administration which serve and i'm so delighted to make progress already we've already strengthened the health care more so than we've done in the past decade and really proud of the factories extended affordable health coverage eleven million children of with great interest and i have to say i agree on the huge benefits of slowing health care inflation if we can achieve this goal the economic benefits are vast and i'm pleased that we all share this goal however at this stage in the game with c b l fully engaged in scoring the proposals i'm less concerned with figuring out whether slowing the growth of rates will help i know well what i'm more concerned about is how we slow the growth rate the specifics of how we do this matter greatly just this week  in spending will not actually be achieved without fundamental changes in the financing and delivery of health care so what the fundamental changes that need to be take take place congress is a legislative body and it's not enough for us to assume that  will have a positive effect on our long term economic growth we need to prescribe exactly how these changes are going to take place what changes we make will actually bend the cost curve over time the question must be answered and answered quickly since our long term economic outlook worsens with each year congress fails to act if you bring up a chart we recently learned from the medicare trustees of the programs unfunded liability has grown to thirty eight trillion dollars just this year a single year increase of two trillion dollars failing to report on this one program for just one year has cost us two trillion dollars while i applaud the administration for probity for proposing real scorable medicare savings many of which were included in republican budget i've yet to see a single democrat healthcare proposal that would direct the savings to deficit reduction the savings are swallowed up by even greater spending increases as only director orszag noted quote our political system one fortunately does not appear to be particularly effective at addressing gradual long term problems such as rising health care costs and quote again i agree which is why we shouldn't give any proposal the benefit of the doubt that it will magically bend the health care cost growth curve over time whether we can achieve these savings depends entirely on the specifics of these changes none of which are in this particular report are they fundamental changes that remove market distortions or remove payment structures or reform payment structures or are they provider cuts that congress has reversed in the past in tax increases according to see below there's no guarantee that the health care systems response to near term cost reductions would produce greater quality or efficiency why i believe these cost reductions are important bending the cost curve requires changes more fundamental than simply provider as noted quote the government can spur those changes by transforming payment policies in federal health care programs and by significantly limiting the current tax subsidy for health care or changing last congress  an entitlement reform bill a roadmap for america's future and just a couple weeks ago i along with a number of my colleagues in the health care bill the patients choice act both of these bills transform the payment structure of federal health care programs and reform the current tax subsidy for health insurance the president has stated repeatedly that quote health care reform is entitlement reform again we completely agree with that the two are critically tied to each other however the fundamental drivers of health of entitlement costs must be addressed to put any health care reform proposal on a sustainable path is a review of the administration's health care plan and where it is headed in the congress i conclude that is more likely to weaken the quality of health care increase its cost and worsen our severe long term budget problems sebille raised the same exact caution stating quote without meaningful reforms the substantial cost of many current proposals to expand federal subsidies for health insurance would be more likely to worsen the long run budget outlook than to improve it and i agree with the benefits of reducing health care inflation and expanding coverage but i hope you can explain how the administration's proposals will actually reduce health care cause in addressing the nation long term americans living standards would rise the budget deficit would be much smaller unemployment labor market would likely function more efficiently because the economic benefits that we identified to bend crucial discussion where we are and where we're headed without reform many of the crucial trends in american health care are well known the council of economic advisors however worked with others in the administration  where non insurance compensation to our workers let me talk about the effect on government rising health care costs could also mean also mean that the government spending on medicare and medicaid will like their current plan they like their doctor they can keep it and they can keep him or her the overarching goal is to develop a cost effective health care system that preserves quality expand coverage and  lines would be open to changes that would give the recommendation of the medicare payment advisory commission a greater chance of adoption and implementation council of economic advisors report also surveys the evidence much of it from international comparisons comparisons across different parts of the united states that there is substantial inefficiency in the current system the finding of the it is as has been suggested likely to be very challenging it will take an incredible cooperation among policymakers consumers and providers to bring this about it will surely require policy is to talk about the economic benefits of successful reform in our study we consider the cost containment and coverage expansion separately but obviously the two are related expanding central to long runs ability another macroeconomic effect of cost growth containment is a shorter run impact on unemployment and employment when health care costs are growing more slowly  grow without firms costs rising so firms do not raise prices as much this allows monetary policy to lower the unemployment rate while keeping inflation steady our growth by one and a half percentage points per year would lower normal unemployment by about a quarter of a percentage point this translates into increase of about five hundred thousand jobs while this is almost surely not a purpose effect for a number of years americans among the benefits that we attempt to put a dollar value on or the increase in life expectancy and the chance of from high medical bills the cost of covering the uninsured represents a mix of public and one of the assumptions you have in your study is that all these cost savings go to the deficit reduction and then all these things happen but let me ask you this when we're looking at the way this bill is being set up all these cost savings are going to create a new benefit so let's just take the medicare savings for example i can only speak to things we read in the in the press because we haven't seen the legislation yet but the four hundred billion dollars in medicare savings i think that and here's my big concern it seems to me that what we're putting on the track is a brand new entitlement program that could very well likely rival the size and liabilities of medicare itself look at the experience of the last ten congress and the money went away and what happened the liabilities continue to grow so here's what we're doing again we're creating a new benefit a new entitlement universal entitlement and we're setting up a p cost you talk about the conclusion of bending the cost one point five percent which by the way i think you say is the upper bound number one my question is do you think that an actual realistic assumption but number two why not talk about the game changers that federal policy can actually effect the changing of the tax subsidies most economists and i think you'd probably agree that is a source of health inflation why not talk about restructuring the way medicare finances health care fan of your work we're raising taxes on businesses we're raising tax rates on small businesses we're raising taxes on capital we're maintaining the second highest tax rate in the industrialized world on corporations w orldwide americans on their overseas operations making it harder for them to be more competitive in the global economy we are gorging ourselves on deficits and debt which is going to make our borrowing costs go up what would you are saying in very very clear terms i want to just follow up on this is that if we are to grow this economy if we're going to enable businesses to be able to have the capital to make the investments whether it's a new employees or expanding do in addition to the issue about the federal budget but i really wanted to ask you about because you mentioned this in your comments and the report comes out pretty significantly that one of the questions we've been asked by our constituents care about the federal budget deficit it's very important to us in the budget they care about economic competitiveness but with a mostly want to know is how can affect them most americans have health insurance coverage now a lot of them are really worried about that cost a lot of them are worried about losing it a lot of them don't change jobs because they don't know what their health care coverage look like don't start new businesses because they may have a preexisting condition and they know they're never going to be to pay for health care coverage really worry about that actually take the action that we laid out that we believe that we have to take in order to bring down the deficit and to be able to address the concerns about the insecurity that so many americans good it's an honor to be here i will be here when you come back immediately pay for health care reform do you believe have a realistic chance of being enacted by congress and a lot of good things can happen in the eye of hunger and promoting healthy nutrition which i think need to be incorporated into our health care policy often families suffering economic hardships have to make tough decisions cost more and families have to choose between buying  involve a report released last tuesday to analyze the administration's economic case for overhauling the health care system mr summers mrs romer to make the argument the health care reform could make american businesses more competitive globally adding and that is one among the political advisors were talking points he did so again when this romer outline or final draft at the recent well attended meeting she cut him off saying that some of his own stuff agreed with his own staff agree the point did not belong in the paper so i appreciate the fact two summers on this and i appreciate the fact that this is one of his favorite political talking points but i would encourage the chair that in the future we may not have witnesses with such integrity that may be appropriate to ask witnesses in the future whether they are receiving calls or pressure from other members of the ministration to politicize their documents in a way just to include talking points that may be favorable to the ministrations but i thank you for standing up now regarding the very same report as indicated a moment ago this dooms a reduction in medical inflation by one point five percentage point they talked about the benefits of the reduction we all agree on all that of the benefits that would occur and as  taxes have been proposed in the title that the economic case for health care reform but you're an economic advisor so i wonder can you discuss the economic case for a four trillion dollars tax increase and what the impact that would have to disease management preventive care wellness programs all the things that in the long term generate savings but in the near term it takes a while to realize dollars and i have to say that as a member of congress and as i travel around my just in the state you can see and know immediately when somebody has not had access to care in the course of their life and it's a cost that we pay for many times over as  coverage can you discuss why expanding coverage and bending the cost curve through such things as what i was just discussing is the most physically responsible way over the long run for us to move ahead  we still struggle with and and i think why it's so important that we put in place a system across the country that can bring down costs we don't really have in place quite yet the way in which we incentivize providers to our payment structure