robbing Peter's grandparents to pay Paul

Our Fiscally Responsible (and, of course, Fearless) Leader is having another go at getting the bills under control

In his budget next week, President Bush will propose substantial savings in Medicare, stepping up his efforts to rein in the growing costs of social insurance programs, administration officials and health care lobbyists said Friday.

For the first time since taking office five years ago, they said, Mr. Bush will try to reduce projected Medicare payments to hospitals and other health care providers by billions of dollars over the next five years. In addition, they said, Mr. Bush intends to seek further increases in Medicare premiums for high-income people, beyond those already scheduled to take effect next year.

Despite the failure of his plan to overhaul Social Security last year, Mr. Bush has signaled that he intends to curb rapid increases in federal spending linked to the aging of the population. "The retirement of the baby boom generation will put unprecedented strains on the federal government," Mr. Bush said in his State of the Union address on Tuesday.

Administration officials, Congressional aides and lobbyists said the president was contemplating a package of proposals that would cut the projected growth in Medicare spending by $30 billion to $35 billion in the next five years. That represents less than 1.5 percent of total Medicare spending in those years.

but, of course, we do need the money.

Steve points out one reason that we do need the money

The new Medicare drug benefit will give drug companies up to $2 billion in extra profits this year because they're no longer required to pay rebates on drugs bought by the government for the elderly poor....

The boost in profits comes from a shift in the drug coverage of 6.4 million poor and elderly people from Medicaid to the new Medicare drug benefit. Unlike Medicaid, which requires drug companies to charge their lowest or "best price" for medications, the Medicare program relies on competition among private drug plans to keep prices low. By eliminating the need to discount drugs for the government, the industry can now pocket the savings.

"The net effect over 10 years is probably closer to $40 billion in extra profit," said Stephen Schondelmeyer, a pharmaceutical economics professor at the University of Minnesota...

I think we can all agree that it's only responsible politics to find some way to pay for a $40 billion increase in government spending that only pays for what the government was already getting for $40 billion less, and the cutting food stamps for the low-income elderly and disabled who received benefits thing didn't work out.

It's maybe kind of a bitch if you're old and poor, though, since the same government has already suggested (quite effectively, apparently) that the pharmaceutical companies shut down the programs they had in place helping the elderly poor pay for drugs. This was spun as concern about fraud, but apparently intended to keep the poor using generics. Liberal stronghold the Wall Street Journal estimates one million seniors are going to lose their drugs.

To save money.

Of the less money in healthcare spending they are providing to the states, the Bush administration has laid down an unfunded mandate in the eight figures in extra costs every year by refusing to let them negotiate bulk purchases with drug companies.

7.5 million seniors will see their out of pocket costs go up, while six out of ten won't be helped.

Our Fearless Leader blames Congress. He says they underestimated the costs, and they were just going to have to be more prudent about spending.

In fairness to Congress, although the White House says that they did tell Congress that they knew the costs would be higher than the costs they were quoted, they also said, they also said that the administration's point guy in getting the bill passed was just kidding when he threatened to fire an analyst who worked for him if he told Congress what the actual costs were going to be.

Still, you'd have to be some sort of partisan to suggest that this administration isn't hurting poor sick old people because they're really serious about deficits.

Now step away from the tax cuts for the rich and no-one gets hurt.

Posted by Julia Sisyphus on February 04, 2006 to Budget ballyhoo | TrackBack