The ACP Advocate Blog
by Bob Doherty
Monday, December 14, 2009
Should federal spending and taxes be taken away from Congress?
The Senate debate on health care reform is on hold until the Congressional Budget Office (CBO) produces a "score" (estimate) of the impact of a compromise negotiated between Democratic centrists and liberals. The new score will update a previous CBO analysis, which estimated the Senate bill "would yield a net reduction in federal deficits of $130 billion over the 2010-2019 period" and "small" reductions over the next decade. The CBO has estimated that the House-passed bill will reduce deficits by about $102 billion over the 2010-2019 period, and continue to have a modest positive impact on deficits in the next ten years.
Some believe that the CBO under-states the cost-saving. David Cutler and Commonwealth Fund President Karen Davis argue the bills will have a much greater impact because "an aggressive approach to health care modernization could result in significantly greater cost reductions." President Obama's Council of Economic Advisers (CEA) has issued a new report that concludes, "The [House and Senate health reform] bills would also significantly lower the Federal budget deficit in the upcoming decade, and extend the solvency of the Medicare Trust Fund by five years."
Robert Samuelson, writing in yesterday's Washington Post, disagrees. He believes that the bills will increase national health care spending and make the deficit worse, in part because he is skeptical that Congress has the will to allow the intended savings to go into effect.
Skepticism about Congress' ability to make tough choices isn't limited to critics of President Obama's health reform initiative. The President's economic advisers tout the benefits of having an Independent Medicare Advisory Board, as proposed by the Senate bill, which "would recommend changes to the Medicare program that would both improve the quality of care and also reduce the growth rate of program spending . . . Absent Congressional action, these recommendations would be automatically implemented."
And today, The Peterson-Pew Commission on Budget Reform issued a report that "calls on policy makers to enact both spending cuts and tax increases to shift our nation's fiscal course." This bipartisan group, headed by former members of Congress, recommends that the White House and Congress adopt a target to reduce the public debt to 60 percent of GDP by 2018; negotiate a specific package of spending reductions and tax increases that are gradually phased in to protect the recovering economy; and create an automatic enforcement mechanism that would require that "any breach of the target would be offset through automatic spending reductions and tax increases . . . [applied] equally to spending and revenue."
I understand the rationale of taking decisions on spending cuts and tax increases away from Congress. Politicians have shown themselves to be chronically incapable of voting for unpopular tax increases and spending cuts.
But I am uneasy about turning over the "power of the purse," which our founding fathers gave exclusively to the people whom the voters elect to Congress, to an unelected commission - or to a process to impose cuts and tax increases automatically if a target is breached. We tried that with the SGR - which triggers cuts in payments to physicians when the SGR target is breached - and we all know how that worked out.
Today's question: What do you think about taking the decisions needed to bring federal spending and revenue into line away from Congress?
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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