[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.
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