Keep the focus on health care and taxes

From my new column for National Journal:

President Obama says he gets the message from Massachusetts. Expect a new focus on jobs and living standards. Expect fresh attention to overgrown public borrowing. The country’s pressing concerns, he says, will be his own priorities.

Fine. Now what? Closer attention to these problems will only underline how little the administration can do to solve them. Saying “jobs, jobs, jobs” does not create any. This is a campaign slogan, not a policy.

The country does not want a second fiscal stimulus. The first was unpopular and another would make the debt problem worse. As for reining in borrowing, there are two ways to do that: lower public spending and raise taxes. When it comes to specifics, people oppose both.

Just what this sharp new focus on the economy is going to achieve is therefore unclear. Caps on student-loan repayments and expanded child care tax credits, as proposed this week? I do not see these turning the economy round. The president calls for a temporary freeze on nondefense discretionary public spending, which is less than 20 percent of the overall budget. Again, not exactly radical — even if it happens.

Are these the bold policies that the health care debate has distracted us from? Obama’s critics say that the focus on health reform was his big mistake. I disagree. In fact, cost control in health care, especially Medicare, is indispensable for long-term fiscal discipline. The White House was right about that. The problem was that its plan raised costs in obvious ways (subsidies, expanded Medicaid) and pressed down too vaguely elsewhere: lots of good ideas and experiments, not enough action. What the administration said about cost control in health care was right in principle but not believable in practice.

It was the correct subject, though…

Clive Crook’s blog

This blog is no longer updated but it remains open as an archive.

I have been the FT's Washington columnist since April 2007. I moved from Britain to the US in 2005 to write for the Atlantic Monthly and the National Journal after 20 years working at the Economist, most recently as deputy editor. I write mainly about the intersection of politics and economics.

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