Health reform can reduce the deficit, but not nearly enough to address the country's debt problem. Higher taxes and spending cuts will be needed.
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NEW YORK (CNNMoney.com) -- The promise of health reform is to make care more accessible for everybody -- and to reduce the federal deficit by slowing the growth rate in costs.
But the promise of deficit reduction through health reform might be overstated.
Here's why: Even if reform works well, the cost savings will not be nearly enough to tackle the debt ogre breathing down Uncle Sam's neck.
"Ultimately, the long-term budget outlook will necessitate serious tax and spending changes," says the Committee for a Responsible Federal Budget, which is led by tax and budget experts from the left and the right.
And "ultimately" really means ASAP, say some tax experts. That's because the financial and economic crises have exacerbated an already tough budget outlook.
"The key message is the future is now. The future has arrived," said William Gale, co-director of the Urban-Brookings Tax Policy Center, in a Brookings video discussing a sobering report on the fiscal predicament that he coauthored with Alan Auerbach, director of the Burch Center for Tax Policy and Finance at the University of California, Berkeley.
The risk is not decades from now, but within the next 10 years. Should investors in U.S. Treasurys consider the country's growing debt load to be unacceptably high, they will start demanding to be paid higher interest rates on the debt they buy to compensate them for the risk they're assuming.