Health bill won’t stop mounting deficit

By JIM LANDERS

WASHINGTON — President Barack Obama’s top economic adviser said last Monday that health care reform is essential to gaining control of the nation’s deficit. But Christina Romer was only able to applaud congressional attempts to keep from adding still more to the nation’s overspending.

It will take another decade — while the nation goes $9 trillion deeper into debt — before any real savings come from the changes designed to give tens of millions of Americans access to health insurance.

“Done correctly, health care reform can genuinely slow the growth rate of health care costs and thus put us on a path to greatly reduced budget deficits in the long run,” said Romer, who heads the White House Council of Economic Advisers.

“Informed observers will recognize that we have made the tough choices and put in place a plan that will help return us to fiscal prudence,” she said.

In a speech before the liberal-oriented Center for American Progress, Romer conceded that the health care bills before Congress were “not going to be enough” to start curbing the federal budget deficit, which was $1.4 trillion in the fiscal year that ended last month.

In terms of the deficit and the impact rising health costs are having, Obama has set the bar low. He has said repeatedly that he will not sign an overhaul that puts the government deeper into the red.

The least expensive bill approved by five different committees of the House and Senate just slips under that bar. The nonpartisan Congressional Budget Office reports that the Senate Finance Committee bill would save $81 billion over 10 years. That’s a lot of money, of course — but not so much when measured against $9 trillion in projected deficits over the same period.

The finance committee spent over a year working on health care. It followed the White House lead in trying to capitalize on a decade of savings offered by some of the industry’s most powerful lobbies — $155 billion from hospitals, $80 billion from pharmaceutical firms.

The doctors of the American Medical Association offered their support with the understanding that Congress would repeal a law that automatically cuts reimbursements for doctors who treat Medicare patients.

Congress has waived those automatic cuts for seven years, and they’re only considered a means for dressing up deficit forecasts. But repeal was not in the committee’s bill, and it would cost an estimated $250 billion. (If it had been added to the finance committee bill, the measure would have failed Obama’s test.)

Cost of health care

After an extended and raucous national debate, what Congress is approaching is a vote on changing the health insurance system, rather than slowing — much less lowering — the cost of health care.

To extend Medicaid, open insurance to people with pre-existing conditions and otherwise lower the ranks of the uninsured will cost nearly $900 billion and absorb virtually all of the savings and new tax revenue included in overhaul bills.

Meanwhile, our medical spending this year will hit $2.5 trillion. Insurance premiums for 2010 will once again outstrip what American workers get in pay increases.

By 2019, federal health care spending will exceed the defense budget. It will be higher than Social Security spending — higher than all of the government’s discretionary spending programs.

Romer noted that the finance committee’s bill would “generate substantially larger savings in the second decade” — 2020 to 2029.

As exhausting as this current health care debate has been, it would take a miracle of economic growth to keep health care spending from compelling action until then.

X Jim Landers is a columnist for The Dallas Morning News. Distributed by McClatchy-Tribune Information Services.