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Incest breeds mutants: the Medicare Prescription Drug Benefit, close up

April 7, 2007

Government incest is not just for Pentagon staffers and defense contractors. Sunday night’s 60 Minutes—in a segment called “Under the Influence,” about the unparalleled lobbying power of Big Pharma—made this all too clear.

The story focused on 2003′s Medicare Prescription Drug Benefit, and all the wrangling it took to push the bill through Congress. Besides shedding light on the arm-twisting, brow-beating and shady deals the bills’ Republican sponsors used to grab votes, what the story really highlighted was the devastating effects of the incestuous relationship between our federal government and big business.

The relationship itself is not exactly news. That congressmen and other public officials often land important, high-paying jobs in industries for which they previously crafted important legislation is well known. But the extent of the relationship—and its effects on our democracy—has not fully been made clear.

Historically, the most conspicuous example of this relationship has been in the defense industry. Former Pentagon analyst Chuck Spinney has been screaming about the “revolving door” between Pentagon staffers and defense contractors since the 1980s. Spinney has gone as far as to say the relationship, which he says became exceptionally inbred with Reagan’s skyrocketing military budgets, has turned the Pentagon into a “moral sewer” where the lack of accountability undermines the constitution and “corrupts the national ethos.”

Here’s an example (that turned out to have some relatively significant consequences). When Dick Cheney was secretary of defense under Bush The Wiser, he commissioned Kellogg Brown and Root to study whether many of the ancillary functions of war could be outsourced to private companies. What did KBR find? Surprise, surprise. They came back to Cheney and said: “Sure, a lot of that stuff can be outsourced. In fact, we can do it!” KBR’s parent company, of course, is Halliburton, which Dick Cheney ended up running from 1995 to 2000, and which has benefited from our present war—which Cheney advocated, planned, bullied intelligence officials into providing shaky intelligence for and repeatedly lied to the American people and Congress about—like few companies or people on the planet.

Back to 60 Minutes and the Medicare Prescription Drug Benefit. It turns out that not only was the bill written by the pharmaceutical industry, but a startling 15 congressional staffers, congressmen and federal officials involved in shaping it went on to land jobs with Big Pharma. Billy Tauzin, for example, the former Republican rep. from Louisiana who played a key role in jamming the bill through the House, went on to become the industry’s chief Washington lobbyist as the president of PhRMA—with a $2 million salary, to boot.

Why is that such a bad thing? Well, take a look at the bill; see what Bill and his ilk helped create. It’s a thinly disguised handout to the industry, because it forbids the government from negotiating prices—which means drug companies can charge whatever the hell they want. Since that little provision helps no one—NO ONE—other than the industry and the money-grubbing bureaucrats who got jobs because of it, it means that our public servants are serving themselves, not us.

And check this out. As originally projected, the cost of the benefit was $395 billion over 10 years. But Medicare’s Chief Actuary Richard Foster revised this estimate to $534 billion. Though he made the revision before the vote, congressmen were never informed of the (eh hem) minor adjustment because Tom Scully, the head of Medicare, told Walker that if he disclosed the new number he would lose his job. Now why would Scully withhold such crucial information from Congress? Because the bill wouldn’t have passed. And Scully certainly had a stake in the bill’s passage: Just ten days after Bush signed the bill into law, Scully took a job as a pharmaceutical industry lobbyist.

So let’s put all this into perspective. The nation’s chief accountability officer and the head of the U.S. General Accounting Office, Comptroller General David Walker, has called the Medicare Prescription Drug Benefit “the most fiscally irresponsible piece of legislation since the 1960s” (he made this statement on a different episode of 60 Minutes) because of how much it will inflate our national deficit. And the deficit itself Walker called the single biggest threat to our country right now—that’s right, bigger than terrorism—because of the havoc it could wreak on our economy in the long run, and because no politician wants to touch it.

If Walker’s assessment is correct, then these incestuous relationships between big business and our elected officials are literally destroying our country. And what is our fearless leader doing to protect us? (Besides spending trillions of dollars we don’t have creating more terrorists, I mean.) After the Democratic House voted in January to make it mandatory for Medicare to negotiate lower drug prices, Bush The Hapless said if the bill ever reached his desk he’d veto it.

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