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

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
December 09, 2016
Friday - Sunday
Jeffrey St. Clair
Roaming Charges: Nasty As They Wanna Be
Henry Giroux
Trump’s Second Gilded Age: Overcoming the Rule of Billionaires and Militarists
Andrew Levine
Trump’s Chumps: Victims of the Old Bait and Switch
Erin McCarley
American Nazis and the Fight for US History
Lewis Lapham
Hostile Takeover
Joshua Frank
This Week at CounterPunch: More Hollow Smears and Baseless Accusations
Paul Street
The Democrats Do Their Job, Again
Vijay Prashad
The Cuban Revolution: Defying Imperialism From Its Backyard
Michael Hudson - Sharmini Peries
Orwellian Economics
Mark Ames
The Anonymous Blacklist Promoted by the Washington Post Has Apparent Ties to Ukrainian Fascism and CIA Spying
Yoav Litvin
Resist or Conform: Lessons in Fortitude and Weakness From the Israeli Left
Conn Hallinan
India & Pakistan: the Unthinkable
Andrew Smolski
Third Coast Pillory: Nativism on the Left – A Realer Smith
Joshua Sperber
Trump in the Age of Identity Politics
Brandy Baker
Jill Stein Sees Russia From Her House
Katheryne Schulz
Report from Santiago de Cuba: Celebrating Fidel’s Rebellious Life
Nelson Valdes
Fidel and the Good People
Norman Solomon
McCarthy’s Smiling Ghost: Democrats Point the Finger at Russia
Renee Parsons
The Snowflake Nation and Trump on Immigration
Margaret Kimberley
Black Fear of Trump
Michael J. Sainato
A Pruitt Running Through It: Trump Kills Nearly Useless EPA With Nomination of Oil Industry Hack
Ron Jacobs
Surviving Hate and Death—The AIDS Crisis in 1980s USA
David Swanson
Virginia’s Constitution Needs Improving
Louis Proyect
Narcos and the Story of Colombia’s Unhappiness
Paul Atwood
War Has Been, is, and Will be the American Way of Life…Unless?
John Wight
Syria and the Bodyguard of Lies
Richard Hardigan
Anti-Semitism Awareness Act: Senate Bill Criminalizes Criticism of Israel
Kathy Kelly
See How We Live
David Macaray
Trump Picks his Secretary of Labor. Ho-Hum.
Howard Lisnoff
Interview with a Political Organizer
Yves Engler
BDS and Anti-Semitism
Martha Durkee-Neuman
Millennial Organizers Want to See An Intersectional Understanding Of Gun Violence
Adam Parsons
Home Truths About the Climate Emergency
Brian Cloughley
The Decline and Fall of Britain
Eamonn Fingleton
U.S. China Policy: Is Obama Schizoid?
Graham Peebles
Worldwide Air Pollution is Making us Ill
Joseph Natoli
Fake News is Subjective?
Andre Vltchek
Tough-Talking Philippine President Duterte
Binoy Kampmark
Total Surveillance: Snooping in the United Kingdom
Guillermo R. Gil
Vivirse la película: Willful Opposition to the Fiscal Control Board in Puerto Rico
Patrick Bond
South Africa’s Junk Credit Rating was Avoided, But at the Cost of Junk Analysis
Clancy Sigal
Investigate the Protesters! A Trial Balloon Filled With Poison Gas
Charles R. Larson
Review:  Helon Habila’s The Chibok Girls: the Boko Haram Kidnappings and Islamist Militancy in Nigeria
December 08, 2016
John W. Whitehead
Power to the People: John Lennon’s Legacy Lives On
Mike Whitney
Rolling Back the Empire: Washington’s Proxy-Army Faces Decisive Defeat in Aleppo
FacebookTwitterGoogle+RedditEmail