• Greenspan Calls for Cuts in Medicare and Social Security
• Rangel, Matsui Press President on Social Security Cuts
• Drug Reimportation Crackdown Continues
• Pfizer Cuts Off Supplies to Canadian Mail-Order Companies
• Bush Names McClellan to Head CMS
• Tauzin Puts PhRMA Job on Hold for Now
• FBI Looking at Bribery Allegations in Medicare Vote
• The Medicare Index—Part II
• Beware Telemarketers Selling Discount Drug Cards
• Retirees on the Delegate Trail
• In Memoriam: Juanita Dunlap Smith
• AFT PLUS Savings on National Hotel Chains
• Quote of Note
• Web site of the Week: http://www.familiesusa.org

GREENSPAN CALLS FOR CUTS IN MEDICARE AND SOCIAL SECURITY
Federal Reserve chair Alan Greenspan has put Social Security back on the front burner as an election issue. In testimony at a House Budget Committee hearing Feb. 25, the administration's chief economic guru urged the federal government to cut programs, including Medicare and Social Security, rather than raising taxes. He also called for raising the eligibility age for Medicare and Social Security and reducing cost-of-living increases in Social Security. "Social Security and Medicare are earned rights paid for by payroll taxes," said George Kourpias, president of the Alliance for Retired Americans. "They did not cause the current financial crisis facing this nation. The Bush tax breaks for the wealthy are the real culprit." He urged Congress to oppose the president's call for making his tax cuts permanent—a move that would add more than $1 trillion to the deficit between 2011 and 2021. Social Security payroll taxes today actually exceed current benefit payments. Largely due to the president's $1.7 trillion tax cut, every penny of today's Social Security surplus goes to other programs, disguising the true size of the deficit, which this year is projected at a record-setting $521 billion.

 
RANGEL, MATSUI PRESS PRESIDENT ON SOCIAL SECURITY CUTS
In other action targeting Social Security, the Bush administration recently released its Economic Report of the President, which outlines two principal goals for "reforming" the program: Cut Social Security benefits and create private accounts. In a Feb. 23 letter to the president, House Ways and Means ranking member Charles Rangel (D-N.Y.), and Ways and Means Social Security subcommittee ranking member Robert Matsui (D-Calif.) argued that the proposed Social Security cuts would not make the program solvent for 75 years or "until everyone now paying into the system is dead." They added that the transition costs of the plan, at their peak, would eat up 24 percent of the country's gross domestic product and add a huge strain to the federal budget at a time when a record-breaking number of American workers are retiring.


DRUG REIMPORTATION CRACKDOWN CONTINUES
The Bush administration is continuing its crackdown on states and localities that seek to reimport lower-cost U.S.-manufactured prescription drugs from Canada. In recent days, the U. S. Food and Drug Administration has labeled a plan by Montgomery County, Md., "undeniably illegal" and sent a letter warning Minnesota Gov. Tim Pawlenty (R) that his state's Web site is "unsafe, unsound and ill-considered." The Centers for Medicare and Medicaid Services has informed Michigan state officials that it is rejecting the state's prescription drug purchasing pool with Vermont because it "violates federal procurement procedures." Meanwhile, the National Conference of State Legislatures reports that as many as 25 states are considering plans to reimport medications from Canada to reduce prescription drug costs.


PFIZER CUTS OFF SUPPLIES TO CANADIAN MAIL-ORDER COMPANIES
In a Feb.12 letter, Pfizer told Winnipeg-based Universal Drug Store and six other Canadian mail-order pharmacies that they could no longer purchase Pfizer products. The drug giant claimed that U. S. purchasers threatened the supply of its products to Canadians. In January, Pfizer sent a letter to Canadian pharmacies warning that it would only authorize sales to those pharmacies that promise not to sell company products to U.S. residents. "The U.S. pharmaceutical industry is threatening the Canadian people," said Andy Troszok, vice president of the Canadian International Pharmacy Association. "If you allow this to continue, it will create shortages in Canada." Minnesota attorney general Mike Hatch (D), who has filed an antitrust lawsuit against GlaxoSmithKline, which has taken similar action, called concerns raised by Pfizer and other pharmaceutical companies over prescription drug shortages in Canada a phony argument made by a "highly arrogant" industry.

 
BUSH NAMES McCLELLAN TO HEAD CMS
President Bush has chosen Mark McClellan as the new administrator of the Centers for Medicare and Medicaid Services (CMS). McClellan, currently commissioner of the U. S. Food and Drug Administration, is the administration's point man in the battle to prevent the reimportation of lower-cost, U.S.-manufactured prescription drugs from Canada. At CMS, McClellan would oversee programs—including the new prescription drug program—providing about $700 billion annually in benefits to an estimated 83 million people. Three key U. S. senators—John McCain (R-Ariz.), Byron Dorgan (D-N.D.) and Debbie Stabenow (D-Mich.)—are threatening to block McClellan's confirmation until he gives a complete explanation of his opposition to Americans' buying cheaper drugs from Canada. 


TAUZIN PUTS PhRMA JOB ON HOLD FOR NOW
Rep. W. J. "Billy" Tauzin (R-La.) who was being courted by the Pharmaceutical Research and Manufacturers of America (PhRMA), the trade association of the drug industry, says he has broken off negotiations to head the group. Tauzin, who as chairman of the powerful House Energy and Commerce Committee helped write and shepherd the Medicare prescription drug bill through the House, is leaving Congress and says he did not wish to do so under an ethical black cloud. PhRMA reportedly offered him a record-setting salary in excess of $2 million. Tauzin has, however, left the door open to take the PhRMA job later if it is not filled until after he leaves Congress.

 
FBI LOOKING AT BRIBERY ALLEGATIONS IN MEDICARE VOTE
FBI agents reportedly are investigating allegations that Rep. Nick Smith (R-Mich.) was offered a $100,000 donation for his son's House campaign in exchange for a yes vote on the Bush Medicare law (HR 1). In December, Smith, who is retiring this year, said that unnamed Republican leaders promised such a contribution. However, he later backed away from that comment, terming suggestions he was bribed "technically incorrect." Smith said that some Republican lawmakers had vowed to oppose his son's campaign if he did not vote for the Medicare legislation, but they did not offer to donate any money to the campaign. Smith ultimately voted against the bill. The House Committee on Standards of Official Conduct has conducted an informal probe into the situation but has so far resisted calls for a formal investigation. 


THE MEDICARE INDEX—PART II

•  Average elderly American's drug costs in 2002: $2,400
• Portion of individual drug costs covered by the new Medicare drug benefit: 45 percent
• Average markup on U.S. drug prices relative to Canadian drug prices: 45 percent
• Retirees with health insurance before Medicare was signed into law: 50 percent
• Retirees with health insurance today: 99 percent
• Compensation package, including stock options, for the chief executive of one Medicare HMO in 2002: $529 million
• Number of elderly Americans dropped by an HMO (1999 to 2003): 2.4 million (31 percent of total)