Sebastian Mallaby�s distortions of what �every honest politician knows�
By Seth Sandronsky
Journal Contributing Writer
Oct 30, 2006, 00:42
As U.S. midterm elections near, the topic of political
honesty draws some pundits like moths to light. Take Sebastian Mallaby in the
Washington Post of October 23.
�Every honest politician knows that entitlement spending on
retirees is going to bust the budget,� Mallaby writes. �But since the failure
of Bush's proposed Social Security overhaul last year, nobody is doing anything
Presumably, these honest politicians are aghast at rising
costs for Medicare, which provides health care to Americans age 65 and up, plus
some disabled recipients of Social Security. We turn to the Medicare
prescription drug benefit bill, known as Medicare Part D.
The GOP Congress claimed that this bill would foster
competition. But first, the heavy hand of government had to go. This would help
to free competition.
As competitive pressures rose, private drug prices would
fall, the GOP promised. Americans covered by Medicare would benefit from lower
Instead, Medicare Part D has mainly helped insurance and
pharmaceutical companies. What happened to the promised price competition? In
brief, the prescription drug benefit bill banned Medicare from negotiating
lower drug prices with insurers and pharmaceutical companies.
By contrast, the U.S. Veterans Administration and nations
such as Australia and Canada use their bargaining power to negotiate prices for
many drugs with private companies. With such negotiations, the VA and these
countries get lower drug prices.
Under the GOP-backed Medicare Part D, the insurance and
pharmaceutical companies successfully lobbied the U.S. Congress to kill
competition. The corporations in these industries got what they wanted --
monopoly profits. Predictably, that monopolization of prescription medications
drove up the costs for millions of people covered by Medicare.
Companies such as Merck (Zocor/cholesterol), Pfizer
(Lipitor/cholesterol and Zoloft/anxiety) and Wyeth (Protonix/heartburn) reaped
billions of dollars in windfall profits, according to economist Dean Baker,
co-director of the Center for Economic and Policy Research in Washington, DC.
�The excess profits for the drug industry as a whole will be close to $50
billion in the first full year of the Medicare drug benefit program,� he added.
The lesson in this Medicare drug bill is clear. Industry
monopolies drive medicine prices up, not down. Senior and disabled Americans
can thank the GOP Congress for that.
No wonder the cost of the U.S. health care system is
outstripping the rate of inflation. Meanwhile, scriveners such as Mallaby
pontificate about politicians needing to cut entitlement spending, a so-called
ticking time bomb in the federal budget. For him, slowing the out-of-control
price increases of U.S. health care is not an issue.
And why is there a need to overhaul Social Security? The
2006 Social Security trustees� report, the standard basis for Social Security
projections, says Social Security will be able to pay 100 percent of its
scheduled benefits through 2046 with no changes needed, according to the
nonpartisan Congressional Budget Office.
Recall that President George W. Bush tried with little
success to convince the U.S. public that Social Security will face a future
cash crisis that requires reform now. Dramatically, he failed to persuade the
American people that a way to save Social Security was by creating private
accounts for younger workers to own.
Under the president�s plan for Social Security, young wage
earners would have a chance to join his �ownership society.� And the same
private accounts for Social Security would generate big fees for the financial
services industry, a large source of campaign funds for the GOP. �Every honest
politician� should know that.
Sandronsky is a member of Sacramento Area Peace Action and a co-editor of Because People Matter, Sacramento's
progressive paper. He can be reached at: email@example.com.
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