• Partisan Debate Dominates House Hearings on
  Social Security
• Budget Borrows Another $150 Billion of Social Security Surplus
• Dark Skies ahead for United Pensioners
• New Report Finds Medicaid Asset Transfers
  Have Little Impact
• Drug Companies' Rx Assistance Programs Faulty
• Texas Has Highest Rate of Uninsured in Nation
• Support Grows for More Regulation of
  Prescription Drug Prices
• New Jersey Activists Take on Trenton at May 16 Rally
  Former AFT Legislative Director Charlotte Fraas
  Dies at 59
• New AFT PLUS Discount Program Saves on Movie Rentals, Theatre, Museums and Sporting Events
• Quote of Note: Pensions under Attack
• Web Site of the Week:
  http://www.elderhostel.org 
  

PARTISAN DEBATE DOMINATES HOUSE HEARINGS ON
SOCIAL SECURITY
The gaping divide between Republican and Democratic proposals for Social Security was on display when the House Ways and Means Committee held its hearing on May 12. Although they do not need Democratic votes to get a bill through their chamber, House Republicans were clearly frustrated with Democratic opposition to privatization because they would prefer a few Democratic votes to provide political cover in the 2006 elections. Democrats insist they will not negotiate Social Security's solvency until private accounts, which would require massive government borrowing and weaken Social Security's solvency, are taken off the table. Ways and Means Chair Bill Thomas (R-Calif.) is pushing to have legislation completed by the summer. He said he wants a broad package of changes that deal with retirement security in general. President Bush has made Social Security his top domestic priority, despite polls that continue to show a majority of voters disapprove of his handling of the issue as well as his proposals for private accounts and steep benefit cuts to the middle class.

BUDGET BORROWS ANOTHER $150 BILLION OF SOCIAL SECURITY SURPLUS
Tucked away in the fine print of the budget resolution recently passed by Congress, Social Security's $150 billion annual surplus was transferred, yet again, to overall government operating expenses. Social Security's Trust Fund has accumulated a $1.7 trillion surplus thanks to legislation passed in 1983 that built reserves to anticipate retiring baby boomers. Since taking office in 2001, the Bush administration has borrowed almost $700 billion from the Trust Fund while enacting massive tax cuts that have cost the government more than $800 billion. In fact, the cost of tax cuts for the top 1 percent of Americans would cover Social Security's future shortfall. This year's budget resolution includes, at President Bush's request, an additional $106 billion in tax cuts that overwhelmingly benefit the wealthiest Americans.

DARK SKIES AHEAD FOR UNITED PENSIONERS
In the largest pension default in American history, United Airlines won approval last week to terminate four employee pension plans underfunded by $9.8 billion. Under the ruling, the Pension Benefit Guaranty Corporation (PBGC) will assume responsibility for the plans covering 134,000 retirees and dependants. The PBGC will take on $6.6 billion of United's pension obligations meaning retired workers will see vastly reduced pension checks, with the top pension now reduced to $46,000. Many analysts predict the ruling will trigger a domino effect on pension plans nationwide, particularly in the airline industry, as other legacy carriers seek bankruptcy protection to slash their pension costs, putting further pressure on the PBGC, which already faces a $23.3 billion gap between its assets and liabilities. United is seeking to further cut costs by rewriting two union contracts - the International Association of Machinists and Aerospace Workers and the American Mechanics Fraternal Association.  The unions, along with the Association of Flight Attendants, are threatening to strike.

NEW REPORT FINDS MEDICAID ASSET TRANSFERS
HAVE LITTLE IMPACT
Although some critics say that Medicaid covers nursing home care for many people who transfer their assets to qualify for the program, there is little evidence to support that claim, according to a report by Ellen O'Brien, associate professor at the Georgetown University Health Policy Institute. The new report, "Medicaid's Coverage of Nursing Home Costs: Asset Shelter for the Wealthy or Essential Safety Net?" notes that there is no evidence that the elderly are transferring assets or trusts to significantly shift cost burdens to Medicaid or that people who do transfer assets are able to achieve Medicaid eligibility. According to the study, seniors who expect to use nursing home care save more than seniors who do not expect to need nursing home care services.

More info: http://www.ltc.georgetown.edu/pdfs
/nursinghomecosts.pdf  

DRUG COMPANIES' Rx ASSISTANCE PROGRAMS FAULTY
Drug manufacturers -- under mounting pressure to reduce medication prices -- are increasingly touting their donations of medicine for low-income and sick people. Programs vary by company, but most require that an individual recipient’s income be no more than about $17,000 a year (twice the official poverty level). Participants must also lack prescription drug insurance and access to government programs. Although drug makers aggressively advertise their medications for the retail market, until recently, many companies have been relatively modest about their donation programs, according to a May 9 report in the Los Angeles Times. Although the drug industry says it is stepping up outreach on these programs, some patient advocates and low-income U.S. residents have said that eligibility rules are becoming stricter and that some companies cancel or suspend their programs without notice.

TEXAS HAS HIGHEST RATE OF UNINSURED IN NATION
Minnesota has the lowest rate of uninsured adult residents and Texas has the highest rate, according to a Robert Wood Johnson Foundation study released April 27. According to the report, based on 2003 data from the Centers for Disease Control, the states with the lowest rates of uninsured adults include Minnesota at 8.3 percent; Hawaii at 9.8 percent; and Delaware at 10.2 percent. The states with the highest rates of uninsured adults include Texas at 30.7 percent; Louisiana at 26.4 percent; and New Mexico at 26 percent. In addition, the study found that many uninsured state residents had jobs. The states with the lowest rates of uninsured adults with jobs were Minnesota at 6.9 percent and Hawaii at 8.5 percent. The states with the highest rates of uninsured adults with jobs were Texas at 26.6 percent, Louisiana at 22.6 percent; and New Mexico at 22.6 percent. Nationwide, about 35 percent of Latino adults with jobs are uninsured, compared with almost 19 percent of African-American adults with jobs and 12 percent of whites with jobs.

SUPPORT GROWS FOR MORE REGULATION OF
PRESCRIPTION DRUG PRICES
Sixty-five percent of U.S. residents support more federal regulation of prescription drug prices, and 51 percent support additional regulations on prescription drug advertisements, according to a Kaiser Family Foundation survey released in late February. The survey of 1,200 adults nationwide found that 74 percent of adults attribute the increase in prescription drug costs to profits by pharmaceutical companies and cost of marketing and advertising, compared to 22 percent who say it is mostly because of the cost of research. Forty-six percent of adults support more federal regulation of prescription drug prices, even if they heard investment in research and development of new medications would decrease. Forty-four percent of people had a favorable opinion of pharmaceutical companies, including 14 percent with a very favorable view, compared with 50 percent who had an unfavorable opinion.

NEW JERSEY ACTIVISTS TAKE ON TRENTON AT
MAY 16 RALLY
Working and retired activists from AFT affiliates in New Jersey joined forces May 16 at a huge rally at the State House to protest proposed cuts in their retiree healthcare and pension coverage. The rally comes as unions respond to statements by acting Gov. Richard Codey and lawmakers that public employee health and pension benefits are too costly for the state. Four members of the AFT-R-New Jersey president Pam Hartkopf, and executive board members Ilene Zelkin, Barbara Oberding and Ray Peterson joined forces with other AFT activists, including those from the Kean University Adjuncts and the William Paterson Faculty Retirees. There was also a large contingent from the Health Professionals and Allied Employees/AFT. Union songs punctuated the short speeches from a variety of union leaders, and several state legislators from both parties also spoke in support of the union members.

FORMER AFT LEGISLATIVE DIRECTOR CHARLOTTE FRAAS DIES AT 59
Charlotte Fraas, 59, the AFT's former director of legislation who also served more than 23 years in various legislative and policy positions within the federal government, died May 10 in Alexandria, Va., after a two-year battle with brain cancer. She had been on long-term leave from the AFT since February 2004. Fraas joined the AFT staff in 1999 and led the union's legislation department through the first years of the Bush administration, using her extensive experience on Capitol Hill to help guide the union on complex legislative issues. "Charlotte was the best possible representative the AFT could have: knowledgeable, savvy and able to navigate tough issues," said AFT president Edward J. McElroy. "She will be greatly missed, but her influence will be felt at the AFT for years to come." Before joining the AFT, Fraas, for most of her career, worked as a policy analyst with the Congressional Research Service and later as legislative director for U.S. Rep. George Miller (D-Calif.). Before retiring from the federal government in 1997, she served one year as director of legislation at the U.S. Department of Education. Fraas is survived by her husband, Phil, and two children, Paul and Katie.

NEW AFT PLUS DISCOUNT PROGRAM SAVES ON MOVIE RENTALS, THEATRE, MUSEUMS AND SPORTING EVENTS
The new AFT PLUS Entertainment Discount Program makes going out more affordable than ever for AFT members. Entertainment PLUS Discounts help you and your family save money when you want to enjoy movie rentals, live theatre, museums, sporting events, theme parks, aquariums, ski lift tickets and much more. When you sign up for the program, you earn 100 "Advantage Points" to use for your future entertainment. You earn one additional point for every dollar you spend through the program. To find out more, call 800/565-3712 and use ID #744387769 or visit http://www.unionplus.org/entertainment. 

QUOTE OF NOTE: Pensions Under Attack
"Without reliable pension plans, Social Security will become the only dependable firewall between dignity and destitution in our old age. . . . Yet the current administration’s proposals for whittling away Social Security and shifting to a program of private accounts would remove the certainty so many depend upon."

Katherine W.V. Stone
UCLA School of Law

WEB SITE OF THE WEEK: http://www.elderhostel.org/
Elderhostel is the world’s largest educational travel organization for adults 55 and over. A nonprofit organization that provides learning experiences to nearly 200,000 older adults each year, Elderhostel offers over 10,000 programs a year in more than 90 countries.