January 29, 2004
Perks for Serving in Government
There are days when the stories coming out of Washington shock even a cynic like me. Today on Morning Edition, I heard a little story about Rep. Billy Tauzin (R-LA) who has been job hunting before he leaves office for his next little gig.
Tauzin was instrumental in getting the travesty of a prescription drug bill passed -- the one where there were lots of subsidies for companies to NOT DROP their prescription drug coverage for retirees (except for that little note that went out to the companies from the Bush administration telling those same companies they could have their subsidies even if they didn't maintain their coverage). And the one that made it criminal to have the government negotiate for lower prices -- obviously that would be unfair to the big pharmaceutical companies who would suffer if their profits were restricted in such a fashion.
Well, it turns out that with the money the big drug companies have locked in for the foreseeable future, they are now able to offer Billy a new job as their chief Washington lobbiest for something around $3 Million a year. No wonder he's decided that leaving the House of Representatives for a more lucrative career is the thing to do now. And as Peter Overby's report said, this is not considered corruption. It simply the way business is done in Washington these days.
The WaPo has more here.
Posted by Mary at January 29, 2004 02:05 AM | TrackBackAnd the WH lied to Congressional GOP in order to pass the Medicare legislation. The bill was sold as costing under $400 billion. Now...
NYT: WASHINGTON, Jan. 29 — The Bush administration said on Thursday that the new Medicare law offering prescription drug benefits and private health plans to the elderly would cost at least $530 billion over 10 years, or one-third more than the price tag used when Congress passed the legislation two months ago.Conservative Republicans said the new estimate confirmed their worst fears, while Democrats said it vindicated their view that the law gave far too much money to drug manufacturers and insurance companies. The bill passed narrowly in the House after Republican leaders gave assurances that the cost would not exceed $400 billion
The Bush administration did not explain how it arrived at its cost estimate, but health economists and budget analysts suggested two factors. The administration predicts that the new law will produce a sharp increase in the number of Medicare beneficiaries enrolled in health maintenance organizations and other private health plans. In addition, the law significantly increases Medicare payments to private health plans.
"For the foreseeable future, the private plans are more expensive than the traditional fee-for-service Medicare program," said Robert D. Reischauer, president of the Urban Institute and vice chairman of a federal commission that advises Congress on Medicare.
[...]
Republicans say the private plans will enhance competition and efficiency in the Medicare market, saving money in the long run.
This is not really true. It is true that if a market-based health care system existed, or could be devised, it would be more efficient than the alternatives. The problem is, this bill does not provide market incentives to cut costs, except by withholding services from captive customers. What it does do is increase Q while guaranteeing p. What market priciple is upheld by that?
Posted by: James R MacLean on January 30, 2004 02:47 PM