The Wall Street Journal Blog reports that Romer, who heads the president's Council of Economic Advisors, spoke about the fiscal benefits of the White House's health care agenda and said: "'It is fiscally irresponsible not to do health-care reform. ... To bury our head in the sand for even one more year and pretend that the problem of rising government health-care expenditures will go away is simply untenable.'"
"Earlier this month, the U.S. Treasury Department reported the fiscal year 2009 deficit was $1.4 trillion, or about 10% of Gross Domestic Product. That's the U.S.' biggest budget deficit since World War II. Meanwhile, in August, the Obama administration estimated that a cumulative deficit over the 10-year budget window from 2010 to 2019 would reach $9 trillion. ... With deficits potentially becoming a key 2010 campaign issue, the gloomy fiscal outlook could complicate Democrats' legislative efforts, including hopes to overhaul health care. Still, Romer on Monday defended the Obama administration's $787 billion fiscal stimulus program and the federal government's financial-bailout program. She pinned most of the blame for the latest projected deficit on policy actions taken during the Bush administration" (Randall, 10/26).
Meanwhile, ABC News reports that Romer touted the "Cadillac Tax" as a critical part of reform: "President Obama's chief economic forecaster went to bat on Monday for a tax on high-priced insurance plans, the so-called 'Cadillac tax,' calling it 'probably the number one item that health economists across the ideological spectrum believe is likely to stem the explosion of health-care costs.'" Romer said such a tax would encourage employers and employees to be more vigilant health care consumers. "Romer's full-throated endorsement of the 'Cadillac tax' keeps the Obama administration at odds on this issue with some of its closest allies. Organized labor has made killing the 'Cadillac tax' a top priority and more than half of House Democrats have signed a letter to Speaker Nancy Pelosi urging her not to include a ‘Cadillac tax' in health-care legislation."
Romer talked about how the tax should be designed, noting that "a handful of ideas were under consideration by Congress including: (1) making special provisions for high-risk occupations such as firefighters; (2) taking regional differences in health-care costs into account "for a period of time"; and (3) making special provisions for firms with older, more costly workers. ... Among the multiple ideas touted as cost savers during her speech, Romer touted the capacity of a public insurance option" (Davis, 10/26).