- The Washington Times - Sunday, March 7, 2004

Last year, when Republicans rammed a new Medicare drug benefit through Congress, I warned they were unlikely to get the political boost they were expecting. Now, just three months after the legislation was signed into law, many now realize — too late — that I was right.

In a Dec. 1 column, I had this to say: “I believe that Republicans have not only made a serious policy error in enacting a new drug benefit, but a political one, as well. Whatever short-run gain they have made will melt away once the costs explode — which they will. Any future Republican effort to restrain those costs will completely reverse this temporary gain. In the end, only Democrats gain politically from entitlement programs.”

Since then, we have learned the Bush administration knew the drug bill would cost $534 billion over 10 years, instead of the $400 billion Congress thought it was voting for. According to press reports, the administration suppressed its cost estimate to allow passage of the legislation. It knew that if the cost were much above the $400 billion figure estimated by the Congressional Budget Office, the legislation would fail. While CBO stands by its estimate, I continue to believe the true cost will be well above $534 billion.

One reason I thought Republicans were being foolish is that the elderly, whose votes they thought they were buying, have such outlandish expectations of what they are owed by society that they are impossible to fulfill. In other words, they were guaranteed disappointment by whatever drug program was enacted, no matter how generous. This is confirmed by poll data.

Every poll since the drug bill was enacted shows a distinct lack of enthusiasm for it on the part of the elderly. As John Harwood of the Wall Street Journal observed in a March 3 column: “Seniors have become the law’s most conspicuous critics. In the most recent Wall Street Journal/NBC News poll, those 65 and over were the only age group to express plurality opposition. Their support for the Republican Party’s handling of the issue, and for Mr. Bush’s re-election, declined since last summer.”

As a consequence, growing numbers of Republicans who voted for the drug bill now wish they hadn’t. Sen. Lindsey Graham, South Carolina Republican, spoke for them when he told The Washington Post on Feb. 29, “There is buyers’ remorse among many who voted for it.” Although Mr. Graham voted against the bill, he says he has encountered no criticism from his constituents for doing so.

Democrats have noticed the disconnect between Republican expectations for political gains from the drug bill and the political reality. “Republicans thought they were going to get a big political bang. They have a dud. Unless they turn perceptions around, they’ve got an anchor around their neck,” said Rep. Rahm Emanuel, Illinois Democrat, who was a top political operative in the Clinton White House.

One reason for the remorse is congressional Republicans are now trying to draft a budget and discovering they have a serious problem on their hands. The nation’s fiscal problem is bad and getting worse, as documented by a new Treasury Department report. Just released, the Financial Report of the United States for fiscal 2003, which ended last Sept. 30, shows the federal government’s total indebtedness rose $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 2002 to $34.8 trillion at the end of last year. Almost all the increase was due to rising costs for Medicare. Yet economist Joseph Antos of the American Enterprise Institute estimates 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, it is only a matter of time before Democrats start hammering Republicans for the huge corporate subsidies included in the drug bill to keep businesses from dropping existing retiree drug coverage. A March 2 Wall Street Journal report said these six big corporations alone will receive $2.5 billion in taxpayer subsidies: BellSouth ($572 million), Delphi ($500 million), U.S. Steel ($500 million), American Airlines ($450 million), John Deere ($300 million to $400 million) and Alcoa ($190 million).

Liberal commentator Matthew Yglesias warns Republicans have transformed Medicare “into a pork barrel project for GOP donors.” It’s bad for the budget and bad for seniors, he says, but “great for corporate profits margins.” That is because the subsidies a contractual obligation businesses already have.

In the end, Republicans will lose far more votes from this legislation than they gained.

Bruce Bartlett is senior fellow with the National Center for Policy Analysis and a nationally syndicated columnist.

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