Listening to Peter Orszag

Former CBO Director Peter Orszag spoke last night at Trinity University on the looming financial crisis.   He was quite informative, giving some good insights into Federal budget and spending.  His take is that the Federal deficit will be driven primarily by health care spending, and suggested that emerging technology that identifies and promotes “best practices” in evidence-based medicine has the potential to rein in costs. He feels that overall, Congress and the President won’t take serious action on the budget until their hand is forced by a crisis, and he he advocated–at least in health care–a ”racheting” arrangement that allows the Feds to establish best-practices policies in Medicare without further Congressional approval.  I’m not convinced that giving any government agency this sort of carte blanche is wise.

He spoke a little on entitlement reform, and rightly noted that even if we changed Social Security to make it more solvent, our approach to grandfathering benefits would mean that reforms would not realize any savings for at least seven years.  Unfortunately, at this point, he dismissed it.  Entitlement reform is like planting  a tree–are you going to stand around and bitch about no shade–and no Social Security–seven years from now?

Finally, he claims the Feds can’t close the deficit gap without a tax increase.  He was persuasive, but he didn’t answer the obvious questions any good fiscal conservative lawmaker should ask:  What spending cuts are you offering in return?  and How do we guarantee you don’t piss the additional money away on some solar-powered corn likker for indigent folksinger scheme?

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