WHILE BILL CLINTON RELAXED ON Martha's Vineyard last week, staff members were sweating and fretting back in Washington, studying computer models for answers to one of the most explosive questions facing his health-care-reform proposal. That question -- the subject of a showdown meeting scheduled with the President this week -- is, How many jobs will be lost during the long transition to reform?
Clinton has publicly stated that health-care reform will "boost job creation," a claim that unnerves many of his advisers. What they know -- and what some of them fear Clinton has not been told -- is that the Administration's own preliminary computer-aided studies of the "employment effects" of health reform predict "significant" job losses.
TIME has learned that according to one computer run, the plan would slow net employment growth by as many as 1 million jobs over the next five years. Other Administration forecasts -- based on computer simulations of the U.S. economy at various government departments and the Urban Institute, a Washington think tank on contract to the White House -- have produced lower estimates of job losses, sources said. But they do not support Clinton's claims of job gains.
Sources caution that these forecasts resulted from a draft of the health- reform plan that is still being refined, and was tested on an econometric model that included "faulty assumptions" about the ways in which employers, workers and health-care providers are likely to respond to health-care reform. Still, these estimates -- and others by independent economists who predict job losses in the 200,000-to-600,000 range -- galvanized Clinton's health-reform advisers last week into a crash program to refine both their computer models and the health-care plan in order to minimize their forecast of unemployment. Says a worried official: "The jobs issue is probably the most sensitive one we face in health-care reform."
Privately, several of the President's advisers contend that the current runaway spending on public and private health care is a growing burden on the economy, which, like a surgical patient who must feel worse before he can get better, might need to endure modestly higher unemployment for several years as the price of reform. Trouble is, Clinton has not prepared the public for any sacrifice. He and his top health-care strategist, Ira Magaziner, have been selling health-care reform as a four-course free lunch. Everyone will be covered. It won't require new taxes. It will immediately boost job creation. And it will immediately reduce the federal deficit. "Several of us," says a political adviser to Clinton, "are worried that we're creating expectations for health care that can't be met."