Buyer's Remorse for Drug Bill
March 8, 2004
Growing numbers of Republicans who voted for the Medicare drug benefit now wish they hadn't. One reason for the remorse is that congressional Republicans are now trying to draft a budget and discovering that they've got a serious problem on their hands. The nation's fiscal problem is bad and getting worse, as documented by a new Treasury Department report, says Bruce Bartlett.
One reason, as shown in the Financial Report of the United States Government for fiscal year 2003, which ended last Sept. 30, is that the federal government's total indebtedness rose by $3.5 trillion last year. And this was before the drug bill was enacted.
According to the Treasury report:
- The federal government's total indebtedness, including the future cost of entitlement programs, rose from $31.1 trillion at the end of fiscal year 2002 to $34.8 trillion at the end of last year.
- Almost all of the increase was due to rising costs for Medicare, yet economist Joseph Antos of the American Enterprise Institute estimates that the new drug bill will add $13 trillion to this figure.
- David Walker, comptroller general of the United States, thinks the number may be as high as $8 trillion.
Furthermore, says Bartlett, it is only a matter of time before Democrats start hammering Republicans for the huge corporate subsidies in the drug bill that were included to keep businesses from dropping their existing retiree drug coverage. A March 2, 2004, Wall Street Journal report said these 6 big corporations alone will be receiving $2.5 billion in taxpayer subsidies (in millions): BellSouth ($572), Delphi ($500), U.S. Steel ($500), American Airlines ($450), John Deere ($300-$400), and Alcoa ($190).
In the end, Republicans will lose far more votes from this legislation than they gained, says Bartlett.
Source: Bruce Bartlett, "Buyer's Remorse for Drug Bill," National Center for Policy Analysis, March 8, 2004.
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