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Commission to rein in federal entitlement costs is proposed

Kaiser Health News

WASHINGTON — Amid signs that health care overhaul legislation will do little to slow the growth in health care spending in the coming decade, lawmakers and Obama administration officials are considering tougher steps to rein in soaring budget deficits.

One approach that's attracting widespread attention calls for creating a bipartisan commission to draft proposals to control the long-term costs of Medicare, Medicaid and Social Security. Together, the three programs account for 40 percent of all federal spending other than interest on the national debt.

The recommendations of the proposed commission would command a swift up-or-down vote by Congress. Senate Budget Committee Chairman Kent Conrad, D-N.D., and Republican Sen. Judd Gregg of New Hampshire, the chief authors of the proposal, say they may attempt to attach it to must-pass legislation raising the government's debt ceiling in the coming weeks.

"My concern is the trajectory of our deficits and debt are completely unsustainable and that (while) health care reform helps, it is not sufficient" to control runaway entitlement spending, Conrad said in an interview. "We've got to do much more, and I don't believe it will happen in the regular order. I think it requires a special process."

Christina Romer, the chair of the president's Council of Economic Advisers, said Monday that the White House was interested in the Conrad-Gregg proposal and other ideas floated by Sen. Evan Bayh, D-Ind., to create an entitlement commission next year, despite disappointments in such panels in the past. For now, however, she said, the administration's primary focus is on passing a health care overhaul bill that would extend coverage to the uninsured and impose discipline on health care expenditures.

"That's the most constructive thing we can do to deal with the long-run budget deficit," Romer said after a speech before the Center for American Progress, a policy-research center in Washington. "What we're going to need besides that going forward, there certainly is the Conrad-Gregg commission idea."

The government ended the 2009 fiscal year Sept. 30 with a record $1.4 trillion budget deficit, according to the Treasury Department and the Office of Management and Budget. It's on track to accumulate deficits totaling $9 trillion by 2019. While federal spending in response to the recession and financial meltdown helped drive up the fiscal 2009 deficit, most future problems will be due to rapid rises in entitlement spending on Medicare and Social Security for seniors and Medicaid for the poor and people with disabilities.

U.S. public and private health expenditures are expected to reach $2.5 trillion this year and account for 17.6 percent of the gross domestic product, according to an analysis by the National Coalition on Health Care, a nonpartisan alliance. By 2018, national health care expenditures are projected to soar to $4.4 trillion.

In addition, national health care spending will increase faster than the growth in the nation's economy. Between now and 2018, the average increase in national health expenditures is projected at 6.2 percent a year, compared with a 4.1 percent annual rise in the GDP, according to the health care coalition study.

Obama administration officials have defended the massive government spending over the past year to bail out Wall Street and stimulate the economy as a necessary response to the worst recession since the Great Depression. They've also argued that the health care legislation wouldn't add to the deficit but instead would take the first essential steps toward slowing the rate of growth of health care spending.

McClatchy Newspapers 2009

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