Barack Obama, US president, and Ben Bernanke, Fed chairman, both spoke today at the first meeting of the National Commission on Fiscal Responsibility and Reform.
Notable was their focus on Medicare and Medicaid, rather than Social Security, as a culprit behind US budget deficit woes.
After speaking at length about the fiscal dangers of the health programmes, Mr Bernanke mentions social security and then directly compares the risks of the two.
The projected fiscal imbalances associated with the Social Security system are notably smaller than those for federal health programs, but they still are significant and thus present an important challenge for policy.
Mr Obama mentions Medicare and Medicaid, but not social security, as major contributors to the deficit.
This is a marked change in political rhetoric. Despite health programmes being a significantly greater drag on US fiscal health than social security – which is reaping more in revenues than it’s paying out in expenditures, though this is expected to change as soon as this year – social security had been the primary focus when speaking about run-away government expenses.
Of course, former president George W Bush went on a failed bid to privatise social security, something highly unlikely under this administration. And Barack Obama, emerging victorious from a federal overhaul of the healthcare system, is likely to want a fresh look at the impact of long-time health programmes on the budget.
And here’s the impact, according to the Center for Economic and Policy Research. (That’s right, if we could get our healthcare costs in line with those in the UK or Canada, we’d actually be running a budget surplus pretty soon.)
