The ACP Advocate Blog
by Bob Doherty
Monday, March 23, 2009
Is the federal deficit a Catch-22 for health care reform?
The Congressional Budget Office has decided that President Obama's proposed budget will add trillions of dollars to the deficit, substantially more than the administration's own budget office estimates:
"As estimated by CBO and the Joint Committee on Taxation, the President's proposals would add $4.8 trillion to the baseline deficits over the 2010-2019 period. CBO projects that if those proposals were enacted, the deficit would total $1.8 trillion (13 percent of GDP) in 2009 and $1.4 trillion (10 percent of GDP) in 2010. It would decline to about 4 percent of GDP by 2012 and remain between 4 percent and 6 percent of GDP through 2019. Our estimates of deficits under the President's budget exceed those anticipated by the Administration by $2.3 trillion over the 2010-2019 period. The differences arise largely because of differing projections of baseline revenues and outlays. CBO's projection of baseline deficits exceeds the Administration's estimate (prepared on a comparable basis) by $1.6 trillion."
Writing for the Wall Street Journal, John McKinnon suggests that the new deficit numbers could "imperil his health-care overhaul." He quotes several influential senators, Republican and Democrats alike, who reacted to the budget numbers by stating that the President's spending plans, will at least need to be scaled back. Some Republicans have gone further. Senator Judd Gregg (R-NH) argues that this "country will go bankrupt" if Obama's budget is adopted. Senator Gregg's views are particularly important, because he is the kind of Republican from a blue state whose votes the President will need to get his budget, and then health care reform, enacted.
It strikes me, though, that the view that the deficit makes health care reform unaffordable has it backwards. As the CBO itself has stated, the rising cost of health care continues to be the single greatest fiscal challenge to the United States. There is no realistic way to bring the federal budget anywhere close to being in balance without controlling the costs of Medicare. There is no realistic way to make Medicare expenditures sustainable without addressing the larger issue of reducing the rate of growth in overall national health care expenditures. And there is no way to make individuals financially secure without controlling the amount they pay for health care - and by guaranteeing them access to affordable coverage that can't be taken away.
The argument that the deficit makes health care reform unaffordable is a classic Catch-22. We can't afford to fix health care because it will add to the deficit ... but we can't afford not to fix health care because it will add to the deficit. It sets up the idea that deficit reduction and health care reform are on a collision course, when in fact one of the former cannot be accomplished without the latter.
Today's questions: Do you believe that the rising deficit numbers mean the country can't afford health care reform? Or do they make health care reform even more important?
About the Author
Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog
Email Bob Doherty: TheACPAdvocateblog@acponline.org.Follow @BobDohertyACP
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