In Search of a Fiscal Cure
Meacham, Jon, Newsweek
Byline: Jon Meacham
How grave are the fiscal problems of the U.S.? Speakers, including President Bill Clinton and the co-chairs of the National Commission on Fiscal Responsibility and Reform, Erskine Bowles and Alan Simpson, discussed the dangers of America's long-term structural deficits at the 2010 Fiscal Summit: America's Challenge and a Way Forward, sponsored by the Peter G. Peterson Foundation. NEWSWEEK editor Jon Meacham asked Peter Orszag, director of the Office of Management and Budget, about the role of health-care reform in our financial future. Excerpts:
A lot of kids grow up wanting to be ballplayers. What turned you into an economist?
I wanted to be a fighter pilot, but my eyes were not good enough. It was in college that Alan Blinder, one of my very first professors at Princeton, wrote this book called Hard Heads, Soft Hearts, which really struck a chord with me because it was about trying to make people's lives better, but doing so in a rigorous way. That combination of math and real-world applicability drew me to economics.
Talk about the criticism of the healthcare plan in terms of cost reduction.
If all we did was take a traditional approach, we would still face the same underlying problem in terms of the structure and delivery of our health-care system. You need to change the underlying incentives for providers.
But that takes a cultural shift, because in my view, you want what you can get when you're sick.
Right now we have incentives for more care rather than better care. The top 25 percent of Medicare beneficiaries account for 85 percent of cost, which leads me back to the thought that we need to change the decisions that providers are making. There are important changes [in] the legislation that move us in the direction of paying for quality.
Will we see higher income taxes over the next couple of decades?
Projected spending is substantially in excess of projected revenue. …