A Centrist idea for the budget impasse

My Dartmouth colleague Russ Muirhead and I have proposed the following relatively simple compromise in an op-ed in Politico today: In exchange for opening the government and raising the debt ceiling, President Obama should offer the Republicans a cap on the rate of growth for all federal health care spending (e.g. inflation plus 1.5 percent).  It would give everyone enough to declare victory.

Oh, it would also avoid default.

The specific number can be negotiated — the negotiation will be tough, but unlike the back-and-forth of the moment, constructive. The key is that such a deal would give both sides what they want. Obama keeps his health care law, and Republicans get to say they prevented it from bankrupting the country. And after all, if Obamacare’s boosters are correct that the law will significantly restrain future health spending, it’s a compromise that will cost the president nothing.

If, on the other hand, the ACA cost projections prove overly optimistic, then legislators will have to tweak the law — and Medicare and Medicaid — to impose additional spending discipline. Again, this is no big deal in theory: It’s something we would need to do anyway if health care spending increases dramatically faster than inflation in coming years.

Read more: http://www.politico.com/story/2013/10/a-subtle-solution-to-the-debt-dilemma-98280.html#ixzz2hnKclrOv

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