Congressman Tom Price, M.D. is the Chairman of the House Committee on the Budget and has represented the Sixth District of Georgia since 2004. Dr. Price serves on the Ways and Means Committee and was previously the chairman of the House Republican Policy Committee and the Republican Study Committee. Prior to his election to Congress, he served four terms in the Georgia State Senate and was the first Republican majority leader in state history. An orthopedic surgeon by trade, Dr. Price is the sponsor of the Empowering Patients First Act, a Republican proposal for healthcare reform. On May 6, the Tory sponsored his lecture on budgetary politics and healthcare policy at Princeton. The Tory’s Allison Berger, Zach Horton, and Josh Zuckerman conducted this interview of Dr. Price prior to his lecture.
TORY: What are the biggest advantages of the Fiscal Year 2016 budget as compared to previous ones and the President’s plan?
TP: I guess, to start with, that it was completed and agreed to by the Senate and the House. This is the first time since 2001 that the Senate and the House have agreed to a budget that balances within a ten-year period of time. It’s the first time since 2009 that an agreed-to budget of any variety has been passed through Congress. The mere fact that we’ve gotten it done, which is a responsibility of the legislative branch, is—though it ought not be—a significant event. Aside from that, beyond that, it is a budget that we believe will get things back on the right track in our nation. It balances within a ten-year period of time without raising taxes. It recognizes the imperative of tax reform in getting the economy rolling. It appreciates that Medicare, Medicaid, and Social Security are all programs that are destined for insolvency and if we don’t do something about them—that doesn’t stick our head in the sand like some others in Washington want to do—we actually lay out a path for solving those challenges. At the same time, we appreciate that national security, national defense, is a priority. We try, within the budget, to address the needs from a resource standpoint of the Pentagon and the Department of Defense.
TORY: There has been bipartisan criticism of the budget’s increase in defense spending. Why do you feel such spending is necessary at this time?
TP: I think that initially it’s important, from a national security standpoint, to listen to folks who know what they’re talking about. My background is healthcare, so I don’t come from national security experience or have expertise. Most folks in Congress don’t. So when you listen to those folks and they tell us, tell the nation, that the resources that are available aren’t enough to be able to accomplish the mission—we’ve always believed that it was important to define the mission and then provide the resources available to accomplish the mission, as opposed to identifying the resources and then saying, “protect our nation if you can.” That doesn’t sound like a reasonable process.
The Department of Defense has had a $500 billion reduction in revenue over the past ten-year block (we’re in the middle of that), so they’ve already seen significant reductions. Right now, base defense spending is at the lowest point as a percentage of GDP since World War II. So, people talk abut a lot of money being spent on defense—and it is, there is no doubt about it—but if you listen to the people who are in charge of keeping us safe and protecting our nation, they say that the resources need to be increased.
TORY: How will the budget overcome enormous deficits and balance within ten years? Will we see significant cuts to entitlement programs?
TP: There are three ways to get to a balanced budget. You can either raise taxes to increase revenue to the federal government, you can decrease spending, or you can grow the economy so that you increase revenue because the economy is growing and more people are doing well and you get more tax revenue. Or you can use a combination of all three methods. We believe that because our country now has the highest corporate tax rate in the industrialized world, and the highest small business tax rate in the industrialized world, that it doesn’t make any sense to punish those people that are trying to create jobs and expand the economy by raising taxes on them. So we think increasing taxes is actually detrimental to growing the economy. We think it’s important to restrain spending, which we’ve done relatively well on the discretionary side, the part that the Appropriations Committee deals with.
Where we haven’t done well in decreasing and controlling spending is the mandatory side. That’s primarily Medicare, Medicaid, and Social Security. So when you’re trying to find portions of the budget where you’re able to save money, the mandatory side is the place to go. I don’t mean that you ought not provide those services for folks because people rely on them. They’ve paid into Medicare, paid into Social Security, and folks who are in the Medicaid population need to be able to access those services. So how do you save money there? You make it so the programs actually run better, that you don’t have the inefficiencies, waste, and fraud that exist in so many government programs. That’s where we outlined how to save significant money in Medicare, Medicaid, and some of the other means-tested programs. That would allow you to save the $5 trillion that it takes to get to balance over a ten-year period of time.
TORY: How did you reconcile competing interests in crafting the budget? There are Democrats who disagree with entitlement reform and Republicans who are campaigning for reelection and may not want to be accused of gutting popular programs.
TP: It’s a challenge. The needle that we thread on this was pretty small. I think it’s all about communication. You need to be transparent about what you’re doing and why. It’s about being honest with folks, being open, up front. We’re not hiding anything. We believe strongly in the positive solutions that we’ve put forward and we’re happy to have the debate. What is saddest from my perspective about the debate that has been undertaken oftentimes in Washington is that it tends to be a nonproductive discussion. A lot of demagoguery goes on, and it happens on both sides. But certainly from a budgetary standpoint, as I’ve presented the budget on the floor of the House, the hyperbole and misinformation and disinformation and flat-out deceit of many of the statements from my colleagues really was troubling. It doesn’t do service to the body politic and it doesn’t do service to the country. These are incredibly challenging issues that we have before us and we as a society have to be debating these things. But we ought not be, one, making it a personal debate and, two, presenting things in a way that just bear no resemblance to the truth or to fact. We can disagree about how we’re going to solve these problems, but we ought not be disagreeing about the fact that the problems actually exist.
TORY: Moving on to federalism. A major selling point of the budget is that it will return power to the states. How does it go about doing that?
TP: For decades, there has been a sense among many people in this country that the federal government has gotten too large and is doing more things than it was prescribed or authorized to do under the Constitution. There is a pretty good argument, I believe, that many of those services being provided by the federal government could be better provided by the states and local communities. So, when we talk about federalism and devolving things back to the states, we do so because we think it helps those programs run more efficiently and more responsive to their users, whether it’s in education or in healthcare, the two largest ones.
One of the big areas is the old issue of Medicaid. Medicaid is a monstrosity at the federal level. You now have one out of every three physicians in this country who are eligible to see Medicaid patients will no longer see Medicaid patients. And it’s not because they’ve forgotten how to take care of Medicaid patients, but it’s because the way that the federal government runs, the program doesn’t even cover the cost of providing service for those patients. They are unable to care for those patients. So that’s a program that may work for the federal government, it may work for politicians, it may even work for some insurance companies. But it doesn’t work for patients. So if we think about whom we want that program to work for—that is, the patients—then we ought to concentrate on that. States have been so creative and much more efficient and effective, when given the opportunity through waiver programs, at providing those services to the Medicaid population. We believe that’s one of the big areas where states can do a much better job.
TORY: Are there other factors involved when doctors are unwilling to accept Medicaid patients?
TP: It’s reimbursement rates but that’s not all. Huge hassle factors are involved in regulation and Medicaid and Medicare. In government programs, especially healthcare, the federal government likes to tell you what you need to do, what you must do. And if you are going to your doctor, the last thing you want is the federal government telling your doctor what he or she can do for you. Many, many doctors say it’s just not worth the headache and the risk, the legal risk, of the federal government knocking on your door wanting to check your charts and do this or that, and to have something very minor that has no bearing on the quality of care being provided be the thing that gets you in hot water with the federal government. So it’s a lot of the regulations that make it more difficult for doctors to practice.
TORY: Could the Empowering Patients First Act make a comeback as a replacement for the Affordable Care Act?
TP: Yeah. H.R. 2300 is the bill that we’ve offered as a positive alternative. It gets everybody in the country covered with a carrot, not a stick. It incentivizes people to purchase health coverage that they want for themselves and for their family, not that the government forces them to buy. It solves all of the insurance challenges, especially portability. Nobody ought to lose their insurance in this country if you change or lose your job. That’s a holdover from a bygone era when if you worked for a company that provided health coverage, then you worked for that company for forty years and you stayed there and you had the coverage. You students are going to have an average of twelve to fifteen different employers in your lifetime. There’s no reason why you ought to have twelve to fifteen different health care policies. It doesn’t make any sense. It may work for their employer, it may work for the insurance company, it may work for the government, but it doesn’t work for you. It doesn’t work for patients.
So that’s an easy one to solve. You just let everybody own their own coverage regardless of who’s paying for it. If you change your job or lose your job, you just take it with you. It goes to wherever you end up, whether you’re working somewhere else or not working. You plug it into the system there. It’s very easy to solve without putting Washington in charge.
The whole issue of pre-existing illness is a real problem because nobody, in a system that pays attention to patients, ought to lose their insurance or get priced out of the market if they get a bad diagnosis. Again, that may work for insurance companies or the government, but it doesn’t work for patients. So that’s an easy one to solve as well if you just step back and make the right diagnosis, if you recognize what the real problem is. And that is that people in the individual and small group markets, about eighteen million people in this country, are the ones that are subject to be priced out of the market if they get a bad diagnosis. So we say, “Make them look like everyone else.” Let them pool together so you get the purchasing power of millions and anybody’s adverse health status doesn’t drive up the cost for anybody else. We call them Individual Membership Associations, or Individual Health Pools. It’s in our bill, H.R. 2300. And that’s the way that you solve the insurance challenges.
And then, finally, H.R. 2300 saves hundreds of billions of dollars a year in health care by ending the practice of defensive medicine. Estimates are that defensive medicine wastes between one in three to one in four health care dollars each year in this country, which is between six and eight hundred billion dollars a year. Those are the tests and examinations that your doctor does, that every doctor does, if they’re honest with themselves, to make certain that if they are ever called into a court of law they can honestly look the judge and the jury in the eye and say, “I don’t know what you wanted me to do, because I did everything.” But in fact everything is rarely necessary. So what we do is say that if the doctor does the right thing based upon what science says and what doctors say, then the doctor ought to be able to use that in a court of law as an affirmative defense. And that begins to change the culture of the practice of medicine.
TORY: What are the most urgent needs in tax reform?
TP: Tax reform is so incredibly important because it is one of the keys to getting the economy growing in a robust way, not in a way that just bounces along and barely recovers. I mentioned earlier that we have the highest corporate tax in the industrialized world. We have the highest small business tax rate in the industrialized world. We tax a lot of the capital that normally would be available for people to borrow and go out and create a better mousetrap or expand a business or create a business. We actually punish the things that we say we want in the area of expanding the economy, so tax reform is vital. In an ideal world, I’m a strong fair tax supporter. I believe that moving to taxing consumption and not income gets us to a much more robust economy and aligns the incentives of our tax system with things we say we want. So we say we want hard work, we say we want investment, we say we want risk-taking, we say we want entrepreneurism, we say we want to reward success, and yet our tax system punishes all of those things. So a fair tax or a national consumption tax is ultimately the way to go.
In addition, we have a really destructive international tax system. American domicile companies that do business overseas and make a profit are punished if they bring that money back home. They are taxed at the same rate, which is 36%, if they bring that money back home. So, what do they do? They don’t bring it back home, because they can borrow money more cheaply here if they need to expand here. So the estimates are somewhere between two and five trillion dollars sit overseas in those companies and they use it to expand business over there. They don’t use it to do research and development here, they don’t use it to expand business here, and they don’t use it to reward individuals who took a risk on the business. All of the things that helps a thriving economy grow, we are punishing. So we believe we need a modern international tax system that allows those businesses to bring those resources home to be able to expand and increase research to get the economy rolling.
TORY: Let’s go back to the budget. Current projections claim that the interest on the debt will wind up accounting for about 30% of GDP by 2050. Do you think this is a major problem in terms of credit rating or accessibility of loans? How do we fix that?
TP: This is a huge, huge problem. Last year we paid about $230 billion in interest on our debt. The projections are that that amount will be $1 trillion within a ten-year period of time. If we don’t change anything, we will spend $1 trillion of your money simply to pay for the interest on our debt, which is money that doesn’t get anything done. That just seems foolish to us to waste that kind of money. And that increases, as you said, to a point where it gets to be a third of the GDP by 2050, but it’s a more near-term problem than that because of the amount of crowding-out that happens. As you increase the amount that you have to spend on interest, then you decrease the amount that you have available to spend on education, energy, transportation, defense, or all the things that we say we want.
So, it’s a real problem. How do you get that down? You decrease the debt. How do you decrease the debt? You’ve got to balance the budget first and then move in the direction of paying off that debt. That’s exactly what our budget does. It gets us to a point where we balance and then it puts us on the path of paying off the debt. All of those things increase the ability of the economy to thrive and provide greater opportunities and so on and so forth.
TORY: Do you think that we need a constitutional amendment to maintain fiscal discipline or do you think that we could trust Congress down the future to adhere to the ten-year plan?
TP: You don’t have trust and Congress in the same sentence often. I’m a big supporter of the Balanced Budget Amendment and in our budget we provide for the path to be able to require the House of Representative to vote on a balanced budget amendment. We’ll do that later this year, so you’ll be able to see who’s for an amendment to the Constitution and who’s standing in the way.
Allison Berger is the Executive Editor of the Tory and a sophomore in the Economics Department. She is from Madison, New Jersey, and can be reached at firstname.lastname@example.org.
Zach Horton is the Publisher Emeritus of the Tory and graduated with a Philosophy degree in 2015. He is from Dallas, Texas, and can be reached at email@example.com.
Josh Zuckerman is the Editor-In-Chief of the Tory and a senior in the Politics Department. He is from Atlanta, Georgia, and can be reached at firstname.lastname@example.org.