If there are no circumstances under which Congress will reform Medicare, there are no circumstances under which the federal government will not go bankrupt.
No circumstances? Has Klein never heard of taxes? Is he an extreme supply sider who thinks increasing taxes will never increase revenues? Even under grim budget scenarios in which the medical cost curve doesn't bend at all, the federal budget rises to consume about 30% of GDP in 2050. You could, in theory, increase taxes to pay for 30% of GDP (they're a little under 20% now). You could also do something to dramatically shrink Social Security spending --the big non-medical driver of federal spending--by raising the retirement age and cutting benefits for those who don't need them (means-testing). It's hard to believe that some combination of taxes and means-tested Social Security cuts couldn't bring revenues and spending into long term balance even if generous Medicare spending goes unpared by Harry Reid's new panel of unelected experts .
Klein's exclusion of these obvious alternatives seems to be part of a new strategy to reconcile the Democrats health care plan with deficit-consciousness. The old argument--Classic Orszagism--claimed simply, if enigmatically, that the solution to the budget crisis was Obama's health care reform, because somehow only when the government insured coverage for all would it have the leverage necessary to "bend the cost curve" down. One problem with Classic Orszagism was that it scared the elderly, and near-elderly, who are hardly crazy to see the suggested restrictions on mammogram spending as the opening bid in an ongoing campaign to "scientifically" lower high-tech expenses (by playing up the "anxiety" caused by false positives, for example). Another problem is that if the government can bend the cost curve, the logical place to start is with Medicare--and, indeed, the powerful Fed-like "IMAB" board in Harry Reid's bill is mandated to cut only Medicare. But if we can cut Medicare, why not just cut Medicare--without also adding Obama's admittedly expensive subsidized coverage for the uninsured?
If all you cared about was the deficit, that would be your position: First see if we can cut Medicare, then talk about extending health care to everyone in a few years. The fierce reaction to the mammogram recommendations , though, reinforced an already amply justified skepticism of the governments ability to reduce treatments to constituents who see them as life-saving. Why do we have any expectation that the cost curve will be bent at all, ever?
Here is where Klein's new argument comes in: Curve-bending skeptics like David Broder have to be wrong because ... well, they have to be wrong . Broder's skepticism
is another way of saying that Congress can't cut health-care costs and the American government will go bankrupt. For one thing, that's not a very good reason not to at least try and avert that outcome. But if Broder's position is that we face certain fiscal collapse, then the only real question is whether we would prefer that 30 million Americans had insurance in the meantime, or went uninsured over that period .
It's Doomsday Orszagism: The government has to be able to bend the curve because the alternative, even without Obama's health care reform, is a fiscal apocalypse in which "the federal government will not be able to honor its debts." The asteroid is heading towards earth, and a mild mannered CBO wonk has his hands on the only plan for heading it off. You gotta believe!
But if there are other ways to head off bankruptcy--namely taxes and Social Security cuts--you don't gotta believe. An alternative argument for health reform would say: extending generous health coverage to all citizens is part of America's social equality. We don't deny people what they need to regain their health. We don't decide that some people are worth care and others aren't, British-style. We can pay for it--it's expensive, it certainly doesn't help the deficit picture, but it's not that expensive at the moment, maybe a hundred or two extra billion a year. It's worth raising some taxes and maybe denying the affluent government retirement checks (which is not such a necessary part of social equality). If we can do some reasonable curve-bending in the long-run to bring down the cost, even better. But we're not counting on it, since so far nobody's been able to do it.
Maybe the various versions of Orszagism--the confident invocations of curve-bending power --are the only way to sell health care this year, even though they've already (by raising the rationing issue) helped consign Obama's reform to seemingly permanent general unpopularity . Maybe it's even necesary to go further, in a Michael Bay-like direction, and claim disingenuously that Orszag's curve bending is the only way to save us all from horrific doom . BS sometimes works to pass legislation. But it's still BS. ... [ Thanks to alert reader S.W. for the link to Keith Hennessy's chart ] 10:29 P.M.