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Fred Hiatt on stepping closer to universal health care -- and bankruptcy

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By Fred Hiatt
Monday, November 9, 2009

The House passage of health-care reform Saturday night should be a moment of celebration. In a country as wealthy as America, no one should have to go without medical care. As in other developed nations, everyone should have access to doctors, to medicine, to preventive services. The House bill would take America a giant step closer to that goal.

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Here is the dilemma: The bill also could take America a step closer to bankruptcy. And for progressives in particular -- for those who believe that government has a mission to help the poor and protect the vulnerable -- that prospect should be alarming. If federal debt continues rising on its present path, hastened by a $1 trillion health-care bill, it is the poor and vulnerable who will be most harmed.

President Obama has acknowledged this dilemma and offered three broad answers: Health-care reform should not add to the deficit. It should control health-care costs. And, once reform is passed, the government will get serious about deficit reduction.

Unfortunately, the House bill fails his first test. True, the Congressional Budget Office has said that the bill is paid for. But the CBO is not allowed to count $250 billion in projected Medicare payments to doctors over the next 10 years, because the House -- after first acknowledging that cost in its reform bill -- decreed it had nothing to do with reform because lawmakers didn't want to pay for it.

Nor is the CBO permitted to ask whether Congress will truly cut hundreds of billions of dollars from Medicare programs in coming years, as the House bill assumes. History suggests that legislators will not be deaf to the complaints of seniors and those who treat them when it comes time for the axe to fall.

As Post health reporter Ceci Connolly explained in a front-page story last week, the House bill also does not do much to lower costs. It includes some valuable pilot programs. But it doesn't end the tax break for employer-provided insurance, a break that is both highly regressive and encourages spending. It doesn't allow for much evidence-based medicine that could wring excess treatment out of the system. It doesn't empower an independent commission that could make cost-control decisions that are too hard for Congress. It doesn't target the cost of malpractice litigation and defensive medicine.

Obama's third answer is welcome, but can he succeed? If he could not or chose not to raise revenue more substantially or reduce entitlement benefits while pleasing the Democratic faithful with universal health care, why would he fare better when he has no goodies left to offer?

The root difficulty is Obama's insistence that the nation can afford a large new social program without raising taxes on anyone who earns less than $250,000 per year.

Under his plan, according to a CBO analysis, the government will be spending 24.5 percent of gross domestic product -- the total value of the national economy -- by 2019 while raising only 19 percent in revenue: a huge, unsustainable gap.

In the kind of fiscal crisis that might ensue, as progressive budget expert Robert Greenstein said recently, "the risk is high that the people with the least political power in this country could bear a disproportionate share of the burden even though, by and large, they're lower on the income scale." The government would spend more and more on interest payments while likely stinting on college scholarships, inner-city schools, and, above all, aid to the poor and near-poor here and abroad.

Expanded access to health care has rightly been a goal for decades. No civilized nation should allow sick people to go untreated. Yet neither should a civilized nation saddle its coming generations with a lower standard of living, a likely effect of U.S. profligacy if unchecked. No civilized nation should leave its government too bankrupt to help the poor.

Is there a way out of this dilemma? Cling to a hope that, as the bill winds through the Senate and conference, Obama puts his clout behind the progressive ideals of thrift and cost containment as well as universal access.

fredhiatt@washpost.com


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