• AFT Council Rejects Social Security Privatization
• AFT Plans Legislative Activist Network
• Bush Budget Slashes Domestic Programs, Hides Real Deficit
• Privatization Tax Would Eat Up Most Social Security Benefits
• New Poll Says Young Reject Private Accounts Tied to
  Reduced Social Security Benefits
• Medicare Drug Price Tag Skyrockets To $724 Billion
• Senators Want To Allow Medicare To Bargain For Rx Drugs
• AP Poll Shows Drop in Bush's Job Approval
• Governors Ask To Meet Canadian Prime Minister on Rx Drugs
• Large Employers To Monitor Medco PBM
• Wal-Mart Rejects Bargaining, Closes Canadian Store
• Is It A Stroke?
• Union Plus Offers Online Tax Prep Service
• Quote of Note
  Web Site of the Week: www.seniordiscounts.com

AFT COUNCIL REJECTS SOCIAL SECURITY PRIVATIZATION
The Bush administration's proposals to make significant changes to the nation's Social Security system, including privatization, will do nothing to enhance the program's solvency and will simply add to the already runaway federal deficit, says the AFT. In a statement approved by the union's executive council at its Jan. 31-Feb. 2 meeting in Orlando., Fla., the AFT warned that the financial strain of creating private retirement accounts will impose "serious and long-lasting perils to the stability of this tremendously successful program." Although President Bush has not unveiled a detailed proposal, a central piece of the administration's discussion about reforming Social Security is to allow workers under age 55 to divert a portion of payroll taxes to individual private retirement accounts. This diversion of payroll taxes could result in a $2 trillion increase to the federal debt in the first decade alone, say Social Security Administration analysts. In fact, to restore solvency to a privatized Social Security program, says the AFT, younger workers' benefits would have to be cut by 26 percent to 45 percent--"a prospect that is totally unacceptable." While modest steps should be taken to maintain the integrity of the program, Social Security is "not headed for disaster." Also see The Basic Facts about Social Security Privatization and its Impact prepared by the Economic Policy Institute.

AFT PLANS LEGISLATIVE ACTIVIST NETWORK
AFT executive council members have approved a plan to create a member activist network in congressional districts across the country that will boost the union’s political involvement and move our legislative agenda. At the council's meeting in Orlando, AFT political and legislative mobilization director John Ost said the initiative will strengthen relationships between locals and their members of Congress. By talking with elected officials and holding them accountable over the long term, network members will improve our grass-roots lobbying, he said. State and local presidents will be asked to identify activists who will meet with their members of Congress at least twice a year to discuss one or two unionwide priorities. The AFT will provide tool kits for these local meetings that include issue information and talking points. This will be coupled with an online reporting mechanism to keep the national office informed. The network is intended to harness some of the tremendous energy AFT members generated during the 2004 presidential campaign and will link members to the national agenda in a more systematic way, says AFT president Edward J. McElroy: "Over a fairly short period, we can make real connections and inroads."

BUSH BUDGET SLASHES DOMESTIC PROGRAMS, HIDES REAL DEFICIT
President Bush's proposed budget, which includes broad cuts in domestic spending programs while calling for new tax cuts, "flies in the face of his re-election campaign that stressed family values and compassion," says AFT president Edward J. McElroy. The fiscal year 2006 budget, released Feb. 7, includes limits on food stamp eligibility; an end to a program that provides housing, education and employment services to the poor; energy assistance to help people pay their heating bills; and measures that reduce Medicaid payments to states. The budget "turns its back on children, the elderly and the most vulnerable, while shifting the burden of assisting them to cash-strapped states," says McElroy in a statement. "His budget also irresponsibly masks the tremendous hidden costs of the administration's misguided scheme to privatize Social Security." Missing from the Bush budget were the initial cost of privatizing Social Security, estimated to cost $4.9 trillion over 20 years, and costs for the wars in Iraq and Afghanistan, which are now running about $5 billion a month. Had the president included the full cost of his tax cuts, the wars and Social Security, deficits over the next decade would total more than $4 trillion, a more than 50 percent increase in the national debt. 

PRIVATIZATION TAX WOULD EAT UP MOST SOCIAL SECURITY BENEFITS
In his State of the Union address, President Bush outlined some of the details of the private accounts he is proposing, but failed to mention a critical fact about those accounts—individuals who chose to have a private account also would get a large, automatic reduction in their Social Security benefit at retirement. A senior White House official said in a background briefing on Feb. 2 that individuals would give up guaranteed benefits from the traditional system in exchange for private accounts. He said that a retiree would come out ahead if the personal account exceeded a 3 percent real rate of return after discounting inflation. This is the rate of return that Social Security trust fund bonds receive. According to the Congressional Budget Office, private accounts would be, in fact, expected to produce a risk-adjusted rate of return of 3 percent above the inflation rate. Therefore, the automatic reduction of Social Security benefits would equal the entire income earned by the private accounts. In effect, the automatic benefit reduction would constitute a 100 percent tax on the retirement savings in those accounts. This “privatization tax” would cost many workers all or most of their private account benefit, subjecting them at the same time to needless risk. If a worker earned the real average rate of return assumed by the Bush administration (4.6 percent above inflation on a mixed stock-bond portfolio), the privatization tax would recapture an amount equal to 70 percent of the entire account, according to CBO.

NEW POLL SAYS YOUNG REJECT PRIVATE ACCOUNTS TIED TO REDUCED SOCIAL SECURITY BENEFITS
A new poll shows young voters may not be the political base that some politicians expect for phasing out Social Security in favor of private investments. Released Feb. 3 by Rock the Vote, a nonpartisan, nonprofit advocacy group for young people, AARP, and the Joint Center for Political and Economic Studies, a civil rights organization, the poll finds that nearly 60 percent of 18- to 39-year-olds oppose private accounts if they would mean a lower guaranteed benefit in retirement. The survey of 1,000 adults, conducted by Roper Public Affairs, reaches similar conclusions as previous polls: Many young people doubt they will receive Social Security and are receptive, at first blush, to the idea of investing their own Social Security money. But when they consider the price of creating private accounts, young people, like most Americans, no longer support them. Other findings of the poll among 18- to 39-year-olds include:

• 63 percent would oppose private accounts if it meant “massive new federal debt in order to pay current benefits.”
• 65 percent would oppose private accounts if it meant that changes in the way Social Security benefits were calculated would result in cuts in guaranteed benefits for everyone, not just people who chose to participate in a private accounts program. Under President Bush’s plan, benefit cuts would be mandatory for everyone, regardless of whether they chose to invest. For young people who decided to stick with a guaranteed benefit, cuts would approach 50 percent.

MEDICARE DRUG PRICE TAG SKYROCKETS TO $724 BILLION
Medicare's drug benefit is now projected to cost $724 billion from 2006 to 2016, a massive increase from the $400 billion limit President Bush vowed in his 2003 State of the Union address. This is not the first time lawmakers have been stunned by Medicare estimates. After the Bush administration and the Republican leadership rammed the Medicare bill through Congress, the White House announced the original $400 billion estimate was actually closer to $534 billion. "The irony is that $700 billion buys an extremely stingy drug benefit," says Ed Coyle, executive director of the Alliance for Retired Americans. "Seniors struggling with their prescription drug costs are not the ones being helped. This law translates into billions of dollars in giveaways to drug companies, HMOs and corporate interests." Lawmakers from both parties are calling for changes to the Medicare law in light of the new estimates.

SENATORS WANT TO ALLOW MEDICARE TO BARGAIN FOR Rx DRUGS
A bipartisan group of senators introduced legislation Feb. 8 that would allow Medicare to use its tremendous purchasing power to get lower drug prices, a provision strictly prohibited by the 2003 Medicare law. The bill would empower the secretary of health and human services to bargain directly with drug companies on behalf of Medicare’s 40 million beneficiaries. Sens. Russell Feingold (D-Wis.), Dianne Feinstein (D-Calif.), John McCain (R-Ariz.), Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.) are sponsors of the bill. To further aid consumers, the legislation would have the Government Accountability Office review retail drug prices and report them to Congress. This information would then be released to consumers to help them compare drug prices in their region. The White House and the congressional Republican leadership both oppose the legislation.

AP POLL SHOWS DROP IN BUSH'S JOB APPROVAL
The public's confidence in President Bush's job performance and the nation's direction has slipped in the opening weeks of his second term, particularly among people ages 50 and older, according to an Associated Press poll released Feb. 11. Adults were evenly divided on Bush's job performance in January, but now 54 percent disapprove and 45 percent approve. The number of people who think the country is headed down the wrong track increased from 51 percent to 58 percent in the past month. Older Americans, especially those ages 65 and above, were most responsible for the declining confidence and approval numbers. Middle-aged people between 30 and 50 were about evenly split on Bush's job performance. "It looks like people are reacting to the State of the Union and plans to change Social Security," said Charles Franklin, a political scientist from the University of Wisconsin-Madison.
More info: www.usatoday.com/news/washington/2005-02-11-bush-poll_x.htm.

GOVERNORS ASK TO MEET CANADIAN PRIME MINISTER ON Rx DRUGS
A bipartisan group of governors from six states requested a meeting with Canadian prime minister Paul Martin to discuss the reimportation of lower-cost prescription drugs from Canada, amid mounting speculation that the Canadian government is set to clamp down on the practice. Canadian health officials have purportedly begun to draft a proposal seeking to limit reimportation because of safety, ethical and medication supply concerns. In a Jan. 19 letter, spearheaded by Minnesota Gov. Tim Pawlenty (R), Govs. Kathleen Sebelius (D-Kan.), John Baldacci (D-Maine), John Hoeven (R-N.D.), Jon Huntsman (R-Utah) and Jim Doyle (D-Wis.) wrote, "We believe it is imperative that the Canadian government realize the restriction of prescription drug supplies could mean the difference between life and death for many Americans." Baldacci spokesperson Trish Riley said the governors would like Canada to establish a formalized bulk purchasing program.

LARGE EMPLOYERS TO MONITOR MEDCO PBM
On Feb. 3, 30 large private employers on announced that they had formed a group called the Rx Collaborative to monitor the practices of pharmacy benefit manager (PBM) Medco Health Solutions and work to reduce their prescription drug spending. PBMs, which work with drug companies to obtain discounts on medications, control 75 percent of drug purchases by employers' health plans and insurers. Many employers have difficulty figuring out where the rebates PBMs receive from drug makers go. In April 2004, Medco agreed in a settlement with 20 state attorneys general and the Department of Justice to inform companies about the payments it receives from drug makers to convince physicians to prescribe certain medications. Through the Rx Collaborative, companies such as Eastman Chemical, Mattel, Unocal and ING Americas will use an independent auditing firm to monitor Medco's revenues, as well as rarely disclosed information like payments made by drug makers for information on product purchases by doctors and consumers. The alliance is expected to save participants at least $50 million during the first year.

WAL-MART REJECTS BARGAINING, CLOSES CANADIAN STORE
Wal-Mart, the world's largest retailer, is planning to lay off nearly 200 employees rather than accept a union contract. The corporate giant announced Feb. 9 it will shut down the Canadian store where workers had formed a union six months earlier. Workers at the Jonquiere, Quebec, facility had been negotiating with Wal-Mart for several months. The company pulled the plug when workers appealed to the Quebec Labor Ministry to start a process to establish a wage and benefit settlement. The AFL-CIO is asking union members, their families and friends to sign a petition demanding that Wal-Mart CEO Lee Scott reverse plans to close the store and negotiate in good faith with Wal-Mart workers. To sign, please click the following link www.unionvoice.org/campaign/walmart_accountable

IS IT A STROKE?
Sometimes symptoms of a stroke are difficult to identify. Unfortunately, the lack of awareness can spell disaster. The stroke victim may suffer brain damage when people nearby fail to recognize the symptoms. Now doctors say a bystander can recognize a stroke by asking three simple questions:

• Ask the individual to smile. 
• Ask him or her to raise both arms. 
• Ask the person to speak a simple sentence.

If he or she has trouble with any of these tasks, call 911 immediately and describe the symptoms to the dispatcher. After discovering that a group of nonmedical volunteers could identify facial weakness, arm weakness and speech problems, researchers urged the public to learn the three questions. They presented their conclusions at the American Stroke Association's annual meeting last year.

UNION PLUS OFFERS ONLINE TAX PREP SERVICE
It’s that time again: tax time. This year, the AFL-CIO’s Union Plus is offering an online tax preparation service and e-filing tool to help you prepare and file your federal and state taxes at half the cost of commercial preparers. E-filing means a quicker return without high cost rapid-refund service fees. This tax tool calculates your taxes, saves information if you start and complete your tax filing at different times, saves year-to-year information and has a built-in customer service component. The cost of the online tax service, which covers both federal and state tax, is $21.95--half the cost of similar services from H&R Block and Quicken. You are not charged until you either file or print your return. However, if your adjusted gross income is $28,500 or less, you can use the Union Plus Tax Service at no cost. The service is provided through CCH Inc., the leading provider of tax and business law information and software for tax preparation professionals. CCH offers help every step of the way. If you have a question not covered by the online help, you can either e-mail the company and receive a response within 24 hours or chat directly online with a CCH customer service representative for $4.95 per session. Go to www.unionplus.org/taxes/ for more information and access to the online tax service.

QUOTE OF NOTE
“The president touts this budget as lean, and necessary to bring deficits under control. But the president’s new tax cuts—$1.6 trillion over 10 years, going overwhelmingly to the wealthiest Americans—and his continuing wars insure that the debt and deficits will continue to rise. The next generation will be stuck with the bill.”

Robert Borosage
Co-Director
Campaign for America’s Future

WEB SITE OF THE WEEK:
www.seniordiscounts.com/
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