Tuesday, June 17, 2003

Rights & Reason: Intellectual Dishonesty at the (Washington) Times

We've all been paying so much attention to the institutional dishonesty at the New York Times, that it appears an outbreak of intellectual dishonesty at the Washington Times, at least on the issue of government-funded prescription drugs. The Times editorial page supports President Bush's effort to create a new entitlement for subsidizing drug costs for most Americans, and in doing so makes an argument which can only be described as bizarre. Compounding this new pro-entitlement mentality was an editorial today attacking the Wall Street Journal, which stands squarely behind capitalism:
We read with interest yesterday's Wall Street Journal editorial on prescription-drug legislation developing on Capitol Hill. From top to bottom, from the theoretical to the practical, Journal editors skewered the Republican direction as bad policy and politics. Their opposition to new entitlements and ever-bigger government is principled — and we agree in large part on their textbook distrust of the welfare state — but the Journal missed the mark on a few aspects of this specific issue. In 2000, George W. Bush campaigned, and in last year's election a majority of Republican House and Senate candidates promised, to deliver a prescription-drug law. A medicine subsidy for seniors is an example of politicians keeping their promises to voters.

It is important to emphasize that Republican support for a prescription-drug entitlement is not a cynical and expensive attempt to buy votes. The new policy would improve the lives of millions of Americans no longer in the workforce whose budgets are squeezed by the rising price of prescriptions
This is a breathtaking position coming from one of the nation's premier conservative newspapers, and may it be an indicator of just how morally and ethically bankrupt modern conservatism has become. Not once in its editorial today did the Times argue why a prescription drug entitlement would be good (or moral) policy—only why it would be good politics. The editorial's concluding paragraph removes any doubt where the Times' interest lay:
Seventy-five percent of voters think prescription drugs for seniors are a good use of taxpayer funds. In a country with a representative form of government, that counts for a lot. However, the political machinations do pay off, with good policy in the short-term and promise for real reform down the road. If Republicans pass a prescription-drug bill and win increased seats in Congress, they will have a more solid base that can be used to reinvent the failing health-care system along more market-oriented lines. That promise alone is worth the price of the current legislation.
Does anyone seriously believe this? Certainly, what principled free-market voter would want to give the Republicans greater political clout when—with the White House and both houses of Congress already in their hands—the GOP committed itself to an expansion of the federal government's role in healthcare that is far more likely lead down the path of Canadian-style socialize medicine than a restoration of the pre-1960s free market in healthcare. The Times is being cynical if they think principled voters are that stupid.

In contrast, yesterday's Wall Street Journal editorial—the one that was too principled for the Times editors—makes simple yet compelling arguments:
Let's start with the amusing irony that the supporters of this giant new prescription drug benefit are many of the same folks who were only recently moaning that a $350 billion tax cut would break the budget. That tax cut will at least help the economy grow. But the new Medicare entitlement is nothing more than a wealth transfer (from younger workers to retirees) estimated to cost $400 billion over 10 years, and everyone knows even that is understated.

The real pig in the Medicare python doesn't hit until the Baby Boomers retire. Social Security and Medicare Trustee Tom Saving told us last week that the "present value" of the Senate [prescription drug] plan—the value of the entire future obligation in today's dollars—is something like two-thirds the size of the current $3.8 trillion in debt held by the public.
The Journal editorial also notes that many employers who sponsor health plans with better prescription drug benefits will drop those benefits once they figure out the government will now pick up the tab. That's why they call it an "entitlement" after all; it's something you can receive without having to earn. And as the Journal correctly states, that makes this issue moral as well as practical:
A universal drug benefit is neither necessary nor morally justifiable. Some 76% of seniors already have some prescription drug coverage. The average Medicare beneficiary spends an affordable $999 a year out of pocket on prescription drugs, and less than %% have out of pocket expenses over $4,000.

The Times, of course, has no answer for these facts, since they're entire argument is political: It's popular with voters, so Bush should do it so he can bolster his re-election, and maybe then we can actually reform the system. But what the Times ignores, from a policy perspective, is how creating any prescription drug entitlement will inevitably lead to government price controls. We saw this after Medicaid and Medicare were created: Without spending caps, beneficiaries tried to milk the government's coffers for all they could. When policymakers figured that out, their response was not to abandon or "reform" the entitlement program, but to shift the blame to service providers (i.e., doctors) by arbitrarily restricting their income. This is why you have doctors leaving the healthcare system in droves. Medicare and Medicaid's reimbursement structure restricts their income by replacing the marketplace with government mandates. And thanks to the antitrust laws, physicians are effectively barred from stopping allegedly private health plans from setting their fee levels too far above the Medicaid-Medicare rates (which the FTC now considers "market price.")

This is the objective reality we face with prescription drugs if we enact even the Senate plan. The Times should be smart enough to know this, but apparently they have so little trust in their Republican friends that they must genuinely believe the GOP cannot retain power without giving seniors additional entitlements. Of course, even that notion has been disproven: We've had five straights Republican House majorities without a prescription drug benefit, and President Bush didn't exactly make this issue the centerpiece of his 2000 campaign. For all the attention it generates, the majority of Americans will not lash out at the Republicans if the current Congress fails to enact prescription drug legislation.

Tony Blankley, the Times' editorial page editor, needs to seriously reconsider his position on this issue. For two days straight now, the Times has run intellectually dishonest editorials that could not withstand even a minimal amount of rational scrutiny. Blankley needs to decide whether his paper's credibility is more important than his influence with Karl Rove and other GOP pragmatists.

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