Ted Kennedy and the Prescription Drug Bill
July 23, 2003
If Sen. Edward Kennedy (D-Mass.) supports the prescription drug bill circulating through Congress, then this can't be a good thing for conservatives because he would never support any initiative that was inimical to liberalism, says Bruce Bartlett.
Although most Democrats oppose the measure as grossly inadequate, Sen. Kennedy counsels otherwise. This is just a "down payment," he tells them. "When we get this as a down payment, we're going to come back again and again and again to fight to make sure that we have a good program," he told CNN's Judy Woodruff on June 18.
In all likelihood, Bartlett says, the actual cost of the bill will be difficult to predict:
- Two economists at the American Enterprise Institute have estimated the present value of this proposal to be $12 trillion.
- This is a calculation in today's dollars of all future drug benefits discounted by the rate of interest.
- In effect, it is the burden on future generations of giving today's seniors, who will have paid nothing for it during their working lives, an extra medical benefit on top of those they already receive.
But even these calculations are too low, Bartlett says.
When the government begins to subsidize something, demand for it rises, pushing up the price. If the Medicare plan ends up subsidizing, say, one-fourth of drug costs, as the Senate bill does, eventually the price of drugs will probably rise by about 25 percent above what otherwise would have been the case. In the end, drugs will be no more affordable than they are today, explains Bartlett.
Source: Bruce Bartlett, "Ted Kennedy and the Prescription Drug Bill," July 23, 2003, National Center for Policy Analysis.
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