October 4th, 2009
12:45 PM ET
5 years ago

Greenspan: Budget neutral health care overhaul not enough

WASHINGTON (CNN) - A bill to overhaul the nation's ailing health care system must avoid additional spending now, and also lower costs down the road, former Federal Reserve Chairman Alan Greenspan said Sunday.

Greenspan told the ABC program "This Week" that the federal debt was already getting too big, so reforming health care must do more than achieve what politicians call revenue neutrality - bringing in as much money as it costs.

"You cannot continue to increase the federal debt," Greenspan said. He noted that the Medicare program for senior citizens already requires long-term borrowing to cover the costs of benefits, describing it as a "huge fiscal hole out there."

"I would say revenue neutral is not adequate" Greenspan said. "In other words, we have to not only have a revenue neutral reform program, but simultaneously recognize that we have to address the longer term."

A compromise health care proposal debated in recent weeks by the Senate Finance Committee is expected to cost almost $900 billion over 10 years, but avoid increased spending by offsetting the cost with a combination of Medicare savings and new revenue-producing fees and taxes.

It was drafted by committee Chairman Sen. Max Baucus, D-Montana, after months of negotiations with five other panel members - three Republicans and two Democrats - and represents the only proposal so far with the potential to attract any Republican support.

Another Senate committee and three House committees have passed Democratic health care plans rejected by Republicans. The Senate Finance Committee is expected to vote on its measure on Tuesday, and then the Democratic leadership in each chamber will meld together single, separate proposals for floor debate in coming weeks.

If both the House and Senate pass their respective versions, a conference committee would then negotiate a final version that would require approval from both chambers before going to President Barack Obama for his signature.

Obama has made health care reform his top domestic priority this year. He and Democratic leaders want the bill to include a government-run public health insurance option as one choice for consumers currently unable or unwilling to obtain coverage, but Republicans unanimously oppose such a plan.

Of the five proposals in Congress, only the Baucus plan in the Senate Finance Committee lacks a public option. Instead, it would allow non-profit health care cooperatives that negotiate collective coverage for members to compete with private insurers to bring down costs for low- and middle-income Americans.

Appearing later on the ABC program Sunday, Sen. Charles Schumer, D-New York, said Democratic leaders would look for ways to have a public option included the final health care bill.

"The more the public looks at a public option, the more they like it," Schumer said, calling the idea the only way to bring real competition into consumer insurance markets. He said Democrats in Congress who hold a majority in both chambers "are going to come together" on some form of public option.

Another Democrat, Sen. Barbara Boxer of California, indicated on CNN's "State of the Union" that a public option compromise was possible.

Asked if she would vote for a bill that lacked a public option, Boxer said: "My vote will depend on the entire bill, and if there's no way to bend the cost curve and help people who have insurance in addition to those who don't, I'll vote no. But I'm very hopeful. There are very many ways to do this."

Republicans argue a public option would drive private insurers out of the market, leading to a government takeover of the health care system. Appearing with Schumer on the ABC program, Sen. John Cornyn, R-Texas, said it was a bad idea now and in the future.

"I think what's been proposed will make things worse, not better," Cornyn said.


Filed under: Health care
soundoff (45 Responses)
  1. Death Panel Sarah

    Well, be sure to ask DOCTOR Greenspan why and when the spending went out of control. Also, why didn't he speak up before he was 'retired'?
    Why are we asking him about healthcare, anyway?
    His is paid for.

    October 4, 2009 01:54 pm at 1:54 pm |
  2. Death Panel Sarah

    I will never cry if the Insurance companies do go out of business(which they never would, they would just have to live with smaller bonuses)!
    They never cared how many people they bankrupted, did they? Why should we now care about them?? Turn about is fair play!!
    John Cornyn is lying. He is a mouthpiece for the insurance industry. A better question for him.... how much money did the insurance industry give you, John??

    October 4, 2009 01:59 pm at 1:59 pm |
  3. Rosa, b'ham al

    This was the same guy that said he was surprised that the banking system couldn't police itself which led to to the recent giant recession.

    October 4, 2009 02:00 pm at 2:00 pm |
  4. Bill

    I thought Greenspan had retired. Bad form, Allen, undercutting your successor. Just can't stay out of the limelight, can you? Other Fed. Chairs have. How would you have liked the same treatment from your predecessor?

    October 4, 2009 02:01 pm at 2:01 pm |
  5. T. van Tol

    Alan Greenspan? Is'nt that the guy who slept during the Bush years
    and is responsible for the disasteres economics in the USA?

    October 4, 2009 02:01 pm at 2:01 pm |
  6. No Hillary = No Obama

    Greenspan – the person who supported deregulation and helped create the loss of accumulated wealth for millions of people – and he has the nerve to go on national tv and give his opinions?

    October 4, 2009 02:06 pm at 2:06 pm |
  7. Death Panel Sarah

    How many people has the insurance industry KILLED by denying coverage for treatments(getting between doctors and their patients)
    (does that sound familiar, cons)

    And we care about them!!?!!??

    October 4, 2009 02:06 pm at 2:06 pm |
  8. Scottsdale Jack

    Where was this concern when Bush was starting the needless war in Iraq? Why is there always plenty of money for war, but none for the needs of US citizens?

    October 4, 2009 02:07 pm at 2:07 pm |
  9. KEEPING IT REAL!

    I work in healthcare. If the general public realize the gross waste that is currently taking place in healthcare we would hear mouths hitting the floor aound the nation. If they cleaned up the chronic waste...health reform could pay for itself. There needs to be more specifics about how waste takes place. For example: the ridiculous amount of paperwork required by Medicare/Medicaid. Extra staff is hired just to meet the paperwork requirements. Or a nurse who would otherwise be useful in patient care is up to his or her nose in government required paperwork! Another example is the lack of coordination of services....xrays, MRIs, lab work...is duplicated a hundred fold. I could go on and on! I agree with Congressman Gray...it appears the opposition to healthcare reform simply wants people to go away and die.

    October 4, 2009 02:08 pm at 2:08 pm |
  10. Smithdp

    Mr. Greenspan,

    Where was your concern for our nation's indebtedness when you signed off on the Bush tax cuts that failed to stimulate the economy or create jobs. But they did contribute to doubling the deficit over the previous 8 years. You sold us out then by endorsing the cuts and now you have the nerve to ring the alarm on future deficits. You rank just behind Bush and his team as most responsible for the nations current deficit issues.

    October 4, 2009 02:22 pm at 2:22 pm |
  11. Mike, Syracuse, NY

    "Obama has made health care reform his top domestic priority this year."

    I'm sure that's a big consolation to the 3 million who have lost jobs on his watch. Why isn't an economic recovery his top domestic priority? He keeps saying this is the worse financial crisis since the Great Depression. The artificial health care 'crisis' didn't cause the recession.

    October 4, 2009 02:24 pm at 2:24 pm |
  12. Rich in Az

    Why do we even listen to this guy, when he participated in helping to create this mess.

    October 4, 2009 02:32 pm at 2:32 pm |
  13. CHIPS

    It,s amazing to me that when in office no everybody had any solutions for Bush and he wouldn't take any. But want to give Obama all the solutions.

    Sit back and watch the new president work and shut-up. Nobody can be any worst then Bush.

    October 4, 2009 02:33 pm at 2:33 pm |
  14. On the other hand...

    Greenspan is absolutely correct. The health care reform being considered by Obama does not lower the cost of health care and costs too much for America, regardless of how they say it will end up being deficit neutral. By the way, this whole deficit neutral argument is fantasy. Get real. Our economy is too important as we all see now to get caught up in fantasy.

    October 4, 2009 02:37 pm at 2:37 pm |
  15. Mike in MN

    So the left says the government needs to create a public option to provide competition for the greedy private insurance companies so they will be forced to lower premiums. The left says they need government to force private insurance companies to insure those with pre-existing conditions and to not drop coverage on those who get sick.
    This is America!!!! Why have the left been spending the last several decades waiting for the government to do this for them? This is America, the left could have and still can create insurance companies that charge lower premiums, cover those with pre-existing conditions, and pay unlimited benitits without dropping coverage on those who get sick. Why have they been wasting their time waiting for the government to do this for them? They could have and still could do this for themselves. That's the wonderfull beauty of a free America. Free, can do, hard working Americans don't have to rely on the government to solve their problems.
    So why have the left not done this? If health insurance companies like this existed they would put the current bunch of greedy ones out of business or force them to compete. I believe it is because the left will always look first for what government can do for them and not what they can do for themselves.

    October 4, 2009 02:39 pm at 2:39 pm |
  16. We Won Get Over It

    Wasn't he around during bush's administration. WHY IN HADES DIDN'T HE TELL THE PUBLIC THAT BUSH AND HIS REPUBLICAN ENABLERS in congress were ruining the economy...Why didn't he say we would have a mess absolute mess. Oh I get it, only the Democrats are held accountable if the spend to bring something about for the public. When the republicans bring something about to benefit big business it's A OK>

    October 4, 2009 02:39 pm at 2:39 pm |
  17. Bill of Florida

    I do not agree with the republicans that a public option would drive private insurers out of business. I think it will make them more competitive, and more service oriented to the American people. On the other hand, I think Greenspan has a point. How do you make the public option available without increasing our debt? We not only have to pay for it, but we have to ensure that it will actually lower costs. Budget neutrality is not good enough when we're in debt up to our eyeballs. I think that the republicans have some good ideas that need to be considered. At the same time, many of their ideas simply cater to corporate wish lists. For example, I think tort reform is a good idea, but it needs to be adjusted not to run rampant all over the rights of people who have truly been harmed by the medical system. Doctors and hospitals need to be held accountable, for example, if the amputate the wrong leg. I don't know how we can make the necessary changes without one form of sacrifice or another, but it has to be done or we will be even worse off in a few years. A great analogy for America is that we're like the people out there with no insurance who waits until they are so sick they they have to go to the Emergency Room at the expense of others. Unfortunately, I don't know who's going to pay our collective hospital bill.

    October 4, 2009 02:39 pm at 2:39 pm |
  18. steve fielder

    Remember that Alan Greenspan, with his lifelong devotion to Ayn Rand-inspired supply-side economic theory with its' unregulated "free market" philosophy, is one of the major players who got us into the economic we're currently enduring. By his own admission, he is now abandoning those very same theories and currently seems to be in a state of personal economic limbo. I'd take any financial advice coming from him with a grain (or a pound) of salt.

    October 4, 2009 02:46 pm at 2:46 pm |
  19. J-Syxx

    Like I care what this quack who helped put us in this financial crisis thinks about health care. I'm sure he's already 108 years old and rich, he doesn't have to worry about things like him or his family contracting serious diseases or getting injured. The only thing he has to worry about is his funeral costs which will be paid in full. I'm sure his health-care is rock solid because of his age and former position.

    October 4, 2009 02:50 pm at 2:50 pm |
  20. Brian in California

    It's interesting how the argument against the public option by the republicans are based on fears it will run private insurers out of business instead of how it could very well facilitate a significant drop in healthcare insurance costs benefiting the American people. Funny how their concern is focused the corporate interests and not on the betterment of the average person.

    October 4, 2009 03:00 pm at 3:00 pm |
  21. zap01

    Anyone not rich enough to do without health insurance would be stupid to not want a public option. Profit from death can not be moral or just. Right now, the republican reform is "marry a Canadian". Somebody somewhere needs to speak the truth regarding public option. As an american, I can travel to 38 different countries and get free medical care. Why can I not get it at home? Because they wouldn't get rich off my health. Sad day when life is sold, slaves to the insurance companies.

    October 4, 2009 03:12 pm at 3:12 pm |
  22. My two cents

    Hey Alan. Zipit. We don't care what you have to say. You did enough damage Mr. Oh Gee I Guess I Was Wrong. Pffft

    October 4, 2009 03:13 pm at 3:13 pm |
  23. patrick

    This man needs to shut up. He has been way way off, I was in the banking industry and had he raised rates along time ago, money when have been more expensive and lending when have been cost more and home prices would have not ballooned the way they did. He is to take a lot of the blame here. How house prices going up by 10-20% a year is not inflation I don't know what the hell inflation is. He is irrelevant and CNN needs to call this out. I am fed up with this country. This man is a wall street insider. 3% growth only for the wealthy, not for us normal folks. And you idiots out there voting in support of your economic victimize-rs need to get a clue. I am fed up with this country. I am no socialist but I am no fascist either and that is what its called when corporation run a government in simple terms. And sadly Obama is turning out to be just one of them. Indoctrination doesn't take long.

    October 4, 2009 03:13 pm at 3:13 pm |
  24. Bud

    The problem is that Washington does not want to take any PROFITS from the insurance industry. But its not possible to reform healthcare while you allow the insurance companies to siphon off more and more PROFITS each year. The current Baucus bill does nothing to keep the insurance industry in check.

    October 4, 2009 03:26 pm at 3:26 pm |
  25. annie s

    Greenspan is probably the most culpable single individual in the economic downturn, so taking his advice on anything should be avoided at all costs.

    October 4, 2009 03:29 pm at 3:29 pm |
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