New at Reason

Julian Sanchez | February 28, 2005

Are critics of the Bush administration right to say new projections have doubled the anticipated cost of the Medicare drug benefit? Or is the White House right when it claims that the new projections leave the cost "virtually unchanged"? Cato's Michael Cannon investigates and finds that, as usual in Washingon, everyone's full of it.

Comments

|2.28.05 @ 10:29AM|#

Does it really matter? The Repug voters have gone into hibernation mode, only to wait to cast their vote in 2008 for whatever theocrat they put in next. Do you have enough faith in the masses for them to realize the pitfalls of big government and it's boondoggles come next election? Sorry for sounding so pessimistic, but MTV's Rock the Vote is about all this country could come up with, "Vote or Die!". You go P. Diddy.

Until there are more people like Bob Barr, who's willing to openly criticize the president, then nothing will change. I mean, Ron Paul still carries the "Republican" label, while speaking and acting like a libertarian.

Akira MacKenzie|2.28.05 @ 10:42AM|#

Just keep telling yourself, "Kerry would have been worse... Kerry would have been worse... Kerry would have been worse..."

|2.28.05 @ 11:06AM|#

Yeah, I tried reciting that just now Akira, but I didn't have a lamp to rub at the time so I don't think it'll work.

R C Dean|2.28.05 @ 11:21AM|#

Nothing says "credibility" and "dialogue" like "Repug" and "theocrat."

And, if you think that the high cost of the prescription drug benefit is a bad thing, then, yes, Kerry would have been worse, as the Dems were pushing for a bigger, more expensive prescription drug benefit.

It sucks that our choices were between bad and worse on big government issues, but there you have it.

|2.28.05 @ 11:41AM|#

"Nothing says "credibility" and "dialogue" like "Repug" and "theocrat.""

I actually could care less about credibility from someone who highlights 2 words from my response, and in turn exclaims that my "credibility" has been shot. Did I hurt your sensibilities R C Dean? Yeah I know, libertarians can still be "believers". I was of course referring to the Evangelical christians that helped put G.W. in the white house for 2 terms. Relax dude, it'll be OK. And here's a nice little PBS documentary for ya' below, just so you know I'm not talking out of my "asche". See, I can censor myself for pompous pricks like you. Well, I guess that didn't work for too long.

http://www.pbs.org/wgbh/pages/frontline/shows/jesus/

|2.28.05 @ 12:03PM|#

Kerry would have indeed been worse. The Democrats only complaint about Bush's prescription drug bill is that it wasn't a bigger giveaway.

The only time Democrats employ the term "fiscal responsibility" is in conjunction with recomendations to raise taxes.

|2.28.05 @ 12:13PM|#

Do we really know that the Democrats' plan would have been more expensive? Given how many times the cost of Bush's plan has been revised, I think the jury is still out on whether the Democrats' plan would have been more expensive.

|2.28.05 @ 12:55PM|#

Well if the Democrats were advocating a higher individual benefit level for each beneficiary, then it would have to be more expensive - regardless of how many times the administration has raised the estimated amount.

The Democrats have been no more expert (or honest) at estimating the future costs of programs they've proposed than the Republicans. The original estimates they came up with for programs they created like medicare and medicaid were way short of what they've wound up costing.

Morat|2.28.05 @ 1:10PM|#

Weren't the Democrats ALSO advocating using the sort of large-scale bargaining with drug makers that tends to lower prices drastically? Kind of a critical point to leave out, isn't it Gilbert?

I guess it's not just the people in Washington that are full of it.

R C Dean|2.28.05 @ 1:37PM|#

I actually could care less about credibility from someone who highlights 2 words from my response, and in turn exclaims that my "credibility" has been shot.

Whether you like it or not, Rob D., using abusive terms tends to damage your credibility.

Weren't the Democrats ALSO advocating using the sort of large-scale bargaining with drug makers that tends to lower prices drastically?

Pull the other one, Morat - its got bells on. Since when has any government program resulted in lower prices, unless the government crosses the line into outright expropriation and coercion?

|2.28.05 @ 1:39PM|#

Weren't the Democrats ALSO advocating using the sort of large-scale bargaining with drug makers that tends to lower prices drastically?

So, make a massive welfare program better by vast federal interference in the drug industry.

One wonders how you figure companies will "bargain" with the federal government for the supplies it needs for a huge public benefit. Or whether, if and when the costs for such a drug benefit ballooned, that would be the excuse for blaming the drug companies...

|2.28.05 @ 1:40PM|#

It's not a "point" that the Democrats could "drastically" bargain down the cost of drugs - it's merely your contention that they could.

|2.28.05 @ 1:49PM|#

"Whether you like it or not, Rob D., using abusive terms tends to damage your credibility."

I'm not running for office buddy, and I wasn't shooting to be politically correct. Man, if you can't be non-PC on Reason, I don't know where else to go. Keep your anal retentive, and reflexive comments to yourself next time.

Morat|2.28.05 @ 2:54PM|#

Pull the other one, Morat - its got bells on. Since when has any government program resulted in lower prices, unless the government crosses the line into outright expropriation and coercion?

Let me get this straight: It works for large-scale prescription plans (like the one I've got at work) but it somehow magically WOULDN'T work for the government? Do they have some sort of magic pixie dust that prevents that sort of thing from happening?

Still, I enjoy the response: "It would cost more because I'm idealogically committed to claiming it would cost more".

It must be nice to ignore entire facets of the situation because your religions -- sorry, I mean politically -- beliefs contradict it.

(For the records: I never claimed the Dems plan WOULD lower the prices. Only that such agreements have, in the past, done so. You contend, with nary a shred of proof, that somehow "government" would screw up what's in essence a bulk-purchase plan....)

Morat|2.28.05 @ 2:57PM|#

So, make a massive welfare program better by vast federal interference in the drug industry.

How is it different than, say, Caremark or Express Scripts doing the exact same thing? What's the actual economic difference between the government -- acting on behalf of, say, 1 million users -- to bargain for lower prices for those users because they purchase in bulk and Caremark doing the same thing for it's 1 million users?

It's not, of course. If they were passing regulations, changing laws, etc -- sure. But what was advocated was that, in essence, Medicare act just like a business.

I'd think you'd be in favor of government acting more like business. What on earth could be the problem?

|2.28.05 @ 2:57PM|#

In all fairness, Morat, if there's anybody who can screw up negotiating a bulk discount it would be the government ;)

|2.28.05 @ 3:08PM|#

"But what was advocated was that, in essence, Medicare act just like a business."

Not exactly. Businesses can only get by with charging their actual customers for the costs of the products and/or services they provide to them. They cannot levy taxes on every income earner in the country to cover the costs of providing something to them.

|2.28.05 @ 3:50PM|#

Well, Kerry would have tried to make it worse, but if we were lucky, the opposition in Congress would have kept costs down.

Of course, now we'll never know.

(And for the record, I did not vote for Kerry. Just in case someone wants to ask me if I did or if I would have preferred Kerry.)

|2.28.05 @ 4:17PM|#

Well, Kerry would have tried to make it worse, but if we were lucky, the opposition in Congress would have kept costs down.

If we hold the Congressional variable constant (assume it stays GOP) then a Democratic President is riskier than a GOP President.

A GOP President will push for large spending increases and definitely get them from a compliant Congress.

A Democratic President will push for HUGE spending increases. He might very well get them, or he could just as easily find himself up against an ornery and agitated GOP Congress that's going to deny him any spending that he asks for.

Remember the good old days when GOP Congressmen spent their time trying to prove that the President killed Vince Foster? Instead of acting like rubber stamps?

|2.28.05 @ 4:50PM|#

But thoreau, at least there would have been a small chance that the GOP congress would have been ornery. Option 1, which we have now, quite obviously sucks.

As an aside, my friend called me "Hitlow" the other day because I was somewhat in favour of the recent decision to force certain lawsuits to be litigated at the federal, rather than state level. I rather liked that one. Maybe I change my nick!

sage|2.28.05 @ 5:51PM|#

If you were a drug maker had a patent on a drug, why would you bother to negotiate a price? It's not like the govermnent could threaten to take their business elsewhere.

sage|2.28.05 @ 5:52PM|#

Damn it, I did it again.

"Weren't the Democrats ALSO advocating using the sort of large-scale bargaining with drug makers that tends to lower prices drastically?"

If you were a drug maker had a patent on a drug, why would you bother to negotiate a price? It's not like the govermnent could threaten to take their business elsewhere.

Did I get it right that time, man?

|2.28.05 @ 6:06PM|#

If you were a drug maker had a patent on a drug, why would you bother to negotiate a price? It's not like the govermnent could threaten to take their business elsewhere.

Actually, they probably could. There are alternatives to most drugs.

But that's an aside...

|2.28.05 @ 6:09PM|#

... the real problem with the drug benefit is that it is joined by a reduction (effectively) in federal funding of biomedical research.

No matter what your political persuasion is, that's just poor planning, because research has a high return on investment. If the goal were to reduce medical suffering, we'd spend the money on research instead of current drugs. Of course, the ultimate reason for the drug benefit is to appease the geriatric voters.

sage|2.28.05 @ 6:16PM|#

"No matter what your political persuasion is, that's just poor planning, because research has a high return on investment."

I don't know if I agree with this. Let's say you are a drug company and the government is funding your research to find a cure for 'X.' Oops, you accidently found a cure for 'X!' If you are smart, you'll keep it under wraps for at least a while, otherwise you lose your research grants.

When the research is funded by you(stockholders) instead of the government, you have an incentive to have something to show for your research.

This could be why roads never seem to stay 'fixed' for long.

|2.28.05 @ 6:46PM|#

sage, I'm going to guess you aren't a biomedical researcher; in academia the motto is publish or perish. Most federal funding goes to competitive (short-term) grants for academic and non-profit researchers, rather than drug companies.

sage|2.28.05 @ 10:28PM|#

Rikurzhen,

Competition is good, I'll agree.

"Most federal funding goes to competitive (short-term) grants for academic and non-profit researchers, rather than drug companies."

OK. Could you point to a reference that I could examine? Specifically showing the amount of federal funds that is spent on medical research, and where it goes. Thanks.

|3.1.05 @ 2:03PM|#

http://www.aaas.org/spp/rd/

this is where I would start. there's a lot of data there, so I'm having trouble finding a specific table/figure for you.

http://www.aaas.org/spp/rd/fy06.htm

this gives current budget projections