FacebookTwitterGoogle+RedditEmail

The Distortions of Sebastian Mallaby on Social Security

by SETH SANDRONSKY

As U.S. midterm elections near, the topic of political honesty draws some pundits like moths to light. Take Sebastian Mallaby in the Washington Post of October 23.

“Every honest politician knows that entitlement spending on retirees is going to bust the budget,” Mallaby writes. “But since the failure of Bush’s proposed Social Security overhaul last year, nobody is doing anything about it.”

Presumably, these honest politicians are aghast at rising costs for Medicare, which provides health care to Americans age 65 and up, plus some disabled recipients of Social Security. We turn to the Medicare prescription drug benefit bill, known as Medicare Part D.

The GOP Congress claimed that this bill would foster competition. But first, the heavy hand of government had to go. This would help to free competition.

As competitive pressures rose, private drug prices would fall, the GOP promised. Americans covered by Medicare would benefit from lower costs.

Instead, Medicare Part D has mainly helped insurance and pharmaceutical companies. What happened to the promised price competition? In brief, the prescription drug benefit bill banned Medicare from negotiating lower drug prices with insurers and pharmaceutical companies.

By contrast, the U.S. Veterans Administration and nations such as Australia and Canada use their bargaining power to negotiate prices for many drugs with private companies. With such negotiations, the VA and these countries get lower drug prices.

Under the GOP-backed Medicare Part D, the insurance and pharmaceutical companies successfully lobbied the U.S. Congress to kill competition. The corporations in these industries got what they wanted”monopoly profits. Predictably, that monopolization of prescription medications drove up the costs for millions of people covered by Medicare.

Companies such as Merck (Zocor/cholesterol), Pfizer (Lipitor/cholesterol and Zoloft/anxiety) and Wyeth (Protonix/heartburn) reaped billions of dollars in windfall profits, according to economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC. “The excess profits for the drug industry as a whole will be close to $50 billion in the first full year of the Medicare drug benefit program,” he added.

The lesson in this Medicare drug bill is clear. Industry monopolies drive medicine prices up, not down. Senior and disabled Americans can thank the GOP Congress for that.

No wonder the cost of the U.S. health care system is outstripping the rate of inflation. Meanwhile, scriveners such as Mallaby pontificate about politicians needing to cut entitlement spending, a so-called ticking time bomb in the federal budget. For him, slowing the out-of-control price increases of U.S. health care is not an issue.

And why is there a need to overhaul Social Security? The 2006 Social Security trustees’ report, the standard basis for Social Security projections, says Social Security will be able to pay 100 percent of its scheduled benefits through 2046 with no changes needed, according to the nonpartisan Congressional Budget Office.

Recall that President George W. Bush tried with little success to convince the U.S. public that Social Security will face a future cash crisis that requires reform now. Dramatically, he failed to persuade the American people that a way to save Social Security was by creating private accounts for younger workers to own.

Under the president’s plan for Social Security, young wage-earners would have a chance to join his “ownership society.” And the same private accounts for Social Security would generate big fees for the financial services industry, a large source of campaign funds for the GOP. “Every honest politician” should know that.

SETH SANDRONSKY is a member of Sacramento Area Peace Action and a co-editor of Because People Matter. He can be reached at: bpmnews@nicetechnology.com

 

 

 

Seth Sandronsky is a Sacramento journalist and member of the freelancers unit of the Pacific Media Workers Guild. Emailsethsandronsky@gmail.com

More articles by:

CounterPunch Magazine

minimag-edit

Weekend Edition
September 23, 2016
Friday - Sunday
Andrew Levine
The Meaning of the Trump Surge
Jeffrey St. Clair
Roaming Charges: More Pricks Than Kicks
Mike Whitney
Oh, Say Can You See the Carnage? Why Stand for a Country That Can Gun You Down in Cold Blood?
Chris Welzenbach
The Diminution of Chris Hayes
Vincent Emanuele
The Riots Will Continue
Rob Urie
A Scam Too Far
Pepe Escobar
Les Deplorables
Patrick Cockburn
Airstrikes, Obfuscation and Propaganda in Syria
Timothy Braatz
The Quarterback and the Propaganda
Sheldon Richman
Obama Rewards Israel’s Bad Behavior
Libby Lunstrum - Patrick Bond
Militarizing Game Parks and Marketing Wildlife are Unsustainable Strategies
Andy Thayer
More Cops Will Worsen, Not Help, Chicago’s Violence Problem
Louis Yako
Can Westerners Help Refugees from War-torn Countries?
David Rosen
Rudy Giuliani & Trump’s Possible Cabinet
Joyce Nelson
TISA and the Privatization of Public Services
Pete Dolack
Global Warming Will Accelerate as Oceans Reach Limits of Remediation
Franklin Lamb
34 Years After the Sabra-Shatila Massacre
Cesar Chelala
How One Man Held off Nuclear War
Norman Pollack
Sovereign Immunity, War Crimes, and Compensation to 9/11 Families
Lamont Lilly
Standing Rock Stakes Claim for Sovereignty: Eyewitness Report From North Dakota
Barbara G. Ellis
A Sandernista Priority: Push Bernie’s Planks!
Hiroyuki Hamada
How Do We Dream the Dream of Peace Together?
Russell Mokhiber
From Rags and Robes to Speedos and Thongs: Why Trump is Crushing Clinton in WV
Julian Vigo
Living La Vida Loca
Aidan O'Brien
Where is Europe’s Duterte? 
Abel Cohen
Russia’s Improbable Role in Everything
Ron Jacobs
A Change Has Gotta’ Come
Uri Avnery
Shimon Peres and the Saga of Sisyphus
Graham Peebles
Ethiopian’s Crying out for Freedom and Justice
Robert Koehler
Stop the Killing
Thomas Knapp
Election 2016: Of Dog Legs and “Debates”
Yves Engler
The Media’s Biased Perspective
Victor Grossman
Omens From Berlin
Christopher Brauchli
Wells Fargo as Metaphor for the Trump Campaign
Nyla Ali Khan
War of Words Between India and Pakistan at the United Nations
Tom Barnard
Block the Bunker! Historic Victory Against Police Boondoggle in Seattle
James Rothenberg
Bullshit Recognition as Survival Tactic
Ed Rampell
A Tale of Billionaires & Ballot Bandits
Kristine Mattis
Persnickety Publishing Pet-Peeves
Charles R. Larson
Review: Helen Dewitt’s “The Last Samurai”
David Yearsley
Torture Chamber Music
September 22, 2016
Dave Lindorff
Wells Fargo’s Stumpf Leads the Way
Stan Cox
If There’s a World War II-Style Climate Mobilization, It has to Go All the Way—and Then Some
Binoy Kampmark
Source Betrayed: the Washington Post and Edward Snowden
John W. Whitehead
Wards of the Nanny State
FacebookTwitterGoogle+RedditEmail