Wednesday, February 09, 2005


"They'll say anything to get a bill passed..."

It appears the curtains are being ripped away from both Michael Jackson's and George Bush's fantasy-based lifestyles at the same time. Mikey's got the trial thing happening, and the true cost of Mr. Bush's Medicare Prescription Drug Benefit is coming out:
WASHINGTON, Feb. 8 - The Bush administration offered a new estimate of the cost of the Medicare drug benefit on Tuesday, saying it would cost $720 billion in the next 10 years.

That is much more than the $400 billion Congress assumed when it passed legislation creating the benefit in late 2003.

But administration officials said the numbers were not comparable. The original estimate was for the years 2004 to 2013. The new estimate covers the period from 2006, when the drug benefit becomes available, to 2015.
Source: New York Times, New White House Estimate Lifts Drug Benefit Cost to $720 Billion

In other words, the original 10-year estimate started two years before the program would even begin paying benefits, so it was actually an 8-year cost estimate spread out over 10 years. Worse, it deliberately understated the "Baby Boomer" effect of a larger percentage of the population qualifying for benefits - the same effect so thoroughly hyped in Mr. Bush's "Charles Keating Memorial Social Security Reformation Package."

Some Democrats actually stated the obvious - Bush's cost estimates for converting Social Security from an insurance program to a defined benefit program are probably a steaming load of bovine-derived organic fertilizer:

(Representative Rahm Emanuel, Democrat of Illinois) said: "The new cost estimate destroys the credibility of the Bush administration. Officials were so far off in estimating the cost of the Medicare law. Why should we believe what they say about the financial problems of Social Security?"

Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health, said: "I told you so. We can't trust numbers provided by administration officials. They'll say anything to get a bill passed. And if the new drug benefit costs more, the extra money goes to their friends in the pharmaceutical industry, not to senior citizens.
Source: New York Times
Even Republicans expressed concerns:

"Since it was sold as a $400 billion program, that's what we should keep it at," Mr. Gregg (Republican of New Hampshire) said."
Source: New York Times

Interestingly, if you take the original (hidden) estimate of $530 billion over 8 years of paid benefits as in the 2004 - 2013 estimate, then extrapolate that annual cost for 10 years, you get $663 billion over 10 years. Given the greying Baby Boomers, the $720 billion isn't a surprising overage over the TRUE numbers.

"An intelligent victor will, when possible, present his demands to the vanquished in installments." attributed to Adolph Hitler


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