Medicare drug benefit codifies the right to plunder

There are two possible explanations for the Medicare drug law, which we now learn will cost $1.2 trillion over its first 10 years. One is that the president and Congress had no idea what they were doing. That's the charitable take. The other is that it was premeditated taxpayer rape.

Since the law passed in 2003, most signs point to a planned looting of the public on behalf of corporate interests. We can't be entirely sure that President Bush fully understood the bill's perversities. Chances are he didn't bother with the details — and, in any case, didn't much care, since the government borrows the money anyway, and the giant chickens won't come home to roost until he's out of office. More active minds in his administration and Congress, however, were definitely in on it.

To understand the enormity of the crime, note that $1.2 trillion is three times the $400 billion the president declared the benefit would cost when Congress voted on it. That comes to approximately $4,050 for every man, woman and child in America.

Whatever role the president played in designing this monstrosity, its survival depended on Bush's talent for selling an especially twisted idea of privatization. In his world, privatization means simply shoveling taxpayer money into private coffers, with few questions asked. That helps explain why billions by the fistful are disappearing into Katrina-relief scams, Homeland Security rip-offs and the nonexistent rebuilding of Iraq.

But nothing compares with the Medicare drug benefit for systematic violation of the public trust. Here, the right to plunder is enshrined in law.

For starters, the Medicare drug law forbids the federal government to negotiate prices with drug companies. Would someone please remind us why Washington can't discuss the prices that will be charged to taxpayers? Ooooh, that would be price fixing, warned the bill's "conservative" boosters.

Funny, but no one demanded that the Department of Veterans Affairs stop negotiating drug prices, which it has been doing for years. And, of course, every other industrialized nation holds parleys on what may be charged, and the pharmaceutical companies dutifully trot to the table.

The spiel was that seniors would choose among private insurance plans, which would bargain for the good prices. Of course, the insurers don't have nearly the government's clout, as the lawmakers and their corporate puppet-masters knew full well. For the top 20 drugs prescribed to older Americans, not one private plan offers a better price than the VA, according to a study by Families USA, a health-care advocacy group. Ten of the drugs were at least 46 percent more expensive in the private plans.

The Medicare drug law bestowed another gorgeous bonanza on the pharmaceutical makers: It forced the 6.4 million poor and elderly then getting drugs through Medicaid to shift into the Medicare program. Medicaid paid up to 30 percent less for drugs than do the private Medicare insurers. Wall Street analysts say this provision alone is worth a cool $2 billion to the drug companies.

The industry has clearly mastered the art of buying Washington. Shortly after the drug benefit passed, its trade group rewarded Billy Tauzin, R-La. — who had pushed the drug benefit through the House of Representatives — with an estimated $2-million-a-year job.

By then, Bush's Medicare administrator, Thomas Scully, had already slipped out of government "service" to work as a lobbyist for drug companies. Scully had famously threatened to fire Medicare's chief actuary if he released his (higher) estimate of the program's costs before Congress approved it.

In a similar vein, Department of Homeland Security bureaucrats routinely negotiate for big-money jobs with the very companies they are handing fat government contracts. (See? Negotiating isn't always a dirty word in the Bush administration.) Two-thirds of the top Homeland Security officers from its early years have already departed for the private sector.

As an appalling piece of legislation, the Medicare drug benefit is a legend in the making. Thank goodness the Bush privatizing team never got its hands on Social Security.

Providence Journal columnist Froma Harrop's column appears regularly on editorial pages of The Times. Her e-mail address is fharrop@projo.com