Where Government Spending Should be Trimmed — And Why It’s Necessary to Fast-Track Universal Health Care

It’s no accident that as Congress returns this week from its two-week recess and begins debate on the $3.5 trillion budget plans for the fiscal year starting in October — which may or may not include a provision that fast-tracks Obama’s health care proposal by allowing it to pass the Senate with a mere majority — the President has summoned his cabinet for a first meeting, at which he’ll call for more cuts in domestic spending.

Symbolism counts in Washington, and Obama’s request that his cabinet officers come up with $100 million in spending cuts will be played up by the White House as the beginning of a major effort to trim unnecessary government spending. It’s part of the President’s effort to reach out to Republicans (and calm the nerves of “blue-dog” Democrats) worried about all the money the Administration has spent and still wants to spend — $787 billion on the stimulus, $700 billion committed to the bank and auto bailouts, and, most importantly, $3.5 trillion for the next ten years, including universal health care. Throw in the cost of a cap-and-trade system to control climate change and you’re talking big money.

But Obama would be mistaken to take more than symbolic steps at this point. The economy is still in a depression because consumers and businesses won’t or can’t spend, and exports are dead because the rest of the world is in even worse shape. Government spending on a large scale is necessary now, and will be next year as well.

Over the longer term, Obama must be careful not to put entitlement programs on the chopping block as part of a “grand bargain” to elicit Republican support for health care and cap-and-trade. Social Security is not in dire straights; it can be made flush for the next 75 years by ever-so-slightly lifting the ceiling on the portion of income subject to Social Security payroll taxes (and if Democrats are reluctant to do that on incomes over $100,000, then they could do so on incomes over $250,000).

Medicaid and Medicare are in trouble because health care costs are rising so fast, which argues for health-care reform rather than cuts in these important programs. Yet if health-care reform has any prayer of controlling the rising tide of health care costs, the plan must allow beneficiaries to opt into a public insurance plan — something Republicans and the health-care establishment are determined to fight. So it’s critically important that the Senate wrap health care into a reconciliation bill that can be enacted by a majority vote in the Senate.

Obama should fast-track health care and stop trying to court Republicans. Every House Republican and all but three Senate Republicans voted against the stimulus; all Republicans in both houses voted against the budget. During the recess they hosted “tea parties” claiming that Americans are over-taxed. Over the weekend, House minority leader John Boehner called the idea of carbon-induced climate change “almost comical.”

Republicans are already off and running toward the midterm elections of 2010, even starting to run ads against House Democrats in close districts. They seem hell bent on on becoming a tiny, whacky minority — the party that denies evolution, denies global warming, denies Americans need a major overhaul of health care, and denies the economy needs anything more than a major tax cut to get it moving again.


Originally published at Robert Reich’s Blog and reproduced here with the author’s permission.

4 Responses to "Where Government Spending Should be Trimmed — And Why It’s Necessary to Fast-Track Universal Health Care"

  1. Allen Taylor   April 21, 2009 at 9:12 pm

    I chose to do my concept of entitlement essay on American Health Reform. I believe the most important thing in life is health. The best thing America can do is put priority on health first. I believe in having incentives for those who aspire to work in the medical field, thus creating more doctors, nurses, ect. Doesn’t America care anymore? If anyone disagrees with me please post your argument.

  2. steven hansen   April 24, 2009 at 6:06 am

    i do agree we need to move forward on health care reform. health care is becoming too big a percentage of gdp.but when you start out with the answer, you are not looking to partisan support. how much of this legislation will be saddled with pork. anyone who thinks passing a pork stimulus is good for America?

  3. Guest   April 26, 2009 at 2:29 pm

    Unless we leave Ideology at the door, we will neve “solve” helathcare. A political solution to the problem will be disasterous.Obama’s (or better, the democratic party) proposal for healthcare may be a good one (at a root level), but it is mired in politics – so the implementation is destined to fail. The last thing the US needs is a political solution to a non-political process (healthcare). One only needs to look at the lack of results in the handling of the financial crisis by both a Rebublican and a Democrat over the last 2 quarters. do we want to repeat this mess with healthcare?If we move forward with an untested proposal on healthcare we will ultimately make a bad situation much worse.A better methodology: We need to remove politics, articulate a bi-partisan proposal, develop a pilot, study the pilot results, make modifications (based on the pilot results/learnings), and then make the wider changes. This is a fact based methodology not a political power move.Keep in mind that the methods discussed have been brief and given at a high level due to the nature of space allowed for “comments”. Further discussion/clarification is required.

  4. Guest   April 26, 2009 at 2:29 pm

    Unless we leave Ideology at the door, we will neve “solve” helathcare. A political solution to the problem will be disasterous.Obama’s (or better, the democratic party) proposal for healthcare may be a good one (at a root level), but it is mired in politics – so the implementation is destined to fail. The last thing the US needs is a political solution to a non-political process (healthcare). One only needs to look at the lack of results in the handling of the financial crisis by both a Rebublican and a Democrat over the last 2 quarters. do we want to repeat this mess with healthcare?If we move forward with an untested proposal on healthcare we will ultimately make a bad situation much worse.A better methodology: We need to remove politics, articulate a bi-partisan proposal, develop a pilot, study the pilot results, make modifications (based on the pilot results/learnings), and then make the wider changes. This is a fact based methodology not a political power move.Keep in mind that the methods discussed have been brief and given at a high level due to the nature of space allowed for “comments”. Further discussion/clarification is required.