Chirac Does It Right

French Premier Jacques Chirac has demonstrated both political courage and fiscal responsibility in proposing a temporary increase in taxes to meet a deficit in the nation’s effective and highly popular health insurance and retirement program. Would that Washington would do the same.

A deficit of $3.9 billion has developed this year in the program as employee and employer contributions, which pay for most of the program, have lagged in a faltering economy. This is the third time in recent years that the program has had a shortfall.

Chirac shares President Reagan’s animosity to tax increases, but he did not let ideology get in the way as he moved to raise on a temporary basis the taxes on salaries, capital and real-estate investments. A commission of six independent experts had recommended against a readjustment at this time of the payroll assessments that fund the programs, calling instead for the treasury to make up the difference.

Structural changes will be undertaken on a long-term basis to return the program to solvency. There is almost universal support for maintaining the social security system basically as it is. Unlike the British National Health Service, the French program is independent of the government. The government negotiates the compensation for doctors and hospitals. Several major associations, operating in effect like private insurance companies, collect fees from workers and employers, with 99.2% of the population covered and more than 90% of the doctors participating.

The popularity of the French program is remarkable. The committee of six experts reported unanimity from all organizations consulted as to their “profond attachement” to the system. Even with government controls over fees, however, costs have been escalating so that France is now paying close to 10% of the gross national product for its health system--less than in the United States but substantially more than the 6% in Britain. Unlike the American system, where about 30 million people are without any kind of healthcare protection, the French system provides quality care to virtually everyone, with freedom of choice of doctors and among public and private hospitals. For the few not protected, there is a special community-care program.

It would seem that the French government has more to teach the American than prudent use of the taxing power.