Q&A: Michael Grunwald on the 'no-brainer' of health IT and ARRA's lasting impact

By Mike Miliard
11:12 AM

In his new book, The New New Deal: The Hidden Story of Change in the Obama Era (Simon & Schuster), TIME magazine correspondent Michael Grunwald makes a compelling case that President Obama's 2009 stimulus bill – despite being lampooned by the right as a pork-laden boondoggle and criticized by the left for not going far enough – is potentially more transformative, in the long run, than Roosevelt's New Deal.

Beyond merely preventing a second Great Depression, Grunwald shows – thanks to  fascinating and wide-ranging behind-the-scenes reporting from the White House, Capitol Hill and beyond – how the American Recovery and Reinvestment Act (ARRA) has quietly set the stage for lasting transformation in energy, education, infrastructure and more.

A central pillar of that mammoth, $800 billion dollar legislation, of course, is devoted to digitizing the nation's medical records and rewiring healthcare for the 21st century, via the $27 billion Health Information Technology for Economic and Clinical Health (HITECH) Act.

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Grunwald spoke to Healthcare IT News about President Obama's rationale for giving health IT pride of place in the legislation, the negotiations and revisions that led to the creation of meaningful use, the ways it has set the stage for broader healthcare reform, the jobs it has created – and why health IT may just be the most lasting, bipartisan and transformative piece of the stimulus bill.

You call the American Recovery and Reinvestment Act (ARRA) one of the "most ambitious and least understood" pieces of legislation in American history. Explain.

In Washington it's just considered this $800 billion joke: $800 billion worth of levitating trains to Disneyland and snowmaking machines in Duluth and mob museums and sod on the Mall and all sorts of nonsense that isn't in the actual stimulus. And even nationally, a year after it passed, the percentage of Americans who believed it created any jobs was lower than the percentage of people who believed Elvis was alive.

I spent nine years at the Washington Post, but I don't live in D.C. anymore. I think it would have been hard to write this book if I did because there's just a groupthink and herd mentality about this stuff. I stumbled into it through energy, and realized that this was by far the biggest energy bill in the history of the planet. And it turns out it really was, not just for energy, but it also laid the groundwork for healthcare reform, it was the most ambitious education reform in decades, the biggest infrastructure bill since Eisenhower, the biggest middle-class tax cut since Reagan, and the biggest investment in research, ever.

And then, oh, by the way, just about every independent economist agrees that it helped prevent a depression and added 2 to 4 percent in GDP, which is really the difference between contraction and growth. So it took this economy that was crashing at a 9 percent annual rate and losing 800,000 jobs a year, and within a few months you had the biggest improvement in employment in 30 years.

So there was clearly a really big story to tell. I didn't know whether everything worked out, but it was clear that this is what Obama meant by "change we can believe in." This was a huge downpayment on just about all his campaign promises.

So why aren't more people aware that the stimulus has worked? Why hasn't the Obama administration done a better job claiming credit?

I'll offer four reasons. The first, that I do sort of document in this book really for the first time, the way the Republicans had essentially plotted to obstruct Obama and destroy him before he even took office. I have the first reporting on these secret meetings with Eric Cantor and Mitch McConnell, and they plotted this strategy of 'no' – Republicans have done a really good job of distorting the stimulus and making it sound like $800 billion worth of waste and fraud. The fraud experts were estimating that 5 to 7 percent of it would be lost to fraud. So far, it's been 0.001 percent.

But Republicans have been really relentless. And then you've got the Democrats who, instead of pushing back, have mostly been kvetching about it too: "It's too small," or "There's too many tax cuts," or "It wasn't shovel-ready enough." Even inside the White House there was real debate over how to sell it. And some real mistakes that, I think in retrospect ... I quote some people at the White House saying how they screwed up the message and did some things that were stupid. And then you had the media. The national media is not really interested in public policy; they just cover the game. They do he said/she said stories. There wasn't a lot of incentive for reporters who don't really care about this stuff to try to track down what really happened.

But the big reason? I always say that this black guy whose middle name is Hussein who got himself elected president? He probably didn't become a political idiot on January 20, 2009. But it was such a really hard sell: It was a jobs bill that passed at a time when jobs were hemorrhaging. And the financial earthquake had hit, but the economic tsunami had not reached the shore. So I quote Larry Summers in December 2008 saying that FDR was lucky: there was three years of depression before he took over; everybody knew it was Hoover's depression. But when Obama took over, unemployment was still pretty low: Even if Obama had taken office in March, like FDR did, that would have been an extra 1.5 million jobs lost on Bush's watch.

So you had this really tough sell. And then Keynesian stimulus, which is really uncontroversial – every Republican and Democratic candidate in 2008 was pushing a stimulus bill, and Mitt Romney was pushing the largest one – but then when you've had this nightmare, and you've suddenly bailed out the banks with $700 billion, and now families and businesses are tightening their belts and you're telling them the answer is to throw another $800 billion into the economy, it's not intuitive. I do think in a way it was sort of a perfect storm where they definitely made some mistakes. But even if they had handled this beautifully and brilliantly, double digit unemployment was going to hard to explain.

(Continued on next page.)

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