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A Drug Deal Gone Sour

March 18, 2004

What's a $150-billion difference among friends?

When legislators were debating whether to add prescription drug coverage to Medicare last fall, Bush administration officials lobbying for the benefit insisted that it would cost no more than $400 billion over a decade. That was already too much because Washington had no plausible way to cover those costs. Now it appears that the administration kept from Congress a document prepared months earlier that estimated that the benefit would cost at least $151 billion more.

According to Richard S. Foster, Medicare's top financial analyst, then-Medicare Administrator Tom Scully threatened in June to fire him if he shared true cost estimates with lawmakers.

On Tuesday, Health and Human Services Secretary Tommy G. Thompson tried to contain the disinformation fiasco by ordering an internal investigation into Foster's allegations. Thompson also distanced himself from his former deputy, who is now (surprise!) a lobbyist paid handsomely to help healthcare companies cash in on the benefit he designed. "Tom Scully was running this," Thompson told reporters who asked why he didn't know about the conflicting cost estimates. "Tom Scully was making those decisions."

Because he is no longer in the administration's employ, Scully is a convenient fall guy. But the administration itself has some explaining to do. First, there's the question of what it will really cost to subsidize prescription drugs for the elderly; next, there's the deception of a White House media campaign being used to sell it.

On Monday, the nonpartisan research arm of Congress, the General Accounting Office, acceded to a request from Democratic lawmakers to probe whether TV "news releases" produced by Thompson's department violated the 1952 Labor Federal Security Appropriation Act, which forbids government agencies to use taxpayer dollars for "publicity or propaganda" purposes.

In the "news releases," a consultant hired by the administration poses as a journalist who "reports" that "the new law, say officials, simply offers people with Medicare ways to make their health coverage more affordable." The report, which dozens of television stations shamefully have aired on their local news broadcasts, never indicates that the reporter is a publicist, and the segment neglects to say that it was produced by the government. This is an unfortunately time-tested political trick -- employed, for example, by the Johnson administration during the Vietnam War to propagandize in favor of the war -- that could not be justified decades ago and cannot be justified now.

Congress shouldn't wait for the GAO report to recommend that Thompson recall the ads. The new $400-billion -- er, $551-billion, or whatever-billion -- Medicare drug benefit is complex enough on its own 700-page-long terms. Far from explaining it, the administration's campaigns have made the benefit all the more perplexing to the very seniors supposedly being comforted.

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