A Tale of Two Letters

President Bush and the Republicans have been busy as beavers lately. Along with their political allies the conservative "Blue Dog" Democrats, and their friends in the business community, they've been working the direct-mail circuit in a big way. And, as we all know, there's nothing that brightens the day like a personal form letter from your president or his minions.

I've gotten mine -- two, in fact. The first arrived in early summer, sent upon White House instruction by the president-select's reluctant subordinates at the IRS. They were pleased to inform me, they said, that my federal tax rebate was on the way! Unfortunately, the letter was not entirely truthful. The new tax law, it boasted, offers "immediate tax relief in 2001." True for me, since I paid federal income taxes last year, but not for about one-quarter of my fellow Americans, who didn't earn enough to pay the income levy but did contribute "big-time," as they like to say in the administration, to the FICA payroll tax.

In addition to an immediate refund, my pen pals went on, the law provides "long-term tax relief for the years to come." Not if you're in the 15 percent bracket, it doesn't. Taxpayers in that category (incomes of $6,000 to $27,000 for individuals and $12,000 to $45,000 for couples) get no bracket reduction comparable to those higher on the income scale. So, long-term tax relief for a substantial segment of Americans is a cruel and cynical hoax.

Even for many who do qualify for structural tax reductions, there is a fly in the ointment. Though the GOP won't admit it, a price will be paid down the line for so-called tax relief. Taxes will be reduced, but so will government services. Despite brave talk about "lockboxes," the diminished surplus produced in large part by the Bush tax cut will almost certainly cause federal officials to dip into the Social Security and Medicare trust funds to pay for other programs and avoid deficit spending.

This is no accident; it's part of a long-range Republican strategy to eliminate government's role as a provider of social insurance. Starve the IRS, and Washington will be forced to drastically curtail or privatize the federal safety net, thereby advancing the conservative ideological belief that, as Treasury Secretary Paul O'Neill puts it, "Able-bodied adults should save enough on a regular basis so that they can provide for their own retirement and for that matter for their health and medical needs." Translation: The former Alcoa chairman, who is worth $60 million, doesn't need Social Security and Medicare, and neither should you.

This brings me to my second GOP-inspired missive, a petition request that arrived a few weeks after the happy-talk letter about tax cuts. It came courtesy of a supposed nonpartisan outfit called Citizens for Better Medicare (CBM), whose message was stark and simple: Medicare is going broke and will not be able to handle the needs of future seniors; it requires radical reform, specifically the reform offered by the "bipartisan" Breaux-Frist plan, named after Sen. John Breaux of Louisiana, a conservative Democrat, and Sen. William Frist of Tennessee, a conservative Republican. Their approach, which is endorsed by the Bush administration, boils down to one word: privatization.

Under Breaux-Frist, Medicare would essentially become a voucher or "premium-support" system in which the elderly would be given the choice of opting out of the current program in favor of purchasing a private medical plan or joining an HMO, a percentage of whose annual premiums (80% in most cases) would be paid by the federal government. The theory (not proven) is that private competition would force down overall health costs; a more likely outcome is the creation of a two-tiered system that would allow the affluent to choose publicly subsidized "Cadillac" plans, while the less affluent make do with bare-bones private plans or traditional fee-for-service Medicare. The latter two options would cost recipients less in up-front premiums, but also provide less in medical services. Seniors would basically get the care they could afford, and since traditional Medicare is likely to absorb the oldest, sickest, and poorest, while private plans cherry-pick the healthier, wealthier seniors, rising costs in the existing government program would exert a downward budgetary pressure leading to fewer benefits and shoddier coverage.

Medicare's overall ability to perform under Breaux-Frist would suffer the further ravages of avaricious private health-care companies -- the Aetnas of the world -- which are not notable for their compassionate capitalism. There's no reason to suppose that "competition" in health care will work any better than it has in the deregulated electricity, telecommunications, or airline industries. HMOs, which already presumably compete in the non-Medicare market, registered their largest premium increases of the past seven years in 2000, with much of the money going to pay swollen CEO salaries that now average $11.7 million a year. These are the very same premiums that would be paid by Uncle Sam under Breaux-Frist, allowing private medical insurers to virtually milk the system.

The backers of Citizens for Better Medicare, the front organization for Breaux-Frist, reveal a lot about the motives behind this harebrained Medicare "reform." The letterhead on my CBM correspondence lists over two-dozen member organizations, about a third of them representing legitimate health concerns. The great majority, however, represent obvious economic and political vested interests, including those with a direct stake in privatization, such as the innocuously named Council for Affordable Health Insurance, an insurance-industry association, and the Healthcare Leadership Council, an alliance of corporate health-care CEOs. The more politically oriented comprise the usual suspects -- standard, anti-government Republican support groups like the National Association of Manufacturers and the US Chamber of Commerce -- but go far beyond that into the realm of the ideologically bizarre.

Among the most zealous supporters of CBM are some of the country's most hard-core rightist organizations. They all share a common perspective on the health-care system: It should be market-driven and free of government involvement or oversight. They include America's Future Foundation, dedicated to proselytizing the younger generation with the aim of making it "the most conservative in history;" The Seniors Coalition, which earned its spurs on behalf of the upscale elderly in the successful 1989 repeal of catastrophic health coverage under Medicare; Third Millennium, the Hitler Youth of political lobbying, which views traditional Medicare as a form of generational warfare; and the 60 Plus Association, formed to counter the AARP and push a "less government, less taxes" approach to seniors' issues.

There are some cautionary lessons here. The first: Beware of Republicans bearing gifts; the second: Beware of conservatives claiming to be reformers. America has successfully laid the groundwork for comprehensive national health insurance with a partial single-payer system (Medicare) that has worked wonders for two generations. It has problems, but it's not in crisis; it should be preserved and expanded, not torn down by those who opposed it from the start. That includes this summer's Beltway letter writers.

Wayne O'Leary is a writer in Orono, Maine.

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