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Wednesday, June 17, 2009

Filling Gaps in the White House Website, Part 5

On June 16, the president did a couple of media interviews, mainly about economic policy and financial services regulation. As of this post, neither is on the White House website.

Well, this is something that keeps me awake at night. There's no doubt that we've got a serious problem in terms of our long-term deficit and debt. I make no apologies for having acted short-term to deal with our recession. I think the vast majority of economists, conservative and liberal, felt that extraordinary interventions were necessary to prevent us from slipping into a potentially deep depression. But as soon as this economy recovers, and that means planning now and starting to take some steps now to deal with it, we're going to have to close that gap between the amount of money coming in and the money—amount of money going out. I have said before and I will repeat, I believe that we can reform entitlements in a way that makes it more sustainable. But most experts will tell you that the biggest driver of those deficits is health care costs. And no matter what else I do, if health care is still going up 5, 6, 7, 8 percent a year, if it's going up three times faster than wages, then we are going to see a federal government that is broke.

I do think that tackling tax reform, both on the individual side and on the corporate side at some point — akin to what was done in 1986, where you clear out some of the underbrush and you make sure that the base is broad, but everybody knows what it is that they’re paying and there aren’t a whole bunch of loopholes; there is serious enforcement and predictability — that kind of reform could end up generating the revenues that we need to run the basics of our government while actually in some cases lowering some rates. But that requires that everybody buy into a simpler, fairer system.

The one thing that I think is very important to understand is that there’s no free lunch, and sometimes politicians have been pretty irresponsible in saying you can have a prescription drug plan, you can have two wars, we can do a whole bunch of things, but we’re going to cut your taxes at the same time. And at some point something has to give.