Orszag presses Congress to make tough budget choices on healthcare reform

Lawmakers must commit to making the tough budget choices called for in President Obama’s healthcare reform law in order to deal with the country’s debt problem, Peter Orszag said in his final remarks as White House budget director. 

“The single greatest driver of our long-term deficit is rising growth in healthcare costs,” he said in a speech Wednesday. “We cannot cut other spending or raise revenue enough. The math simply does not work in any viable way.”

After years in which the country was headed in the wrong fiscal direction, Orszag said, the healthcare law “changes course by enacting substantial deficit reduction, reduction this administration is committed to building on.”

The healthcare law calls for Medicare cuts, a new independent board that can fast-track more proposals to reduce Medicare spending and a new excise tax on high-cost plans in future years. Skeptics of the law say those cost trimmings will be ignored by Congress, negating any budget savings.

Orszag, one of the main architects of the healthcare reform plan, said the law passed by Democrats and signed by Obama earlier this year includes the “most promising set of changes ever enacted into law” to deal with the growth in health costs. But he also indicated Congress will have to make sure it comes to fruition. 

Passing the law was a big step, but Orszag said “mere enactment is not enough.”

Independent economists and the White House have said the $13 trillion debt, expected to grow by roughly $1 trillion annually for the next decade and beyond, is on an unsustainable path.

Citing Congressional Budget Office (CBO) figures, Orszag said that the cost savings from the law would cut the 75-year deficit projection of 8 percent of gross domestic product by more than a quarter.

A recent CBO report, however, drew an alternative scenario in which many of those savings would be ignored and debt would grow at a faster pace. Republicans have cast doubt on whether the health spending cuts would be implemented, just like past laws to reduce Medicare doctor payments that Congress has bypassed.

Orszag is exiting public life after serving as the director of the Office of Management and Budget (OMB) since the start of the Obama administration. Before that, he was director of the Congressional Budget Office and a prominent health economist. 

Obama has nominated Jacob Lew, the last OMB director for former President Clinton, to succeed Orszag.

During a question-and-answer session after Orszag’s farewell speech, a member of the audience sang a song in which he called the outgoing Cabinet member and White House senior economist Lawrence Summers “fascist pigs.”

The man said he was a member of Lyndon LaRouche’s political action committee, a group that has depicted the president with a Hitler mustache. The man was ushered out of the room, but only after he finished singing.

Orszag joked afterwards that “all questions must be in song.”

He has accepted an offer to become a distinguished visiting fellow at the Council on Foreign Relations.