What Peter Orszag accomplished -- and what he failed to do
Before Peter Orszag was named director of the Office of Management and Budget, he led the Congressional Budget Office. OMB is part of the executive branch and advocates for the president's priorities, but CBO is an independent budget watchdog that traditionally contents itself with estimating the likely cost of legislation and the probable size of the federal deficit. Orszag, however, thought the watchdog needed to do a bit more barking: In particular, he believed that the relentless march of health-care costs posed a dire threat to federal finances. People talked about the "entitlement crisis," but that was a mistake: Social Security was a trivial problem. The issue was Medicare and Medicaid, and they were following the trends of the broader health-care sector. Health-care reform, Orszag argued in a series of speeches and blog posts, was entitlement reform.
Orszag paired the gloom-and-doom with an optimistic theory of how to avert disaster. Where most people assumed that controlling health-care costs would eventually mean confronting the dread specter of "rationing," Orszag -- taking his cue from reams of research showing that states that spent a lot of money on per capita Medicare spending didn't have better outcomes than states that spent much less -- argued that a substantial portion of each dollar we spend on health care is wasted. The answer wasn't cutting care, he said, but amassing much more evidence on what worked and what didn't, and then integrating that data into a health-care system armed with electronic medical records and software to help doctors make evidence-based decisions. That was a strategy politicians could support without seeing their careers flash before their eyes.
Soon after, Obama won the election and Orszag was named to the OMB, where he headed up the health-care reform effort. During the process, Orszag played full-court press, fighting internal battles over the shape of the plan, emerging as a key media spokesperson, and proving himself an adept congressional negotiator. After the endless negotiations over the stimulus package, which included billions for the research and computer systems that Orszag thinks crucial to the future of health care, Senate Majority Leader Harry Reid said, "in my mind, if there is a hero in all of this, it is Peter Orszag."
On a policy level, Orszag was wildly, even improbably, successful. A bill was passed. The Congressional Budget Office, now under the watchful gaze of Doug Elmendorf, certified it as deficit-reducing. Orszag's two top priorities -- an independent commission empowered to aggressively reform Medicare and a tax on high-value insurance plans -- survived the process.
But on a political level, he lost the argument: Polls showed that few Americans thought the legislation would reduce the deficit. The conversation has turned to long-term deficit reduction without even a breath spared for the long-term deficit reductions that Orszag muscled into the bill. In the most recent Washington Post/ABC poll, 56 percent of Americans disapproved of the way Obama has handled the deficit. The health-care bill itself is not popular, and the number one concern is cost.
Photo credit: By Carolyn Kaster/Associated Press
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