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Passing Health Reform Would Contribute To Obama’s Deficit Reduction Goals

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"Passing Health Reform Would Contribute To Obama’s Deficit Reduction Goals"

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This morning, Sen. Evan Bayh (D-IN) appeared on MSNBC’s Morning Joe to (unsurprisingly) endorse President Obama’s new proposal to institute a discretionary spending freeze for two years. “The freeze would affect $447 billion in spending, or 17% of the total federal budget,” but it would “exempt security-related budgets for the Pentagon, foreign aid, the Veterans Administration and homeland security, as well as the entitlement programs that make up the biggest and fastest-growing part of the federal budget: Medicare, Medicaid and Social Security.”

Bayh supported Obama’s new approach but criticized him for spending too much time on health care reform. “We can have progressive government in this country, but you’ve got to take it a step at a time. You’ve got to be in touch with the times you’re in,” he said:

And going with the large bill in the middle of the worst recession since the 1930s and a major new expenditure at a time we were running a $30 trillion deficit just didn’t resonate real well. Monday morning quarterbacking is not something I’m into, but you’ve gt to learn from these sorts of things, and going forward let’s do what we can in a common sense way.

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Bayh is wrong to suggest that health care reform is antithetical to reducing the nation’s $1.4 trillion deficit. After all, according to the Congressional Budget Office (CBO) the Senate health care bill would reduce the deficit by $132 billion over 10 years (or up to $409 billion over 10 years according to a Commonwealth study) and lower Medicare spending per beneficiary from 8% growth rate to 6% growth rate. As Christina Romer, chairwoman of the Council of Economic Advisers, explained in December, reform would slow the growth rate of cost by 1 percentage point per year” and have “a dramatic impact on where we are relative to otherwise we would have been.”

Health care reform would compliment the administration’s new focus on deficit reduction by slowing the fastest growing part of the deficit. In yesterday’s interview with Diane Sawyer, Obama reiterated his commitment to “keep on pushing” “on the big issues” and said, “We are going to have to be serious about the deficit in ways that we haven’t been before.” Obama didn’t say if he would urge Congress to pass comprehensive health care reform as party of his effort “to be serious about the deficit,” but taking a strong position on reform certainly demonstrate that he is “not backing off the need for us to tackle these big problems in a serious way.” As he told Congress during his address in February, “Put simply, our health care problem is our deficit problem. Nothing else even comes close. Nothing else.”

Cross-posted on The Wonk Room.

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