Snake oil on drug benefit

The AARP has just endorsed the compromise bill to add a prescription drug benefit to Medicare -- and has pledged to spend millions to win its passage. No, the bill isn't perfect, the organization says, but it is a good start on a longtime priority.

One might suppose that message would carry some weight, the AARP being, after all, the principal voice of America's elders.

If so, one wouldn't be versed in the pandering politics of the Democratic primary process.

To hear the presidential candidates gathered to address AARP New Hampshire's members yesterday tell it, the bill is no compromise at all but one of the most malign of schemes ever concocted in the annals of human imagination. The benefits are inadequate, the premiums outrageous, the limited experiment with competition an affront to all that is dear and decent.

To hear five of the six candidates present tell it, that is. Connecticut Senator Joseph Lieberman said he'd prefer to take a day or two to evaluate the newly minted measure. Such a stance passes for courageous iconoclasm in this field.

Actually, one other candidate also sounded a sensible note. That was Howard Dean, the former Vermont governor. Massachusetts Senator John Kerry had just expressed his frustration that this new entitlement was limited to a price tag of $400 billion over 10 years.

Dean demurred. "I do believe that $400 billion is enough," he said. "I don't think we can stand up and say you can have a blank check for anything."

Now, let's be clear. Most of these Democrats can lay claim to being more fiscally responsible than President Bush, for one simple reason: They are willing to repeal some of the administration's tax cuts as they endorse expensive new priorities.

By the same token, the president could at least be called fiscally principled if, having embraced a tax cut program that has helped plunge the US government back into deep deficits, he resisted any new entitlements. He hasn't. As Robert Reischauer, president of the Urban Institute and former director of the Congressional Budget Office, puts in in a classic bit of understatement: "He has shown little appetite for imposing fiscal constraints." Why, when it's far easier to seek reelection by granting both tax cut treats and pleasing new benefits -- and let the Rock the Vote generation worry about the debt load he's placing on the future? (That the Democrats portray this spendthrift president -- who hasn't vetoed a single spending bill while overseeing significant increases -- as an ultraconservative intent on dismantling government merely shows the way ideology distorts evidence.)

Still, the new entitlement will cost at least $400 billion over 10 years, and that cost will mushroom after the baby boomers start to retire in 2011. By contrast, the Democrats' favorite funding nostrum -- repealing the income tax cut for individuals earning more than $150,000 and couples making more than $200,000 -- would raise between $260 billion and $300 billion over 10 years.

And the problem with devoting that sum entirely to a new entitlement is that it does nothing to reduce the annual federal deficits and therefore the ever-increasing load of debt this country must someday reckon with.

"Even if you find a way to raise money for the expansions, you are still in a big hole," says Robert Bixby, executive director of the Concord Coalition.

A better strategy, Bixby says, would be to target an everyday prescription drug benefit to those who truly need it, then add a catastrophic program for seniors hit by extraordinary costs.

But to advocate that kind of fiscally prudent approach would have been to offer less than the AARP wanted. Better -- and safer -- to insist that seniors settle for more.

And yet when political strategists recommend that candidates demonstrate courage and character by publicly disagreeing with powerful interest groups, somehow one suspects that yesterday's panderama isn't quite what they have in mind.

Scot Lehigh's e-mail address is lehigh@globe.com.