Deficits and Health Care Reform

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After an eight-year hiatus, deficit reduction matters to Republicans again. Why the party that turned a quarter-trillion dollar surplus into a $1.2 trillion deficit thinks it has credibility on the subject is a mystery. That the party that put two wars and Medicare expansion on future generations' tab pretends to care about fiscal responsibility at all is rather comical. But pretend they do. This week, for example, Rep. Dave Camp ® of Michigan, the ranking member of the House Ways and Means Committee, responded to the mid-session budget review by insisting, "If the House Democrats' unaffordable $1 trillion health care bill wasn't dead before, it should be now."

That, of course, doesn't make sense. Unlike the Republican policies of the Bush-era, the Democratic health care bill would be paid for, not added to the debt. What's more, as Ezra Klein explained, "Camp's argument boils down to the idea that big deficits mean we can't spend money. But he's not saying that 'if the $541.1 billion the military has requested in 2009 wasn't dead before, it should be now.' Nor is he saying that 'if the extension of President Bush's tax cuts wasn't dead before, it should be now.' Both of those comments would actually make more sense, as neither expenditure is revenue neutral. But Camp's comment isn't about the deficit. It's about killing health-care reform."

But if Camp's comment were about the deficit, he'd nevertheless have it backwards. Tim Fernholz argues this week that if policymakers are serious about improving the budget outlook, health care reform is the solution.

[budget expert Stan Collender] is right that a deficit-neutral health-care bill will, by definition, have no direct effect on future government deficits and debt. But look more closely, and it becomes apparent that health-care reform will have major effects on decreasing deficits over the long term, when spending discipline is actually important....

The people standing directly in the way of health-care reform are conservative Democrats who claim to be deficit hawks, like Max Baucus and Kent Conrad in the Senate and the Blue Dogs caucus in the House. Of late, however, their interest in cutting the deficit has been eclipsed by political cowardice in the face of unified Republican obstruction to any and all reform efforts. The stumbling efforts of these supposed paragons of fiscal responsibility to maneuver the politics of health-care reform have decreased the chances of a bill that would reduce the deficit over the long term.

So get it straight: If the latest budget projections are keeping you up at night, the best way to ease your troubled mind is to support health-care reform. Otherwise, costs will keep rising, and deficits along with them. Opportunities to improve health care only come along once in a while -- the last major effort was 15 years ago. Fifteen years from now, it's possible that nearly one-quarter of every dollar spent in the U.S. will be spent on health care -- much of that coming, directly or indirectly, from the government. That sounds fiscally responsible, doesn't it?

Something for Dave Camp and his cohorts to keep in mind.

http://www.washingtonmonthly.com/

Edited August 27, 2009 by Col. 'Bat' Guano