Orszag: Health care reform won't increase the deficit

WASHINGTON (CNN) – White House Budget Director Peter Orszag offered a window Sunday into President Obama’s ambitious plans to reform the nation’s health care system while dealing with record budget deficits and the nation’s struggling economy.

“We have always said health care reform has to be deficit-neutral over a five- or ten-year window,” Orszag said on CNN’s State of the Union when asked whether the White House might take on higher deficits in order to fund one of the president’s big domestic agenda items.

“And then much better than that over the long term. So we are very committed to making sure that health care reform is self-financing and also brings down costs over time both for families and for the federal government. So you are not going to see a deficit-increasing health care reform.”

Obama’s budget guru refused to say whether the president would sign a health care reform legislation that included a provision taxing employer-provided health care insurance benefits as one means of helping to finance health care reform.

“It was not in the president’s campaign plan, it wasn’t in our budget. Clearly there are some members of Congress who are putting it on the table. We’re going to have to let this play out,” said Orszag said

Orszag also told CNN Chief National Correspondent John King that the president’s $787 billion stimulus package is beginning to have an effect as money is flowing out of the federal government to states and cities. “We’ve obligated $100 billion,” Orszag said, “we’re running at about $1 billion a day now.”

“At the same time, we want to make sure that the money goes out for real projects that will help boost the economy and not for swimming pools and things that are not the intended purposes. So, quickly and wisely is the balance.”

Although Orszag told King that the White House plans to update its budget projections to account for the continuing recession, Obama’s budget director was upbeat overall about the economy.

“The free fall in the economy seems to have stopped .. . .There’s some glimmers of sun shining through the trees but we’re not out of the woods yet. We do have more work ahead.”