Obama Hails the Industry's Promise to Cut Costs by $2 trillion in Next Decade

May 11, 2009— -- President Obama called today's meeting with health care industry heavyweights "historic" and "a watershed event in the long and elusive quest for health care reform," despite the muted reaction outside the White House as proponents and critics wait to see how the plan actually develops.

The president, echoing his past remarks, emphasized today that health care reform is a central component of fixing the economy and the lives of the American people.

He told health care players at the meeting, "You've made a commitment. We expect you to keep it," according to White House press secretary Robert Gibbs.

"We cannot continue down the same dangerous road we've been traveling for so many years, with costs that are out of control, because reform is not a luxury that can be postponed, but a necessity that cannot wait," the president said in a speech following the meeting.

"It is a recognition that the fictional television couple, Harry and Louise, who became the iconic faces of those who opposed health care reform in the '90s, desperately need health care reform in 2009. And so does America. That is why these groups are voluntarily coming together to make an unprecedented commitment," he added.

There was mixed reaction from Capitol Hill. Sen. Ted Kennedy, D-Mass., probably the president's biggest supporter on health care issues in the Senate, lauded the president's efforts.

"This is an extraordinary moment of opportunity for real reform in health care," he said. "The president knows it's time to act and is providing impressive leadership. Members of Congress from both parties and leaders of the insurance industry know that the time has come to reduce costs and expand access to quality health care for all. The American people are right to call on Congress and the administration to delay no longer in easing the heavy burden of ever-increasing health costs that crush the budgets of families and businesses alike."

Others were more skeptical.

Sen. Charles Grassley, R-Iowa, the ranking Republican on the Senate Finance Committee, and a chief Republican negotiator trying to figure out how to pay for health care reform, said in a statement that the idea of the White House and the insurance industry saving $2 trillion is a great one, but he'll believe it when he sees a nonpartisan score from the Congressional Budget Office (CBO).

"For health care budgeting purposes, CBO's word is the only one that counts," he said in the statement.

A senior administration official had made it clear Sunday that the CBO does not analyze the impact on national health expenditures.

"I would not anticipate that CBO will be 'scoring' the statement or the event that is occurring tomorrow, in part because CBO traditionally does not evaluate or does not score impacts on national health expenditures, but as you look out over a long period of time, the impact on national health expenditures is absolutely crucial to achieving long-term fiscal savings for the federal government itself, because, again, if not, it's not a sustainable system," the administration official said.

Some say today's meeting was hardly a breakthrough and, in fact, Obama's plan for companies to voluntary make these cost cuts may meet the same fate as the failed health care plan President Jimmy Carter tried to implement in 1977.

"I am convinced that the people who sat around that table and the president himself sincerely believe this was a good plan, and yet I kind of have a feeling it was Kabuki theater," said Uwe Reinhard, a professor of political economy at Princeton University.

"One should be careful not to promise too much."

The president has said before that he wants to see health care reform enacted and signed into law by the end of 2009, but Gibbs would not expand today on whether the president has told Congress when he wants a bill.

Gibbs said he does not have a firm timetable on how health care will play out on the Hill but said that both House and Senate finance committees are "actively working on this."

Sen. Max Baucus, D-Mont., the chairman of one of the key congressional committees that the president is entrusting to draft the legislation, has said the Senate Finance Committee could begin drafting the legislation at the beginning of the summer, with a bill up for a vote before the August recess.