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Home > Opinion-Editorials: 2005
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Cut Federal Spending and Put Medicare Prescription Drugs on Hold

By Richard E. Ralston
November 14, 2005

Republicans in Congress are now struggling to carve some spending cuts out of their recent vast increases in the Federal Budget. Democrats, while critical of deficit spending, are helpfully suggesting even more spending increases. The best quick fix would be to delay the single largest increase in Federal spending in forty years: Congress should put implementation of the new Medicare prescription drug program scheduled to begin in 2006 on indefinite hold.

In 2003 the Bush Administration told us, and Congress pretended to believe, that the program would cost $400 billions dollars over the first ten years, and much more thereafter. There was no explanation of how the government would pay for that much spending. Now we are informed that it will be triple the original estimate—$1.2 trillion—before it starts to get really expensive later. That would pay for recovery from dozens of hurricanes and a handful of wars like Iraq. It is a financial disaster, and we need to stop the bleeding before it starts.

Some prefer to pay for it by rolling back tax cuts on the "wealthy." That's not nearly enough money. Others would pay for it by rolling back all of the Bush tax cuts. They don't say how those who cannot afford their prescription drugs can afford higher taxes instead. Unfortunately any tax increases are simultaneously committed many times over to proposed new spending by their advocates. Those who propose more taxes advocated more generous prescription drug benefits in the original bill: $1.2 trillion would not have been enough. They want new taxes to pay for hurricane recovery efforts and the wars in Iraq and Afghanistan. Huge shortfalls in Medicaid, Medicare and Social Security are also supposedly to be met by rolling back the tax cuts, as are the large increases in subsidies by the Agriculture Department. Others want these taxes to further increase the huge Bush increase in spending on Education. Ad infinitum. Tax increases would just be a tidbit swallowed up in the maw of the Leviathan.

The prescription drug program should be suspended until Congress designates specific spending cuts to finance it. Anything else is a flight from reality with ruinous consequences for our economy and our health. Even if Congress can find offsetting cuts for this monstrosity, the case could be made that it is just not worth it.

What are retirees then to do? At least they will be spared the "surprise" of rising premiums, rising deductibles, larger "holes" in the middle, and restrictive formularies as costs go into orbit. Only the Federal government can so effortlessly combine escalating costs and decreasing benefits.

It certainly can be a struggle to pay for prescription drugs in the last years of life, including the new expensive drugs that provide optimum benefits. Many retirees are covered by their former employers' retirement plans and private Medicare supplemental policies—in many cases superior to the new government program. Those least able have access to Medicaid—as the rapid increases in spending for that program testify.

Other options for retirees should immediately be opened up that would cost a tiny fraction of the new program in forgone revenue. Those who have already been researching prescription drug policies for the new program should be allowed to purchase similar polices free of tax, or by freeing up for that purpose Health Savings Accounts—the use of which is now highly restricted for those on Medicare. Retirees, taxpayers, and pharmacists will also be spared the "cost of cost control" which the present bill entails, including the cost of 1300 pages of new Medicare regulations (added to the 130,000 already in print), paperwork, and the salaries of new administrators, regulators and enforcers.

Perhaps one side benefit of delaying this confusing mess of a prescription program would be to provide funds for hurricane recovery. The Federal government could easily blow through these savings on other new spending. But at least while recovering from natural catastrophes we would not be starting down the road to another disaster.

Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine.

 

Copyright © 2005 Americans for Free Choice in Medicine. All rights reserved.
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