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Congress
worked late into the night this past weekend to pass a Medicare prescription
drug bill that represents the single largest expansion of the federal welfare
state since the Great Society programs of the 1960s. The new Medicare drug
plan enriches pharmaceutical companies, fleeces taxpayers, and forces
millions of older Americans to accept inferior drug coverage – while
doing nothing to address the real reasons prescription drugs cost so much.
Nothing
from the government is free, of course, and prescription drugs will be no
exception. The perception that seniors will be able to flash a Medicare card
at the pharmacy and walk out without paying anything is completely false. In
fact, many seniors will end up paying more out-of-pocket under the Medicare
scheme than they do now with their private plans. The Medicare drug benefit
requires monthly premiums, co-pays, and deductibles, just as private plans
do. It also has gaps in coverage that no sensible person would accept if
offered by a private insurer. Like all government programs, the Medicare drug
entitlement will be shabby, degrading, and inferior to the private sector.
The
vast majority of older Americans already have private prescription drug
coverage that they don’t want changed, and this 78% of seniors may well
lose their good private coverage altogether. In fact, the government’s
own Congressional Budget Office estimates that at least one-third of all
private companies will dump their retirees into the Medicare system as a
result of the new bill. Big corporations love the Medicare drug plan, because
they want to shift the responsibility for providing drug benefits to their
retirees onto taxpayers. Dozens of major companies shamelessly advertised in
the Washington Times and elsewhere in support of the Medicare bill for this
very simple reason. Their pension plans are dangerously underfunded, so
naturally they use their lobbying influence to promote a Medicare drug
system. In this sense the Medicare bill is a taxpayer-funded corporate
bailout for hundreds of American companies.
The
financial impact of this legislation on taxpayers cannot be overstated.
Government projections that the drug program will cost $400 billion over the
next decade cannot be trusted, as existing Medicare programs cost 4 times
more than estimated when they were created. The likely cost is at least $1
trillion over 10 years, and much more in following decades as the American
population grows older. The Medicare “trust fund” is already
badly in the red, and the only solution will be a dramatic increase in
payroll taxes for younger workers. The National Taxpayers Union reports that
Medicare will consume nearly 40% of the nation’s GDP after several
decades because of the new drug benefit. That’s not 40% of federal
revenues, or 40% of federal spending, but rather 40 % of the nation’s
entire private-sector output! Clearly this new Medicare spending will bury
our great-grandchildren unless we rethink the wisdom of ever-increasing
entitlement programs.
Phony
senior lobbies want free drugs paid for by taxpayers; American corporations
want to dump their retirees into Medicare at the expense of taxpayers;
pharmaceutical companies want huge windfalls provided by taxpayers; and
politicians want to get reelected by passing incredibly shortsighted
legislation courtesy of taxpayers. Most of today’s politicians will
never have to answer to future generations saddled with huge federal deficits
because of this expansion of Medicare. Those generations are the real
victims, as they cannot object to the debts being incurred today in their
names.
Ron Paul
www.house.gov/paul
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Congressman
Ron Paul of Texas enjoys a national reputation as the premier advocate for
liberty in politics today. Dr. Paul is the leading spokesman in Washington
for limited constitutional government, low taxes, free markets, and a return
to sound monetary policies based on commodity-backed currency. For more
information click on the Project Freedom website.
Published
with the authorization of Dr. Paul.
Copyright
Dr. Ron Paul
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