• Congress Delays Action on Private Accounts
• AFT, Senior Groups Opposing Private Accounts,
  Estate Tax Cut
• Seniors Mobilize around Social Security
• Majority of Employers Will Apply for Medicare
  Rx Subsidy
• States Refusing To Contribute to New Medicare
  Drug Benefit
• Five Drug-Importing States Add Two New Countries
• U.S. Spends More Per Capita on Healthcare than Other Nations
• AFT Continues Impressive Membership Growth
• Music Discounts: A Great Present for the Grandkids—Or for You
• Quote of Note: Bipartisan Take on More Tax Cuts
• Web Site of the Week: www.websciences.org/preview/nsf/disorder.html 

CONGRESS DELAYS ACTION ON PRIVATE ACCOUNTS
If this week's comments by lawmakers are any indication, the chance that Congress will address Social Security before the August recess is not very likely. Although both the House and Senate had promised bills by June, members concede their efforts to deliver President Bush's top domestic priority may be delayed until September, if not later. Senate Finance Committee Chair Charles Grassley (R-Iowa) is struggling to build consensus among Republicans on the committee to deal with the program's finances. All Democrats and Republican Sens. Olympia Snowe (Maine) and Gordon Smith (Ore.) have so far resisted backing private accounts. Diehard supporters of private accounts are coalescing around a plan that would seize Social Security's surplus to fund them. Sen. Jim DeMint (R-S.C.) introduced one such bill, S.1302, in late June; Rep. Jim McCrery (R-La.) introduced the House version, H.R.3304, July 14. Despite a 231-202 GOP majority in the House, it remains to be seen whether GOP leaders can garner the 218 votes needed to pass the bill. Moderate Republicans are questioning the surplus proposal because it would accelerate Social Security's insolvency and expand the federal deficit. Without the support of moderate Republicans, House leaders have little chance of passing a bill as Democrats remain unanimously opposed to private accounts. Ironically, the latest GOP plan, tabbed Grow Accounts, is a political gimmick to "save the surplus." The measure does nothing to improve the program's future finances, despite the president's repeated crisis calls to act on the impending insolvency. In fact, it would force the federal government to borrow even more money to fund the budget shortfall, already projected at more than $330 billion next year. 
 
AFT, SENIOR GROUPS OPPOSING PRIVATE ACCOUNTS, ESTATE TAX CUT
The AFT has joined more than 25 other labor and senior groups in opposing Bush administration efforts to privatize Social Security and repeal or reduce the federal estate tax. In July 19 letters to the U.S. House and Senate, the members of the Leadership Council of Aging Organizations urged lawmakers to "recognize the adverse effect those accounts would have on Social Security’s long-term solvency; on Social Security benefits, including benefits for survivors and disabled workers; and on the federal budget and the federal debt." The group opposed recent proposals to cut benefits for most future retirees and fund temporary private accounts carved out of the Social Security payroll tax surplus on the grounds that they would make solvency worse, add trillions of dollars to the national debt and weaken retirement security. In the estate tax letter sent July 14, LCAO said that it would also fight any compromises that would reduce revenues by an unacceptably large amount. Repeal of the estate tax, the group said, would drastically reduce federal revenues needed to reduce the deficit and fund key federal programs. Permanently repealing the estate tax would cost about $1 trillion between 2012 and 2021. Currently, only estates larger than $1.5 million for an individual ($3 million for a couple) are subject to the estate tax; only about 1 percent of estates pay any estate tax at all. The estate tax gets all its revenues from the wealthiest 1.4 percent of Americans, and two-thirds of it from the top 0.2 percent. Contrary to claims by repeal supporters that the estate tax hurts family farmers, the American Farm Bureau Federation says that it cannot cite a single example of a farm having to be sold to pay estate taxes. The average estate tax, paid by fewer than one out of 20 farmers, is $5,000.
 
SENIORS MOBILIZE AROUND SOCIAL SECURITY
Senior opposition to private accounts has a lot to do with the trepidation in Congress to act on Social Security. Older voters wield significant influence in elections, especially midterm elections, because they are much more likely to vote. The Alliance for Retired Americans, with a big assist from AFT retiree activists, has played a central role in educating and mobilizing seniors around Social Security and the dangers of privatization. The Alliance produced and distributed a 10-minute educational video on Social Security, narrated by Olympia Dukakis--funded in part by the AFT--and available on the AFT Web site at http://www.aft.org/. The nationwide grassroots network has also mobilized around the Truth Truck, which hauled more than a million petitions from seniors opposed to Social Security privatization. The truck wrapped up its final leg through the Midwest this week. All told, the truck traveled 12,500 miles through 19 states, making a total of 39 stops and touching more than 70 members of Congress with one message: Don't Privatize Social Security. The final Truth Truck stop will be in Hyde Park, N.Y., home of President Franklin D. Roosevelt, for Social Security's 70th birthday on August 13th. Scores of AFT and NYSUT activists are expected to participate.
 
MARJORITY OF EMPLOYERS WILL APPLY FOR MEDICARE Rx SUBSIDY
At least 60 percent of mid to large employers providing retiree drug coverage will apply for the Medicare Part D subsidy coverage in 2006, according to a survey conducted by Mercer Human Resource Consulting, a benefits firm. The prescription drug subsidy is expected to pay about 28 percent of an employer’s cost for coverage equal to that provided by the Medicare plan. Employers can go beyond the Medicare coverage but will receive no subsidy for the additional coverage. In a survey of 257 drug plan sponsors with at least 500 employees, more than half of the employees that said that they would apply for the coverage had not yet determined whether their plans were the actuarial equivalent of the Medicare coverage. Like consumers, the employers were finding the process both cumbersome and confusing. Mercer found that 14 percent of employers, usually the smallest firms (500 to 999 employees), said that they would not apply for the subsidy and would scale back their plans or coordinate retiree coverage with a Medicare prescription drug plan.
 
STATES REFUSING TO CONTRIBUTE TO NEW MEDICARE DRUG BENEFIT
Many states, including the president’s home state of Texas, are openly resisting a requirement that they pay billions of dollars annually to the federal government to help finance the new Medicare prescription drug benefit. According to the 2003 Medicare law, states must make monthly payments to the U.S. Treasury Department to defray the cost of Medicare’s providing drug benefits to beneficiaries considered dually eligible for Medicare and Medicaid. Beginning Jan. 1, 2006, Medicare will provide drug coverage to such individuals, who previously were covered through state Medicaid programs. Although the Bush administration said that the payment requirement is explicit in the 2003 law, several states, led by Texas Gov. Rick Perry (R), have rejected the federal government’s interpretation. In a letter to other governors and in a message accompanying his veto of a $444 million appropriation for the state's contribution for the next two years, Perry wrote, "For the first time, state governments would be expected to directly finance federal Medicare benefits with state tax dollars. In effect, states will be billed on a monthly basis for the cost of federal services." The Republican-dominated New Hampshire Legislature expressly prohibited any payments to the federal Medicare program unless a court has determined that these provisions of the 2003 law are constitutional. The Congressional Budget Office estimates that required state contributions to the Medicare trust fund, also known as clawback payments, will total $124 billion from 2006 to 2015. 
 
FIVE DRUG-IMPORTING STATES ADD
TWO NEW COUNTRIES
Illinois and Wisconsin announced plans July 18 to add Australia and New Zealand to the states' prescription drug import program, expanding options for their residents and those of three other states who are seeking less expensive medicines. Australia and New Zealand join Canada, Britain and Ireland as medication sources for the program, I-SaveRx, which was created by Illinois and Wisconsin in October and has been joined by Kansas, Missouri and Vermont. Canada has been by far the largest of the exporters, but Gov. Rod Blagojevich of Illinois said in a statement that same day: "The drug companies and their allies are turning up the heat in Canada, which has been the primary point of purchase for millions of Americans. We've known for some time that a sound importation program can't rely solely on Canada." The move comes fewer than three weeks after Canada's health minister, under threat from U.S. companies, announced plans to introduce legislation limiting bulk prescription drug exports to the United States. The bill is aimed at preventing medication shortages in Canada. The Pharmaceutical Research and Manufacturers of America, the industry trade group, repeated its opposition to any import plan that circumvented the U.S. Food and Drug Administration's safety system. The states’ program, however, works only with licensed pharmacies in the exporting countries that complied with Illinois standards. The pharmacies are not allowed to dispense drugs that originate in countries not part of the agreement with the five states. A report issued by Blagojevich that same day found that average prices for 78 common prescription drugs were 51 percent cheaper in Australia and 32 percent cheaper in Canada than in the U.S. Since the I-SaveRx program began nine months ago, his office said, more than 10,000 orders have been placed, with an average saving of 25 percent to 50 percent.

U.S. SPENDS MORE PER CAPITA ON HEALTHCARE THAN OTHER NATIONS
The United States spends more on healthcare per capita than other industrialized nations but does not receive more services, according to a study published on July 12 in the July/August issue of Health Affairs. Led by Gerard Anderson, a health policy professor at Johns Hopkins, researchers analyzed the healthcare costs of 30 industrialized nations. The study found that the U.S. spent $5,267 per capita for prescription drugs, hospital stays and doctors visits in 2002, the latest year for which complete data was available, a median of $2,193 per capita on healthcare. Healthcare spending accounted for 14.6 percent of the U.S. Gross Domestic Product in 2002, a time when only two other nations -- Switzerland and Germany -- spent more than 10 percent of their GDP on healthcare. The United States has 2.9 hospital beds per 1,000 residents, compared with a median of 3.7 beds per 1,000 residents among the other nations examined. Our nation had 2.4 doctors and 7.9 nurses per 1,000 residents in 2001, compared with a median of 3.1 doctors and 8.9 nurses per 1,000 residents among the other nations. The average medical malpractice payment, which included both settlements and judgments, was $265,103 in the United States in 2001, compared with $309,417 in Canada and $411,171 in Britain.
 
AFT CONTINUES IMPRESSIVE MEMBERSHIP GROWTH
The AFT has continued its record of strong membership growth over the past year. The union experienced growth in every region of the nation and in the wide range of professions it represents, adding a net gain of 38,788 members to its ranks between the AFT convention last year and this July’s QuEST conference. The AFT has gained 750,695 members since 1985, more than doubling in size during that time. The union's numbers have increased every year for more than 20 years. The union's membership now stands at 1,361,485. "It takes a lot of hard work and resources to grow the union," notes AFT president Edward J. McElroy. "These numbers show that workers from a wide spectrum of employment want and need union representation where they work. We're proud to have a culture of organizing. These numbers are especially impressive when you consider that to maintain our current level of membership, we must sign up 3,000 workers every week because of membership loss due to retirements, resignations and other factors." 
 
MUSIC DISCOUNTS: A GREAT PRESENT FOR THE GRANDKIDS—OR FOR YOU
Taking a vacation this summer or just relaxing at home and want to add some of your favorite songs to your collection? AFT PLUS now offers a music discount club, but with no reply cards to deal with. All single CDs are just $9.99. Buy two and get the third free. Best of all, free shipping is available on all orders. More than 15,000 titles are available for you to choose from. Start saving today and start adding to your music collection for the summer. Visit http://www.unionplus.org/music.
 
QUOTE OF NOTE: Bipartisan Take on More Tax Cuts
"The recent increase in revenues is unlikely to change the long-term budget outlook in any significant way. As [Congressional Budget Office] Director Doug Holtz-Eakin pointed out, the increase is the result of unique circumstances and factors including temporary corporate tax breaks that may not continue in the future. . . .Certainly policymakers should not repeat the mistakes of 2001 by allowing improvements in the short-term budget outlook to serve as an excuse to further relax, already overly lax, fiscal discipline."

Committee for a Responsible Federal Budget
July 12, 2005

WEB SITE OF THE WEEK: http://www.websciences.org/preview/nsf/disorder.html
Poor quality sleep can have the same effects on the brain as alcohol. For many people over age 65, sleep deprivation is a regular part of life. The National Sleep Foundation Web site offers ways that can help you get the rest you need without medication.