Health Savings Accounts (HSAs) are proving to be more popular than anyone had predicted. It appears that the medical marketplace is undergoing radical and systemic change. In May, I testified before the Senate Special Committee on Aging on the effects of HSAs and other consumer-directed health care plans. Joining me were Treasury Secretary John Snow, Aetna president Ron Williams, and representatives from the American Medical Association and the Chamber of Commerce.

A June 23 Wall Street Journal article described how Whole Foods Market shifted to a consumer-driven health plan for its employees after CEO John Mackey read my book Patient Power. After one year, Whole Foods Market’s costs went down 19 percent while other employers were experiencing increases of 19 percent.

The latest Social Security Trustee’s report shows that the case for reform is greater than ever. In an NCPA analysis of the report, Social Security/Medicare Trustee Thomas R. Saving and his colleagues show how Social Security and Medicare are on a course to crowd out funding for every other government program. Specifically:

• 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!

These results were reported in the National Journal, the ne plus ultra of inside-the-Beltway publications. Financial columnist Scott Burns was quick to pick up on the story in several columns and an editorial will soon appear in the Wall Street Journal.

The single most important issue in the coming election is emerging to be the debate over the Bush tax cuts for dividends and capital gains. To highlight the issue, we created a new Web site – taxesandgrowth.ncpa.org – which is dedicated solely to these and other tax issues. The site allows visitors direct access to one the most comprehensive collections of free-market tax policy materials available online.

We have also retooled Debate Central for the 2004-2005 topic, “Resolved: That the United States federal government should establish a foreign policy substantially increasing its support of United Nations peacekeeping operations.” The site allows debate students access to as many as 1,000 documents and a new “Negative Case Against the United Nations.”

Debate Central is created for the 400,000 high school students who participate in formal debates each year. The National Federation of High Schools (NFHS), the umbrella organization for high school debate nationwide, regularly refers students to Debate Central, and has even adopted Debate Central as its official bulletin board. Tallying more than one million hits per month during the primary fall debate season, Debate Central is the largest and most popular debate Web site today available to high school students.

As always, none of these activities would be possible without your encouragement and support.

Warm regards,

Warm regards,

John Goodman
President

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