Friday, March 19, 2004, Knight-Ridder
by William Douglas
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.”