Have you ever wondered about the power of ideas to cause change? This quarter, we report on two remarkable achievements.

The NCPA’s concept of Health Savings Accounts (HSAs) is surging in popularity. President Bush is actively promoting the idea. House Ways and Means Committee Chairman Bill Thomas made the case for it at an NCPA briefing at the National Press Club. I also briefed reporters on Health Savings Accounts as an invited guest at a “Newsmaker” session at the National Press Club. The National Journal called me the “father of HSAs” and credited the NCPA as the source of the idea.

Ten years ago, the NCPA was opposed by all the major business groups, all the major insurance companies and even the American Medical Association. Today, there has been a sea change. Companies that were once in the vanguard of managed care are now on the cutting edge of the HSA revolution – developing new, innovative products.

In the idea business, it doesn’t get much better than this. But our success on the Social Security front comes in a close second.

I have always believed that the Social Security / Medicare trustee’s report is far more powerful than all think tank reports combined. The problem: until recently, the annual reports tended to mislead the public and apologize for a chain letter approach to elderly entitlements. That began to change when NCPA Senior Fellow Thomas Saving became a trustee. Saving and the other private sector trustee, John Palmer, have exerted a powerful influence.

Each year the reports have been getting better and better, and this year’s report was another powerful breakthrough. For the first time ever, the Trustees Report reported the present value of unfunded obligations under Social Security and Medicare. The numbers are staggering:

• The unfunded liability over the next 75 years is $31 trillion; looking indefinitely into the future, the number is $72 trillion – seven times the size of the economy!

• If we want to be able to pay all promised benefits without ever raising taxes, we need $72 trillion on hand right now, invested at the government’s borrowing rate.

How does this liability materialize in terms of cash flow? Consider that:

• In just 10 years, we will need $1 out of every $7 of federal income tax revenues just to make up for the deficits in Social Security and Medicare.

• By 2020, we will need $1 in $4; by 2030, we will need $1 out of every $2!

The need for reform is more urgent than ever. Saving and his team at Texas A&M University’s Private Enterprise Research Center have developed an elderly entitlement model, which constitutes as the basis for the NCPA’s online Social Security calculator at www.teamncpa.ncpa.org. This site allows users have access to a one-stop-shopping resource for Social Security news and information.

Another vitally important project is the second annual report on “Economic Freedom in North America,” published by the NCPA and the Fraser Institute in Canada. This first-of-its-kind report measures how economic freedom promotes economic growth in the 50 states and 10 Canadian provinces. It is an invaluable tool to combat creeping big government at the state and local levels.

Our marketing efforts continue to be highly successful. NCPA ideas about public policy issues reached U.S. print, broadcast and Internet audiences nearly 1.5 billion times in 2003, with an equivalent advertising value of $40 million. Over the past year, the NCPA’s main Web site, www.ncpa.org, averaged nearly 3.2 million hits per month. Hits for all NCPA sites exceeded 49 million and subscribers to our five online newsletters totaled more than 14,000.

The NCPA’s quarterly activities and clip book are on-line at www.ncpa.org/abo/quarterly. Retrieve hard copies of articles and clip highlights by request to the NCPA’s Development Department.

The NCPA relies solely on support from its donors. As always, we value your questions, comments and support as we look forward to a very exciting year.

Warm regards,

Warm regards,

John Goodman
President

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