In November 2003, the president assured nervous lawmakers that his plan to “reform” Medicare wouldn’t cost a dime more than $400 billion. Over a year later, as the deficit is spiraling out of control, costly wars rage on, and tax cuts for millionaires have been taken off the table, we’re learning that the Bush gang was off about Medicare’s cost — by a lot.
The White House released budget figures yesterday indicating that the new Medicare prescription drug benefit will cost more than $1.2 trillion in the coming decade, a much higher price tag than President Bush suggested when he narrowly won passage of the law in late 2003.
The projections represent the most complete picture to date of how much the program will cost after it begins next year. The expense of the new drug benefit has been a source of much controversy since the day Congress approved it, with Democrats and some Republicans complaining that the White House has consistently low-balled the expected cost to the government.
A few hundred billion here, a few hundred billion there, soon we’re talking about real money.
The problem, of course, is not just one of cost. If the Bush administration had crafted a good policy, which helps seniors, but underestimated the price tag, that’s one thing. But the truth is the administration knew about higher costs, hid the numbers from Congress, and the program itself is little more than a massive give-away to Bush’s corporate allies.
The White House, for example, blocked efforts to allow Medicare to use bulk purchasing power to negotiate cheaper drug prices. On top of that, the Medicare program will give corporations $89 billion to “discourage” employers from dropping retirees from their plans. The loophole: corporations receive the subsidy even if they cut support for pensioners…and many are taking the money and running. (The AARP recently sued the administration over this provision.) Also, the nonpartisan CBO said billions have been added to the cost of the bill because of excessive payments to private insurers and HMOs.
And now that we know that the administration couldn’t have been more wrong about its own Medicare plan, what does this foretell about Social Security?
[Rep. Rahm Emanuel (D-Ill.)] said: “The new cost estimate destroys the credibility of the Bush administration. Officials were so far off in estimating the cost of the Medicare law. Why should we believe what they say about the financial problems of Social Security?”
As soon as the White House comes up with an answer to that one, they should let the rest of us know.