Noah Millman thinks that we should get rid of the debt limit in favor of a limit on Medicare spending.
We’re all agreed that the big driver of future deficits is the growth in Medicare, which in turn is driven primarily by the growth in the cost of medical services (secondarily by demographic factors).
Both parties agree with this, but there is stark disagreement about how to restrain the growth of Medicare: whether by greater government control of the medical system or by less (or by a combination thereof – Obamacare plus the voucherization of Medicare would be such a combination).
He goes on to state the obvious about the debt ceiling:
We’re also all agreed (everyone who’s actually paying attention, anyway), that the debt ceiling serves no rational purpose. Congress approves both taxes and spending; if Congress refuses to approve borrowing the difference, then Congress isn’t making a policy statement – it’s simply refusing to do its job.
In its place, he proposes a cap on Medicare spending and if that cap is to be violated in a given year, then Congress would have to pass a supplemental spending bill, a supplemental bill to reduce spending, or raise the Medicare ceiling and say the extra amount will be deficit financed. His point is that in the long run, the major driver of budget deficits is health care, and health care has its primary impact on the federal budget in the Medicare program. A policy such as the one Millman suggests would help to focus our attention on health care costs….and then we would have to decide whether we wanted to pay more than planned or to take steps to reduce planned spending.