- The Washington Times - Tuesday, August 4, 2009

Some of President Obama’s health care numbers don’t seem to add up, and that’s complicating his efforts to pass his top domestic priority.

Mr. Obama could be falling into the same trap that snagged George W. Bush when he was pushing private accounts for Social Security as part of his “ownership society” in 2005. Mr. Bush’s claims that the proposal would help shore up Social Security’s long-term finances were hard to document mathematically and wound up feeding greater public skepticism.

Mr. Obama claims his health effort will not dig the nation deeper into debt and over time will help reduce deficits. He has vowed not to sign any health bill that raises deficits.

However, even the nonpartisan Congressional Budget Office says none of the health plans pending on Capitol Hill would control long-term spending and that ones with the elements Mr. Obama wants would add about $1 trillion to the deficit over the next 10 years.

Furthermore, the CBO said an administration-backed independent council of medical experts to recommend Medicare cuts would yield only modest savings.

The White House stands by its claims. Its allies claim that CBO forecasts, for instance, don’t reflect potential future cost savings that might be expected from the prevention of illness achieved from wider health care coverage.

A recent report by the White House Council of Economic Advisers claims that the government can cut the projected level of health spending by 15 percent over the next decade and by 30 percent over the next 20 years. However, some of those reductions would come from fewer services rather than lower payments to providers.

Recent polls show increasing anxiety over federal budget deficits and the failure of Congress to figure out how to pay for a health care overhaul.

Suggestions have ranged from taxes on soft drinks to a surcharge on wealthy individuals, from a tax on health insurance benefits paid by employers — opposed by Mr. Obama in last year’s campaign — to a proposed tax on insurance companies. Plus letting existing Bush tax cuts expire for wealthier Americans.

Peter R. Orszag, the director of the Office of Management and Budget and a former CBO director, insists that the health care effort “is deficit neutral over the first decade.”

Other budget experts are dubious.

During his presidential campaign, Mr. Obama repeatedly vowed that “you will not see any of your taxes increase one single dime.” Now, however, his advisers refuse to rule out higher taxes to help tame the budget deficit or as part of a health care overhaul.

Some analysts note that new taxes to support the health care plan would begin in 2011 but the benefit parts wouldn’t be fully up and running for several more years, resulting in one-time-only extra revenue.

“From what we’ve seen so far, I don’t look at this as a cost-saving effort,” said Robert L. Bixby, executive director of the Concord Coalition, a budget watchdog group. “I don’t know how they’re going to pay for it, even over the first 10 years. Getting off the launch pad is difficult, then controlling the orbit hasn’t been figured out yet.”

The House headed home for its August recess, and the Senate plans to begin its recess at week’s end, after missing Mr. Obama’s original deadlines for health care votes in each chamber.

At home, lawmakers are certain to be buffeted by constituents who polls show are becoming uneasy over the health legislation debate.

Even members of Mr. Obama’s party are voicing skepticism, while Republicans have mounted a full-bore attack on the program as a costly and risky government “takeover” during a deep recession.

The contentious debate carries overtones of Mr. Bush’s ill-fated efforts to partially privatize Social Security.

Fresh off a re-election victory, Mr. Bush claimed in early 2005 that his proposal to let younger workers set up private investment accounts would help shore up Social Security’s finances. He traveled across the country promoting the scheme, much as Mr. Obama is today with his health care effort.

Mr. Bush insisted such accounts would grow fast enough to provide a better return than the present system. At the time, the Dow was close to 11,000, far above where it sits today.

The Bush White House projected that setting up private accounts would have a “net neutral effect” on deficits. Sound familiar?

That would have been true only over the long term, 75 years or more. In the shorter term, creation of private accounts would have required heavy federal borrowing to finance the payment of benefits to current retirees.

Mr. Bush eventually made it clear that those setting up such accounts would also have to relinquish an offsetting portion of their future guaranteed retirement benefits.

Lawrence H. Summers, a top Obama economics adviser, said Sunday on CBS: “What the president has been completely clear on is that he is not going to pursue any of his priorities — not health care, not energy, nothing — in ways that are primarily burdening middle-class families. That is something that is not going to happen.”

Health care programs almost always cost more than first projected, including — Mr. Obama likes to point out — Mr. Bush’s Medicare prescription-drug program. “You passed a prescription drug plan and didn’t pay for it [and] handed the bill to me,” Mr. Obama said in remarks directed at Republicans.

“That’s been the history of all these kinds of programs,” says Harvard economist Martin Feldstein, who was chairman of the Council of Economic Advisers from 1982 to 1984. He cited both Medicare and Medicaid as examples.

Mr. Obama has said the health legislation is vital to achieving economic recovery, but others worry that Mr. Obama could damage his cause by overstating his case.

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