How Bush scammed Congress re Medicare law changes

US Senate approves McClellan for Medicare job
US Senate approves McClellan for Medicare job
Forbes - 3/11/04

WASHINGTON (Reuters) - The U.S. Senate approved by voice vote early Friday the nomination of Mark McClellan to run Medicare and Medicaid, the government health insurance programs that cover nearly 80 million poor, elderly and disabled Americans.

McClellan, a 40-year-old physician and economist, currently serves as commissioner of the Food and Drug Administration.

At the Medicare agency, he will oversee implementation of a new $530 billion law that provides prescription drug benefits for seniors.

"Dr. McClellan is the right person. ... He is an extremely bright and capable public servant," Senate Majority Leader Bill Frist said in a statement. Frist is also a physician.

McClellan is well-regarded by Republicans and Democrats, but his nomination to run the Centers for Medicare and Medicaid Services had run into resistance from some senators over his aggressive campaign to stop importation of lower-priced medicines from other countries.

To overcome the resistance, McClellan reversed himself and agreed to testify Thursday before the Senate Commerce Committee about drug pricing and importation of cheaper medicines.

In his new job, McClellan will be faced with the challenge of putting in place the complex Medicare changes, which are expected to be a centerpiece of President Bush's re-election campaign.

The law provides prescription drug coverage for seniors starting in 2006 and also encourages a bigger role in Medicare for private health insurers and managed care plans.

Before heading FDA, McClellan served on the Council of Economic Advisers. He was a deputy assistant treasury secretary during the Clinton administration.

His brother, Scott, is Bush's press secretary.

FDA Deputy Commissioner Lester Crawford is slated to become acting commissioner after McClellan's move.

Daschle calls for revote on Medicare drug bill
Mar. 13, 2004
Daschle calls for revote on Medicare drug bill
BY TONY PUGH
[email protected]

The Senate minority leader says a new vote is needed on the Medicare drug benefit bill after learning the administration's top cost analyst may have been ordered to provide skewed information to Congress.

WASHINGTON - Senate Minority Leader Tom Daschle said Friday that allegations of unfavorable cost estimates about the Medicare prescription drug bill being withheld from lawmakers justifies reopening the vote on the drug benefit.

The nation's top Medicare analyst confirmed Friday that his former boss, Thomas Scully, ordered him to withhold his estimates because they exceeded what Congress seemed willing to accept by more than $100 billion.

Richard Foster, the chief actuary at the Centers for Medicare and Medicaid Services, said Friday night that he received a handwritten note from Scully, then the centers' administrator, in early June ordering him to ignore information requests from members of Congress who were drafting the drug bill.

Knight Ridder, The Herald's parent company, reported the episode in an exclusive story published Friday, but Foster's comments were his first on the matter.

At the time of the estimate, the House was sharply divided on the proposed new Medicare drug benefit, which the administration strongly backed. Ultimately, the House passed the measure, 216-215, on June 27. In November, House members endorsed a House-Senate compromise version by a 220-215 vote. Approving the version were 13 Republican fiscal conservatives who had said they would vote against it if it cost more than $400 billion for its first 10 years.

On Friday, leaders in the House and Senate called for investigations into the alleged muzzling. Sen. Edward Kennedy, D-Mass., wrote President Bush demanding to know what cost estimates he used in pushing the new drug benefit.

DIRECT ORDER

Scully's note, according to Foster, ``was a direct order not to respond to certain requests and instead to provide the responses to him and [to] warn about the consequences of insubordination.''

The note was Scully's first threat in writing, Foster said, and came after at least three less formal threats. They ''came in different forms,'' he said. 'Sometimes he would make a comment that `I think I need another chief actuary,' or 'If you want to work for the Ways and Means Committee [which was drafting the bill] I can arrange it.' It was that sort of thing.''

Efforts to reach Scully at his office and home on Friday were unsuccessful. In a recent interview, he denied closing off Foster's lines of communication with Congress. On only one occasion, Scully said, did he block Foster's contact with lawmakers, in this case Democrats, saying their motives were purely political.

Foster said Scully insisted upon a pattern of withholding of information.

''Estimates that were supportive of the legislation were generally released and estimates that could be used to criticize the legislation were generally not released,'' Foster said.

Foster said he believed higher-ranking members of the administration than Scully knew of the higher cost estimates that his office had computed.

''Did the president know? Did [Health and Human Services] Secretary Tommy Thompson know? I don't know,'' Foster said.

The White House press office didn't respond to requests for comment.

HIGHER COST

Knight Ridder reported Friday that Foster's Office of the Actuary suggested that the drug benefit would cost at least $100 billion more than the $395 billion estimated by the Congressional Budget Office, whose job it is to project costs of legislation. One projection prepared in early June by Foster's office and obtained by Knight Ridder concluded that a Senate version of the bill might cost as much as $551 billion.

When Bush signed the bill in December, the drug benefit bore a $395 billion price tag. In January, the president's budget director, Joshua Bolten, upped the estimate by $139 billion.

Sen. Bill Frist of Tennessee, the majority leader and one of the few Republicans to address the controversy Friday, noted that Foster's estimates were based on different and more costly assumptions than those of the Congressional Budget Office.

Frist's spokesman, Bob Stevenson, added: ``If an individual's job was threatened and if they were trying to shield information from Congress, that could be an issue of concern.''

In a grim-faced floor speech Friday, Daschle, a South Dakota Democrat, called for reopening the vote on the drug benefit. He also called for an investigation into the firing threat and assertions that the administration had withheld its cost estimates from Congress.

''Whether this is criminal or not is a matter we will certainly want to clarify,'' Daschle said. ``But if not criminal, it was certainly unethical. And I think we need to know the facts.''

Prescriptions And Profit
Prescriptions And Profit
March 14, 2004
CBS News - 60 Minutes

It may come as no surprise that the pharmaceutical industry is the most profitable business in the country. Americans pay far more for their prescription drugs than citizens of any place on Earth.

It will also come as no surprise that as a political issue, the high price of drugs has united both Republicans and Democrats. More than a million Americans now buy their medications in Canada.

And it's no longer just older people taking buses across the border. Mayors and governors from Minnesota to Alabama are helping Americans get Canadian drugs by mail.

Such purchases are technically illegal. So far, the government has declined to prosecute individual customers or the cities and states involved. But the FDA - The Food and Drug Administration - has raised the specter of safety.

For more than a year, the FDA Commissioner, Dr. Mark McClellan, has been waging a campaign against Canadian importation. The FDA has also issued a serious warning that using Canadian drugs could be unsafe. Correspondent Morley Safer reports.
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How unsafe? How common are the problems for drugs that people are buying in Canada?

"Well, that's the problem. We don't know," says Dr. McClellan. "Because we don't have the authority to tell where these drugs have come from, or to monitor closely how they're getting into the United States. And to make sure that the drugs that come in are safe, it could be a widespread problem."

"That's a lot of hooey. There is no reason that buying drugs in Canada is any less safe than buying them in the United States," says Dr. Marcia Angell, who was executive editor of The New England Journal of Medicine for 11 years. She's currently writing a book on the secrets of the drug industry.

"The people who say you have to worry about the safety of drugs from Canada are imagining the way it was in the old days. That there's a moat around the United States that drugs that are sold in the United States are made by only American companies. And made in this country," says Angell.

"It's not that way anymore. Pfizer, for example, has 60 manufacturing sites in 32 countries. So the drugs are made all over the world. They're sold all over the world."

Most of Pfizer's anti-cholesterol drug Lipitor is made in Ireland. The same Lipitor that's sold in both U.S. and Canadian pharmacies. Other familiar drugs like Zocor, Nexium, and Prevacid are the same as the ones sold in Canada. They're much cheaper there because the drug companies must abide by Canadian government price controls.

Do the drug companies still make a profit?

"Oh, sure. Why else would they sell them in Canada? They're not charities. Of course they make a profit," says Angell.
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The United States is the only industrialized country without some form of control on the prices of drugs. The U.S. also accounts for more than half of the industry's profits.

In order to keep those profits up, the drug companies have joined the FDA in trying to shut down imports from Canada, and Canadian pharmacies are feeling the pressure. In one pharmacy just over the border, Americans account for 30 percent of its business. They were nervous about having 60 Minutes mention the actual name of the pharmacy.

"We've had several letters from the big multi-nationals, certainly threatening to cut off the drug supply very explicitly if you are supplying medications to U.S. patients," says the pharmacist.

This pharmacy supplies drugs to municipal workers in the city of Springfield, Mass., through a program set up by former Springfield Mayor Michael Albano.

"Major pharmaceutical companies are saying, ?'We're going to limit our supply.' What does that tell you? It tells you that they want to keep the artificially high prices in America," says Albano. "How brazen is that? It just boggles my mind that they can get away with this."

When Albano was faced with a budget crunch last year, he had to lay off firefighters, police officers, and teachers. By arranging for 3,000 city employees, retirees, and family members to buy Canadian drugs, the city can make substantial savings.

"We can save anywhere from $4 to $9 million on an annual basis if I get everybody enrolled and everybody goes to Canada. And that's a huge amount of money right now," says Albano. "If I can save $9 million for my city and put it back, redirect it back into police and fire and to public education, it'll make a world of difference. So it's a huge savings."

Does he do it himself?

"I do it for my family's use. My son Mikey is diabetic. And we get his insulin and related products for diabetes from Canada," says Albano, who saves that saves his family $250 a year because there is no co-payment. "And it'll save the taxpayers who front 76 percent of the payment about $850 a year. So it's a rather substantial savings for my family and for the taxpayers of Springfield."

The FDA says importing drugs from Canada or buying drugs from Canada is unsafe. Does Albano agree?

"The American public is not buying that safety issue. The fact is that it is getting insulting for the FDA to say that. I view myself as a responsible father," says Albano. "And I could tell you that I would not let my son inject insulin into his body three times a day if I thought there was a safety factor here."

Mayor Albano concedes that casually buying drugs on the Internet could be risky, but says it was quite simple for him to check out his Canadian supplier, and challenges the FDA to do the same thing.

"The FDA has become a pawn of the pharmaceutical industry, that they are protecting those high profit margins. If the FDA wanted to put a plan together similar to what we're doing in Springfield, that would be good for all Americans, they can do it in 15 minutes, relative to safety," says Albano.

"We get all our medications from certified, regulated pharmacies in Canada. It's no different than going to your neighborhood pharmacy. And it's the exact same medication."

So why can't the FDA insure the safety of products from Canadian pharmaceutical exporters - and make sure that it's as safe as any product leaving an American company?

"Under current law, we don't have the authority to insure the safety of foreign produced, foreign distributed drugs," says McClellan.
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So what would motivate the FDA, which is not in the business of profiting from drugs, to put out an alarm about Canadian drugs?

"The influence of the pharmaceutical industry on our government is huge. And the FDA is a part of the executive branch of the government. And this is just the propaganda that's put out to do the drug company's bidding, to make sure that Americans don't have access to cheaper drugs," says Angell.

"Because then they'll come to know what's going on. And what's going on is that these drugs, while they're made by global companies all over the world, are sold in this country for about double what they're sold for everywhere else. And that they wanna keep secret."

"Our interest is in protecting and promoting the health of the public," says McClellan.

Of course, the whole controversy over Canadian drugs would be moot if Republican Congressman Dan Burton of Indiana had his way. During the recent debate over the Medicare bill, he co-sponsored a provision that would have legalized bringing in Canadian drugs with safeguards.

But Burton says he ran into two brick walls: the drug industry and the U.S. government: "This is a perfect example, in my opinion, of where a special interest, the pharmaceutical industry, has been able to manipulate the Congress and the government of the United States to their benefit, and to the detriment of the American taxpayer and the American people."

Since 1999, the drug industry has given more than 45 million dollars in political contributions, and it's spent hundreds of millions more on an army of more than 600 lobbyists to work its will on Capitol Hill.

Congressman Burton says the new Medicare act makes it clear the industry got its money's worth. He says billions of dollars are in it for drug companies in this new Medicare Prescription Drug Benefit.

"In the new Medicare Act, the federal government is specifically prohibited from negotiating prices with drug companies," says Safer.

"That is unconscionable. The government of the United States negotiates prices in the Defense Department, in every area of government," says Burton. "And here we are, going to spend billions and billions and billions and probably trillions of dollars on pharmaceutical products. And we cannot negotiate the prices with the pharmaceutical industry. That's just not right."
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In December, surrounded by members of Congress, President Bush signed the new Medicare act. Since 1999, these legislators have accepted more than a million and a half dollars in campaign contributions from people working in the pharmaceutical industry. President Bush alone has received more than half a million dollars.

But now, the new Medicare prescription drug benefit is being billed as a big victory for America's seniors.

"You gotta be kidding me," says Burton. "Seniors, when they find out what's in that bill, are gonna be very angry. The problem is, they're not gonna find out about it until after this next election."

The plan doesn't start until 2006. Does Burton think that will reduce the attraction of importing drugs from Canada?

"Oh, I don't think so," says Burton. "Because even when you talk about the discount cards and the other things, you're gonna find that seniors are gonna be paying, in many cases, more than they are paying for Canadian imports right now."

60 Minutes contacted Bristol-Myers Squibb, Pfizer, Merck, Wyeth, Glaxo SmithKline, and Eli Lilly. None of them would agree to be interviewed. Safer asked Dr. Angell about the case the industry invariably makes to justify drug prices.

"This is a kind of blackmail. What they're saying is, ?'Don't mess with us. Let us charge whatever we want for our drugs. Otherwise, you won't get the miracles,'" says Angell. "And the truth is that they spend less in R&D then they make in profits. And far less then they spend on marketing. And they don't make that many miracles in the first place … The problem is, is that we're no longer getting our money's worth."

Adds Albano: "The pharmaceutical industry is gouging the American consumer. There's no other conclusion one can draw. And why should we, in this country, have to pay the highest prices in the world? Why isn't the president doing something? Why isn't Congress doing something? Someone has to wage this battle. So we're prepared to do it here."

Political pressure is building. Congress now plans to reconsider legislation that would legalize Canadian drugs. As for Dr. Mark McClellan, he is leaving the FDA and becoming President Bush's new head of Medicare and Medicaid.

Feds investigate US Videos, for TV News, Come Under Scrutiny
March 15, 2004 - New York Times
U.S. Videos, for TV News, Come Under Scrutiny
By ROBERT PEAR

WASHINGTON, March 14 ?- Federal investigators are scrutinizing television segments in which the Bush administration paid people to pose as journalists praising the benefits of the new Medicare law, which would be offered to help elderly Americans with the costs of their prescription medicines.

The videos are intended for use in local television news programs. Several include pictures of President Bush receiving a standing ovation from a crowd cheering as he signed the Medicare law on Dec. 8.

The materials were produced by the Department of Health and Human Services, which called them video news releases, but the source is not identified. Two videos end with the voice of a woman who says, "In Washington, I'm Karen Ryan reporting."

But the production company, Home Front Communications, said it had hired her to read a script prepared by the government.

Another video, intended for Hispanic audiences, shows a Bush administration official being interviewed in Spanish by a man who identifies himself as a reporter named Alberto Garcia.

Another segment shows a pharmacist talking to an elderly customer. The pharmacist says the new law "helps you better afford your medications," and the customer says, "It sounds like a good idea." Indeed, the pharmacist says, "A very good idea."

The government also prepared scripts that can be used by news anchors introducing what the administration describes as a made-for-television "story package."

In one script, the administration suggests that anchors use this language: "In December, President Bush signed into law the first-ever prescription drug benefit for people with Medicare. Since then, there have been a lot of questions about how the law will help older Americans and people with disabilities. Reporter Karen Ryan helps sort through the details."

The "reporter" then explains the benefits of the new law.

Lawyers from the General Accounting Office, an investigative arm of Congress, discovered the materials last month when they were looking into the use of federal money to pay for certain fliers and advertisements that publicize the Medicare law.

In a report to Congress last week, the lawyers said those fliers and advertisements were legal, despite "notable omissions and other weaknesses." Administration officials said the television news segments were also a legal, effective way to educate beneficiaries.

Gary L. Kepplinger, deputy general counsel of the accounting office, said, "We are actively considering some follow-up work related to the materials we received from the Department of Health and Human Services."

One question is whether the government might mislead viewers by concealing the source of the Medicare videos, which have been broadcast by stations in Oklahoma, Louisiana and other states.

Federal law prohibits the use of federal money for "publicity or propaganda purposes" not authorized by Congress. In the past, the General Accounting Office has found that federal agencies violated this restriction when they disseminated editorials and newspaper articles written by the government or its contractors without identifying the source.

Kevin W. Keane, a spokesman for the Department of Health and Human Services, said there was nothing nefarious about the television materials, which he said had been distributed to stations nationwide. Under federal law, he said, the government is required to inform beneficiaries about changes in Medicare.

"The use of video news releases is a common, routine practice in government and the private sector," Mr. Keane said. "Anyone who has questions about this practice needs to do some research on modern public information tools."

But Democrats disagreed. "These materials are even more disturbing than the Medicare flier and advertisements," said Senator Frank R. Lautenberg, Democrat of New Jersey. "The distribution of these videos is a covert attempt to manipulate the press."

Mr. Lautenberg, Senator Edward M. Kennedy, Democrat of Massachusetts, and seven other members of Congress requested the original review by the accounting office.

In the videos and advertisements, the government urges beneficiaries to call a toll-free telephone number, 1-800-MEDICARE. People who call that number can obtain recorded information about prescription drug benefits if they recite the words "Medicare improvement."

Documents from the Medicare agency show why the administration is eager to advertise the benefits of the new law, on radio and television, in newspapers and on the Internet.

"Our consumer research has shown that beneficiaries are confused about the Medicare Modernization Act and uncertain about what it means for them," says one document from the Centers for Medicare and Medicaid Services.

Other documents suggest the scope of the publicity campaign: $12.6 million for advertising this winter, $18.5 million to publicize drug discount cards this spring, about $18.5 million this summer, $30 million for a year of beneficiary education starting this fall and $44 million starting in the fall of 2005.

"Video news releases" have been used for more than a decade. Pharmaceutical companies have done particularly well with them, producing news-style health features about the afflictions their drugs are meant to cure.

The videos became more prominent in the late 1980's, as more and more television stations cut news-gathering budgets and were glad to have packaged news bits to call their own, even if they were prepared by corporations seeking to sell products.

As such, the videos have drawn criticism from some news media ethicists, who consider them to be at odds with journalism's mission to verify independently the claims of corporations and governments.

Government agencies have also produced such videos for years, often on subjects like teenage smoking and the dangers of using steroids. But the Medicare materials wander into more controversial territory.

Bill Kovach, chairman of the Committee of Concerned Journalists, expressed disbelief that any television stations would present the Medicare videos as real news segments, considering the current debate about the merits of the new law.

"Those to me are just the next thing to fraud," Mr. Kovach said. "It's running a paid advertisement in the heart of a news program."
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Jim Rutenberg contributed reporting for this article.

Robber barons influencing government was a bad thing 100 years ago, and it apparently has gotten worse, not better.

Economic power requires checks and balances as much as any other power. Too bad the Medicorp Bill denies any chance for checks and balances.

Buyer beware has become Buyer You Will Do As You Are Told

Not a good sign.

The mess this situation exhibits is undoubtedly spread much wider than just the pharmaceutical industry. When a hierarchy controls government, you have a kingdom, not a federal republic.

As the pretenses fall by the wayside, it is the people that suffer. We are allowing our rights and privledges and powers to be taken away from us by a hierarchy. Doesn't that give you even the slightest concern? What did we fight a revolution over if not to end the king's power over all of us?

Bush is acting like a king, and he has a gentry surrounding him that feels it is superior and empowered to rule over all the rest of us.

Doesn't this bother you at all?

Foster: White House Had Role In Withholding Medicare Data
Foster: White House Had Role In Withholding Medicare Data
HHS Actuary Feels Bush Aide Put Hold on Medicare Data
By Amy Goldstein
Washington Post Staff Writer
Friday, March 19, 2004; Page A02

Richard S. Foster, the government's chief analyst of Medicare costs who was threatened with firing last year if he disclosed too much information to Congress, said last night that he believes the White House participated in the decision to withhold analyses that Medicare legislation President Bush sought would be far more expensive than lawmakers knew.

Foster has said publicly in recent days that he was warned repeatedly by his former boss, Thomas A. Scully, the Medicare administrator for three years, that he would be dismissed if he replied directly to legislative requests for information about prescription drug bills pending in Congress. In an interview last night, Foster went further, saying that he understood Scully to be acting at times on White House instructions, probably coming from Bush's senior health policy adviser.

Foster said that he did not have concrete proof of a White House role, but that his inference was based on the nature of several conversations he had with Scully over data that Congress had asked for and that Foster wanted to release. "I just remember Tom being upset, saying he was caught in the middle. It was like he was getting dumped on," Foster said.

Foster added that he believed, but did not know for certain, that Scully had been referring to Doug Badger, the senior health policy analyst. He said that he concluded that Badger probably was involved because he was the White House official most steeped in the administration's negotiations with Congress over Medicare legislation enacted late last year and because Badger was intimately familiar with the analyses his office produced.

The account by Foster, a longtime civil servant who has been the Medicare program's chief actuary for nine years, diverges sharply from the explanations of why cost estimates were withheld that were given this week by White House spokesmen and Health and Human Services Secretary Tommy G. Thompson. They suggested that Scully, who left for jobs with law and investment firms four months ago, had acted unilaterally and that he was chastised by his superiors when they learned of the blocked information and the threat.

Two days ago, Thompson told reporters: "Tom Scully was running this. Tom Scully was making those decisions." Thompson said the administration did not have final cost estimates until late December predicting that the law would cost $534 billion over 10 years, $139 billion more than the Congressional Budget Office's prediction. Foster has said his own analyses as early as last spring showed that the legislation's cost would exceed $500 billion.

Last night, White House deputy press secretary Trent Duffy said, "It is my understanding that Mr. Badger did not in any way ask anyone to withhold information from Congress or pressure anyone to do the same." Duffy said he asked Badger this week whether he had done so and that Badger replied he had not. Duffy said that Badger was traveling last night and was unreachable to comment. Calls to his home were not returned.

Foster suggested the White House had been involved as new details emerged of the manner in which he had been threatened. The actuary released an e-mail, dated last June 20, from Scully's top assistant at the time regarding one GOP request and two Democratic requests for information about the impact of provisions of the Medicare bill on which the House would vote a week later.

In a bold-faced section of the three-paragraph note -- reported in yesterday's Wall Street Journal -- Scully's assistant, Jeffrey Flick, instructed Foster to answer the Republican's question but warned him not to disclose answers to the Democratic queries "with anyone else until Tom Scully explicitly talks with you -- authorizing release of information. The consequences for insubordination are extremely severe."

The warning came in response to an e-mail Foster had sent to Scully that same Friday afternoon, 22 minutes earlier, in which he said the three questions "strike me as straightforward requests for technical information that would be useful in assessing drug and competition provisions in the House reform package." Foster offered in that e-mail to show Scully his proposed replies in advance.

Flick, who now oversees the Medicare agency's regional office in San Francisco, did not return several phone calls.

Scully was out of town and did not respond to efforts to reach him via e-mail last night. He said in an interview this week that he and Foster had disagreed over how helpful an executive branch employee needed to be to Congress. He called it "a separation of powers issue."

In 1997 budget legislation, Congress sought unsuccessfully to require the Medicare actuary to respond to all of its requests. Such language was included in a conference report on the bill but does not carry the force of law.

Foster said that the e-mail was the only instance in which he had been explicitly threatened in writing, but that "there were other instances in which Tom in an e-mail or just over the phone would clearly be unhappy and would say less formally something to the effect, 'If you want to work for the Ways and Means Committee, I can arrange that.' "

The actuary said that in June 2001, shortly after Scully arrived, he directed Foster to send weekly reports of any requests for information he had received from Capitol Hill or elsewhere in the administration.

Congressional Democrats yesterday called for the General Accounting Office to investigate the episode. Thompson announced Tuesday he had ordered HHS's inspector general to conduct an inquiry.

Bush Medicare Reform Bill Becomes a Nightmare for GOP
Posted on Fri, Mar. 19, 2004
Bush Medicare Reform Bill Become a Nightmare for GOP
By William Douglas, Knight Ridder Washington Bureau Knight Ridder/Tribune Business News

Mar. 19--WASHINGTON - Enactment of a sweeping Medicare reform law last year was supposed to be the crowning achievement of President Bush's "compassionate conservatism" as he readied himself for re-election.

By providing a federally subsidized prescription-drug benefit for senior citizens, albeit a limited one, administration officials felt they usurped a major issue from the Democrats and cut into Democratic support among seniors age 65 and over -- an especially important voting bloc in key battleground states such as Florida.

But less than four months after he signed it into law on Dec. 8, Bush's Medicare-reform dream has turned into a nightmare and a potential drag on his bid for re-election.

-- The Bush administration deliberately didn't tell Congress that the measure could cost more than $100 billion more than advertised.

-- House Republican leaders abused House rules to push the measure to a narrow victory. There are also allegations of threats and bribes that are under investigation.

-- The Bush administration spent millions of taxpayer dollars on public service TV ads touting the Medicare reform law that look suspiciously like Bush campaign commercials. Those, too, are now under investigation.

-- Polls show that a majority of Americans don't like the Medicare reforms.

"It's something that's eating away at the credibility of the administration in an election year on a bill that he (Bush) thought was a building block for his re-election," said Stephen Hess, a political analyst for the Brookings Institution, a centrist think tank, and a former aide to President Eisenhower.

The law's afterglow faded fast once lawmakers learned it could cost at least $100 billion more than the $395 billion over 10 years that the White House originally advertised. That White House revelation in late January riled budget hawks who'd said they wouldn't vote for the measure if it cost more than $400 billion. The measure probably would have failed if the higher cost estimate had been known.

Lawmakers got steamed after the nation's top Medicare actuary, Richard S. Foster, told Knight Ridder that he had projected the higher cost long before Congress voted in November. Lawmakers were never told about his higher cost estimates because he says he was ordered by his boss, former Medicare Administrator Thomas Scully, to withhold them from Congress or he would be fired.

House Democrats, led by Rep. Henry Waxman, D-Calif., the ranking member of the House Government Reform Committee, are threatening a lawsuit to force Health and Human Services Secretary Tommy Thompson to turn over all of Foster's undisclosed estimates. And they're not stopping with Thompson.

Waxman and four other senior House Democrats fired off a letter Friday to White House chief of staff Andrew Card demanding that the White House disclose its role in withholding the information from Congress.

"In this case, there appears to have been extensive White House involvement in the development of the cost estimates for the prescription drug provisions," the letter asserts.

In an interview with Knight Ridder, Foster said he was reasonably sure that Doug Badger, a White House health policy adviser, was aware of the higher cost estimates. Foster said Scully hinted that he was being pressured by Bush administration officials to withhold the cost projections from Congress.

White House spokesman Trent Duffy said earlier this week that Badger didn't order Scully to muzzle Foster. Scully, who now works at a local law firm specializing in health care matters, didn't return a call for comment.

Duffy said Friday the White House isn't likely to cooperate with the investigation that the Democrats are requesting.

The HHS inspector general's office is investigating Foster's assertion that Scully ordered him to withhold cost estimates from members of Congress.

Karl Rove, Bush's chief political strategist, called the Medicare issue "much ado about nothing" on Friday because Congress relies on cost estimates for legislation made by the Congressional Budget Office, not the executive branch. In a Friday interview with the editorial board of The Miami Herald, Rove refused to say whether he was involved in the decision to withhold the high cost estimates.

Democrats hope to get answers Wednesday during a House Ways and Means Committee hearing on the long-term financial health of Medicare. However, Foster wasn't confirmed as a witness Friday; congressional witness lists are set by the majority party, currently Republicans.

Foster met Friday with Ways and Means members and staff from both parties and stood by his cost estimates while acknowledging that CBO's lower estimates were professionally executed and could be correct.

Many lawmakers felt abused when Republican leaders pushed the bill through the House of Representatives on Nov. 22 by keeping the vote open for nearly three hours -- usually votes are allowed only 15 minutes -- and by twisting GOP members' arms until they supported it.

The House Ethics Committee has launched an investigation into allegations by Rep. Nick Smith, R-Mich., that "bribes and special deals were offered" to induce him to vote for the bill in that period.

Smith, who voted against the bill, has said that unidentified Republican power brokers offered "extensive financial support and endorsements for my son, Brad, who is running for my seat. They also made threats of working against Brad if I voted no."

HHS Secretary Thompson sat beside Smith on the House floor, talking to him avidly for about an hour before the final Nov. 22 vote.

Smith later backed off his bribery claim, but the Ethics Committee is proceeding anyway.

In addition, the General Accounting Office, the investigative arm of Congress, is examining whether HHS television ads touting the new Medicare law -- with pictures of Bush prominent -- constitute illegal political propaganda. GAO already has concluded that the ads contain "notable omissions and errors," but its preliminary judgment was that they are legal.

The ads -- called "video news releases" by the administration -- feature an actor portraying a television news reporter and are being offered to local TV news shows. Critics say the ads are intended to make viewers think they are watching objective news reports.

The law provides limited prescription-drug coverage for about 40 million seniors. It also makes it easier for cheaper generic drugs to reach the marketplace.

The law's centerpiece is the drug benefit, which will not be available until 2006. Until then, seniors would get drug-discount cards that could net savings of 10 percent to 25 percent off market prices.

Under the full drug benefit, seniors would pay a $250 deductible, a $34 monthly premium and 25 percent of the cost of drugs between $250 and $2,250. Seniors would encounter a gap in coverage after $2250 until their out-of-pocket expenses reaches $3,600 or $5,100 in total drug expenses. At that point, they'd pay only 5 percent of their additional drug costs.

A Gallup poll in January revealed public dissatisfaction with the reforms. Fifty-three percent of those surveyed said the new prescription drug benefit didn't go far enough; 27 percent said it was about right while 9 percent said it went too far. Eleven percent of the poll's respondents had no opinion.

The mushrooming controversy is spurring cries of cover-up from Democrats.

"There is no place for silencing the truth," said Sen. John Kerry of Massachusetts, the Democratic presidential candidate. "I believe the American people deserve real answers on why this administration is keeping public officials quiet and keeping facts from the American people. We deserve better than this."

Sen. Edward Kennedy, D-Mass., echoed the Watergate-era line this week: "What did the president know and when did he know it?"

By week's end, congressional Republicans were rallying behind Bush and the Medicare reforms. They dismissed complaints about the bill's hidden cost estimates, ongoing investigations and controversy over the HHS ads as simply a Democratic scheme to discredit a GOP triumph.

The controversy "says more about the Democratic attack machine than it says about the bill," said John Feehery, spokesman for House Speaker Dennis Hastert, R-Ill.

Independent analysts, including conservatives, weren't so sanguine.

"This bill will not go down in the annals of good government," said Robert E Moffitt, the director of the Center for Health Policy Studies at the Heritage Foundation. "Now it's a political problem."

Rep. Waxman's letters to Bush & OMB re medicare law misi
Reps. Waxman, Rangel, Dingell, Stark, and Sherrod Brown ask the White House and OMB about their involvement in the development and withholding of cost estimates of the Medicare prescription drug bill. 3/20
Letter to the White House and Letter to OMB:

http://www.house.gov/reform/min/inves_admin/admin_medicare_cost_estimates.htm

King George
"Bush is acting like a king, and he has a gentry surrounding him that feels it is superior and empowered to rule over all the rest of us.

Doesn't this bother you at all?

Yes, it bothers a me a lot.

In my view, the only criminal indictements of the Bush Crime Syndicate will be the V. Plame Outing. VP will not be indicted. The perps will not implicate the VP in fear for their lives and their families' lives.

All the other Bush Crime Syndicate Crimes will not be brought to indictement because the Oligarchy will not allow them to be brought forth.

Legislative Riders
How many Legislative Riders are attached to the Medicare Bill? 300-something sticks in my head. I'm a Senator or Representative from Podunksville. We need a porkbarrel road, or bridge, or building to the tune of $22 million. Make it a Legislative Rider and I'll be glad to sign the bill!

[quote]2.rider - a clause that is appended to a legislative bill

clause, article - a separate section of a legal document (as a statute or
contract or will)

bill, measure - a statute in draft before it becomes law; "they held a public hearing on the bill"

legislative act, statute - an act passed by a legislative body

From "The Free Dictionary."

[/quote]

$11 Billion "Porkbarrel"
Considering that the overall Medicare Bill will cost around $515 billion, maybe $11 billion for "legislative riders" (earmarks, porkbarrel, boondoggle, etc.) isn't all that much. Here's Senator McCain on the subject:

[/color]Senator McCain and the $11 Billion "Earmarks"

Big Pharma gets a big payback for supporting Bush and Cheney.

Meanwhile, America's seniors get a slap across the face -- GOP style.

Actuary tells of pressure to keep estimate from Congress
Posted on Thu, Mar. 25, 2004
Actuary tells of pressure to keep estimate from Congress
JESSE J. HOLLAND
Associated Press

WASHINGTON - Medicare actuary Richard Foster was between a rock and a hard place.

If he told Congress the Medicare bill could cost more than $100 billion more than they thought, he could be fired. If he quit and went public, it would make a big splash but nothing likely would change for the next actuary. If he did nothing, Congress would pass a bill without having the best information, but he'd be around to fight another day.

Foster did nothing, and Congress last year passed what some people have called the most sweeping changes in history to Medicare, the government's main health care program for older and disabled Americans.

But Foster now is telling lawmakers that the Bush administration's top Medicare official last year withheld from Congress the legislation's actual estimated cost for political gain.

Since President Bush signed the bill in December, the administration has acknowledged it believes the Medicare law will cost $534 billion over 10 years - more than the $395 billion estimated by congressional budget analysts.

Keeping the bill's cost below $400 billion was considered crucial for winning enough votes of conservative Republicans so it would pass in the House.

Foster said he was forced to give his cost estimate - higher than Congress' estimate - to Thomas Scully, head of the Medicare agency until December. Scully would then decide whether to give the information to Congress, Foster was told.

But Foster said Scully did not pass on some of the information to lawmakers - a move that he suspects was politically motivated.

"I considered that inappropriate and, in fact, unethical," Foster told the House Ways and Means Committee on Wednesday.

Democrats argue that is proof the White House schemed to keep from Congress the actuary's higher estimate to get its bill passed. They've called on the Justice Department to investigate for possible criminal violations.

"Officials at the highest levels of the Bush administration knew that the new Medicare bill was based on a lie," Rep. Lloyd Doggett, D-Texas. "Threatening to fire the top actuary for fulfilling his professional responsibilities, just because they disagree with the facts he reveals, represents only the latest example of an administration that intimidates those who dare to disagree."

Republicans - and Foster himself - said Scully had the authority to stop Foster from giving the information to Democrats.

House Ways and Means Chairman Bill Thomas, R-Calif., said that the Clinton administration also tried to stop Foster from giving Medicare information to Congress back in 1997, and that he told the actuary in "identical telephone conversations in different administrations" that he would stand up for him.

Foster has complained that Scully, now a lobbyist, stopped him from telling lawmakers about his higher estimates of the bill's cost.

The Associated Press, quoting several officials, reported last June that Scully had threatened to fire Foster. Scully had then characterized his remarks as "heated rhetoric in middle of the night."

After a lawyer told him Scully did have the legal right to tell him not to give Congress the information, Foster said he had three choices: give Congress the information and be fired, quit and go public, or follow orders and do nothing.

After discussing it with his staff, he decided to stay. "I would be better off working in the system," said Foster, noting that he now has assurances from Health and Human Services Secretary Tommy Thompson and Scully's successor, Mark McClellan, that he can respond to congressional requests.

A telephone message left for Scully was not immediately returned.

Health and Human Services, which oversees Medicare, recently began an investigation. Democrats also requested a review by the General Accounting Office, the investigative arm of Congress.

Four Democratic senators, in a letter to Attorney General John Ashcroft, said the instructions that Foster says he received could constitute criminal violations.

"These potential violations" by the department, the White House budget office and the White House "are a serious matter that must be investigated," wrote Sens. Debbie Stabenow of Michigan, Frank Lautenberg of New Jersey, Edward Kennedy of Massachusetts and Hillary Clinton of New York.

ON THE NET

Medicare: http://www.medicare.gov

Report: White House wrong on Medicare
SEATTLE POST-INTELLIGENCER
Tuesday, May 4, 2004
Report: White House wrong on Medicare
THE ASSOCIATED PRESS

WASHINGTON -- Bush administration officials were wrong to prevent a budget expert from giving Congress estimates of the cost of Medicare legislation, congressional researchers have concluded.

In a report made public Monday, the nonpartisan Congressional Research Service said efforts to keep Richard Foster, the chief Medicare actuary, from giving Democratic lawmakers his projections of the bill's cost - $100 billion more than the president and other officials were acknowledging - probably violated federal law.

Recent estimates set the bill's cost at more than $500 billion.

Foster testified in March that he was prevented by then-Medicare administrator Thomas Scully from turning over information over to lawmakers. Scully, in a letter to the House Ways and Means Committee, said he had told Foster "that I, as his supervisor, would decide when he would communicate with Congress."

Congressional researchers chided the move. "Such 'gag orders' have been expressly prohibited by federal law since 1912," Jack Maskell, a CRS attorney, wrote in the report.

The report was requested by committee Democrats after majority Republicans refused to subpoena Scully and White House adviser Doug Badger to testify about their roles in keeping cost estimates from lawmakers.

Rep. Bill Thomas, R-Calif., the committee chairman, said he would be willing to issue subpoenas if laws had been broken.

A spokesman for Thomas did not immediately respond to requests for comment.