Do You Want Increased Defense Spending or Medicare Prescription Drug Coverage?

(8/14/99)- We all know that amongst other things life involves compromise and choices. We believe that in order to have prescription drug coverage under Medicare we must have compromises within the budgetary process. As we see it this, compromise must come from the money allocated for defense spending.

The Balanced Budget Act of 1997 has meant that there has been a cut of anywhere from 10 to 20% in spending in most areas to stay within the caps that are set by the Act. Thus there is literally no room for compromise in these areas. This has meant that the Congress has had to use subterfuges such as using the term "emergency spending" in order to be able to allocate money for certain purposes. This however will create several problems down the road.

Looking at the House's version of the Defense Department's appropriation about $266 billion will be spent on military appropriations. This is an increase of about $15.5 billion over 1998's appropriation. Incidentally this is an amount that is slightly over half the total amount available to be spent by Congress to finance all Federal agencies. It is about $2.8 billion more than the White House and the Pentagon requested.

The following will give you some idea as to where some of the allocation for the military spending will go:

When President Clinton announced his Medicare prescription drug coverage plan of June 29, 1999 he estimated the cost at $118 billion over a 10-year period of time. The Congressional Budget Office examined his figures and came to the conclusion that it would cost $168 billion over this period of time. The CBO came to their conclusion based on 4 reasons:

  1. The CBO assumed a faster rate in growth for prescription drug expenditures for the elderly.
  2. The Administration had overlooked the cost of prescription drug spending for the elderly in nursing homes in their estimate.
  3. There will be a sharp increase in the number of people applying to the Federal government for assistance in paying their premiums.
  4. Because of restrictions under the plan the "drug benefits managers" could not effectuate the same saving as they can save for private employers and HMO's.

We have stated in some of our other articles that we do favor prescription drug coverage for the elderly under Medicare. It is obvious that the Congress and the President will have to make compromises before this will become a reality. If we can eliminate the $15.5 billion increase in defense spending for next year, and keep defense spending increases at the same level as the rate of inflation for the following years, we will have a large chunk of the money needed for the prescription drug coverage plan. We encourage you to let your Congress-people and the President know what your feelings are on this matter. To see how to get the e-mail addresses of all Senators and House members and the e-mail address of President Bill Clinton and Vice-President Al Gore see our article Helpful Web Sites.


Allan Rubin
August 14, 1999

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