- The Washington Times - Tuesday, August 26, 2003

A coalition of more than 20 conservative and fiscal watchdog groups yesterday urged lawmakers to reject the House and Senate Medicare prescription drug bills, saying they are fiscally irresponsible and harmful to many seniors.

“The prescription drug entitlement is an ill-considered proposal that ought to carry an interaction warning for seniors and taxpayers,” said John Berthoud, president of National Taxpayers Union Foundation. “Policy-makers must find a more palatable remedy.”

Stephen Moore, president of the Club for Growth, called the legislation “budget-busting.”

“We as Republicans should be trying to limit government, not trying to massively expand it,” he said.

The groups said the bills would create a huge financial burden for government, likely resulting in higher taxes, and would cause many seniors to lose their private drug coverage and be forced into a government plan that would cost them more.

The bills are being melded in a House-Senate conference.

Robert E. Moffitt, a policy analyst at the Heritage Foundation, said the House and Senate bills would encourage employers to drop retiree drug coverage and force seniors into the government-run program.

“That will result in millions of seniors losing their private coverage,” he said.

The Congressional Budget Office (CBO) estimates that 37 percent of seniors with employer-based coverage will lose that coverage if a prescription drug entitlement is enacted, he said.

Conference negotiators are trying to limit the cost of the final bill to $400 billion over 10 years, Mr. Berthoud said, but the program will cost much more in the long run and will “foist upon American taxpayers the largest entitlement expansion since the Great Society.”

The NTU Foundation released a study yesterday that found that prescription drug entitlement would increase the cost of Medicare by $300 billion in the year 2026 alone. It also found that by 2057, the drug benefit will have doubled the estimated burden of Medicare on the nation’s annual economic output — 14.4 percent of the gross domestic product with drug coverage, versus 7.1 percent without it.

Medicare is projected to have an aggregate deficit of $66.8 trillion between now and 2075, the Heritage Foundation said in a report last month. If the government pays 25 percent of drug costs, the annual Medicare deficit will climb to 24 percent of income tax revenue in 2026 and 39 percent in 2042.

The foundation predicts that the swell of baby boomer retirements will put pressure on the government to eliminate the Bush tax cuts, resulting in a $775 billion tax increase by 2013.

The groups said one answer is to provide a drug benefit only to those who truly need it.

“There is no evidence … that there’s any need for a universal drug benefit,” said Mr. Moffitt, noting that the CBO and others estimate that more than 70 percent of senior citizens have drug coverage. “Do we want to replace existing largely private-sector drug coverage with a government entitlement?”

Donald Devine, chairman of the Coalition Against Higher Medicare Drug Costs, said the groups are working to send the message to their members.

Mr. Moore said the Club for Growth is working with Rep. Patrick J. Toomey, Pennsylvania Republican, on a letter from conservatives saying they will vote against the final bill unless it has certain key reforms, including cost containment. Mr. Moore said the outcome lies with the White House.



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