Summit vows healthcare push
Obama goal to insure millions intended to save money later
WASHINGTON - A White House summit that opened discussions on how to make sweeping changes in entitlement programs concluded yesterday with a pledge to immediately pursue an effort to provide health insurance to most Americans, which could increase spending in the short term but would be designed to save money later.
President Obama said at the end of yesterday's "fiscal responsibility summit" that next week he will hold a similar meeting on healthcare, focused on how to provide coverage to most of the 47 million Americans who do not have insurance while also squeezing out savings by revamping the system. "Putting America on a sustainable fiscal course will require addressing healthcare," Obama said. "Many of you said what I believe, that the biggest source of our deficits is the rising cost of healthcare."
The effort to overhaul healthcare and extend insurance to most Americans has vexed politicians in Washington for decades. There had been discussion among analysts in the last month about whether the Obama administration might try to wrap healthcare into a "grand bargain" that would also include overhauls of Social Security and Medicare.
But Obama aides said that the president wants to work on healthcare separately and "made it clear they want to focus on healthcare first," according to Senator Judd Gregg, a New Hampshire Republican who took part in the summit.
Gregg, who backed out of his nomination to be Obama's commerce secretary earlier this month, is cosponsor of a measure to create a bipartisan panel to produce recommendations on an array of entitlement programs that would be subject to an up-or-down congressional vote. Gregg said he was concerned that overhauling healthcare will be difficult without the bipartisan commission.
The summit was intended to be a clear signal to the public that despite the massive deficit - projected at $1.2 trillion this fiscal year before passage of the $787 billion stimulus bill - Obama intends to cut spending over his presidency. Obama hopes he can halve the deficit over four years through measures including tax increases on the wealthiest Americans, a reduction of troops in Iraq, and an increase in revenues if an economic recovery develops as he hopes.
"We cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation," he said in opening the summit with a vow to end "clever accounting tricks" and other deceptions to hide the size of the federal budget.
But in the markets, continued worries about the recession appeared to trump Obama's pledges to cut government deficits. The bellwether Dow Jones industrials dropped 251 points yesterday, ending at the lowest level in nearly 12 years.
Just hours before the summit, Obama promised the nation's governors that tomorrow he will start sending them $15 billion in stimulus money for Medicaid, which provides healthcare for the poor. (According to the White House, Massachusetts will get $594 million, Maine will get $94.5 million, New Hampshire $31.5 million, Rhode Island $93.5 million, and Vermont $45.5 million.)
Obama sought to rebut criticism that he was trying to cast himself as a deficit hawk just one week after signing the stimulus package, asserting that both tracks are necessary.
He also made clear that the deficit should not stand in the way of major initiatives. The country faces "long-term challenges - healthcare, energy, education, and others - that we can no longer afford to ignore," said Obama, who is expected to deliver a similar message tonight for his first address to a joint session of Congress.
A new analysis by economists at the Centers for Medicare & Medicaid Services highlights the urgent need to contain healthcare costs, which continue to increase, even as the overall economy shrinks because of the recession.
Even after the economy recovers, health spending is projected to continue growing faster than the gross domestic product, almost doubling over the next decade to $4.4 trillion, according to the analysis, which will be published today on the website of the policy journal Health Affairs. That would be about one-fifth of the economy, more than twice the proportion it was in 1980, the report said.
Democratic leaders in the Senate, including Senator Edward M. Kennedy of Massachusetts, are working on major legislation that aims to reduce health costs as well as improve quality and extend coverage to the uninsured. But it is not at all clear that they will be able to do all three things at once.
Robert Reischauer, president of the Urban Institute and former head of the Congressional Budget Office, said at the session on healthcare at yesterday's summit, "The notion that we are going to save gobs of money is still largely unproven by the analyses that researchers have done."
Obama acknowledged that there are trade-offs in overhauling healthcare and "some of these things will ultimately involve some tough decisions and some tough votes."
While yesterday's summit was designed to be bipartisan, some Republicans emphasized they felt excluded from negotiations on legislation such as the stimulus bill and expansion of children's health insurance.
The summit was "a good first step," Representative Joe Barton, a Texas Republican, told Obama. "But if this is all we do, it's a sterile step. On the other hand, if you really follow up and include everybody in the process, you're more than likely to get a solution that everybody signs off on."
Obama agreed that Democratic leaders in Congress must try to work with Republicans in the future, but he issued terms for such discussion.
"On the one hand, the majority has to be inclusive," he said. "On the other hand, the minority has to be constructive."
In an unusual question-and-answer session at the close of the summit, Obama called on a number of Republicans to seek their suggestions, starting with his campaign opponent, Senator John McCain, who urged a closer eye on Pentagon spending.
At one point, Obama ribbed one of his most outspoken critics, Representative Eric Cantor of Virginia.
"I'm going to keep on talking to Eric Cantor," he said. "Some day, sooner or later, he's going to say, 'Boy, Obama had a good idea.' It's going to happen. You watch. You watch." 