PRESTOPUNDIT -- "It's a team sport, baby!"

When it comes to drugs George Bush is all about subsidizing big business and harming the market -- Bruce Bartlett. Quotable:

The worst example of subverting conservatism to aid business is the recently enacted Medicare drug benefit, which the Bush administration rammed through Congress with unprecedented pressure. This legislation will cost trillions of dollars. A key reason for the high cost is that it applies to all elderly, including those who already have drug coverage from their employers or private insurance. It would have cost a fraction as much to aid only those without drug coverage.

The incredibly more expensive option was chosen exclusively to benefit big businesses. The universal option justified the inclusion of large business subsidies in the legislation in order to keep companies from simply dropping their retiree drug coverage and dumping it all on the taxpayer. Some large companies are anticipating hundreds of millions of dollars from the federal government in coming years -- funds that go straight to their bottom lines because it relieves them of a liability they already have.

A Feb. 3 report in The Wall Street Journal notes that Delphi, an auto parts manufacturer, expects to reduce its future retiree health care costs by $500 million as a result of the drug legislation. And it has only 14,000 retirees and dependents to cover. Much bigger companies like General Motors and Lucent Technologies will save vastly more. The former has 440,000 retirees and dependents to cover, and the latter has 240,000.

I predict that when the federal government starts mailing checks for tens of millions of dollars to big corporations to subsidize them for keeping health coverage they have already promised their retirees, the excrement will hit the fan ..

Posted by Greg Ransom | TrackBack