About the Author

James C. Capretta

James C. Capretta

New Atlantis Contributing Editor James C. Capretta is an expert on health care and entitlement policy, with years of experience in both the executive and legislative branches of government. E-mail: jcapretta@aei.org.


James C. Capretta’s Latest New Atlantis Articles

 Health Care with a Conscience” (Fall 2008) 

 Health Care 2008: A Political Primer” (Spring 2008) 

 The Clipboard of the Future” (Winter 2008)


 More on James C. Capretta

Text Patterns - by Alan JacobsFuturisms - Critiquing the project to reengineer humanity

Wednesday, September 14, 2011

The Case for Competition in Medicare — A New Backgrounder 

I have a new background report available at the Heritage Foundation on why Medicare reform should be market-based:

Recently, proposals have been advanced that would bring market discipline to Medicare by converting the program into fixed premium assistance instead of an open-ended, defined-benefit entitlement. These reforms are designed to harness the power of competition to increase efficiency in the Medicare program.

These reform plans have met with fierce criticism in some quarters. A primary argument of opponents is that government-led efforts will work better than competition to control costs without compromising the quality of care for patients. However, a careful review of the history of Medicare and other programs shows that this criticism is wrong. Competition can bring more discipline to the program, whereas the alternative—top-down price controls—will seriously erode the quality of care that seniors and other patients receive....

Read the whole report here (in PDF here).

posted by James C. Capretta | 4:48 pm
Tags: Medicare, markets
File As: Health Care

Tuesday, September 13, 2011

Tinkering With What Works in Medicare 

I have a new report up at The Heritage Foundation on efforts to tinker with the Medicare Part D drug benefit program: 

Over the past several years, one small corner of America’s vast entitlement superstructure — the Medicare drug benefit — has been working well, satisfying program participants, and holding cost growth to a bare minimum. This is unheard of in the entitlement arena, where cost overruns are the norm. Naturally, encountering that kind of success, some politicians — especially those who had nothing to do with making sure it was properly designed — now want to change it....

You can read the whole article here (PDF here).

posted by James C. Capretta | 2:56 pm
Tags: Medicare, Medicare Part D
File As: Health Care

Friday, September 9, 2011

On the President’s Speech: Got Jobs? 

National Review Online has convened a panel to respond to the president’s jobs speech last night. Here was my response:

Let’s get this straight: The president, now in his third year in office, is worked up with righteous indignation because Congress hasn’t done enough on jobs. Really?

During his first two years in office, he had commanding majorities in the House and Senate. He could have passed just about any kind of economic agenda he wanted. What did he do? He passed an $800 billion stimulus bill that didn’t work and then spent a year and a half passing the most controversial and burdensome entitlement expansion in half a century. That’s pretty much the entire Democratic economic agenda.

Now he has the audacity to suggest that Congress is to blame for not doing more? And, in the middle of yet another highly partisan presidential lecture, that anyone who opposes his failed approach to job creation is somehow doing so for partisan reasons?

That kind of speech may make the president and his partisan supporters feel better for a week or two, but it won’t produce bipartisan legislation that might actually help the country. What the president should be aiming for is real results for voters. That’s the only thing that can save him now. Instead he chose more partisan posturing. The result is that he will almost certainly go into 2012 with the worst economic record for a first-term president in modern history. Good luck with that.

You can read the whole panel here.

posted by James C. Capretta | 2:13 pm
Tags: President Obama, jobs
File As: Health Care

Wednesday, September 7, 2011

A System in Need of an Update 

The New York Times Room For Debate series has a new question up, asking, “Can the Middle Class Be Rebuilt?,” in which I offer this response

The United States, and our Western capitalist partners, have entered a new economic era. Intense global competition has suppressed wages in some industries that had uncompetitive cost structures. And because political leaders of both major parties have for far too long emphasized consumption and income protection at the expense of investments in the future, the adjustments necessary to provide new opportunities to replace lost employment have been slow and inadequate.

Meanwhile, as economic pressures have intensified, it’s become clear that the social welfare arrangements built decades ago by governments and employers are no longer viable, especially in view of the unprecedented demographic transformation — rapid population aging and slow or stagnant labor force growth — now underway in the industrialized world.

There’s no retreating from these challenges, especially global competition. What policy makers must do is get the policy fundamentals right again so that dynamic economic growth in the private sector can once again generate new opportunities for the middle class....

You can read the whole response here.

posted by James C. Capretta | 10:55 am
Tags: middle class
File As: Health Care

Friday, September 2, 2011

The Trouble with the Super Committee 

I have a new column up at e21 on the ups and downs of the upcoming budgetary “super committee”:

As Congress gets set to reconvene after Labor Day, all eyes have turned toward the so-called “super committee” — the special budgetary panel created by the debt limit deal. That’s understandable because the super committee has the potential to be a very, very powerful force in Washington. As constituted, if seven of the twelve members of the committee agree to a proposed deficit reduction plan, it will be brought up for an up or down vote in the House and Senate — without the possibility of amendment from non-super committee members. Further, and even more importantly, the super committee’s legislative proposal can’t be filibustered in the Senate. That effectively lowers the bar of support needed to get a super committee-endorsed plan through the upper chamber by nine votes — from a super majority of 60 to a simple majority of 51.

The committee’s legislative mandate is also sweeping. It is charged with finding a minimum of $1.2 trillion in deficit reduction over the coming decade to avoid the same amount getting cut automatically and indiscriminately from a wide array of spending programs, including Medicare and the defense budget. To meet its deficit cutting objective, the super committee has the authority to tackle tax and entitlement reform, health care, the budget and appropriations process, even government reorganization. All it takes to get something big and serious moving through Congress is for seven of the super committee members to support it....

You can read the whole column here.

posted by James C. Capretta | 2:40 pm
Tags: super committee, budget
File As: Health Care

Thursday, September 1, 2011

How Should Washington Control Medicare Spending? 

On May 19, I participated in a public forum in Washington, D.C., sponsored by the Heritage Foundation, called “How Should Washington Control Medicare Spending?” My remarks focused on why a market-based reform of Medicare would be far superior to government-imposed cost controls. A transcript of the event is now available here, and the video is here. My slides are also available here.

posted by James C. Capretta | 1:13 pm
Tags: Medicare
File As: Health Care

Monday, August 29, 2011

Freeze, investigate, then replace Obamacare 

I have a new Op-Ed with James Wootton of Partnership for America in the Washington Examiner:

President Obama says he wants a grand bargain on the budget with no ideological "lines in the sand."

Yet he insists that the costliest and most controversial program in decades — the Patient Protection and Affordable Care Act (Obamacare) — be taken off the table. That won't fly. Congress should unwind the health law in three quick steps: freeze, investigate and replace....

Read the whole piece here.

posted by James C. Capretta | 1:27 pm
Tags: repeal
File As: Health Care

Tuesday, August 9, 2011

Yes, It Is Obama’s Fault 

The downgrade, though questionable, is a richly deserved rebuke for the president.

Let’s start by partially agreeing with Paul Krugman’s weekend column in the New York Times, in which he correctly calls out Standard and Poor’s for displaying an unusual degree of chutzpah in downgrading the creditworthiness of the United States government. After all, this is the same firm that was — at best — asleep at its lookout post during the worst wealth-destroying financial calamity in 75 years. Now, just days after Congress and the president agreed on a ten-year $2.1-trillion spending reduction plan, we are supposed to listen to S&P’s political prognostications ... because why?

Still, it’s hard to escape the conclusion that there is an element of justice in what has transpired because the S&P downgrade is such a clear and richly deserved public rebuke to President Obama. He and his allies have filled the airwaves since last Friday’s decision with their blame-game spin, trying to pin the downgrade on anybody but themselves. It won’t work. This happened on the president’s watch and was entirely preventable. But it happened because, at every crucial juncture over the past two and a half years, the president has cynically put his own political fortunes above what would be best for the country.

Recall that in February 2009, the White House convened a “Fiscal Responsibility Summit” at which the president pledged a new era of discipline and promised to tackle the problem of rising entitlement costs. He could have done so in 2009 or 2010 without the need for any Republican cooperation, given the huge Democratic majorities in both the House and the Senate. But, instead of making fiscal consolidation a priority, the president chose instead to use his once-in-a-generation Democratic majorities to secure an activist agenda that liberals had been dreaming of for years. First, there was an $800 billion “stimulus” bill that was loaded with inefficient public spending projects. Then came the $1 trillion health care plan that included the largest expansion in entitlement spending since the 1960s. These efforts, both highly controversial, exhausted all of the energy in the Congress. Deficit reduction never happened, and never really came up.

Meanwhile, to fend off questions about how exactly he planned to head off the fiscal crisis that most experts could see was rapidly approaching, the president appointed a debt commission, led by Erskine Bowles and former Senator Alan Simpson. Conveniently, the commission was given a reporting deadline after the November 2010 election, allowing the president and Democratic candidates to deflect questions about the deteriorating budget outlook during the election season until after the commission issued its report. In the end, this ploy did them no good, as Democrats were routed in an election dominated by mounting fiscal concerns around the country. The landslide put Republicans back in control of the House of Representatives.

In response to the election, the White House had a rare opportunity to create a political environment conducive to bipartisan compromise, especially on entitlements. But again the president chose otherwise. He completely ignored the Bowles-Simpson recommendations in his 2012 budget submission to Congress, and indeed avoided proposing anything controversial at all in what he submitted. The result was a budget request that called for an astonishing $11 trillion in deficit spending over the period 2011 to 2021, with federal debt rising to nearly 90 percent of GDP — well past the danger zone.

At the time, some speculated that the president submitted such an irresponsible plan because he wanted to preserve his ability to attack the inevitable Republican counter and thus boost his re-election prospects. Others said No, that couldn’t possibly be. Obama isn’t that cynical. Oh yes he is!

Led by Budget Committee Chairman Paul Ryan, the House passed a budget plan that cut spending by $6 trillion over a decade, stabilized federal deficits and debt on a permanent basis, and kept federal taxation at its historic average. If this plan had been adopted, there would have been no downgrade by S&P or anyone else. It was a serious plan, with fundamental and structural changes in the health entitlement programs — Medicare and Medicaid — to move away from the failed command-and-control model toward one in which the programs’ participants would call the shots.

Once again, the president could have used passage of the Republican budget in the House to move toward bipartisan compromise. But again he chose otherwise. In a stunningly partisan speech, the president launched a barrage of demagogic attacks on the Ryan budget. He essentially called it un-American and unworthy of any consideration whatsoever. And he pledged to fight to maintain the entitlement status quo, no matter the consequences.

It was plain from the president’s words that April day that he had no intention of ever working with Republicans on serious entitlement reform. What he planned to do was to relentlessly attack their plan — the one and only plan on the table that would actually fix the problem and reduce the risks of a debt-induced calamity — in the hope that such attacks would boost his chances of re-election. If his partisan political maneuvering meant that it would be near impossible to work with Republicans on the budget, and thus more likely that he was putting the nation at greater economic risk, so be it.

Democratic political operatives everywhere were ecstatic with the president’s choice. They sensed they were on their way to 2012 success.

But a funny thing happened on the way to a second term. It turns out that the presidency can’t always be just about cynical political games. At some point, the leader of the country must actually lead and solve problems, even if that means cooperating with his political opponents.

Since taking office, President Obama had had multiple opportunities to steer the country away from the fiscal abyss. But at every point, he has had other priorities — passing a massive health care entitlement, satisfying his liberal base, and most especially protecting his chances for re-election. In normal times, he might have gotten away with such self-centered governance. But these aren’t normal times. In 2012, the president could very well find that what seemed like clever maneuvering on the budget has hurt his re-election effort as much as it has hurt the country.

[Cross-posted to The Corner.]

posted by James C. Capretta | 5:31 pm
Tags: credit downgrade, President Obama
File As: Health Care

Thursday, August 4, 2011

Why the Still-Looming Debt Crisis is a Health Care Crisis 

Yuval Levin and I have a new article up at The Weekly Standard on why the debate over spending cuts versus tax increases doesn¸’t get to the root cause of the still-looming debt crisis — namely, spiraling health-care costs:

Simply put, our coming debt crisis is a health care cost crisis. In 1971, the government spent 1 percent of GDP on Medicare and Medicaid. Four decades later, spending on these two programs has more than quintupled to 5.6 percent of GDP last year. In its latest long-term outlook document, published in June, the Congressional Budget Office projected that spending on these programs, and on the new entitlements created by Obama-care, will reach 10.4 percent of GDP by 2035 and 13 percent by 2050. In the meantime, all other government spending combined (including Social Security, defense, domestic discretionary spending, and everything other than interest on the debt) will actually decline, from 17 percent of GDP today to 14.6 percent in 2035 and 14 percent in 2050....

[President Obama’s proposed cuts to Medicare] might produce marginal savings for a time, but they would not come close to addressing the heart of the problem. They would lock in place the immensely inefficient open-ended payment structure of Medicare (which is the chief driver of health care cost inflation) and the new health care law’s architecture, with the federal government calling the shots in the health sector. Under such circumstances, cost cutting can only be achieved at the expense of quality care​ — ​and even so it rarely happens. Worse yet, such trivial steps would make real reforms less likely, by letting our leaders persuade themselves they have dealt with entitlements when in fact they would have only bought a little time.

To fix health care and the federal budget, reformers must set their sights on a much more fundamental shift, away from central planning and toward a genuine marketplace in health care ​—​ with cost-conscious consumers subjecting insurers and providers to competitive pressures.

Read the whole article here.

posted by James C. Capretta | 1:15 pm
Tags: debt, Medicare
File As: Health Care

Tuesday, August 2, 2011

The Debt Deal: A Temporary Truce 

I have a new post up on The Corner detailing why the debt deal is only a patch, and the real fights are still to come:

Fittingly, the “deal” that has emerged from the protracted, months-long stand-off on the debt limit isn’t so much a deal as it is a (very) temporary truce between the parties. Because, while its passage will result in some real and desirable spending reductions in exchange for a bump up in allowable federal borrowing, it also purposely sets the stage for new confrontations in the months ahead — confrontations that will bring to the surface all of the reasons this battle has been so heated, and which weren’t resolved at all by [the deal]....

For starters, it’s clear that both sides will find it exceedingly hard to live with the automatic cuts that will go into place if no plan comes out of the joint committee, or if the plan that does come out is defeated in the House or Senate. Keith Hennessey estimates that the automatic 2013 cut in defense could reach 10 percent. That’s not responsible, and most Republicans would find it extremely difficult to swallow.

Indeed, the Democrats are hoping that enough Republicans will balk at this prospect that the joint committee will be able to recommend a “balanced package” – meaning something with tax hikes. But as Hennessey notes, the automatic cuts in domestic spending would be nearly as deep as they would be for defense — perhaps 8 percent in 2013. And so it’s not clear who would feel the most pressure. Are rank-and-file Democrats really ready to go along with automatic, across-the-board cuts in education, labor, and health programs? Moreover, the president is the commander-in-chief. No one will get more blame than he will get if the military is hamstrung, and the country more vulnerable, from the cuts that would be imposed by political gamesmanship.

Read the whole post here.

posted by James C. Capretta | 1:15 pm
Tags: debt limit, debt deal, debt
File As: Health Care

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