[Congressional Record Volume 140, Number 2 (Wednesday, January 26, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: January 26, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               HEALTH CARE REFORM IS NO CURE FOR DEFICIT

  Mr. PACKWOOD. Madam President, there was an excellent article in the 
Wall Street Journal today by Senator Domenici. I ask unanimous consent 
that it be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                  [Wall Street Journal, Jan. 26, 1994]

               Health Care Reform Is No Cure for Deficit

                         (By Pete V. Domenici)

       As we in Congress examine President Clinton's health care 
     reform plan in the wake of his State of the Union message, we 
     would do well to recall what he told the nation about its 
     fiscal health last July: Health care reform is key to 
     reducing the federal deficit and keeping it down.
       In fact, throughout last year's budget debate, the 
     president made it clear that he was proposing a two-pronged 
     attack on our nation's deficit. The first step had been 
     presented in his budget plan (primarily increased taxes); the 
     second step would come in health care reform, which would, 
     once and for all, control federal health care entitlements, 
     and therefore, the federal deficit. ``We need to bring the 
     deficit down to zero,'' President Clinton said. ``To do that, 
     we have to pass health care reform.''
       By the time the president's health care proposal reached 
     Congress in late October, however, money ``saved'' from 
     reforming federal health care programs was being earmarked 
     not for deficit reduction but for extending coverage to the 
     uninsured.
       The administration's plan is not unique in using whatever 
     savings are achieved via health care reform to extend 
     coverage. This is true of other reform plans as well, 
     including the GOP Task Force proposal I have co-sponsored. An 
     important distinction, however, is that the GOP Task Force 
     plan at least recognizes that we cannot add to the current 
     deficit with uncontrolled and open-ended health care 
     entitlements. It places a spending limit on any new health 
     programs so that they cannot exceed the savings achieved from 
     controlling current health program outlays. No such mechanism 
     exists in the administration's bill.
       Consider the consequences. The deficit, using the 
     Congressional Budget Office's numbers, will dip slightly to 
     below $200 billion in four years. Then it begins rising 
     again. Without the administration's $300 billion in deficit 
     reduction from health care reform, as promised back in July, 
     the deficit will once again reach nearly $360 billion within 
     seven or eight years.
       In other words, most of the deficit reduction resulting 
     from the $255 billion in taxes and user fees and further cuts 
     in defense spending adopted last year will still not 
     eliminate the long-term deficit projections. Failing to 
     control entitlement spending during last year's budget 
     deliberations--particularly the health care entitlement 
     programs--will go down in history as the great missed 
     opportunity of the Clinton administration.
       How, then, can Mr. Clinton make good on his stated desire 
     to take the deficit ``down to zero''?
       The first option, obviously, is more taxes. But, economic 
     negatives aside, there clearly is little political support 
     for more taxes.
       Some will argue that we can cut more out of the defense 
     budget. But the defense budget, already on a downward path 
     since 1985, will be reduced further under the Clinton defense 
     plan. In just a short four years we will be devoting less 
     than 3.2% of our gross domestic product to national security, 
     a level not seen since 1940.
       How about more cuts in other domestic programs? Not easy. 
     Just to stay within the spending limits established in the 
     budget, discretionary spending will have to be reduced nearly 
     $20 billion over the next five years--not counting at least 
     $25 billion for the President's investment initiatives he 
     claims he didn't get last year.
       Bob Reischauer, director of the Congressional Budget 
     Office, recently observed: ``All the numbers that will be 
     generated for the health care reform debate will be highly 
     uncertain and should be treated accordingly.'' Unfortunately, 
     health care estimates in the past have underestimated the 
     costs and overestimate the savings. Two examples: When the 
     Medicare hospital insurance program was adopted in 1965, it 
     was estimated to cost about $9 billion in 1990; the actual 
     cost was $67 billion. When the 1990 Budget Agreement was 
     adopted, we thought we had cut the cost of federal health 
     programs by more than $42 billion. Since then, ``technical 
     reasons'' have more than wiped out any real savings.
       If we repeat history and our estimates are off by similar 
     magnitudes, hold on. Instead of helping to reduce the 
     deficit, as the administration still asserts, the White House 
     plan could increase the deficit by $400 billion. National 
     health care expenditures could be more than 19% of GDP. 
     Therefore we would go through a tremendous shake-up of the 
     health care system, not reduce the federal deficit and not 
     change the proportion of our national wealth devoted to 
     health care.
       If would behoove us all, regardless of political 
     affiliation, to be humble in our ability to predict the 
     fiscal impact of any proposal. Let us hope that the 
     administration, in an effort to guarantee health security to 
     all Americans that can never be taken away, does not ignore 
     our country's economic security, threatened by increasing 
     federal debt.

                          ____________________