Administration's Paygo Plan Will Overlook Health Reform, Other Health Spending

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President Obama urged Congress to enact into law tough financial rules requiring them to offset any new spending or taxes, but was clear that where health care is concerned, lawmakers should overlook those rules, Bloomberg reports. "Under fire from Republicans for his spending proposals, Obama is seeking to impose a 'pay-as-you-go' system on the budget to demonstrate his commitment to fiscal restraint" (Faler and Runningen, 6/9).

However, the rules Obama suggested Tuesday "would carve out about $2.5 trillion worth of exemptions for [his] priorities over the next decade," the Associated Press reports. "His health care reform plan also would get a green light to run big deficits in its early years." Medicare and Medicaid would be largely exempt, too, even though much spending on the two entitlement programs remains unfunded (Taylor, 6/9).

Obama's budget director, Peter Orszag, meanwhile told an audience at the Brookings Institution that health reform spending would pay for itself over the next decade, Bloomberg reports in a separate story: "These are not untested proposals. These are proposals that have been scored by an appropriately skeptical Budget Office. The package we put together will be deficit neutral over 10 years. There is no ambiguity about that," he said (Gaouette, 6/9).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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