Spring Break
A Progressive Solution to Long-term Fiscal Deficits
James Coan, Editor-in-chief
Issue date: 5/11/08 Section: Opinion
When it comes to policy, I spend most of my time working on energy - how to get more efficient, reduce our oil use, and mitigate global warming. I feel it is a necessity to work on these issues so America insulates itself from the very problematic possibilities of continued rising costs of oil and damaging effects of climate change. Yet for me, energy issues inspire distress, not fright.
That feeling of fright about the future of the country is reserved for what I consider the looming budget crisis. I have seen projections from the Congressional Budget Office (CBO) showing how health care spending would continue to increase faster than GDP growth, and how health spending would swamp the federal budget, increasing the size of the federal government from 18% to 28% of GDP by 2050, not counting interest payments. Right when our generation would have the chance to govern, we could be inundated with debt and straddled between the awful choices of dramatically increasing taxes, cutting benefits, and slashing programs.
Especially the last two seem antithetical to progressives, and no progressive should flippantly advocate for a 50% tax hike. Could a progressive solution be found?
Given my interest, I went to the lecture at the beginning of second semester that Comptroller General and director of the Government Accountability Office David Walker gave precisely about this issue. (It's good I did - he recently resigned.) He presented more unnerving statistics such as how America has over $50 trillion in unfunded entitlement obligations, about four times our yearly GDP. And he pointed to health care costs as the primary cause. I asked him whether Barack and/or Hillary's plan would help control the costs, but he dodged the question, claiming not to know enough about their plans to respond.
I had to do my own research to find whether a progressive solution was possible or already proposed. Henry Aaron, a Senior Fellow of the Brookings Institution, a think tank in Washington, again attributed this shortfall entirely to health care spending in a 2007 article in the journal Health Affairs. Unlike Walker, he does identify the first step to controlling these costs, a decidedly progressive one: providing universal health care coverage. His logic is that treatments must be limited to reduce costs, but in the absence of universal coverage, such a change would lead to even fewer people being able to access health care. Unallowable hardships would result, the belt-tightening would stop, and health care costs would continue their steady march upward. Only with universal coverage can the process towards controlling skyrocketing costs begin.
That feeling of fright about the future of the country is reserved for what I consider the looming budget crisis. I have seen projections from the Congressional Budget Office (CBO) showing how health care spending would continue to increase faster than GDP growth, and how health spending would swamp the federal budget, increasing the size of the federal government from 18% to 28% of GDP by 2050, not counting interest payments. Right when our generation would have the chance to govern, we could be inundated with debt and straddled between the awful choices of dramatically increasing taxes, cutting benefits, and slashing programs.
Especially the last two seem antithetical to progressives, and no progressive should flippantly advocate for a 50% tax hike. Could a progressive solution be found?
Given my interest, I went to the lecture at the beginning of second semester that Comptroller General and director of the Government Accountability Office David Walker gave precisely about this issue. (It's good I did - he recently resigned.) He presented more unnerving statistics such as how America has over $50 trillion in unfunded entitlement obligations, about four times our yearly GDP. And he pointed to health care costs as the primary cause. I asked him whether Barack and/or Hillary's plan would help control the costs, but he dodged the question, claiming not to know enough about their plans to respond.
I had to do my own research to find whether a progressive solution was possible or already proposed. Henry Aaron, a Senior Fellow of the Brookings Institution, a think tank in Washington, again attributed this shortfall entirely to health care spending in a 2007 article in the journal Health Affairs. Unlike Walker, he does identify the first step to controlling these costs, a decidedly progressive one: providing universal health care coverage. His logic is that treatments must be limited to reduce costs, but in the absence of universal coverage, such a change would lead to even fewer people being able to access health care. Unallowable hardships would result, the belt-tightening would stop, and health care costs would continue their steady march upward. Only with universal coverage can the process towards controlling skyrocketing costs begin.
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