David Walker on Paying for Health Care

Dean Baker objects to the 60 Minutes interview with David Walker:

if they wanted to be accurate, the 60 Minutes crew could have pointed out that almost the whole horror story is driven by projections of exploding health care costs, not “entitlements” for the elderly (e.g. Social Security).

While this is a fair point, most of this interview did focus on health care costs:

David Walker is an accountant, the nation’s top accountant to be exact, the comptroller general of the United States. He has totaled up our government’s income, liabilities, and future obligations and concluded the numbers simply don’t add up. And he’s not alone. Its been called the “dirty little secret everyone in Washington knows” – a set of financial truths so inconvenient that most elected officials don’t even want to talk about them, which is exactly why David Walker does … “What’s going on right now is we’re spending more money than we make…we’re charging it to credit card…and expecting our grandchildren to pay for it. And that’s absolutely outrageous,” he told the editorial board of the Seattle Post Intelligencer. You have heard this before, from Ross Perot 15 years ago. You might have even thought the problem had been solved, when President Clinton announced, “Tonight, I come before you to announce that the federal deficit … will be simply zero.” “Well, those days are gone. We’ve gone from surpluses to huge deficits and our long range situation is much worse,” Walker says … The problem with Medicare, Walker says, is people keep living longer, and medical costs keep rising at twice the rate of inflation. But instead of dealing with the problem, he says, the president and the Congress made things much worse just three years ago when they expanded the Medicare program to include prescription drug coverage. “The prescription drug bill was probably the most fiscally irresponsible piece of legislation since the 1960s,” Walker argues.

You see – that is the difference between Bill Clinton and George W. Bush. President Clinton likely wanted to expand the role of the government in providing health care including a prescription drug benefit but realized that he had raised taxes by as much as possible given the opposition of the GOP to any tax increase. President Bush on the other hand brags about “giving us our money back” AND a prescription drug benefit often in the same speech. And when faced with a choice between making the new benefit less costly to future taxpayers versus making it as lucrative for Big Pharma as possible – he choose the latter. No wonder Dean gets to make this argument:

As is clear to anyone who is moderately competent at arithmetic, the projected budget problems are due to a projected explosion in health care costs, not demographics. If U.S. health care costs were more in line with those in any other wealthy country, there wouldn’t be much of a budget crisis to talk about.

Back to the 60 Minutes for the real problem here:

Asked if he knows any politicians willing to raise taxes or cut back benefits, Walker says, “I don’t know politicians that like to raise taxes. I don’t know politicians that like to cut spending, but I think what we have to recognize is this is not just about numbers. We are mortgaging the future of our children and grandchildren at record rates, and that is not only an issue of fiscal irresponsibility, it’s an issue of immorality.”

Could we hear at least one of the candidates for President admit that we’ll either have to cut spending or raise taxes – or both?