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February 9, 2005
The Drug Benefit - It was a little bit more than we figured
The following quotation is from a rather obscure story I found on the web.
He smiled back. "I guess now is not a good time to tell you about the docking fee..""The docking fee?"
"Yeah, Lily said it was a little bit more than we figured."
"How much more?" They had used the remainder of Mulder's inheritance along with their combined savings to deposit into an offshore account and had been living off the interest. They weren't starving, but they did need to be frugal.
"Not too bad-- the equivalent of a hundred dollars. I think I calculated the conversion incorrectly. So it'll mean we have to be a little more careful this month."
"Why didn't you tell me?"
He hesitated before answering, then smiled. "Cause I knew you'd kick my ass," he joked.
From The Offspring: Epilogue by Kelli Rocherolle (emphasis added)
It is a rather good analogy to the cost of the New Medicare prescription drug benefit, except that the numbers for the about nine orders of magnitude different. President Bush told us and Congress that the cost of his new program would be would be $400 billion. It turns out that the new cost estimate from the White House is $724 billion. A little bit more than we figured. But this is the White Houses second revised estimate. The first one only increase the amount Congress thought they were approving by $134 billion. It is true that this new estimate covers two additional years in the rolling ten year forecast but those two year average $162 billion each. This is a little bit more than the $40 billion per year average for the initial ten years.
There are four things of interesting about this. First, the White House knew or should have known that the $400 billion was a significant understatement. Second, why wasn't it OK for Medicare to negotiate drug prices? I'm not sure but the good well of the drug companies was not the reason. Third, why is it OK to use a 10 year rolling average for this new drug benefit and the White House insists on using in perpetuity projection for Social Security and not the usual 75 year rolling forecast? The reason is simple: They want to make sure that their side wins even at the cost of the truth. Finally, according to CBS News this evening,
There's no question that there is an unfunded liability inherent in Medicare that Congress and the administration is going to have to deal with over time," Bush told reporters.Well, why is this OK for Medicare and not for Social Security? "Cause I knew you'd kick my ass."
Posted by Duane Smith at February 9, 2005 8:24 PM | Read more on Current Events |
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