Excerpts from Remarks by Christina Romer to the Center for American Progress

WASHINGTON, DC- Christina Romer, Chairman of the Council of Economic Advisers will deliver remarks this afternoon at the Center for American Progress.  The following are excerpts from her remarks.

“In recent months, many have expressed concern about the budget deficit.  This is a concern that President Obama and his entire economic team share.”

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“(Economists) Auerbach and Gale calculate that roughly half of the long-run deficit is due to the policy actions of the past 8 years.  According to a study by the Center on Budget and Policy Priorities, just 3 percent of the long-run fiscal problem is due to the ARRA.  The rest of this yawning gap is due to projected rises in spending on entitlement programs, primarily Social Security, Medicare and Medicaid.  Some of this is the result of the aging of the population.  But the far greater source is the fact that health care costs, both public and private, are rising much faster than GDP.”

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“Obviously, we can’t go back eight years and make more responsible choices.  And, we can’t take short-run contractionary actions that could endanger the recovery.  We need to look forward and begin to put the nation on a more sustainable long-run fiscal path.  Given the central role of rising health care expenditures, any solution to our long-run budget problem will simply have to include slowing the growth rate of health care costs.”

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“Some have argued that it is irresponsible to reform our health care system at a time when the budget deficit is so large and our long-run fiscal problems are so severe.  I firmly believe the opposite:  it is fiscally irresponsible not to do health care reform.”

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“For the first time in decades, we have a chance to genuinely reform health care and expand health insurance coverage in this country.  We must see reform through to completion. But, we must do reform well.”

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“Though there is some variation across the different versions of the bills, we are also on track to meet the President’s promise that heath reform will not add one dime to the deficit.  The five Congressional committees have identified hundreds of billions of dollars of savings in Medicare and Medicaid.”

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“[F]iscally prudent health care reform that expands coverage to tens of millions of Americans and transforms our health care system to one that is higher quality and lower cost is possible.”

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“A public health insurance option would be a credible entrant in concentrated markets, and would serve as a competitive, alternative choice, constraining the ability of insurers to raise premiums, and thus containing the growth rate of costs.”

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“Slowing the growth rate of health care costs will enable firms to once again give raises in the form of take-home pay rather than more expensive health insurance.”

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“[S]tate and local governments would save substantially as a result of health care reform.”

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“Some view health insurance reform as something we should do before or after tackling the deficit.  My plea today is to view it as the most significant act we could take to tackle the deficit.  Putting in place health care reform that genuinely slows the growth rate of costs is truly one of the largest and most important fiscal reforms we can undertake.”

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“In health care reform we have an opportunity to navigate the difficult path between long-run fiscal responsibility and sensible short-run macroeconomic policy.  Done correctly, health care reform can genuinely slow the growth rate of health care costs and thus put us on a path to greatly reduced budget deficits in the long run.”