By Laura Conaway

White House economic adviser Christina Romer is speaking today to the Center for American Progress. In prepared remarks sent over this morning by the White House press office, Romer ties the debate over the $1.4 trillion budget gap to the one on overhauling health care.

Romer first cites the role of the Bush administration, then segues into medical spending:

(Economists) Auerbach and Gale calculate that roughly half of the long-run deficit is due to the policy actions of the past 8 years. According to a study by the Center on Budget and Policy Priorities, just 3 percent of the long-run fiscal problem is due to the ARRA [American Recovery and Reinvestment Act]. The rest of this yawning gap is due to projected rises in spending on entitlement programs, primarily Social Security, Medicare and Medicaid. Some of this is the result of the aging of the population. But the far greater source is the fact that health care costs, both public and private, are rising much faster than GDP.
. . .
Some have argued that it is irresponsible to reform our health care system at a time when the budget deficit is so large and our long-run fiscal problems are so severe. I firmly believe the opposite: it is fiscally irresponsible not to do health care reform.

Romer goes on to say that the overhaul won't add to the federal deficit and that a government-run health plan could help cut spending:

A public health insurance option would be a credible entrant in concentrated markets, and would serve as a competitive, alternative choice, constraining the ability of insurers to raise premiums, and thus containing the growth rate of costs.

categories: Health Care, Politics

10:59 - October 26, 2009

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