If we can get health-care costs under control, then our long-term budget picture is much better.
We can do more, and perhaps we should. Though the Affordable Care Act does much to bring Medicare to heel, there are policies left untried, including increasing deductibles and co-pays for wealthier seniors in Medicare. Similarly, taxes are going to have to go up by significantly more than they did in the fiscal cliff deal to support an aging population. One place to start is to limit the tax break richer Americans get on itemized deductions, as the Obama administration has proposed. Perhaps those two items can be the basis for a future fiscal deal.
But the truth is that deficit reduction is going better than you’d think from listening to the sniping in Washington. So why the continuous freaking out over the deficit? In part, it’s because deficits offer a convenient excuse for politicians to push policies that the American people wouldn’t support on their own terms. Republicans have long wanted to devolve Medicare to private insurers, for instance, but they didn’t get any traction with the idea until they cloaked it in the guise of deficit reduction.
In general, if someone says he thinks the deficit is the most important issue facing the country, but he doesn’t think it’s important enough to merit raising another dollar in taxes, he probably doesn’t really think the deficit is all that important an issue.
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