Dear Friends:

As the third quarter of 2003 draws to a close, the most serious problem the nation faces is the growth of elderly entitlements. More than a year ago, the Treasury apparently suppressed a report on this problem, co-authored by Jagadeesh Gokhale of the American Enterprise Institute and Kent Smetters of the University of Pennsylvania. In a new update for the NCPA, Gokhale and Smetters find that:

• The U.S. federal fiscal imbalance is calculated to be $44.2 trillion




• If Congress passes the Senate version of the prescription drug bill, the nation’s fiscal imbalance can increase as much as $12 trillion.




• The unfunded liability under the drug bill ($8.7 trillion) is greater than the unfunded liability under Social Security ($7 trillion).

Is there an alternative? Yes. The NCPA and Milliman & Robertson jointly produced a study showing that if the average spending on Medicare was combined with the average Medigap premium, the amount would be sufficient to purchase for the elderly the same type of coverage enjoyed by the non-elderly, including coverage of prescription drugs without the federal government spending an additional dime.

Tom Saving conducted a teleconference for the National Association of Business Economists on September 25 on the rising costs of Medicare and Social Security. In addition, NCPA Research Manager and Senior Fellow Dr. Devon Herrick reported his research to media across the nation, showing that seniors can save as much as 50 percent on prescription drug costs by using smart shopping strategies. Herrick also told the media that implicit rationing of health care, especially among the elderly, is becoming a more critical issue as people live longer.

Meanwhile, NCPA spokespeople also educated our nation’s decision-makers with these activities:

• NCPA Senior Fellow and Medicare/Social Security trustee Thomas Saving briefed the U.S. Senate Committee on Aging on July 29. Saving also presented the financial outlook for Social Security and Medicare entitlement programs at the American Medical Association meeting in Chicago on September 5 and to the Mont Pélerin Society on September 19 -20.




• NCPA President John C. Goodman joined Health and Human Services Secretary Tommy Thompson and former House Speaker Newt Gingrich in addressing the Iowa Association of Health Underwriters about consumer-driven health insurance – “Reforming the Health Care system” – on September 18.

The NCPA’s E-Team, now composed of 28 NCPA Adjunct Scholars who educate target audiences about energy and environmental misinformation through informative publications, has achieved dramatic results since the project was launched in May of 2003. Adjunct Scholars from universities and other think tanks have joined the NCPA to offer their unique expertise in various fields of energy and environmental policy. This Advisory Council of adjunct scholars has achieved media placements across the nation from the Washington Times to CNN International on topics including global warming, importance of the oil industry on American prosperity and the northeastern blackout.

The area of Social Security reform is rising to the forefront of the policy debate in the upcoming presidential election. A NCPA press release was sent to Iowa media the day before Senator Tom Harkin’s annual "Steak Fry" on September 12 and Team NCPA posters lined the only road leading to the event. The day after Democratic candidates offered solutions to the Social Security problem on a live CNBC debate, the NCPA released a fact check, sent to national security media and reporters covering specific candidates, that rebutted the participant’s answers.

Our Team NCPA Web site, coupled with our Social Security site containing our interactive Social Security calculator at www.mysocialsecurity.org, received over 2 million hits in the first half of 2003. The two sites are undergoing a merge into one comprehensive Social Security site – www.teamncpa.org – containing links to all NCPA Social Security news releases and commentaries and results of demographic studies on groups most affected by Social Security reform.

We are currently conforming the Team NCPA plan to the E-Team Marketing Model. Team NCPA Adjunct Scholars will offer insights on the importance of Social Security reform to five different demographic groups: general audiences, African Americans, women, younger workers and Hispanics and Immigrants. Confirmed scholars include Public Trustee of Social Security and Medicare Thomas R. Saving, Boston University economist Laurence Kotlikoff, NCPA Senior Fellow Celeste Colgan, National Black Chamber of Commerce President Harry Alford, NCPA Senior Policy Analyst Matt Moore, Ohio Secretary of State Kenneth Blackwell and NCPA President John Goodman.

With projects such as E-Team and Team NCPA expanding online, the NCPA has been able to more effectively educate our target audiences on policy debates across the country. Over the past year, the NCPA’s main Web site, www.ncpa.org, averaged nearly 3.5 million hits per month; hits for all the sites topped 54 million and subscribers of our five online newsletters totaled more than 14,000.

The NCPA’s quarterly activities and clip book are also now accessible on-line at www.ncpa.org/abo/quarterly. To obtain hard copies of media articles and clip highlights available though our Web site, contact the NCPA’s Development Department for further assistance.

I look forward to our continued relationship investing in the lives of the American people regarding public policy matters. As always, the staff at the National Center for Policy Analysis values your questions and comments.

Warm regards,

John Goodman
President

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