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Taxpayers Union Writes Congress to Oppose Medicare Drug Bill

Oct. 29, 2003 - Opponents to the proposed drug benefit for Medicare participants is at a fever pitch as the deadline nears for agreement by the Senate and House conferees to reach agreement on a Medicare reform bill. The latest media blitz is by the National Taxpayers Union, which claimed support by 37 other groups, in a letter of opposition sent to all members of Congress.

Below is their news release and below it is the content of their letter.

News Release by National Taxpayers Union:

Coast-to-Coast Coalition of 38 Tax Groups Tells Congress: Scrap Current Medicare Prescription Drug Plan

Joint Statement Calls for Alternative that "Respects Limited Government Principles"

(Alexandria, VA) -- As lawmakers face renewed White House pressure to finalize legislation that would create a prescription drug benefit in the Medicare system, a joint statement by 38 citizen groups representing millions of Americans warned Congress today that taxpayers will be trampled in the rush to create a new entitlement program. The non-partisan National Taxpayers Union (NTU) organized the coalition effort.

"On top of large increases in other federal spending, and in light of the coming crisis for Medicare and Social Security, this new prescription drug expenditure would be the height of fiscal irresponsibility," the signatories stated. "[T]his bill would ... foist upon American taxpayers the largest entitlement expansion since Lyndon Johnson's 'Great Society.'"

Even though many organizations oppose the current Medicare drug plan for a variety of reasons, today's NTU-sponsored statement underscores for the first time the breadth and depth of opposition to the proposal from taxpayer groups across the country. Signatories hailed from 23 states, including Arizona, Arkansas, California, Colorado, Florida, Idaho, Illinois, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New York, Ohio, Oregon, Pennsylvania, Tennessee, Utah, Virginia, West Virginia, and Wisconsin (plus Washington, DC). Copies of the letter, addressed to House Majority Leader Tom DeLay, were sent to all Members of Congress.

Reasons for the signatories' opposition to the House-passed and Senate-passed bills (and the direction being taken by House and Senate Conferees) include:

• The reported 10-year "cost" of $400 billion for the new benefit is almost certainly a fantasy. Medicare itself now costs seven times more than it was projected to cost when the program was first created in the 1960s.

   

• The bill aims to create a universal entitlement, even though 76% of seniors already have drug coverage (and would probably pay more for worse benefits under the proposal).

   

• Proposed subsidies won't significantly deter firms from dropping considerable numbers of retired employees who now have company-provided drug benefits.

   

Recently, NTU's research affiliate released a study that outlined other fiscal dangers of the proposal. For example, in the year 2026 alone (the projected insolvency date of Medicare "Part A"), the prescription benefit would increase the overall cost of Medicare by $300 billion.

"While some analysts argue that the disastrous legislation moving through Congress is 'politically expedient,' our millions of members call it something else: politically inexcusable," the letter concluded. "Taxpayers will remember those who had the courage to oppose this bill --and those who didn't -- long after next year."

The 350,000-member NTU was founded in 1969 to work for lower taxes, less wasteful spending, and accountable government. Note: The full text of the letter, a list of signatories, and the NTU Foundation Study, Dangerous Interaction: How Mixing a Drug Benefit with Medicare Could Mean an Overdose of Federal Spending, are all available online at www.ntu.org.

Letter Sent to all Members of Congress:

On behalf of the millions of members belonging to the undersigned taxpayer groups from across America, we write to strongly urge you to oppose the huge entitlement expansion contained in the Medicare prescription drug legislation currently moving through Congress.

Although Congress is attempting to limit the plan's cost to $400 billion over the next ten years, this bill would still foist upon American taxpayers the largest entitlement expansion since Lyndon Johnson's "Great Society." Unfortunately, $400 billion is likely to be just a baseline since Medicare itself now costs American taxpayers over seven times what it was projected to cost when it was created in the 1960s. On top of large increases in other federal spending, and in light of the coming crisis for Medicare and Social Security, this new prescription drug expenditure would be the height of fiscal irresponsibility.

Instead of being targeted at low-income seniors, the legislation which has passed both Houses would create universal coverage, even though 76 percent of seniors now have some form of prescription drug coverage, and the average senior spends less than $999 per year of their own funds on medications. Having middle income workers subsidizing drug costs for wealthy seniors -- as this bill would do -- may make sense to Ted Kennedy, but it makes no sense to us and is one of the worst features of this legislation.

Of course, this bill may actually worsen the situation for many seniors who currently enjoy good coverage. Many companies that now provide a drug benefit for their retirees will be inclined to discontinue that benefit once the federal government offers its own plan. According to recent Congressional Budget Office estimates, 37 percent of all retirees with employer-based coverage would lose that part of their retirement package under the Senate plan, while 32 percent would see such a loss under the House plan.

Subsidizing corporations that pledge not to drop their prescription drug coverage is not the answer. Such a provision won't stop huge numbers of companies from dropping coverage. And where it does, it will come at an unreasonable cost to taxpayers.

Our millions of members are opposed to this massive expansion of entitlement spending. We urge you to work with your fiscally conscientious colleagues in the House to scrap the current bill, and craft a bill that respects limited government principles. While some analysts argue that the disastrous legislation moving through Congress is "politically expedient," our millions of members call it something else: politically inexcusable. Taxpayers will remember those who had the courage to oppose this bill -- and those who didn't -- long after next year.