Sen. Kent Conrad (D-N.D.), who voted in favor of the law, introduced legislation that would cut the number of card choices from 73 to three and would forbid card sponsors from changing discounts or drugs after seniors sign up. Sen. Olympia Snowe (R-Maine), who also voted for the law, introduced a bill that would let Medicare negotiate directly with drug makers for lower prices. Many insiders agree, however, that little or nothing will happen to change the legislation this year because of the election-year climate and the Republican control of Congress.

In a comparison of the 20 medications most commonly prescribed to Medicare beneficiaries, Families USA found that the lowest prices available through the drug cards for 10 of the medications were at least 50 percent higher than prices paid by the Veterans Administration, which negotiates for millions of veterans.

Focus groups conducted by Bill McInturff of Public Opinion Strategies and Geoff Garin of Peter D. Hart Research Associates, Republican and Democratic pollsters, found that seniors are confused and concerned about the drug cards. Worries center on five areas: 1. The discounts are not substantial enough to make drugs affordable. 2. The discounts are not guaranteed. 3. The plan ends after only two years. 4. Fears about investigating and choosing from a large number of cards. 5. The adequacy of a $600 credit for low-income seniors.

The Department of Agriculture reversed its position that accepting a drug card would disqualify some low-income seniors from food stamps if they received the $600 temporary prescription drug card subsidy.

Only about 20 percent of the three million beneficiaries now enrolled in the Medicare prescription drug discount card program chose the program. Some 2.4 million beneficiaries were automatically enrolled because they belonged to a Medicare HMO or lived in one of seven states with senior drug assistance programs, which also have been automatically enrolling beneficiaries.

SOCIAL SECURITY SHORTFALL ONLY HALF AS BAD AS PROJECTED
A new Congressional Budget Office (CBO) analysis several years in the making finds that the long-term shortfall in Social Security financing is 47 percent smaller than the Social Security trustees have projected. The trustees foresee that the Social Security shortfall over the next 75 years will equal 1.89 percent of taxable payroll over the 75-year period. In the study, released June 14, CBO predicts the shortfall as 1.0 percent of taxable payroll. As a result, CBO sees 2052 as the date when the trust fund will no longer be able to pay full benefits, a full 10 years later than the trustees' projection. If CBO is proved right, the required changes to restore financial balance to Social Security will be significantly smaller. The cost over the next 75 years of the tax cuts just for the 1 percent of households with the highest incomes—a group with average incomes of about $1 million per year—exceeds the entire 75-year Social Security shortfall that CBO projects. “We're not out of the woods,” says AFT associate director of federal legislation Bill Cunningham, “but the CBO report provides further evidence that radical solutions like individual private accounts and more tax cuts for the rich are a big part of the problem, not the solution.

More info: www.cbpp.org

DECLINE OF TRADITIONAL PRIVATE PENSIONS LOWERS LIVING STANDARD
The traditional pension, an employee benefit widely available until the early 1980's, has been vanishing from the American workplace ever since. In 1983, more than two-thirds of older households—those headed by people ages 47 to 64—had someone earning a pension. By 2001, fewer than half did. The waning of the pension has, imperceptibly but surely, stripped older workers of an immense store of wealth. Retirement benefits today, particularly the 401(k) account, simply are not worth as much as the older kind of benefits. When the holdings of typical households are tracked, today's near-retirees turn out to be a little poorer, in constant dollars, than the previous generation was when it approached retirement in 1983. In 1985, about 115,000 American companies had traditional pension plans. As of last year, only about 31,000 did. Of those, many companies have frozen benefits, pension specialists say, so that additional years of service no longer build a bigger pension. Others have closed their plans to new employees or reduced their benefits formulas. According to new research by Edward N. Wolff, an economist at New York University, the average net worth of an older household grew 44 percent, adjusted for inflation, between 1983 and 2001, to $673,000. But much of that growth was in the accounts of the richest households. When Wolff looked at the net worth of the median older household—the one at the midpoint of the economic ladder, a better indicator of what is typical—the picture changed. That figure declined by 2.2 percent, or $4,000, during the period, to $199,900. Wolff's findings, based on analysis of 18 years of Federal Reserve financial data, also show that when pensions were more common, they served as a social leveler. Companies that offered them had to use the same pension formula, involving years of service and salary, for all workers in a plan; otherwise, the companies risked losing their tax break. Traditional pension plans were part of a system that reduced the poverty rate among the elderly to just 1 in 10 in 2002, the lowest in half a century. The advent of self-directed retirement plans, by contrast, is giving rise to an elite minority who are well prepared for retirement, and a majority who are falling behind. "The people at the top did better than they ever would have under the old system," Wolff said. "Basically, they made out like bandits."

More info: www.nytimes.com/2004/06/13/business/yourmoney/
13unequal.html

AFT RETIREMENT COMMITTEE ENDORSES THREE RESOLUTIONS
With national retiree membership topping 190,000, the AFT retirement committee flexed its muscles at its May 25-26 meeting in New York City. Members voted overwhelmingly to support three resolutions. The first called for replacing the new Medicare law to eliminate privatization and coverage gaps, strengthen incentives for employers to keep providing coverage, and allow Medicare to negotiate prices and offer a standard national plan. The second and third resolutions would encourage affiliates to include retiree chapter leaders on COPE or legislative committees or their governing boards. A third calls for stepped-up reporting of retirees to the national union. The coming election was also a major focus. Political mobilization director John Ost outlined AFT's ambitious plans for 16 battleground states and told committee members how retirees could become involved in the union's unprecedented political push. He encouraged retiree leaders to download political fliers and information from the AFL-CIO's activist Web site, www.workingfamiliestoolkit.org, which can be adapted to a chapter's needs. On a sadder note, committee chair Walter Dunn announced his retirement as NYSUT's second vice president, effective the end of this month. He also said that he would not be a candidate for re-election as a national vice president at the July AFT convention, bringing to an end his tenure as chair of the AFT retirement committee. Dunn's replacement will be chosen by the AFT executive council at its post-convention meeting in July.

DEMS ATTEMPT TO BLOCK MEDICARE PRIVATIZATION IN THEIR STATES
A Medicare privatization program that would force traditional Medicare to compete with private health plans in six cities is already facing stiff opposition almost six years before it is to begin in 2010. At least 15 Senate Democrats and nine House Democrats who oppose privatization have proposed bills to prevent the pilot project, a mandate of the 2003 Medicare law, from reaching their states. The bills were introduced after word spread that President Bush had negotiated with some Republican lawmakers to prevent the program from landing in their states. A spokesperson for the Department of Health and Human Services, which will select the six cities for the pilot program, claimed he did not know of any such agreements. It is highly unlikely that the Republican-controlled Congress will act on any of the bills before the November election; however, they illustrate the Democrats' determined opposition to Medicare privatization. A spokesperson for Senate minority leader Tom Daschle (D-S.D.) promised the Democrats would return to the issue next year if nothing is accomplished.

N.Y. UNION CONTRACT REWARDS PURCHASE OF CANADIAN DRUGS
Lawmakers in Schenectady County, N.Y., on June 8 voted 14-0 to approve a contract with the Civil Service Employees Association Local 847, which includes a program encouraging union members to purchase lower-cost prescription drugs from a Canadian online pharmacy. The four-year contract, which CSEA approved on May 25, covers about 850 county employees and 100 retirees and is retroactive to Dec. 31, 2002, when the previous contract expired. Under the program, the county will waive co-payments for CSEA members who purchase their prescription drugs through the mail from CanaRx Services. It is estimated that the program will save the county at least $500,000 per year on prescription drug costs, which reached $2 million last year. The contract also includes a cumulative pay raise of 12.6 percent over the four years, and CSEA members who qualify for health insurance will receive a $150 bonus in 2006, the final year of the contract.

JOHN KERRY ON STRENGTHENING THE ECONOMY
The economic policies of the last three years have resulted in the loss of 1.2 million jobs overall and 2.7 million lost manufacturing jobs. For those lucky enough to have jobs, incomes are down while costs for healthcare, college, energy and child care are up. As a result, family debt stands at record levels and record numbers of families are falling into bankruptcy. The U.S. economy is 7 million jobs short of the figure President Bush predicted his policies would create. And the new jobs being created are paying more than $9,000 less than the ones they replaced. Profits are rising, but real wages are stagnant. If wages had grown as they did in the past, each household would be earning $2,600 more than it is today.

To begin to address these issues, presidential candidate John Kerry is proposing:

• An end to tax breaks for companies that move jobs overseas, and tax cuts for corporations that keep jobs in America.
• Healthcare relief by cutting annual insurance premiums by up to $1,000 through a federal government pickup of 75 percent of hospital costs for patients with over $50,000 in medical bills.
• An annual tax credit—not a deduction—on the first $4,000 spent for college tuition. This tax credit would be refundable for low-income households.
  

START YOUR SUMMER WITH A DISCOUNT SUBSCRIPTION
Are you missing out on your favorite magazines? Do you want to save money on subscriptions? AFT PLUS can help you do just that. As an AFT member, you are entitled to magazine discounts through our AFT PLUS Subscription Services program. Save up to 50 percent on your favorite magazines and even on gift subscriptions for your friends and family. Choose from more than 1,000 titles, including Bon Appetit, Business Week, Golf Digest, Good Housekeeping, Newsweek, Prevention and Sports Illustrated. Call 800/877-7238 or visit www.buymags.com/aft to place your order, check a rate or obtain a current listing of all available publications.

QUOTE OF NOTE
Most retirees looking for big savings with the new drug discount cards are likely to be disappointed. Although Medicare promises double-digit savings with the cards, rampant price inflation of brand-name drugs and outsized profit margins on generics cast doubt on the claim. For example, the generic version of Prozac (fluoxetine) costs some pharmacies 4 cents a capsule, or less than $4 for a 90-day supply, yet those with a Walgreens discount card would pay $84. Warehouse discounter Costco's Web site sells 100 capsules of fluoxetine for about $15 without a discount card. In fact, Costco says more than 80 percent of the time, its prices for generics will be lower that those offered through the Medicare discount program.

—St. Petersburg Times

WEB SITE OF THE WEEK: http://seniors-site.com/travel/pets.html
Whether by air or car, this site offers a wealth of information in simple checklists on how to travel with that pet you just don't want to leave behind.

HAVE YOU UPDATED YOUR SUBSCRIPTION YET?
To keep you up-to-the-minute on exciting new benefits and send you just the news you want, the AFT is asking all subscribers to Retiree e-news to complete a short profile listing your interests and a few additional bits of information. It takes just a minute or two. Click on http://www.unionvoice.org/aft_retirement/join.tcl. And remember to send your comments, suggestions and requests to us at RETIREES@aft.org. Thank you.