Where is our economic policy? Chief executives say the Bush Administration lacks a viable strategy for U.S. competitiveness

Chief Executive, The, June, 2005 by Peter Galuszka

In our survey, respondents said President Bush appears to be spending too much time on Social Security and not enough time on other issues, including health care costs, budget deficits and trade issues, as well as our deficit with China. Are we putting our focus on the right things?

Oh, absolutely. There's no doubt about that. Social Security is the issue the President is taking to the American people at this time because it's much better understood. It's been studied every which way to Sunday. It's all about demographics, about the changing nature of the American work force and it's pretty straightforward.

Medicare and Medicaid are more complicated. They reflect incredibly complex issues, such as rising health care costs and the forces behind that, deep-seated political, moral, ethical and philosophical questions about the health care system. I suggest to your readers, if we can't solve Social Security, which is much more straightforward, if we can't find the political will to deal with that one, it's going to be nigh on impossible to find the political will to deal with the much more complicated issues of Medicare and Medicaid. So, we see Medicare and Medicaid as critically important issues [and] we see success on Social Security leading to success on those fronts.

But in the interim we're not neglecting Medicare and Medicaid, or rising health care costs. The administration has a number of initiatives under way to slow the rise in health care costs. Your readers, I am sure, are aware of a number of them, things like malpractice reform, and are probably pretty supportive of the administration on this. I hope they get behind it and work those issues because rising health care costs are directly related to abusive lawsuits that affect the way health care is delivered.

The administration is also pushing hard on things like getting consumers more involved in health care through health savings accounts. One of the problems we have in the health care arena, of course, is that consumers of health care are often spending other people's money other than their own. When people spend others' money rather than their own, they don't make as good choices. The President's proposals for health savings accounts are a real breakthrough on this score.

Health savings accounts will allow people to accumulate sizeable sums in a tax-advantaged way that they can use for health care purposes, but they can roll over as well. So what's not spent in a given year can accumulate and continue to grow in a tax-advantaged way. There are a lot of things going on that represent important breakthroughs in health care, including a lot of work on information technology and the way [it's used] in reducing health care costs.

The budget deficit was a big concern of our CEOs in our survey. Any thoughts?

Yes, the deficit as we've said many times is too large. It's important. Deficits matter and we're committed to a sharp reduction in the deficit. The President's goal is to cut it in half in the next few years, bringing it to a level that will be low by historical standards. There are only two ways to deal with the issue. One is to keep the economy strong because a strong, growing economy produces a lot more government revenue. We're beginning to see the effects of tax cuts creating a stronger revenue stream for the government; tax receipts are up quite sharply. That's a direct result of the fact that the economy is performing so well. But in addition to keeping the economy strong and growing and expanding and creating jobs, it's also important we curtail spending.