August 25th, 2009
11:59 PM ET

Deficits: Why they threaten health reform – and what Obama might do

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/08/25/art.obama.bernanke.deficit.jpg]

David Gergen | Bio
AC360° Contributor
CNN Senior Political Analyst

If you were sitting in the White House, it is entirely understandable that you would decide to unveil the surprise announcement of Ben Bernanke’s reappointment today: that may be the best and only way to divert attention from other economic news that is eye-popping.

The Bernanke appointment will be welcomed in financial circles, both here and overseas, because he is widely seen as the man who stopped us from going over a cliff. While some in Congress remain relentless critics of Bernanke, President Obama will generally win high marks for a reassuring move.

Strikingly, this is the third time in recent years that a president of one party has reappointed the head of the Federal Reserve first selected by a president of the other party: Ronald Reagan reappointed Paul Volcker, a Carter appointee; Bill Clinton reappointed Alan Greenspan, a Reagan appointee; and now Obama is reappointing a George W. Bush appointee. All of the choices have been seen as wise at the time.

Yet even the Bernanke story cannot fully deflect attention from the other economic story engulfing the administration today: its official announcement of new economic projections – in particular, its acknowledgment that deficits over the coming decade will be even higher than it said only three months ago. Now, the administration is predicting that instead of $7 trillion in new deficits, the country will rack up a staggering $9 trillion in new deficits for the 2010-2019 period. (The Congressional Budget Office has published its own numbers today that are largely parallel.)

Deficits of that magnitude would be extraordinarily dangerous and irresponsible for the country. They would double the national debt, risk much higher inflation, saddle future taxpayers with annual interest payments of over $900 billion, make us even more reliant upon China as a creditor, and over time would weaken us as a great nation. Talk about trend lines that are unsustainable!

Health care reform was already in growing trouble before this report. These deficit projections clearly add another significant threat to its passage. The administration will now have to persuade Congress and a skeptical public that it would be financially prudent to embark upon an ambitious new entitlement program in the teeth of dangerously growing deficits.

As vital and as morally right as it is to extend health insurance to everyone in need, the public is also wise to worry about the costs of robust reform. People have long memories, and they will recall that when Medicare was passed in the mid-1960s during the LBJ years, the House Ways and Means Committee projected that Medicare would cost about $12 billion in 1990; in 1990, it reportedly cost some $107 billion.

When Washington enacted prescription drug reform in the George W. Bush years, the administration put a price tag on it of $400 billion over nine years; new estimates have projected a cost of $724 billion over nine years. More recently, Massachusetts has embraced a health reform plan that is widely hailed – and serves as a model for the national effort this year – but it, too, has far outstripped original cost estimates.

In view of all this, President Obama has a choice. He can push forward with health reform efforts, giving short shrift to these deficit concerns. If so – if he continues to insist that Washington is just too “wee-weed up” - he will find that some of his strongest allies will become more reluctant on a big health reform bill this year.

Or he can come to grips with these grim forecasts and present to the nation a credible, comprehensive plan for reining in long-term deficits before Congress acts on health reform. The second path demands more courage – and is also the one of real leadership.

soundoff (186 Responses)
  1. Mike, Syracuse, NY

    It took 233 years to get our debt where it was when Obama took office, and he will double it in the next 10 years. He needs a smack upside the head. He's out of control and the only fitting punishment is raise taxes on everyone who voted for him. Oops, can't do that, half his supporters pay no tax, they are just leaches on society.

    August 25, 2009 at 9:02 pm |
  2. Harold R.Chorney

    Dismayed to see that CNN is contributing to deficit hysteria by the way it is presenting the deficit and debt data.
    I am a professional economist and a professor of political economy at Concordia University in Montreal where I teach public policy and political economy. I have published extensively on deficits and debt and Keynesian economics.

    The only sensible way to discuss deficits and debt is to always compare them to the underlying GDP. So for example 11 trillion dollars of debt in comparison to an economy of 14 trillion dollars is about 78 %, a percentage well below the debt to GDP ratio during the second world war when the ratio exceeded 110 per cent. The deficit of 1.5 trillion dollars is as a percentage of the GDP about 10.7 %. During the second world war this ratio exceeded 23 %.

    So there is no reason to panic about the size of the American deficit. As the economy improves so too will government revenues from taxes and government expenditures on stimulus and income support for the unemployed will be reduced ensuring that , so long as interest rates are kept low, the ratio of debt to GDP will stabilize and even drop as the GDP grows and unemployment falls. Remember also that one should subtract from the gross debt the size of government assets in order to arrive at a smaller but more realistic accounting of the net debt.a large chunk of these deficits are financed from American savers and they help transfer passive savings that are sitting on the sidelines during a recession into productive investments that create jobs.

    Deficit finance facilitates stimulus which as we shall see in the coming months promotes recovery from the severe economic downturn that the financial crisis threatened. In the end the economy will recover, infrastructure will be improved and prosperity will return and the debt to GDP ratio fall to less frightening levels.

    Harold R. Chorney
    further info at haroldchorneypoliticaleconomist.piczo.com

    August 25, 2009 at 9:00 pm |
  3. A.M. Deist

    Until America gets captialism out of the health care system, costs will continue to spiral, even with millions more losing their access to health care.

    August 25, 2009 at 8:51 pm |
  4. Timstigator

    Obama has been a huge disappointment. I do not wish to vote for Hillary in 2012 but it will be with no enthusiam when I do vote for Obama.

    Good Lord. The only person I know who will vote again for Obama. I didn't know one existed.

    August 25, 2009 at 8:26 pm |
  5. Cincinnati RIck

    Gergen: "Or he can come to grips with these grim forecasts and present to the nation a credible, comprehensive plan for reining in long-term deficits before Congress acts on health reform. The second path demands more courage – and is also the one of real leadership."

    Reply: Of course that's the solution. But it requires more than mere leadership. If, against all experience with governmental entities, one believes that Obama can deliver a workable government management of health care, turning water into wine and feeding the multitudes with a few loaves and fishes are simply cheap parlor tricks. Jesus move over...we have the real Messiah here.

    August 25, 2009 at 8:23 pm |
  6. Dave in Arizona

    The state of the economy and these new projections are unfortunate and perhaps some of the reform should be postponed, but it needs to be done eventually.

    Providing a measure of medical care to all Americans is as vital - if not more so - than providing basic education, fire protection, police protection, etc. We should all be able to pay extra for advanced medical care, private schools, fire extinguishers, and alarm systems; but a guaranteed minimum of all of those is needed for those who cannot afford it for themselves.

    August 25, 2009 at 8:23 pm |
  7. Rootbeer Brown

    Jefe Obama is nothing but a handmaiden to a cabal of self serving, duplicitous, breathtakingly stupid and incompetent oligarchs.
    He is a disgrace of unmitigated proportions and his legacy will be limited to the number of s**t stains he leaves on the White House carpets.

    August 25, 2009 at 8:15 pm |
  8. Earl

    Mr. Gergan is correct. It is completely irresponsible to move forward on socialized health care now. We can not fight two wars, clean greenhouse gases, and all the other spending programs Obama has signed AND give free health care to 47 million people! Obama is not a cool customer. He is bull-headed to go forward with socialized health care and bankrupt America.

    August 25, 2009 at 8:13 pm |
  9. Jan from Mississippi

    There are 91,325 US citizens age 50 years or older

    Give each of them $2 Million dollars


    Each must buy a house ( Hence, housing market solved!)

    Each must buy a new car (Hence, automobile crisis averted)

    Each must choose a health care "menu" choice plan and 50% MUST be for prevention! – each person pays for 10 years of the "premium" (Hence, health care is solved, Medicare drain is averted)

    This would have cost 180+million.... MUCH less than the current spending and not only that, but the "prudent" would have many thousands left over to invest – (hence the financial institutions are RESTORED!)


    I am 59, worked all my life and have 4 grown boys who each have families.... what a concept!

    August 25, 2009 at 8:13 pm |
  10. Rodd

    Thank-you Mr. Gergen!!! Finally someone in the news is beginning to realize what is happening in our government as well as our country. Every time someone criticizes this president...all I hear is what Bush did and what Bush did not do! Bush was NO president...FACT! Obama is NO president!!! Face it people... We have NOT had a president since Bill Clinton!!! The only change which has come to Washington is a different administration who is continuing with more of the same from the previouis 8 year disaster. I am proud that I do not have to look at my voter registration card to determine who to vote for. This independent is jumping from the sinking Obama ship!!! Bill Clinton said it best, "The era of big government is over!" That has certainly gone down the pipes! Ronald Reagan said it beautifully, "Government is not the solution to our problems...Government is the problem!!! Only in America could Pelosi, Reid, and Obama convince more than half the people of this country that we need to pay more taxes to control the weather! The congress is not God, and Obama certainly is not the Messiah!!!

    August 25, 2009 at 8:06 pm |
  11. Calie Stephens

    "Or he can come to grips with these grim forecasts and present to the nation a credible, comprehensive plan for reining in long-term deficits before Congress acts on health reform. The second path demands more courage – and is also the one of real leadership."

    Gergen, you favor the above approach which you say requires courage and leadership. Why the heck did you write the column, knowing that Obama has no courage and is certainly not a leader.

    Gergen, you lost your credibility and objectivity years ago. You used to be someone that I respected.

    Calie Stephens
    Dallas, TX

    August 25, 2009 at 7:47 pm |
  12. Mark from Saint Louis

    It's not a right or left issue, it's a right or wrong issue.

    How is this huge deficit acceptable???? It was only $250 billion under Bush , which was bad but this is all a Democrat fiasco now. 9 Trillion? Come on people.

    August 25, 2009 at 7:44 pm |
  13. Jim

    I didn't think Gergen would ever criticize Obama-as he is always kissing up to him and attacking his former GOP friends. This new 1.5 trillion dollar deficit that BO now believes we will have next year will have long lasting–very negative consequences...but this is what happens when you put a community organizer in a position way over his head!

    August 25, 2009 at 7:43 pm |
  14. DTR

    I admire you as an articulate, thoughtful contributor to the national conversation. However, we are picking at the edges of the most sensible solution, national healthcare and everyone gets taxed for it. These other solutions will cost more $'s in the end and the outcomes will likely not be any better than we currently experience.

    Like many Americans I have healthcare thru employment although I pay 1/2 the premium. Were I to lose my job or retire prior to Medicare eligibility I could not afford the premium. The HMO already makes treatment decisions based on researched outcomes ( which is the correct way to describe the sound bite "rationing"). Sometimes I don't like that but I accept that the decisions are rational. I am weary of this country's inability to look at the greater good and make some sacrifice to that end.

    The deficit? Well I vote to get out of unnecessary wars and use the money to care for our citizenry. It is unconscionable to have people die and/or lose everything they have worked for because they got sick.

    I look forward to your comments nightly Mr Gergen.

    August 25, 2009 at 7:34 pm |
  15. Independent Texan

    The ugly truth is this, and you will not hear it from either party: we have overleveraged ourselves with these unfunded entitlements; so much so that there is NO HOPE of meeting those obligations while remaining fiscally solvent. So here are our choices, Americans: 1) cut entitlement benefits, sharply, and NOW; 2) jack up our already high tax burden in the midst of the worst recession since the Great Depression; 3) stand by and watch the country's credit rating go down the tubes.

    My money is on #3 because the entrenched Democrat system and its fawning leftist media supporters will not permit #1, and the people who do the work and pay the taxes have had enough and will not abide by #2.

    So, what do we have to look forward to? At some point in the near future, the world will shift from the unsound dollar as a base currency to a basket of currencies, which will result in an immediate over supply of dollars on world markets. When supply greatly exceeds demand, the value goes down, and in this case we are talking about the dollar. When the dollar plummets, interest rates skyrocket, and the value of dollar denominated investments (e.g. our retirement accounts) tank.

    When the dollar plummets, inflation rears its ugly head. If we think the cost of living is high now, just wait until five years from now. It's going to be unbearable.

    We can't afford what entitlements we have now, let alone what Obama wants to pile on top of it.

    Yes, health care is being rationed now, partly by insurance companies and what they can successfully avoid paying, and partly by the cold cruel market - rich people get the best care, poor people do not. Is it "fair"? I guess not, if your sense of fairness is a Utopian World in which all is made well by the all-powerful government.

    To discard the current system of rationing (largely driven by market forces) and replace it with a new system of rationing run by government bureaucrats who decide which lives are worthy saving and which are not, is a matter of political choice I suppose.

    It boils down to whether we trust market solutions or governmental solutions. It's philosophical.

    But remember, it's the governmental solutions (unfunded Medicare, Medicaid, and Social Security) that are bankrupting the nation. It's absolutely NUTS to be creating more entitlements while we are bailing water from the existing ones.

    A pox on both major parties, who have put us in this position. VOTE LIBERTARIAN.

    August 25, 2009 at 7:33 pm |
  16. Cindy Merrill

    The"Stimulus" gave seniors a one time bonus of $250. That's approx. $5 a week for a year. Compare that to the $13 a week added to the average paycheck. Now throw in the projected cuts in Medicare, the threat ( either imagined or at least partially true), of rationing healthcare for the elderly: Guess what? Seniors think they're now considered second class citizens. Gosh! WHERE did they get that idea from? The government. When a social worker tells a 67 year old diabetic that he can't get his SNAP food credit increased ( even though dietic food costs 35% more on average), you know something is terribly wrong:
    My husband and I just got turned down for a SNAP Food credit increase ( He's diabetic and we live on SSI). Which would you prefer: An extra $100 for dietic food, or $180,000 a month for Hospital costs if or when John has a Diabetic blackout or slips into a Coma? You, the taxpayers, already pay for his SSI and VA, so its your decision.

    August 25, 2009 at 7:21 pm |
  17. Luke

    David Gergen,
    No doubt, you are a great political mind. No doubt. But seriously, few if any of the financial implications of the republicans destructive rein during the last 8 years were NOT known just 3-6 months ago. It was known that the deficit was going to rise significantly. This was known. But now here we are in a hailstorm of "reform" and all the wee weedness that comes with it. There are aggressive messaging efforts to kill reform from major organizations and deep pocketed interests. And there is a targeted republican messaging effort to kill this – albeit indirectly. Thats where we are now. But I totally disagree with your premise. This country needs to make some positive changes to begin to curtail future deficits. One is lowering health care costs – on businesses most importantly. The other is setting up a green energy economy and dealing with the undeniable effects of global warming and the effects it will have in the future. An opportunity exists to turn things around. And by many measures Obama has done a great job so far – LOOK WHAT HE'S INHERITED!. But he's not done and this country NEEDS this more than you're admitting. In short, its easy to kick Obama and the dems when they're down in the trenches fighting for this country against a multitude of interests. But you know better than to side with the same people who brought us the iraq war and that lionshare of our fiscal problems. Of all people, you shouldn't have taken the bait. Stay strong with Obama and the Dems. America and you will be glad you did.

    A former Republican

    August 25, 2009 at 7:16 pm |
  18. Diane C

    Pamela T
    Exactly right. Anyone who needs medical attention in this country has access by walking into an ER. The majority of the hospitals are clean and staffed with caring professionals. Many healthcare professionals give their time freely to help the poor–and even travel to other countries to help there.

    When you take away the potential for a profit by inserting the govt you also remove the possibility for innovation. Profit isn't evil.

    August 25, 2009 at 6:44 pm |
  19. steve

    Great article by Mr. Gergen, really appreciate it.
    OH! You're my new favorite blogger fyi

    August 25, 2009 at 6:41 pm |
  20. Black Saint

    Please, People Obama promised La Raza he would upgrade the free health care the Invading horde of |Illegal Aliens is currently getting. They do not want to wait in ER for their free health care.

    August 25, 2009 at 6:40 pm |
  21. curt King

    Let's stop blaming others (Bush or anyone else)
    The President and his supporters including CNN and Mr Gergen had not only supported but generously promoted candidate Obama and neglected to objectively report and protect american people. To Mr. Gergen's credit, he has decided now to report instead of promote his candidate of 2008.
    President Obama and his supporters knew of the global challenges, they all vowed that they are the ones most qualifed to fix the country ad world's problems. Instead, they only carried out what they believed the narrow window of opportunity to install extreme ideologies and socal agendas at the expense and compromise of the country and all the people. It is so sad that people is willing to sacrifice the country for their own selfish legacy and ideologies. Now they fail to deliver, they have gone back to blame others. Shame on them! Be a man ! Otherwise, stop whining and deal with the problem or get out! They want to have a cake and eat it ,too. I have buyer's remorse about my vote last Novemeber.

    August 25, 2009 at 6:38 pm |
  22. steve

    Great article by Mr. Gergen, really appreciate it.

    August 25, 2009 at 6:36 pm |
  23. Jay Dubs

    Mr. Gergen, you are right to worry about the deficit. You wrong, however, to look at health care reform as a separate problem. The federal deficit is being driven by rising health care costs (the expenses of Medicare and Medicaid are growing at a rate far faster than any other government programs) – costs that are rising across the board. Health reform MUST be passed in order for these costs to be controlled and for our deficit to be controlled!

    That's the irony of deficit hawks fighting health reform... they are fighting the very means by which the deficit will eventually be controlled (if it is ever to be controlled).

    August 25, 2009 at 6:28 pm |
  24. Silqworm

    We should all drop out of consumer society and start bartering in silver coin. This will cause the dollar to collapse faster, and thus we will liberate ourselves of all of the national debt and future taxes. The Chinese, Japanese, Russians, Germans, and the rest will be paid back in gold or silver over time according to treaty. The Counties will establish their own comprehensive general welfare policies independent of State or Federal interference. The Federal Government should go back to it's proper 1% level. The System as such was already bankrupt in 1789 when it was ginned up. We as individuals need to recognize that we were all born into a eugenicist Monopoly bankers game; isn't it obvious to everyone now that Morgan is the tyrant, we are the slaves, and we're not going to play it anymore, David.

    August 25, 2009 at 6:16 pm |
  25. Damian Palmares

    It just goes to prove that the current projections for their proposed public option will run two or three times higher than what they are projecting. The CBO already gave a higher cost projection than the administration proposed, but if you look back at Medicare and what the original projected costs of that program were and where they actually ended up, it's pretty scary. Where will the difference come from? Higher taxes, along with the expiration of Bush's tax cuts, then add on taxes for cap and trade which hopefully will be denied and this administration is only 6 months in.

    Who in their right mind would want a single payer health system ran by our government? We can't even deliver the mail without running in the red. Where do you think the salaries for doctors will go if that ever happened and what kind of quality would result from that? God help us all.

    August 25, 2009 at 6:10 pm |
  26. Tom

    Then he might have to raise taxes a little bit to pay for this.

    Considering that our European nations with their "crushing burdens of socialist taxation," stuck firmly on their "roads to serfdom," seem to be "doing a lot better than we are in a lot of fields," I have no problem with this.

    August 25, 2009 at 6:08 pm |
  27. aknarayan

    "The fundamental problem is cost; we spend three times per capita what europe spends... and have $100T (that’s trillion) in unfunded liabilities for medicare in the out-years. And the ONLY solution is aggressive rationing…just like the europeans do..."

    I think this post hits at the core issue here of cost.
    About 80% of the government budget is composed of health spending (Medicare/Medicaid), social security and defense spending. Within about 8 years, Medicare will go broke and within a few decades health care spending will consume nearly 40% of our GDP.

    Anyone who wants to talk seriously about reducing the deficit should A) discuss the types of cuts they are willing to stomach in one of those three programs or B) discuss the level of taxation we would require in order to get our deficits under control.

    If the GOP wants to complain about Obama potentially cutting Medicare AND about skyrocketing deficits, then they should come up with serious proposals for how they will either raise taxes or cut spending (from one of the big three) in order to get our fiscal house in order. Otherwise they are engaging in sheer demagoguery.

    On the other hand, President Obama is attempting to make cuts in Medicare by eliminating many of the excesses in the way we practice medicine. There is tremendous amount of variation in medical care that is not evidenced based. Moreover coordination of care amongst providers can help to eliminate excessive testing/procedures that drive up costs. These are measures that can save billions of dollars without rationing care to anyone.

    August 25, 2009 at 6:06 pm |
  28. Tim Gibson

    If walls could talk, wait they have, we print it, spend it, you loose it. Is that not what our administration continues to tell us daily.

    Nothing short of a miracle will be to little to late at this point in our rushed and unprepared direct line of fire for Hurricane Debt and default of a nation.

    The jitterbug is a dance our leadership knows much to well. Don't be lost in the fancy footwork.

    August 25, 2009 at 6:05 pm |
  29. ScienceMan

    I thought the CBO's ten yr projections were 7.1 trillion because they assumed all the Bush tax cuts would expire in 2011 as per the law. OMB's apparently keeps them for the folks under 250k. This is what the big difference is. Clearly this is too much over the long run, but I don't remember many of you people complaining in Feb when everybody thought the world economic house was on fire and something urgent needed to be done. Now that the fire seems to be under control and altho still smouldering, you all are complaining about the cost of the water to put it out. If reducing the long-term national debt has now become the country's first priority then so be it. There will have to be draconian cuts in the military budget (especially the 400 billiion in defense contracts), cost reductions in Medicare, medicaid, food stamps (will people starve), education, law enforcement, Agriculture subsidies, NASA,, Gov pensions, etc. This will result in even higher unemployment especially for white collar professionals, Perhaps living the high life on credit for the last couple of decades along with a trillion dollar war in the Iraq black hole, has finally caught up w us. I am not sure how Americans under 65 who have never experienced real austerity will adapt to it. Any politician is going to have a hard time and short shelve life. I was a Perot supporter back in 1992, when he was sounding the alarm about the national debt. Only about 15% of the people took him seriously. The Clinton tech bubble and the Bush real estate bubble and the useless trillion dollar war kept the illusion of prosperity going for about 16 yrs. But it seems Ross was right. Maybe it's time for a third party.

    August 25, 2009 at 6:05 pm |
  30. stephen

    Tough for Gergen to cross the picket line like this. I'd sleep with one eye open if I were him. And I don't think Elbows Emmanuel is going to give him a painless death, either.

    August 25, 2009 at 5:56 pm |
  31. oeg

    1. De-link your insurance from your job, so you have the freedom to change jobs.
    2. Even up, via tax credits, the cost of insurance that is currently much higher for the individual because insurance companies subsidize big companies and governments in order to get their business.
    3. Adopt nationally the Texas and California plans as regards medical torts. Once torts are equalized,
    4. Allow people in any state to buy insurance from a company in any other state.

    Seems to me all of this could be done via regulation, not legislation.

    August 25, 2009 at 5:46 pm |
  32. Jack Flannigan

    Both parties have put this nation in debt. At this juncture finger pointing serves no purpose. It really did not matter which side of the TITANIC (right or left) the iceberg struck, the fact of the matter is – it sank. Go ahead argue all you like, in the mean time the ship is sinking and there are not enough life boats. Debt will sink this nation just as sure as an iceberg sank the TITANIC. Can we stop SPENDING money that we do not have and start to INVEST what little actual hard currency we have within this nation. If not, good bye America, it has been nice knowing you.

    August 25, 2009 at 5:37 pm |
  33. Mart

    Mr. Gergan is right on. Why don't we have healthcare like the French? What would it cost to start that up? It's certainly cheaper than anything here.

    August 25, 2009 at 5:33 pm |
  34. Russ was a Californian

    Raise taxes on everyone. No exceptions. All 345 million of them. Men, women, children, rich, poor, middle class, legal, illegal, resident, expatriot, old, young, married, single, working, retired.

    Everyone must have some skin in the game.

    August 25, 2009 at 5:32 pm |
  35. Mike in MN

    I agree with Gergen and polls show a majority of voters also do. The polls show a majority of voters rank reining in the deficit as a higher priotiry than health care reform.
    The deficits threaten all of Americans. While the lack of health care is a very real problem for some Americans, it is somewhere below 20% of the population.
    Unless the government can get the entitlement programs under control, creating a new one will only add to the mounting disaster.
    And while Obama seems to be fond of blaming the deficits on Bush the fact is that who is at fault is not relevant in terms of fixing the problem. What is relevant is the Obama is now the President and he must provide the leadership needed to solve this problem. Bush is out of the picture. And a health care reform bill that comes with a trillion dollar plus price tag and a CBO esitmiate of adding 230 billion to the deficit is not the leadership a majority of voters is looking for.

    August 25, 2009 at 5:22 pm |
  36. rick


    I don't think David Gergon was particularly easy or particularly hard on George Bush, at least comparatively speaking. I think that President Bush has been almost universally condemned for his economics, as well as for the war in Iraq, etc. President Obama spends a fair amount of time stressing that he inherited a mess, and he did.

    Mr. Gergon's point is that the situation, as it is, needs to be dealt with in a way that addresses the growing, and I mean growing, deficit and debt situation. I agree with him. The trouble is that politicians have a difficult time facing the problem squarely, as in they have trouble advocating a combination of reductions in federal spending and increases in federal revenue necessary to bring our books into the realm of reasonableness.

    I'm thinking of running as an Independent for US Senate to just come out and say what needs to be done: give a schedule for raising the retirement age, remove the income limit on the retirement payroll tax, take a point off of the retirement payroll tax and put it on the medicare payroll tax, take out all of the increases planned in federal education spending, junk cap and trade and go with a simple $.50/gallon increase in the gasoline tax to finance subsidies for renewable energy sources, redirect $100 billion in unspent stimulus money to build 4 state of the art nuclear energy facililities, eventually producing a good amount of energy with almost no carbon footprint, and generating great revenue on the open market. Also, in addition to increasing the 33% and 35% tax brackets to 36% and 39,6% brackets, also add a point to the 25% and 28% brackets. And, yes, I agree with you, get the people in the gap health insurance, but pay for it with a combination of premiums paid by way of a payroll tax on the affected employers and employees, and dedicate some universal tax, such as a dedicated 0.5% additional payroll tax for universal health care, so that this worthwhile endeavor does not increase the deficit.

    There's a lot of shared sacrifice there, but if the CBO scored it it would show deficits and debt being brought into solid shape, and that would help the overall economy tremendously.

    August 25, 2009 at 5:21 pm |
  37. Freedom Fan

    (trying again)

    The national debt nearly doubled during Bush's 8 year term, but is forecast to DOUBLE YET AGAIN under Obama ... in only 4 more years!

    So while Bush took the deficit from 60% of GDP to 70% in 8 years; Obama will take it to 100% of GDP in only four more years!

    Are we stark raving MAD? Why are we even talking about health care or cap-and-tax or any of the other job-killing, economy destroying, deficit expanding measures?

    If you aren't terrified of the dire situation which lies just over the horizon by following Obama, then you must be a doddering idiot... or paul krugman.

    August 25, 2009 at 5:21 pm |
  38. TheEnforcer

    What's the matter?

    Kool-ade wearing off?

    August 25, 2009 at 5:21 pm |
  39. Tony P. Fremont, Ca.

    Conversely, I believe it's because of the deficit that health care reform is entirely necessary. The Public option is the only reform in Obama's proposal capable of triggering a significant savings by decreasing health care costs in our future. Deficit of unpaid acquired debt is no different than inflation of acquired debt for health bills in a monopolized private health insurance market. Both facts still equate to decreasing our nation's assets and GDP. As once said, "desperate times call for deperate measures". Obama's proposal is the only idea offered in significantly taking the "dent" out of rising health care insurance costs and stabilizing the monopolized market.
    Two-thirds of the health care reform costs are funded by cutting bureaucratic private health insurance waste in health care and the other one-third would be funded by those in the tax bracket earning over $300k per year. The folks in the same tax bracket on Wall Street who "sucked" our banks dry of money with the sale of fradulent CDO sub prime mortgage accounts to investors/victims. What could be more sweet?

    August 25, 2009 at 5:20 pm |
  40. James Collins

    Why don't you reporters ask Senator Mc Cain why he who has had Government Medical Care and Insurance for his entire live, from birth till today why the rest of us can not have what he has had these many years?? He was born in a government hospital, was treated by government doctors until he was in captivity in Viet Nam and then afterwards up to and including his government insurance as a Senator, His first wife and children were under the government treatment and insurance. (His second wife is rich and will buy her own hospital if she needs care.) But what about the rest of the population??? Why is it good for him but is not good for US???


    August 25, 2009 at 5:16 pm |
  41. Freedom Fan

    "The enormous deficits started with Democratic Party take over of
    Congress in 2007 session"
    -w six

    Droll. The national debt nearly doubled under Bush's 8 year term and is forecast to DOUBLE AGAIN

    August 25, 2009 at 5:14 pm |
  42. Tony P. Fremont, Ca.

    Conversely, I believe it's because of the deficit that health care reform is entirely necessary. The Public option is the only reform in Obama's proposal capable of triggering a significant savings by decreasing health care costs in our future. Deficit of unpaid acquired debt is no different than inflation in a monopolized private health insurance market. Both facts still equate to decreasing our nation's assets and GDP. As once said, "desperate times call for deperate measures". Obama's proposal is the only idea offered in significantly taking the "dent" out of rising health care insurance costs and stabilizing the monopolized market.
    Two-thirds of the health care reform costs are funded by cutting bureaucratic private health insurance waste in health care and the other one-third would be funded by those in the tax bracket earning over $300k per year. The folks in the same tax bracket on Wall Street who "sucked" our banks dry of money with the sale of fradulent CDO sub prime mortgage accounts to investors/victims. What could be more sweet?

    August 25, 2009 at 5:13 pm |
  43. Steve Zecola

    Mari's comment is illustrative of the problem of getting things fixed in Washington. She is obviously smart and articulate. But, rather than addressing the existing situation, it's easier for her and politicians to attack the opposition.

    Politicians deal with scores of issues everyday and therefore cannot be experts on all of them. They need to first understand the basic facts and issues of the problem before addressing them.

    Gergen has done this with the deficit: $11T in existing debt, no assets, $9T in additional debt forecasted over the next 10 years, with interest payments alone costing taxpayers $900 M a year.

    Moreover, this analysis does not cover the even larger liabilities from Medicare and Social Security – which are not reported because the federal government doesn't adhere to Generally Accepted Accounting Principles.

    It's a dangerous statement to say that the United States is the richest country and base policies on that belief. As we saw with the recent financial crises, the house of cards can come down quickly. In fact, there is still over $1 T in bad housing debt on the banks' books which poses a financial risk to the economy.

    To ignore the current reality is a prescription for failure. The top two priorities for the Administration in near-term should be: 1) fixing the banking industry and 2) getting the federal budget under control.

    August 25, 2009 at 5:13 pm |
  44. gladRocks

    Michael A, what free market are you talking about? The government already controls almost 50% of our healthcare market through medicare and medicaid...it also prohibits insurance companies from offering policies across state lines and it mandates all kinds of care be included in our policies...

    and by what standards are we ranked 27th? The answer: is they include all kinds of things like homicide...I wonder if you think that means gun control should be a part of health care reform?

    And what nations outrank us in surviving diseases like cancer, diabetes, heart disease? Answer: none...

    So, let's double down on government control, increase the cost of health care from where it is now and live...an extra year.

    August 25, 2009 at 5:10 pm |
  45. Seeryer

    You are a status quoer. You want DC to be controlled by the elites that come to your cocktail parties and give you the "inside scoop". You are what is wrong with DC. All of you think of ways to not rock the boat. You are seizing on these numbers becasue you hope they will be cited as a reason not to rock the health care boat. It is easy for wealthy elitists like yourself to ponitificate on air about what is bad or good for bipartisanship in Washington. Bipartisanship did not get Obama elected but it will get him defeated. As a liberal supporter of Hillary who knew she would bust some heads, Obama has been a huge disappointment. I do not wish to vote for Hillary in 2012 but it will be with no enthusiam when I do vote for Obama. We hear all this BS about arm twisting from Rahm and "Chicago style politics" but the reality is Obama is beinding over backward to be liked by everyone. And in the process he is losing respect of those who look up to him and being played like a fiddle by those who despise him. The president needs to say to hell with the way things work in DC and truly bring change to the capital instead of letting the capital change him. And never listen to your advice.

    August 25, 2009 at 5:10 pm |
  46. MikeS

    It is good to hear people attacking moderates like Bush and liberals like Obama. Mari is right we need a true conservative to cut spending not just curb growth.

    August 25, 2009 at 5:06 pm |
  47. hudson duster

    And yet, even if those problems came from a previous administration, they still have to be solved by this one with the financial resources that are really available, not those that should be available by force of moral outrage.
    These numbers are real. All the pleading in the world will not create the wealth to solve them. And an inexperienced novice who changes stories to suit the day will certainly not solve them.

    August 25, 2009 at 5:05 pm |
  48. wko

    You've sounded a warning Mr. Gergen (as have others). Question is: Is the president or anyone in the White House or Congress listening? The answer: NO!! They are demogogues and idealists. Unfortunately the republicans don't have the votes to stop them. The only hope is for the democrats to implode. This is an unmitigated disaster. Elections certainly do have consequences. Obama can't lead and Congress is hapless.

    August 25, 2009 at 5:04 pm |
  49. citizen

    The actions of the white house are the same actions they told us not to do.....get way over your head in debt and keep borrowing money you cant afford to pay back....

    This guy needs to be stopped, saying "the last prez ran up the debt too" sounds like a little kid trying to talk his way out of being in trouble by saying the other kids did it too.

    August 25, 2009 at 5:00 pm |
  50. Timstigator

    Did everyone notice how gingerly Mr. Gergen is in criticizing his Lordship? How delicately he points out that the ship is sinking and the captain better do something about it? Gergen's man-crush on Obama over the past year and a half on CNN has completely destroyed is previously respected reputation as someone with no skin in the game that provided smart analysis. It is no longer smart analysis. It's out-and-out promotion. Shame on you, Gergen. Your days of political analysis will be over as soon as Obama's first and only term is over. But something tells me you're starting to jump ship now. Probably so you can hook up with the next network for a job. Shameful. At least you show more transparency than the Obama regime.

    August 25, 2009 at 4:59 pm |
1 2 3 4