The public largely blames Congressional Republicans for recent automatic spending cuts, which are projected to slow the economy and eliminate hundreds of thousands of jobs. But Peter Orszag, a former budget director under President Barack Obama, says that Democratic politicians deserve some of that blame too.
Speaking to Business Insider's Joe Weisenthal, Orszag said in a video interview published Wednesday that Democrats who oppose reforming so-called "entitlement" programs such as Medicare have made rapid budget cuts more likely.
"I think the Democrats who are opposed to any longer-term entitlement reform, which would have the advantage of being phased in gradually, are doing the labor market no benefit," Orszag told Business Insider. "By not scratching the itch on some kind of deficit reduction over the long term, they're creating more pressure for austerity in 2013 in the legislative process, which is not good."
Many economists agree that the government needs to rein in health care costs to reduce its long-term debt. The U.S. already spends far more on health care than any other advanced country, according to the OECD, and rising health care costs will likely remain one of the biggest drivers of long-term U.S. government debt growth, according to the Congressional Budget Office.
For now, the country is beginning to grapple with new spending cuts that took effect this month. Starting this Friday, the Defense Department will send out furlough notices to employees forcing them to take unpaid time off.