OMB Director Peter R. Orszag Urges that Fiscal Reform Start Now

OMB Letterhead

February 23, 2009
Contact: OMB Communications, 202-395-7254
Remarks as Prepared for Delivery

OMB Director Peter R. Orszag Urges that Fiscal Reform Start Now
White House Summit First Step to Long-Term Fiscal Health

"Our nation is being forced to grapple with a pair of trillion-dollar deficits:  one is the trillion-dollar deficit between what the economy could be producing each year and what it is producing; the other is the trillion-dollar budget deficit that this Administration inherited.

The first deficit – the trillion dollar income gap this year -- is an urgent crisis. The longer it persists, the more jobs that are lost, the more businesses that are closed, and the more income loss that families suffer.  The Recovery Act that was enacted earlier this month helps to address that crisis – jumpstarting the economy and creating or saving 3.5 million jobs.

The second deficit -- the budget deficit -- may be somewhat less urgent, but it’s no less important.  Over the medium to long term, the nation is on an unsustainable fiscal course.  To be responsible, we must begin the difficult process of fiscal reform now.

That’s why the President convened this summit today:  because we can no longer let the urgent get in the way of the important.  No longer can we put off the tough choices we must make to address our budget deficits.

In charting a new fiscal course, we need to be clear in diagnosing the problem. The single most important thing we can do to improve the long-term fiscal health of our nation is slow the growth rate in health care costs.  Health care is the key to our fiscal future.

So to my fellow budget hawks in this room and in the rest of the country, let me be very clear: health care reform is entitlement reform.

The path of fiscal responsibility must run directly through health care.  

We also must recognize that reforms to Medicare and Medicaid will only succeed in the context of slowing the spiraling growth of overall health care costs.

Improving the efficiency of the health system -- so that we get better results for less money -- is therefore not just or even primarily a budget issue.  

Health reform would also provide direct help to struggling families, since health care costs are reducing workers’ take-home pay to a degree that is both under-appreciated and unnecessarily large.

And for many states, health care is increasingly crowding out other priorities -- such as support for higher education, which in turn had lead to higher tuition and painful cutbacks at state universities.

All of this is why the President has said time and again that he is committed to reforming our health care system this year.

With his leadership and the hard work of everyone in this room, we can reform health care, start to bend the curve of long-term costs, and get our economy on a path of long-term growth."