Use the Budget Surplus for Universal Health Care

Los Angeles Times

Senate Democrats have managed to whittle George W 's tax cut from $1.6 trillion to $1.2 trillion. Big deal. Last year, Bill Clinton vetoed a $700 billion tax cut. And once the Senate tax bill goes to conference with the House, it's sure to be back up there where Bush wants it.

Democrats can't fight Bush's tax cut with nothing but an admonition that it's "too large." They need to put something else on the table that's important to working Americans -- and which won't be possible if the surplus is used for Bush's tax cut. That something is universal health care.

Besides, what better time than now to revive the idea of universal health care? There's a huge budget surplus. Meanwhile, the number of Americans lacking health insurance continues to rise (now almost 43 million, up from 38 million ten years ago). And those who have it are paying more than ever in co-payments, deductibles, and premiums. About 28 million households now spend more than 10 percent of their pay on health care costs and premiums. As the economy sinks, working families will have an even harder time. If they lose their job their health insurance may disappear.

Yet nobody in Washington is talking about universal health care. George W. wants to use the bulk of the surplus for a whopping tax cut mostly for the rich. If there's any money left, he'd also include a $2,000 tax credit against the cost of family health insurance. But this wouldn't be much help to the typical middle-income family that now pays more than $6,000 a year to guarantee its health care. Even with the tax credit is figured in, health insurance would still take a whopping 15 percent out of this family's annual income. And the credit would be of almost no use to families that can't afford health insurance to begin with. The Congressional Budget Office recently concluded that a tax credit would have to be more than twice as large as the one Bush is mentioning in order to get most of them insured.

What about the Democrats -- the party that first championed universal health care? Democrats don't even want to utter the words "universal health care" because they still believe Bill and Hillary Clinton's ill-fated plan of 1994 was responsible for the Republican takeover of Congress later than same year. They don't want to revive memories of that plan for fear of losing electoral support in 2002.

Those fears are misplaced. The Clinton health-care plan sank because it was too complicated for the public to understand, which made it a perfect foil for right-wing demagogues. In fact, the public supported the idea of universal health care. Opinion polls taken in late 1993 and early 1994 showed most Americans in favor. A majority consistently listed "universal health care" as America's most important unmet need. And a public that wanted universal health care seven years ago is almost certain to want it now, as family health-care bills skyrocket.

A deeper reason Democrats don't want to talk about universal health care is they've adopted the old-time Republican religion of fiscal austerity. This gospel won't allow spending of the magnitude required to insure all Americans. Instead, congressional Democrats say the budget surplus should be divided into thirds. One third should be used to eliminate the federal debt, another third for a tax cut more modest that George W. is proposing. Only the last third should be used for additional spending.

If today's Democrats had their way, a bit more money would go into Medicaid for the very poor and expanded health insurance for children not quite poor enough to qualify. But this would still leave a huge health gap. The current children's health insurance program reaches only about a third of the 9 million children already eligible for it -- an administrative problem that won't be corrected merely by putting more money into the program. Anything less than universal access leaves out too many families.

It's a matter of simple priorities. It makes no more sense to use the surplus to pay down the federal debt than to use it on a big tax cut for the wealthy. Give all Americans affordable health care instead. As John Maynard Keynes pointed out sixty years ago, public indebtedness per se isn't a problem. In fact, some debt may be needed to maintain aggregate demand. The underlying question is what the public debt is used for. If the benefits to the public exceed the costs of borrowing from the public, it would be silly not to borrow. And with health-care costs soaring and coverage declining, the benefits of universal health care are very, very high.

What a difference seven years makes. Bill Clinton proposed his plan for universal health care when the nation was deeper in debt than it is now, and faced annual deficits of almost $300 billion a year for as far as the eye could see. Now we have a budget surplus even Alan Greenspan thinks is too big, and the federal debt is dropping. Working families need affordable health care more than ever. Put it all together. You don't have to be a rocket scientist -- or even a politician -- to figure out what has to be done.

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