If you want a sustainable budget, stay the course with Pres. Obama

I have an op-ed in today’s Durham (N.C.) Herald-Sun newspaper arguing that the re-election of President Obama increases the chances of a deal that will put us on the path to a sustainable budget. It is reproduced below. This will be a familiar argument if you have read my book Balancing the Budget is a Progressive Priority.

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By Donald H. Taylor Jr., Herald-Sun guest columnist

The fate of Obamacare and the direction of the next step in health reform is the clearest choice in the presidential election.

Obamacare has already expanded insurance coverage to young adults by allowing them to remain on their parents’ insurance, and it will begin the setup of state-based markets (think Orbitz.com) in which the uninsured and those working for small businesses can purchase private insurance coverage with income-based subsidies. North Carolina will have the choice of expanding Medicaid in financially advantageous terms if we wish to do so (the Supreme Court said states could not be forced).

Obamacare contains many efforts that begin changing the way we pay for care — policies that if tried, evaluated and implemented, could help us address cost inflation while improving quality.

However, the hardest steps on cost containment will never be taken so long as health reform remains the policy of only one political party. Eventually, there has got to be a deal that makes both political parties responsible for taking the hardest steps.

Re-electing President Obama and moving forward with Obamacare will provide the conditions under which such a political deal is most likely to occur, yielding the best chance for the best health policy.

Gov. Romney is in many ways a hero of health policy, having achieved near universal coverage in Massachusetts; his plan is the pattern for Obamacare. He now says that he will repeal and replace it on day one of his presidency, and that is the clear sentiment of the Republican Party.

When viewed purely in policy terms, Obamacare represents a moderate track, and not the single-payer system that many liberals want. The part of Obamacare that is most offensive to Republicans is the Obama part.

If Republicans record a clean sweep in this election (presidency and both houses of Congress), they will be able to repeal the vast majority of Obamacare. However, there is no reason to believe they will get around to the replace part. It is not that they don’t have ideas on health reform. They do. What they lack is the political will (it takes 218 votes in the House, 60 in the Senate, months of discussion) to push a reform through from scratch.

When was the last time the Republican Party invested political capital to push a health reform effort that would expand insurance coverage while addressing costs and quality? There is no example.

There is a tremendous amount of policy work that must be done in Washington in the coming weeks and months on taxes and spending, and the scope of the tax and spending changes that happen by default mean that the time will be ripe for a large-scale deal, one whose inevitability has been delayed only by the election. If we can identify some modifications of Obamacare that are to the liking of Republicans in the midst of these broad negotiations, and while doing so make the hardest work of health reform the responsibility of both parties, then we have a reasonable chance of moving toward a sustainable budget over the next decade.

If the first step on health reform is back to nothing via repeal, then I fear that will be the last step for some time. And we have no hope of a sustainable budget without consequential health reform because health care costs are our biggest long-run spending problem.

If you want a sustainable budget, the best course of action is to stay the course and re-elect President Obama, in large part because he already has a health reform vehicle that provides many great steps and is flexible enough to accommodate the inevitable next ones.

Donald H. Taylor Jr. is an associate professor of public policy at Duke University and author of “Balancing the Budget is a Progressive Priority.” Taylor has contributed financially to the Obama campaign and has canvassed, but this column was not seen by anyone else and he is not a policy adviser to the campaign.

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cross posted at freeforall.

Author: Don Taylor

Don Taylor is an Associate Professor of Public Policy at Duke University, where his teaching and research focuses on health policy, with a focus on Medicare generally, and on hospice and palliative care, specifically. He increasingly works at the intersection of health policy and the federal budget. Past research topics have included health workforce and the economics of smoking. He began blogging in June 2009 and wrote columns on health reform for the Raleigh, (N.C.) News and Observer. He blogged at The Incidental Economist from March 2011 to March 2012. He is the author of a book, Balancing the Budget is a Progressive Priority that will be published by Springer in May 2012.

11 thoughts on “If you want a sustainable budget, stay the course with Pres. Obama”

  1. Common sense. Unfortunately, the majority of people neither understand nor care about realistic policy debate on healthcare, or budget balancing, or anything else. I wonder if Romney really will repeal Obamacare after he squeaks into victory by stealing the election through rigged electronic voting machines (ala Bush in Ohio in 2004.) Won’t it be sad to waste all the effort that went into the last chance, modest healthcare reform of Obamacare?

  2. “health care costs are our biggest long-run spending problem” except perhaps military spending. Suppose the US spent as much on its military than the next ten countries put together, instead of the next 20. Wouldn’t that help the deficit some? Of course a lot of that spending goes to the military industries conveniently situated in all 435 congressional districts – but cutting it would still hurt fewer people than turning Medicare or Medicaid or both into voucher programs and capping the value of the vouchers.

    1. John G
      We do spend lots on military and in health and military spending are the two areas in which the US is most clearly an outlier cross nationally. However, by default health care costs will rise over the next 20-30 years due to the joining of the demographic reality of the baby boomers with a system wide health care cost inflation problem. So, I would still put health care as the biggest spending side issue (it will take an increase in taxes over historical norms as well) that must be addressed to attain a sustainable federal budget.

      1. Note also that one of the biggest expenditures at the DOD is health care, the operate the military healthcare system, Tri-Care insurance and cover current personnel, family and retirees.

      2. So, I would still put health care as the biggest spending side issue (it will take an increase in taxes over historical norms as well) that must be addressed to attain a sustainable federal budget.

        Well OK, but health care is a spending side issue for the entire economy, not just public spending. Our system is broken. Conflating this fact with “sustainable budgets”, whatever those are, is an economic misnomer and a political disaster. Under conditions of ‘not full employment’ the assertion regarding taxes needed to ‘pay’ for it is simply not true. If health care takes up an increasing share of the economy, what difference does it make if the spending is ‘private’ or ‘public’?

        1. Yes, the entire health system has a cost problem. It manifests itself most clearly in the federal budget via Medicare and also Medicaid. You have to address the big issues in both the public and private parts of the system….I completely agree that it is not just a federal budget problem.

  3. I agree: If you want trillion dollar deficits sustained until people are using our currency for wallpaper, by all means vote him back in.

    1. If Gov Romney wins and Rs clean sweep, $1 Trillion deficits will be a quaint/fond memory. Gov. Romney has pledged to (1) do nothing on Medicare for 1 decade; (2) further cut taxes (a lot); (3) increase military spending; (4) not do the sequester. My guess is FY 2015 deficit ~$2-$2.5 T under R clean sweep.

  4. This webpage is a joke right? “Obama” and “sustainable budget” don’t go together. You could have written this the first week Obama was President, but definitely not after the past 4 years.

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