How Quickly They Forget

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Tuesday, December 01, 2009 at 8:58 am

Republican leaders in the Senate on Monday asked the top actuary at the Health and Human Services Department for a cost analysis of the Democrats’ health-care reform proposal. That would be exactly as dry as it sounds except for this: the actuary, Richard Foster, is the very same official muffled by the Bush administration in 2003 when Democrats asked for a similar examination of Medicare’s prescription drug benefit — an unfunded initiative that Republicans rammed through Congress in order to solidify the seniors’ vote in the run-up to the 2004 elections.

Apparently forgetting that episode, Sens. Charles Grassley (Iowa), senior Republican on the Senate Finance Committee, and Michael Enzi (Wyo.), senior Republican on the Senate health panel, emphasized the importance of Foster’s analysis, arguing that the his estimates “will be invaluable to the Senate.”

In keeping with the President’s request that health care reform be deficit neutral over a ten-year period and reduce the growth of health care spending over the long run, it is vital that Members have a complete analysis of the full cost of this legislation for individuals, businesses and government programs.

“It is absolutely critical,” the senators added, “that the American people have the best information possible regarding the impact of this legislation.”

Sounds like regular-old good government, right? Well, only if taken in a vacuum.

Flashback six years, and it was the Democrats asking Foster to examine the Republicans’ proposal to create Part D, Medicare’s enormous prescription drug benefit that took effect in 2006. The Congressional Budget Office had estimated the cost of the proposal to be $395 billion over 10 years — just shy of the $400 billion authorized by the GOP’s budget bill — but Democrats also wanted Foster’s estimate, which was later revealed to be $534 billion.

They didn’t get it. Instead, Thomas Scully, the Bush appointee who headed the Centers for Medicare and Medicaid Services at the time, screened all of Foster’s work to ensure that nothing got to Congress that might threaten the bill.

As described by Foster himself, one month into the debate Scully “ordered me to cease responding directly to congressional requests for actuarial assistance.”

Instead, I was directed to provide the responses to him for his review, approval, and ultimate disposition. Following several vigorous discussions, the administrator made it clear that this was a direct order and that if I failed to follow it, “the consequences of insubordination are extremely severe.” I understood this statement to mean that I would be fired if I provided the requested information to Congress.

Foster went on to clarify that Scully “didn’t try to influence the amount of any estimate or the outcome of our analyses,” but instead would release to Congress only “those studies that could be used to support the Medicare legislation, [while] other reports that could be used to argue against the legislation would not be released.”

I was extremely concerned by this situation for two reasons: First, because important technical information was being withheld from Congress for political reasons — an inappropriate and highly unethical practice. And second, because the Office of the Actuary’s objectivity would be called into question if only products supporting the legislation were made available.

An investigation was launched by the HHS inspector general, which confirmed Foster’s statements in a July 2004 report.

Scully warned Foster that he would take disciplinary action if Foster provided certain information in response to Congressional requests. Scully also advised a Congressional staffer that he would fire Foster for releasing information. A staff assistant to Scully conveyed similar warnings to Foster.

Still, the HHS investigators said they didn’t find any instances when Scully had violated criminal law, and the case was dropped.

Grassley, for his part, called Scully’s conduct “inappropriate” in the wake of the HHS report. But for the most part, he didn’t appear to see anything wrong with Congress being denied Foster’s tabulations.

“[T]he true cost estimate as far as Congress is concerned is that of the Congressional Budget Office,” Grassley, then-chairman of the Finance Committee, said in a July 2004 statement. “We’re required by law to abide by the cost estimates prepared by the Congressional Budget Office, and that cost estimate was available for everyone’s review before the vote.”

Of course, none of that mattered because, long before either the HHS report or Foster’s cost estimate was unveiled, Bush had signed the prescription drug bill into law.

Writing in Forbes this month, Bruce Bartlett – former advisor to Ronald Reagan, George H.W. Bush and Rep. Ron Paul (R-Texas) — provided the historic context surrounding the Part D vote.

Recall the situation in 2003. The Bush administration was already projecting the largest deficit in American history — $475 billion in fiscal year 2004, according to the July 2003 mid-session budget review. But a big election was coming up that Bush and his party were desperately fearful of losing. So they decided to win it by buying the votes of America’s seniors by giving them an expensive new program to pay for their prescription drugs.

Bartlett goes on to point out a key distinction between the Republicans’ drug bill of 2003 and the Democrats’ reform bill of 2009:

Just to be clear, the Medicare drug benefit was a pure giveaway with a gross cost greater than either the House or Senate health reform bills how being considered. Together the new bills would cost roughly $900 billion over the next 10 years, while Medicare Part D will cost $1 trillion.

Moreover, there is a critical distinction — the drug benefit had no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit, whereas the health reform measures now being debated will be paid for with a combination of spending cuts and tax increases, adding nothing to the deficit over the next 10 years.

David Walker, the former U.S. Comptroller General, has said that, “The prescription drug bill was probably the most fiscally irresponsible piece of legislation since the 1960s.”

No matter. The Republicans for months have blasted the Democrats’ health reform bills for being too expensive. Indeed, Grassley said Monday that “health care reform should lower the cost of premiums; it should reduce the deficit; it should bend the growth curve in health care the right way.” The Democrats’ reform bill, he added, “doesn’t do any of those things.”

Bartlett has some thoughts for such statements.

It astonishes me that a party enacting anything like the drug benefit would have the chutzpah to view itself as fiscally responsible in any sense of the term. As far as I am concerned, any Republican who voted for the Medicare drug benefit has no right to criticize anything the Democrats have done in terms of adding to the national debt. Space prohibits listing all their names, but the final Senate vote can be found here and the House vote here.

Would it surprise anyone to learn that both Grassley and Enzi voted in favor of Part D?

Comments

7 Comments

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Comment posted April 7, 2010 @ 9:00 pm

I knew that an investigation was launched by the HHS inspector general, which confirmed Foster’s statements in a July 2004 report. Pretty much good indeed.


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Comment posted April 8, 2010 @ 9:55 pm

American people have the best information possible regarding the impact of this legislation anyway.


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Comment posted May 5, 2010 @ 7:54 pm

I wonder the impact of this legislation. And yes, how the heck did we all forget?


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