Arbitrary $1 trillion threshold for health care

I understand that people are concerned about the potential costs of health care reform, but it's immensely frustrating how Senate Finance chair Max Baucus and other prominent figures in Washington have become fixated on the idea that the reform bill shouldn't cost more than $1 trillion. I haven't heard a principled reason why that number is the right one -- it's just an arbitrary threshold. If we used the Euro as our currency, no one would be saying "Health care can cost 721.084511 billion Euros* and not a penny more." And yet the $1 trillion number is seriously constraining the debate over the substantive provisions of the bill.

(* According to Google's currency converter this morning.)

Comments

[Rob]

What's frustrating is that politicians toss around the notion of having the country go an additional trillion dollars into debt as if they're ordering a frozen custard. One of the problems with the massive stimulus package and bailouts has been the desensitization of people to the vast sums involved. Another trillion? What the heck! And that's only over the next ten years. It's in the out years that the fun really starts.

Maybe Brendan as a scholar in health policy could provide us with a comparison of the original estimates of what Medicare would cost the country with the actual costs we've incurred. That should give us a nice perspective to judge the reality of holding the cost of health care "reform" to a mere trillion dollars.

[Eskimohorn]

Rob,

Reagan, GHWB & GWB were the ones who first ordered the "frozen custard" debt as you put it. And, when they were in office the only ones as concerned about the debt so consistantly were libertarians (and Ross Perot).

Now, flash forward to today where it's a huge issue now that the Republicans no longer control the checkbook. And, the faux indignation over domestic spending. Deficit spending is all a matter of taste (spend trillions in Asia, or invest it locally).

Conservatives need to come up with real solutions for today's problems than merely parrot the talking points of corporate and special interest lobbyists. If there's a solution to address the needs of the uninsured and underinsured millions, then we're waiting to hear it from conservatives.

[Rob]

Eskimohorn, Reagan added less than $2 trillion in debt, G.H.W. Bush less than $1.5 trillion, Clinton less than $1.5 trillion. G.W. Bush added $5 trillion to $7 trillion, depending on whether you attribute to Obama any portion of the FY 2009 deficit resulting from stimulus packages and bailouts he engineered. According to the CBO, in two terms Obama's February budget proposals would add more than $7 trillion to the debt, and he'll leave his successor with annual deficits of around a trillion dollars and growing. And to the best of my knowledge that doesn't even include the full cost of the health care program being hammered out in Congress.

So you're right, George Bush's deficits were bad, but Obama's will be worse.

You want real solutions for today's problems? President Obama recently said, "The reckless fiscal policies of the past have left us in a very deep hole. And digging our way out of it will take time, patience and some tough choices." Here's my real solution: when you find yourself in a hole, quit digging!

[David]

Further to Rob's post, the CBO used unreasonably optimistic economic assumptions:

Even the CBO’s most recent estimate is very optimistic, projecting that “real (inflation-adjusted) GDP falls by 1.5 percent in 2009 before growing by 4.1 percent in both 2010 and 2011.”
http://www.thenewamerican.com/usnews/election/913

The actual GDP growth as of June 22 is negative 5.84%. http://forecasts.org/gdp.htm There's no way the full year will come close to a drop of only 1.5%. And, to achieve 4.1% real growth two years in a row would be remarkable even during good times. It's a ridiculous assumption given that the current recession may not even end before 2010 and given that the 2010 and 2011 economy will be burdened by the need to deal with the humongous deficit.

Even without an additional $1 trillion deficit for a new health plan, we are courting economic disaster.

[David]

On a re-reading of Brendan's post, I erred in addressing a $1 trillion deficit. It was actually a $1 trillion estimated cost.

However, I do believe that a big health plan will tend to be a drag on the economy because of the additional taxes needed to cover its cost as well as the likelihood that the actual cost will exceed the extimated cost.

[Eskimohorn]

Again, the rancor of deficit spending in Reagan, Bush & Bush simply did not exist when they were deficit spending. Where is this coming from? If this was such an issue, tell me - did you support Clinton, who brought us a surplus? Did you protest Bush's spending? If the answer is no, then you're not living in reality.

[Rob]

Eskimohorn, you can't understand why many people were somewhat concerned about Bush's deficits but greatly concerned about Obama's projected deficits? Look at the chart. Except for the 2008 bailout, the Bush deficits were a fraction of the projected Obama deficits.

A buzzword these days is "sustainable." The projected deficits Obama's programs will cause are simply not sustainable. If you were living in reality, you'd be concerned too.

[Jack Davis]

Brendan, this was a very thoughtful post. The trillion dollar number is completely arbitrary. I would argue that obsession with saving money has led to severe problems with britain and Canada's health care systems. They have underfunded the systems, and consequently have long waiting lists and dissatisfied customers.