At breakfast today with a health wonk type, I was told that the battle to watch on health care reform would be the same battle that always bedevils health care reform: It'll be the budget hawks versus the reformers. But I'm not so sure. There comes a man from the East who has walked among the budget hawks, and been accepted as one of them. And he has walked among the health care reformers, and been accepted as one of them. And now he walks alongside Obama, and has been accepted by him. And this man might speak to the budget hawks, and tell them that health care reform is good, and he might speak to the health care reformers, and tell them cost control is good, and he might speak to Obama, and Obama might listen. This man is Peter Orszag. In Washington, there is a thing called "fiscal responsibility." This thing called "fiscal responsibility" is different than fiscal responsibility. Fiscal responsibility, presumably, is smart fiscal management that deals forthrightly with looming problem. "Fiscal responsibility" is a particular set of biases and policy priorities, best exemplified in the person of Robert Samuelson. Among them: Entitlements are unsustainable. Social Security must be trimmed. Medicare must be cut. Medicaid must be slashed. The budget is in danger and austerity is our only cure. This all sounds very responsible. The problem is that it's not, uh, true. The budget is in dire straights. But Social Security is fine. And Medicaid isn't even facing real problems. It's Medicare. And Medicare's problems are the same problems facing health care as a whole. And the problem is simple: If costs keep growing at the current rate, it will destroy the federal budget and force a decline in real incomes. The government can't afford it, and nor can the private market. The answer, then, is obvious enough: Health care reform that focuses on cost control. But advocates of "fiscal responsibility" haven't made that argument. They've argued for entitlement commissions that will cut the cost of entitlements. And what happens 10 years later, when cost growth makes Medicare unsustainable again? Another commission, presumably. But Orszag, the former director of the Congressional Budget Office and the incoming director of the Office of Management and Budget, doesn't buy it. As a former protege of Robert Rubin, his "fiscal responsibility" credentials are impeccable. But he argues that fiscal responsibility means health care reform. His is the argument that it's absurd to say we can't afford health care reform. Rather, we can't afford not-health care reform. The following comes from my profile of Orszag, which is the lede story on TAP today:
As the bailout was winding its way through Congress this fall, it became common for columnists and news anchors to argue that the presidential candidates would have to trim their agendas in response. At the first presidential debate in Mississippi, moderator Jim Lehrer asked, "What are you going to have to give up, in terms of the priorities that you would bring as president of the United States ... to pay for the financial rescue plan?" A few weeks later, at the third presidential debate, moderator Bob Schieffer said, "We found out yesterday that this year's deficit will reach an astounding record-high $455 billion. Some experts say it could go to $1 trillion next year. Aren't you both ignoring reality? Won't some of the programs you are proposing have to be trimmed, postponed, even eliminated?"But Orszag was having none of it. "Many observers have noted that addressing the problems in financial markets and the risks to the economy may displace health care reform on the policy agenda," he wrote on his blog. Orszag went on to argue that rising health costs threaten the nation's very solvency. If they continue to grow, investors will no longer be willing to buy Treasury bonds at low rates. And if that happened, the government would lose its ability to mount the sort of costly rescue operations that have kept this crisis from turning into a calamity. "So if you think the current economic crisis is serious," concluded Orszag, "and it is, imagine what it would be like if we didn't have the ability to undertake aggressive and innovative policy interventions because creditors were effectively unwilling to lend substantial additional sums to the Federal government."Behind Orszag's economic jargon was a startlingly aggressive message. He was essentially accusing those who would delay health reform of bringing a Zippo and a can of kerosene to the federal budget. "I have not viewed CBO's job as just to passively evaluate what Congress proposes," he tells me shortly before his appointment to the OMB, "but rather to be an analytical resource. And part of that is to highlight things that are true and that people may not want to hear, including that we need to address health-care costs."
Much of the profile is dedicated to explaining the quiet powers of the CBO and the OMB, both of which are powerful players in Washington that get fairly little coverage because their work is technical and wonkish. But you saw a flash of their importance yesterday, when Orszag said that health care was the administration's first priority after the stimulus. If it had been any other appointee, the comment would have been written off. But as OMB director, Orszag is writing the administration's budget, which is where the administration's priorities will be laid out. He's also the guy building the budget forecasts and telling Obama what the country's fiscal future looks like. And unless he's radically changed his argument in the last month, he's telling Obama that unless we do real health care reform, the country's fiscal future gets grim, and soon. Which suggests that, for the first time in rather awhile, we may have a fiscally responsible administration, rather than a "fiscally responsible" one, and the budget hawks may lie down with the health policy lambs. For more, read the profile.
