Health Care and the Deficit
THE BUDGET deficit is still much too large, and in theory this is the perfect time to reduce it further, while the economy is strengthening and before it overheats. But the president and the Democratic Congress have given themselves time off this year from conventional deficit reduction in favor of health care reform. That adds to the urgency of producing a reform that (a) is affordable - no frills - (b) is solidly financed and (c) includes a credible means of containing costs. If they fail to produce such a plan, they will face a serious fiscal problem next year as well as an unsolved health care problem.</br></br>The economy was in a more uncertain state than now when the president decided last winter to take the year off in terms of deficit reduction. The uncertainty provided a rationale: The need to take care - having already cut the deficit substantially the year before - not to take a second step in the same direction that might choke off the recovery. The president and many congressional Democrats wanted the year off anyway. They have a lot else on their agenda than simply reducing the deficit, which is no one's idea of fun.</br></br>But the decision to shift from the deficit to health care this year was not a dodge or gimmick. It was, and still is, defensible in fiscal as well as programmatic terms. Health care costs are the rogue item in the federal budget, just as they are in every other budget in the country. If left to themselves they will drive up future deficits almost no matter what else Congress does. They have to be contained, nor does it do much good if Congress, in containing them, merely shifts them to the states or private payers. That's a hidden tax increase if ever there was one.</br></br>Almost all the reform plans now in play would increase national (not just federal) spending on health care in the short run by increasing the number of people who are insured. In the longer run, however, a plan that is any good will appreciably reduce projected spending and the pressure on the budget.</br></br>That should be the goal. It was the stated goal when the president introduced his plan. If he and Congress prove incapable of achieving it, here is what they will likely face next year.