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Ditching health reform will only dig us into a deeper deficit

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By David S. Broder
Thursday, February 4, 2010

The economic collapse of 2008 and 2009 did so much damage to the United States that only now can we begin to measure the devastation.

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A sentence buried in the budget that President Obama submitted to Congress this week screamed for attention. "Household net worth fell from the third quarter of 2007 to the first quarter of 2009," it said, "by $17.5 trillion or 26.5 percent, which is the equivalent to more than one year's GDP."

Translated from economic jargon, that sentence means that America lost the benefits of an entire year of work -- of all that the brains and labor of American enterprise can produce, in the calamitous near-failure of Wall Street and the banking system.

The casualties of that upheaval are all around us, most notably in the 10 percent of Americans who are officially unemployed -- a figure that increases to 17 percent when you consider part-time workers and those who have become discouraged.

What the budget makes clear is that it will be years, under the best of assumptions, before we can recover and it may be a decade until the nation's finances look as healthy as they did the day Bill Clinton left office and George W. Bush was sworn in. Unemployment at the end of this year is expected to remain around 10 percent and it may be only a couple points lower when the nation votes for president in 2012.

As David Sanger pointed out in the news analysis that led the New York Times on Tuesday, by projecting a full decade in which debt will outpace income growth for the nation, the budget forecasts a protracted test for the United States' ability to sustain its domestic harmony and international leadership.

The economic consensus is that the steps Obama has prescribed lead in the right direction but fall far short of what is needed to restore to our children the bright prospects that past generations of Americans thought of as our legacy.

If that sobering message does not compel the members of this Congress to set aside their quarrels long enough to address the problems facing the nation, then they deserve the contempt in which many Americans hold them.

Time and again, the budget shows beyond question that we are well advanced on "an unsustainable path." The combination of a growing population of the aged and the relentless inflation of medical costs, beyond the overall increase in prices, dooms the nation's future prospects.

A chart in the budget shows that the three big entitlements, Medicare, Medicaid and Social Security, now consume 41 percent of the federal spending, aside from interest payments. On current trends, this will rise to 60 percent by 2030, when all surviving baby boomers will be 65 or older -- crowding out almost everything else the country needs from government.

Because that prospect is such a nightmare, Obama is right in saying this Congress cannot simply walk away from health-care reform. It has to try again, with an invitation to Republicans and Democrats to make lowering costs the prime objective and not quitting until there is agreement on a plan.

Adding poignancy to this picture is the immediate plight of the states and local governments. Obama has resisted the temptation to salve Washington's wounds by dumping more responsibilities onto the lower levels of government.

This year, those governments are really hurting. Revenue is lagging and the demands for subsidized health, education and law enforcement services are higher than ever. All states but one are constrained by constitutional requirements to balance their budgets.

The federal government has helped, with $280 billion in stimulus funds ticketed for state and local governments last year and this. But after essentially doubling since 2000, the budget shows aid from Washington virtually leveling off next year.

The sad truth is that until the federal government steps up to the issue of health care and entitlement costs, the country will continue to pay the price.

davidbroder@washpost.com


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