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To: calgal who wrote (18325)12/2/2003 1:10:33 AM
From: calgal  Respond to of 793770
 
Pass the bills forward
By Alan Reynolds

The House and Senate passed a bill called "a $400 billion prescription drug bill for seniors." Much is made of the fact this bill was supported by AARP, an organization said to "represent 35 million seniors." In reality, the bill will cost 4 or 5 times that much in the next decade alone. And AARP represents itself, not seniors.
The prescription drug plan is estimated to cost "only" $410 billion over just the first eight years, not 10, because the plan pays nothing until 2006. The estimated yearly expense quickly triples from $25.7 billion in the first year to $73.1 billion by 2013. The CBO also assumes the monthly premium will rise from $35 to $58 by 2013 and that the deductible will be increased from $250 to $445. Were it not for those increased premiums and deductibles, even the initial cost would far exceed $410 billion.
The most alarming numbers are not in the first eight years but the following 10. That's when the ratio of retirees to working taxpayers tilts dramatically against the latter. The director of the Congressional Budget Office estimates costs of the new drug subsidies during the 10 years starting with 2013 will range from $1.3 trillion to $2 trillion. Congress and the president evidently care more about the next election than the next decade.
AARP does not represent the highly diverse opinions of its members, who include anyone over age 50 willing to pay $12.50 a year for discounts and publications. AARP's famed lobbying clout comes from its large tax-free income, and most of that income comes from selling insurance. AARP cannot plausibly claim to "represent" anyone, let alone seniors, because the organization's policy preferences are those of its hierarchy, not its members.
Congress has its own special interests, particularly in the high voter turnout among older folks. Legislators made no effort to balance new drug benefits against the costs, but instead described the benefits as free — something for nothing. Some seniors, they boast, will pay less "out of pocket." But that only means the cost comes out of someone else's pocket.
Who will be willing and able to finance these rapidly escalating drug subsidies? Nobody has the foggiest idea. Medicare is already in the hole by more than $13 trillion over the long haul, and drug subsidies could easily add another $10 trillion to those unfunded promises.
That means the odds just became even greater the Medicare tax will be raised even more in the future. And that points to a massive transfer of income from younger workers (regardless how poor) to older retirees (regardless how rich). As William Graham Sumner once explained, when A and B get together to decide what C should do for D, then C is the forgotten man.
The political hope is that seniors will express appreciation for this mandatory gift from their children by letting incumbent politicians keep their jobs. But even that political payoff is questionable. More than three-fourths of seniors already have drug insurance, and many of the rest don't want it unless someone else pays for it.
A fifth of seniors are covered by government plans like veterans benefits and Medicaid. A fourth buy their own drug insurance, despite perverse federal rules allowing drug coverage only in the two most costly Medigap policies. Many who can and do pay their own way will now switch to the government plan because it is artificially cheap, at least at first.
A third of seniors have retirement drug benefits from a former employer, and these plans are often generous. Employers would be delighted to drop costly coverage for former employees and force them into the new federal scheme. That prospect almost scuttled the bill, because there were more votes to be lost from seniors angry about losing their private drug plans than could possibly be gained by bribing other seniors to buy into this new scheme.
Congress fixed that by giving $85 billion in tax-exempt subsidies to corporations to encourage them to not drop their plans. This booty improves the health of nobody, but it seemed a small price to pay for avoiding the wrath of older voters.
The new drug plan leaves participating seniors overinsured for small yearly drug bills yet totally uninsured for medium-sized drug bills. After using up a tiny $250 deductible, participating seniors would pay only 25 percent on the first $2,000 of drug bills, then 100 percent on the next $2850, and then 5 percent on anything above $5,100. The problem is not the "hole in the donut" but the donut itself.
Paying a big share of routine bills is extremely expensive, so it leaves no money for bigger bills. This is like insuring cars for oil changes but not for a total wreck, or like insuring homes for the cost of gutter cleaning but not for fire.
Catastrophic coverage kicks in when annual drug bills reach $5,100, but the CBO figures that cutoff will exceed $9,000 by 2013. This is by far the most important type of insurance, and also by far the cheapest. The bill's architects project that half of all seniors will pay less than $1,891 for drugs in 2006, which explains why coverage is so generous on the first $2,000: That's where the votes are. But subsidizing a large number of minor drug bills provides the least useful insurance at the highest possible expense.
If Congress and the president were not so anxious to define "reform" as taking money from the forgotten young Smith and giving it to old Jones, many useful reforms could have been cheap or free. Prescription discounts have long been sold by drug stores and others, without federal involvement, and this bill may or may not encourage wider access to them.
Catastrophic drug insurance could be virtually self-financing if the premium was subsidized only for seniors with low incomes and few assets. Rather than provide a stand-alone drug benefit for Medicare (costly because it encourages only those with oversized drug bills to sign up), insurance companies could have simply been permitted to bundle such a benefit with some of the lower-cost Medigap plans.
The bill's best feature is also cheap or free. Everyone will be able to put up to $2,250 a year into a Health Savings Account (HSA), which is similar to an IRA except the funds are dedicated to medical expenses. The HSA can be tapped to pay premiums for health and long-term care insurance. Because this will make future generations much less dependent on taxpayers as they grow older, its favorable long-term impact on the spending side of the budget (long-term care is bleeding Medicaid) should far outweigh any static short-term revenue losses.
Everyone approaching middle age had better start building a Health Saving Account as soon as possible, because Congress just promised seniors another few trillion in future benefits without the least idea how to make good on those promises.

Alan Reynolds is a senior fellow at the Cato Institute and a nationally syndicated columnist.



To: calgal who wrote (18325)12/2/2003 1:13:09 AM
From: calgal  Respond to of 793770
 
The Liberal Hangover
Why they hate Bush so.

By Adam Wolfson

At a recent news conference in London a reporter asked President Bush, "Why do they hate you, Mr. President? Why do they hate you in such numbers?" It's a rather embarrassing question to ask anyone, never mind the leader of the free world, and Bush in his reply shed no new light on this peculiar political phenomenon. Every president has his detractors, of course. If he did not there would be reason to wonder whether he was doing his job. But Bush hatred does seem to be sui generis.











Bill Clinton was surely disliked by many conservatives, but even taking into consideration his impeachment, their dislike for him was, in certain respects, restrained. No anti-Clinton political movement or candidate ever emerged, only Dole's ironic detachment of the 1996 election. Hillary Clinton is certainly despised by the Right for her far-left sensibilities, but that's largely not the case with her husband, whose policies were relatively moderate and whose rhetoric was nearly always middle of the road. It is true that Ronald Reagan was greatly disliked by the Left, even hated. But it was an antipathy dripping with condescension, and condescension does not easily work itself into the white-hot lather of a Howard Dean — only the patronizing sneer of a Walter Mondale.

So what is it about George W. Bush that drives the Left utterly mad? Liberals have given many justifications for their righteous anger: He "stole" the 2000 election; he's too Texan, too Christian, just too dumb; he struts and talks like a yokel. Others complain bitterly of his "far-right" policies: His support for a ban on partial-birth abortion, his opposition to human cloning and gay marriage, and his tax cuts and faith-based initiatives. And, of course, there's the war in Iraq — always the war in Iraq.

These explanations no doubt have something to do with why the Left despises Bush. But there is more to their hatred than is generally understood — something more fundamental is at work. Almost all modern liberal thought begins with the bedrock assumption that humans are basically good. Within this moral horizon something such as terrorism cannot really exist, except as a manifestation of injustice, or unfairness, or lack of decent social services. Whether knowingly or not Bush has directly challenged this core liberal belief — and for this he is not easily forgiven.

The president has in fact acknowledged liberals' desire "to put that day [of September 11] behind us, as if waking from a dark dream." But if "the hope that danger has passed is comforting," it is also, Bush has admonished, "false." September 11 was no dream; it was, in his view, a portent of what may come. And so Bush has repeatedly urged his audiences to see that "the evil is in plain sight," and that the democracies must learn to "face these threats with open eyes."

But what should be clear and obvious is made obscure by liberal ideology. If we are to face the evil in plain sight, we must first properly fit words to facts. Bush calls the terrorists "killers" and "evildoers," and speaks of an "axis of evil." He affirms the need for the "violent restraint of violent men," and argues that military strength is necessary to keep at bay "a chaotic world ruled by force." He describes life under Hussein's rule in Iraq as a "Baathist hell." We live, the president warns, in "a time of danger."

These are not mere words to Bush, but have given shape to his singular foreign policy. The president went to war in Iraq rather than trust the good faith of Hussein or the diligence of U.N. arms inspectors; he refuses to recognize Arafat as a legitimate leader of the Palestinian people; he has made clear that a lasting peace can come to the Middle East only through democratic reform. The very touchstone of his thinking is the moral and political distinction between democracy and tyranny.

Such analysis does not go down well with liberals. The utopian Left believes that the wolf can be made to dwell with the lamb. Their preferred method of dealing with wolfish dictators is to "dialogue" with them. Surely, they say, dictators want (well, more or less,) what we want: peace and good will towards all men. It is this sort of blindness that allowed Arafat to win the Nobel Peace prize. It is this sort of wishful thinking that led liberals to believe that Hussein could be contained by U.N. resolutions alone. The Left almost as a matter of ideology shuns all such unpleasant realities. The Clinton administration, after all, proposed calling rogue states — nations who starve and torture their own citizens and threaten their neighbors — "states of concern." Bush simply calls them "evil."

The Left vilifies Bush because he insists on calling a spade a spade, and in so doing threatens to bring down their entire intellectual edifice. Even after the horrors of the 20th century, the Left has yet to recover from its Rousseau-induced hangover. Liberals still insist on seeing human nature as basically good. Nothing is more offensive to such a mentality, not Hussein's torture chambers, not al Qaeda's wanton killing of innocent life, than one who dares to speak so plainly of "evildoers."

Adam Wolfson is editor of The Public Interest.

URL:http://www.nationalreview.com/comment/wolfson200312010913.asp