Obama says balancing budget without addressing health care is 'impossible'

President Obama on Tuesday during a prime-time news conference linked issues within the U.S. budget in part to high health care costs, stating that "almost every single person" who has examined the nation's budget has concluded that the government must find a way to reduce health care costs, the Washington Post reports (Shear/Wilson, Washington Post, 3/25).

Obama said, "It's going to be an impossible task to balance our budget if we are not tackling rising health care costs" (Condon, CongressDaily, 3/25). Obama said that policymakers will not be able to control rising health care costs in the near future. He said, "We're not going to be able to do it this year or next year or three years from now" (Wolf/Jackson, USA Today, 3/24).

Obama said that congressional lawmakers likely will maintain his budget priorities in their budget resolutions, although details likely will change (Shear/Wilson, Washington Post, 3/25). He said, "We never expected when we printed out our budget that they would simply Xerox it and vote on it," adding, "The bottom line is that I want to see health care, energy, education and serious efforts to reduce our budget deficit" (Baker/Nagourney, New York Times, 3/25).

House, Senate to Unveil Budget Resolutions

Democratic leaders in the House and Senate on Wednesday are scheduled to release their respective fiscal year 2010 budget resolutions, which aim to "bring skyrocketing annual deficits under control, while preserving the option of enacting some of the president's most significant and costly domestic priorities," the Post reports. Lawmakers in both chambers say they plan to cut hundreds of billions of dollars over the next five years from Obama's proposal.

Senate Budget Committee Chair Kent Conrad (D-N.D.) said his budget resolution would not include new spending for Obama's proposed expansion of health care coverage. However, Conrad said that lawmakers could opt to include additional funding for health care reform as long as the entire cost -- which is "likely to cost in excess of $1 trillion over the next 10 years" -- is offset by tax increases or spending cuts, the Post reports (Montgomery, Washington Post, 3/25).

Although Obama's proposal included a $634 billion health care reserve fund, the Senate measure does not set a dollar amount for a health care overhaul fund. However, Conrad said his resolution includes the creation of special reserve funds that would allow legislation on health care as long as those plans did not add to the deficit (Herszenhorn/Hulse, New York Times, 3/25). Conrad said, "We are saying 'you get a deficit neutral reserve fund' and they have the opportunity to write the legislation that they think makes the most sense. They do it in a deficit neutral way that will trigger the reserve fund and allow us to change the allocations" (Sanchez/Friedman, CongressDaily, 3/25). He added that his resolution makes room for Obama's plan to provide access to health coverage to the uninsured while not adding to the budget deficit (Taylor, AP/Boston Globe, 3/25).

White House Office of Management and Budget Director Peter Orszag said "the House and Senate budget resolutions will reflect" the "four key areas" on which Obama has focused, including health care (Herszenhorn/Hulse, New York Times, 3/25). Both chambers' budget committees are scheduled to mark up their respective resolutions on Wednesday with floor action expected in both chambers next week (Clarke et al., CQ Today, 3/24).

Budget Reconciliation Process

Conrad said the resolution does not include the use of the budget reconciliation process, which requires only 51 yes votes instead of 60 to prevent a filibuster. House Budget Committee Chair John Spratt (D-S.C.) said the House's version of the resolution will use the budget reconciliation process for Obama's plan to overhaul the U.S. health care system (Fritze, USA Today, 3/25). According to CQ Today, the use of budget reconciliation "would make it easier for Democrats to push through contentious proposals such as a health care overhaul." Although Conrad has said he will not include reconciliation instructions in his chamber's measure, "Republicans fear they will be included in the House resolution, allowing them to be retained in the conference report and ultimately adopted," CQ Today reports. An amendment to the Senate resolution would attempt to block Democrats from including reconciliation instructions in any compromise resolution that comes from a House-Senate conference committee. Senate Finance Committee Chair Max Baucus (D-Mont.) said he would resist reconciliation instructions in conference, although he would not rule out its inclusion. He said, "We'll cross those bridges when we get there," adding, "Anything can happen. It shouldn't. My goal is to help keep that from happening" (Clarke et al., CQ Today, 3/24).

AARP Calls For Reserve Fund in Budget

Congressional lawmakers should include Obama's proposed $634 billion health care reserve fund in their respective budget resolutions, AARP CEO William Novelli wrote in a letter to congressional leaders, CQ HealthBeat reports. However, the reserve fund should not be paid for by cuts to Medicare or Medicaid, he added. He wrote, "It is essential to finance the health care reserve fund with revenues in addition to any savings." Although he did not directly address the issue of using the budget reconciliation process to pass health care reform measures, he "did appear to hint that it would be better to avoid" such a process, according to CQ HealthBeat. Novelli wrote, "We believe bipartisan support will be essential to the successful enactment of health reform." In the letter, Novelli also addressed changes to Medicare that Obama has proposed, which Novelli wrote would drive up premiums (Reichard, CQ HealthBeat, 3/24).

Editorial

Obama in his speech "reaffirmed his triumvirate of spending priorities -- health care, energy and education," but did not do enough to lay out ways to address the national deficit, a Post editorial states. The editorial continues, "Cutting the deficit in half is an unimpressive promise given the state of the deficit; the more important question is getting deficits down to a sustainable level." The editorial adds, "If his priorities are important enough to spend money on, the president owes Congress and the country a vision of how he would generate sufficient revenue to meet the needs" (Washington Post, 3/25).

Opinion Piece

In order to address "both the difficulty and the urgency of accomplishing a huge and ambitious agenda," lawmakers "must act quickly and decisively" on Obama's initiatives, including health care, Sens. Evan Bayh (D-Ind.), Tom Carper (D-Del.) and Blanche Lincoln (D-Ark.) write in a Post opinion piece. They continue, "[W]e believe that President Obama is correct when he says that we cannot afford to wait any longer to fix health care." They continue that addressing Obama's proposals "are titanic and complicated tasks" for which "many worthwhile policy solutions can be found in the practical center -- ideas that also have the benefit of appealing to vast segments of the American electorate."

However, "the Republican leadership has basically decided to stay on the sidelines to let the Democrats carry the load of reform alone," they write. They continue, "[I]t is not our intent to water down the president's agenda," adding, "We intend to strengthen and sustain it." They add, "Practical solutions are practical because they offer our best chance to make a difference in people's lives today without forcing our children to pick up the tab tomorrow." They write, "To represent [moderate U.S. voters], the three of us will seek to pursue a set of core principles." These principles include "help[ing] shape and pass a far-reaching agenda to address America's most urgent domestic problems, ... promot[ing] ideas that spur long-term, private-sector economic growth" and "pursu[ing] fiscally responsible solutions to put our debt-ridden nation on a sustainable path that protects and strengthens the American middle class" (Bayh et al., Washington Post, 3/25).