Louisiana governor Bobby Jindal’s response: Jindal’s response to Obama’s address to Congress, February 24, 2009, http://articles.cnn.com/2009-02-24/politics/sotn.jindal.transcript_1_gop-response-bobby-jindal-americans?_s=PM:POLITICS.

  280 “We can’t be the antigovernment party”: Michael Grunwald, “The Republicans in Distress,” Time, May 7, 2009, http://www.time.com/time/magazine/article/0,9171,1896736,00.html.

  281 “a very narrow party of angry people”: Zvika Krieger, “Huntsman, Interrupted,” The New Republic, May 20, 2009.

  282 a CNBC commentator named Rick Santelli: “Rick Santelli’s Shout Heard ’Round the World,” CNBC, February 22, 2009, http://www.cnbc.com/id/29283701/Rick_Santelli_s_Shout_Heard_Round_the_World.

  283 “The real nerve struck”: “Rick Santelli: I Want to Set the Record Straight,” CNBC, March 2, 2009, http://www.cnbc.com/id/29471026/Rick_Santelli_I_Want_to_Set_the_Record_Straight.

  284 scores of Republicans who had opposed and denounced the stimulus: Gotcha journalism isn’t necessarily partisan; reporters liked going after Republican hypocrites. John Solomon and Aaron Mehta, “Legislators Who Criticized Stimulus Sought Its Funding,” Washington Post, October 18, 2010; Louise Radnofsky, “Democrats Target Stimulus Critics Who Sought Funds,” Wall Street Journal, February 16, 2010; Jim McElhatton, “Stimulus Foes See Value in Seeking Cash,” Washington Times, February 9, 2010; Tyler Whitley, “Cantor Criticizes Stimulus Package, Suggests Alterations,” Richmond Times-Dispatch, July 7, 2009. The author has copies of scores of congressional letters seeking energy and transportation funds.

  285 “We lost that legislative battle, but we won the argument”: Andy Barr, “Pence: GOP Won Stimulus Argument,” Politico, February 27, 2009, http://www.politico.com/news/stories/0209/19375.html.

  286 “Asked About Stimulus, Tedisco Talks a Lot”: Jimmy Vielkind, New York Observer, February 16, 2009.

  287 Washington Republicans suggested they would stop bankrolling his campaign: Bazile wrote an odd book about the Murphy-Tedisco race: Dan Bazile, Too Close to Call (Albany: ZLS, 2010).

  288 “Tedisco’s victory will be a repudiation”: Michael Steele, “It’s the Spending, Mr. President,” Politico, April 1, 2009, http://www.politico.com/news/stories/0409/20764.html.

  289 “We’re essentially franchisees”: Grunwald, “Republicans in Distress,” Time.

  290 a young conservative named Marco Rubio: Michael Grunwald, “GOP at War with Itself in Florida Senate Race,” Time, August 12, 2009, http://www.time.com/time/politics/article/0,8599,1915837,00.html.

  291 love emails about “magnificent gentle kisses” and worse: “Exclusive: Read E-mails Between Sanford, Woman,” The State, June 25, 2009.

  292 “I think even our critics would agree that at the very least, we’ve been busy”: Obama speech at Georgetown University, Washington, D.C., April 14, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=86000.

  293 “The obsession with race”: Mike Allen, Jim Vandehei, and John Harris, “100 Days: How Obama Changed D.C.,” Politico, April 24, 2009, http://www.politico.com/news/stories/0409/21546.html.

  294 the New York Times ran a story: Peter Baker, “Familiar Obama Phrase Being Groomed as a Slogan,” New York Times, May 15, 2009.

  295 Doris Kearns Goodwin said it sounded like a woman’s girdle: John B. Judis, “The Unnecessary Fall,” The New Republic, August 12, 2010.

  296 “The recession has entered a new phase”: Neil Irwin and Annys Shin, “In Poor Jobs Numbers, Hints of Improvement,” Washington Post, May 9, 2009.

  297 “She hasn’t found any yet”: YouTube video of Ellie Mae available at http://www.youtube.com/watch?v=tl_q0afUl0E.

  298 “By any objective standard, this has been a failure”: Mitch McConnell on Meet the Press, CBS, July 19, 2009.

  299 “Fiscal stimulus is a well-tested antibiotic”: Christina D. Romer, “So, Is It Working?: An Assessment of the American Recovery and Reinvestment Act at the Five-Month Mark,” Speech at the Economic Club of Washington, D.C., August 6, 2009, http://elsa.berkeley.edu/~cromer/DCEconClub.pdf.

  300 Jared Bernstein learned this the hard way: White House press briefing, June 8, 2009, http://www.whitehouse.gov/the_press_office/Briefing-by-Press-Secretary-Robert-Gibbs-with-Jared-Bernstein-the-Vice-Presidents-Chief-Economist-6-8-09.

  301 Obama wrote “No”—and underlined it: Ryan Lizza, “The Obama Memos,” The New Yorker, January 30, 2012, http://www.newyorker.com/reporting/2012/01/30/120130fa_fact_lizza.

  302 Boehner scoffed on Fox News that in Ohio: John Boehner on Fox News Sunday, July 5, 2009.

  303 critics who “are already judging the effort a failure”: Obama weekly address, July 11, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=86398.

  304 “I know voters in Ohio”: Eric Cantor on Fox News, July 9, 2009.

  305 “just when the Recovery Act was providing its maximum benefit”: Mark Zandi testimony before the Joint Economic Committee, October 29, 2009.

  306 Bernanke helped save the global economy: Michael Grunwald, “Person of the Year 2009: Ben Bernanke,” Time, December 16, 2009, http://www.time.com/time/specials/packages/article/0,28804,1946375_1947251_1947520,00.html. When I was working on my Bernanke profile, one White House official suggested that since fiscal stimulus was just as important as monetary stimulus, Time should expand my story into another “Committee to Save the World” cover like the one featuring Summers, Rubin, and Greenspan in February 1999. I guess I did this book instead.

  307 But the data told a powerful story: “The Economic Impact of the American Recovery and Reinvestment Act of 2009: First Quarterly Report,” White House Council of Economic Advisers, September 10, 2009, http://www.whitehouse.gov/assets/documents/CEA_ARRA_Report_Final.pdf.

  308 “What can you sell when you do not have the White House”: Ben Smith, “Exclusive: RNC Document Mocks Donors, Plays on ‘Fear,’” Politico, March 3, 2010, http://www.politico.com/news/stories/0310/33866.html.

  309 Obama asked Grassley point-blank: Richard Wolffe, Revival: The Struggle for Survival Inside the Obama White House (New York: Crown, 2010), p. 70.

  310 Porkulus was all about dubious-sounding projects: Scott Mayerowitz and Nathalie Tadena, “Stimulus Waste? The $3.4 Million Turtle Crossing,” ABC News, July 10, 2009, http://abcnews.go.com/Business/Economy/story?id=8045022; David Saltonstall, “Drudge Story on Pork Draws Ire from President Obama’s Agriculture Chief,” New York Daily News, July 21, 2009; Dan Eggen, “Former Hospital CEO Rick Scott Leads Opposition to Obama on Health Care,” Washington Post, May 11, 2009.

  311 the stimulus had added at least 2 percent to GDP: Calmes and Cooper, “New Consensus Sees Stimulus Package as Worthy Step.”

  312 And the administration had fulfilled all of its pledges: “Roadmap to Recovery: Day 200,” White House report, September 2009.

  313 One poll found that 45 percent of Americans: Rasmussen survey, June 10, 2009; Joe Biden, “What You Might Not Know About the Recovery,” New York Times, July 26, 2009; Biden speech at Brookings Institution, September 3, 2009, http://www.brookings.edu/events/2009/0903_recovery_biden.aspx.

  314 the event ended up in a department briefing room: Obama remarks at Department of Transportation, April 13, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=85995.

  315 the Recovery Act logo: Logo available at http://www.recovery.gov/News/mediakit/Picture%20Library/circle_recovery_logo.jpg.

  14. Change Is Hard

  316 In the fall
of 2009: “Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed,” Government Accountability Office, September 23, 2009, http://www.gao.gov/products/GAO-09-1016.

  317 At an event at a Home Depot in Virginia: Obama remarks in Alexandria, Virginia, December 15, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=86995.

  318 “green the ghetto”: Van Jones, The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems (New York: HarperOne, 2008).

  319 The Government Accountability Office, the department’s inspector general, and the media: “Factors Affecting the Department of Energy’s Program Implementation,” GAO, March 4, 2010, http://www.gao.gov/products/GAO-10-497T; “Progress in Implementing the Department of Energy’s Weatherization Assistance Program Under the American Recovery and Reinvestment Act,” Department of Energy, Office of Inspector General, February 2010, http://energy.gov/sites/prod/files/igprod/documents/OAS-RA-10-04.pdf.

  320 “Massive Funding: BBBBBBBBILLIONS!”: PowerPoint presentation provided to author.

  321 audits that found sporadic cases of shoddy work: For example, “The State of Illinois Weatherization Assistance Program,” DOE Office of Inspector General, October 2010, http://energy.gov/sites/prod/files/igprod/documents/OAS-RA-11-01.pdf. There were similar problems in West Virginia and several other states.

  322 The African Heritage Dancers and Drummers of Washington: Letter from Representative Fred Upton to Energy Secretary Steven Chu, November 23, 2010, http://upton.house.gov/UploadedFiles/Letter_to_Sec_Chu.pdf.

  323 a follow-up by the GAO found the program’s start-up problems were largely solved: “Progress and Challenges in Spending Weatherization Funds,” GAO, December 2011, http://www.gao.gov/assets/590/587064.pdf.

  324 not the clean-energy economy: “AWEA Year End 2009 Market Report,” American Wind Energy Association, January 2010; “US Solar Industry Year in Review 2009,” Solar Energy Industries Association, April 15, 2010.

  325 the saga of Serious Materials: Glenn Beck, January 20, 2010.

  326 The lead inquisitors were Senators Tom Coburn and John McCain: Coburn and McCain issued two reports: “Stimulus Checkup: A Closer Look at 100 Projects Funded by the American Recovery and Reinvestment Act,” December 2009; and “Summertime Blues: 100 Stimulus Projects That Give Taxpayers the Blues,” August 2010. Coburn also issued a report by himself in June 2009: “100 Stimulus Projects: A Second Opinion.” All three are available at http://www.coburn.senate.gov/public/?p=OversightAction.

  327 “Exclusive: Jobs ‘Saved or Created’ in Congressional Districts That Don’t Exist”: Jonathan Karl, ABC News, November 16, 2009, http://abcnews.go.com/Politics/jobs-saved-created-congressional-districts-exist/story?id=9097853#.T34Fm79AZqs.

  328 “To read some coverage”: Earl Devaney, Chairman’s Corner blog, Recovery.gov, March 22, 2010, http://www.recovery.gov/News/chairman/Pages/march222010.aspx.

  329 “Now you can go right online”: Glenn Beck, July 20, 2009.

  330 “Undercounting Concerns Stimulus Investigators”: Matt Kelley, USA Today, November 30, 2009.

  331 a poll during the controversy: Washington Post/ABC News poll, November 2009.

  332 “Promises, Promises: Web Site Likely to Fall Short”: Philip Elliot, Associated Press, February 18, 2009.

  333 “the stimulus has done more to promote transparency”: Ryan Holeywell, “Did the Stimulus Do Anything for Transparency?” Governing, February 2012.

  334 “Traffic Set to Slow as Stimulus Gears Up”: Brad Heath, USA Today, May 4, 2009.

  335 “Stimulus Projects Bypass Hard-Hit States”: Heath, USA Today, May 27, 2009.

  336 “Pace of New Stimulus Spending Slows”: Heath, USA Today, September 13, 2009.

  337 “Stimulus Takes Detour Around Ailing Metropolitan Areas”: Heath, USA Today, September 24, 2009.

  338 “Metro Areas Get Chunk of Rural Stimulus Aid”: Heath, USA Today, December 27, 2009.

  339 Another example from my overflowing gotcha file: Jennifer LaFleur, “Stimulus Weatherization Aid Favors Cold Regions,” ProPublica, May 7, 2009; Michael Cooper, “Stimulus Funds Spent to Keep Sun Belt Cool,” New York Times, June 7, 2009.

  340 the Washington Post, was a serial offender: ClimateProgress has catalogued the Post’s witch hunt: http://thinkprogress.org/romm/2011/12/01/379444/washington-post-solyndra-reporting/. For example, the Post did forty-three articles on Solyndra in the fall of 2011, and twenty-six mentioned that one of its investors, George Kaiser, was an Obama fund-raiser. (He has testified under oath that he never discussed Solyndra with the administration. Nobody has contradicted him.) Only one story mentioned that the influential Republican Walton family also invested in Solyndra. Only one mentioned that the Bush administration had pushed the loan as well. Only one mentioned that the loan program had plenty of reserves to cover the Solyndra default. And several stories included the kind of misleading statistics and out-of-context quotes that made it clear the reporters were hunting for a scalp.

  341 One story tarred CleanTech for Obama cofounder Sanjay Wagle: Carol D. Leonnig and Joe Stephens, “Federal Funds Flow to Clean-Energy Firms with Obama Administration Ties,” Washington Post, February 14, 2012.

  342 when national reporters focused on “the stimulus”: I guess I should mention that I was the main exception to all this stimulus negativity. My bosses at Time magazine thought I was bonkers; I spent months bugging them to let me write a story about how the stimulus is changing America, and then months bugging them to put it in the magazine. To their credit, they finally did. Michael Grunwald, “How the Stimulus Is Changing America,” Time, August 10, 2010, http://www.time.com/time/magazine/article/0,9171,2013826,00.html.

  343 “If a school continues to fail its students year after year”: Obama speech, March 1, 2010, http://www.presidency.ucsb.edu/ws/index.php?pid=87595.

  344 That was the TIGER program: Michael Grunwald, “Transportation Stimulus: Where Did the Federal Money Go?,” Time.com, September 13, 2010, http://www.time.com/time/nation/article/0,8599,2017466,00.html.

  345 The best example was in Florida: Michael Grunwald, “Can High-Speed Rail Get on Track?” Time, July 19, 2010, http://www.time.com/time/magazine/article/0,9171,2002523,00.html.

  346 “provide significant economic and environmental benefits to the state”: Letter from Alcee Hastings et al., June 19, 2009. Republicans Lincoln Diaz-Balart, Mario Diaz-Balart, and Adam Putnam were among the ten representatives who signed.

  15. Gas Versus Brakes

  347 President Bush inherited a budget in the black: The Congressional Budget Office in January 2001 projected a surplus for that year of $281 billion and surpluses for that decade that would add a total of $5 trillion to the Treasury. In January 2009, weeks before Obama became president, the CBO projected the 2009 deficit to hit $1.2 trillion and the ten-year shortfall to be $3.1 trillion. “The Budget and Economic Outlook: Fiscal Years 2002–2011,” CBO, January 2001, http://cbo.gov/sites/default/files/cbofiles/ftpdocs/27xx/doc2727/entire-report.pdf; “The Budget and Economic Outlook: Fiscal Years 2009 to 2019,” CBO, January 7, 2009, http://www.cbo.gov/publication/41753.

  348 a dizzying economic nosedive: A study by Bob Greenstein’s left-leaning Center on Budget and Policy Priorities estimated that the decrease in tax revenue and increase in safety net payments caused by the economic downturn were responsible for roughly 30 percent of the deficits in 2009, 2010, and 2011, while the Bush tax cuts accounted for about 26 percent of those deficits and war costs accounted for about 14 percent. Kathy Ruffing and James R. Horney, “Economic Downturn and Bush Policies Continue to Drive Large Projected Deficits,” Center on Budget and Policy Priorities, May 20, 2011, http://www.cbpp.org/cms/index.cfm?fa=view&id=3490. The Recovery Act only accounted for about 13 percent of the shortfalls in those years and virtually none afterward.

  349 The actual bond market seemed perfectly calm: Bond rating agency Fitch found “relative calm” in the corporate bon
d market by the second half of 2009, noting that downgrades had nearly ceased and that low-grade bonds were being issued at a far greater clip than in 2008. “U.S. Corporate Bond Market Finds Relative Calm,” Fitch Ratings report, October 22, 2009.

  350 “That is oh, so wrong”: Ron Suskind was the first to report on this meeting: Confidence Men, p. 354.

  351 Obama had tried to explain counterintuitive Keynesian concepts: Paul Krugman noted that one passage of Obama’s inaugural address—“Our workers are no less productive … our goods no less needed … our capacity remains undiminished”—echoed the words of Keynes. “Stuck in the Muddle,” New York Times, January 22, 2009. The George Mason speech during the transition may have been his most emphatic defense of the idea that the government needs to spend more when families and businesses are spending less.

  352 the bully pulpit doesn’t come with magical powers: Ezra Klein, “The Unpersuaded,” Washington Post, March 19, 2012.

  353 “a consensus that the stimulus package”: Calmes and Cooper, “New Consensus Sees Stimulus Package as Worthy Step.”

  354 When Summers froze Austan Goolsbee out of a key meeting on the auto bailout: Steven Rattner, Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry (New York: Harcourt, 2010), pp. 129–30.

  355 the White House scheduled a jobs summit: Obama remarks at closing of jobs summit, December 3, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=86961.

  356 In a speech a few days later: Obama speech at Brookings Institution, Washington, D.C., December 8, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=86961.

  357 Obama’s political team wanted him: Ryan Lizza, “The Obama Memos,” The New Yorker, January 30, 2012.

  358 Obama proposed a three-year discretionary spending freeze: State of the Union, 2010, January 27, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=87433.