Health Care: the Second Shoe

February 21, 1993

President Clinton's emotions reached their highest pitch during his first address to Congress when he declared: "All our efforts to strengthen the economy will fail unless we also take this year -- not next year, not five years from now, but this year -- bold steps to reform our health care system." What he did not add -- but every alert lawmaker must have known -- is that another tax proposal is coming atop the near-$300 billion "contribution" Mr. Clinton has already requested.

First Lady Hillary Rodham Clinton's health care task force is studying a packet of ideas that could lead to tax hikes ranging from $30 billion to $90 billion. Just how Congress would react to the dropping of such a big second shoe is a major administration dilemma. House Democratic leaders may adopt Reaganesque tactics by folding the health care proposals into one huge "reconciliation" bill that would also include the core of the Clinton economic program. Then legislators would have to vote up or down, all or nothing, a course designed to keep most Democrats in line.

In the interest of "truth in budgeting," this would make sense. As former Sen. Warren Rudman observed last week, "Unfortunately you can't really measure this [Clinton] program in terms of its deficit reduction, until his health care plan comes out."

A look at administration budget projections shows why. Even if Congress were to enact everything Mr. Clinton has proposed until now, which already includes $40 billion in government savings by increasing Medicare Part B premiums and cutbacks on payments to providers, the deficit would decline only until the end of his present four-year term. Then it would resume its steady upward climb. But if added health care controls are included, the deficit would continue a hoped-for decline to below the $100 billion mark ten years hence.

Thus, no matter if Mr. Clinton succeeds in boosting income taxes on the wealthy and energy taxes on just about everyone else, he will not cage the federal deficit dragon unless the runaway costs of medical entitlements are somehow contained.

The problem, of course, is even more pervasive. With employers staggering under the ever-expanding burden of employee health care benefits and all of society having to foot the bill for some 37 million Americans who lack health insurance, the nation is spending close to $1 trillion a year on a public-private system bedeviled with inadequacy and inequity. Preventive medicine is shortchanged. Priorities are skewed away from children, who do not vote, to golden agers, who do. And yet long-term nursing care remains an unsolved crisis.

Whatever Mr. Clinton proposes on health care will be controversial. Greater government intrusion into the medical profession, price controls of dubious efficacy, a shift to what essentially may be a national health plan, perhaps even some form of rationing -- all these will require difficult adjustments. But, the president emphasizes, the cost of doing nothing could be infinitely greater.

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