Does Sen. John Kerry, D.-Mass., want to restrict the growth of Medicare or not? It depends on which Kerry you ask: Thrifty Kerry or Demagogic Kerry.
Thrifty Kerry boasts on his Web site that he “has the courage to take on special interests to get health care costs under control.” In the Nov. 24 presidential debate in Iowa, Kerry called the just-passed Medicare prescription-drug bill a “special interest giveaway” containing “$139 billion worth of slush fund money that’s going to go directly to the drug companies.” Kerry criticized the Medicare bill for, among other things, not allowing the federal government “to actually negotiate bulk purchases for states, which would lower prices.” (He’s quite right on this point, which we’ll get back to in a moment.)
Demagogic Kerry seems blissfully unaware of Thrifty Kerry’s existence. In the Nov. 24 debate, he mocked Howard Dean for calling himself a “balanced budget freak” and repeated a challenge he’s made before:
Will he still try to reduce the rate of growth in Medicare? He’s said several times he’s going to cut the rate of growth in Medicare. … I’d like to know if he still intends to reduce the rate of growth in Medicare as one of the ways in which he’s going to balance the budget.
Dean tried to duck the question, but Demagogic Kerry wouldn’t let him. Chatterbox’s Slate colleagues Mickey Kaus and Will Saletan have already noted the bizarre exchange that followed, in which Demagogic Kerry harassed Dean for refusing to make a fiscally irresponsible pledge that Medicare would continue its present growth rate forever. But to properly appreciate how fervently Demagogic Kerry turned not only on Dean but on Thrifty Kerry (“get health care costs under control”), you need to read the whole thing:
Dean: Look at the big picture: We’ve done a great job on health insurance … Kerry: But you still haven’t answered my question.Dean: We’ve done a great job on kids. Kerry: But you still haven’t answered my question. Dean: And Tom Beaumont wrote in the Des Moines Register weeks ago that Medicare is off the table. Moderator: Congressman? Kerry: No, the question is will you slow the rate of growth? Do you intend to slow the rate of growth in Medicare? Because you said you were going to do that.Dean: Well, what I intend to do in Medicare is to increase reimbursements for states like Iowa and Vermont, which are 50th and 49th respectively. Kerry: Are you going to slow the rate of growth, Governor, yes or no? Dean: We’re going to do what we have to do to make sure that Medicare lasts … Kerry: Are you going to slow the rate of growth, Governor? Because that’s a cut. [Chatterbox interjects: Republicans often accuse Democrats of misrepresenting as budget “cuts” funding increases that, percentage-wise, don’t match the previous year’s increase, or some larger proposed increase. Here we have a rare instance of a Democrat clarifying this point voluntarily. In fact, a slower rate of increase in funding for any given government program can fairly be described as a “cut” only if it fails to keep up with the inflation rate.]Dean: Well, I’d like to slow the rate of growth of this debate, if I could, but we’re going to make sure that Medicare works. Kerry: Well, I’m sure you’d like to avoid it altogether, but … Moderator: OK. Let me ask you, Senator Kerry … Dean: Medicare is off the table. We are not going to cut Medicare in order to balance the budget. I’ve made that very clear. I’ll do it one more time. We will not … Kerry: That’s not the question.
Dean can be pretty schizoid himself when asked to defend his gubernatorial record of fiscal responsibility—his first impulse is usually to deny it in order to pass himself off as the sort of free-spending panderer Democrats like to favor in the primaries—but in this case Dean held firm.
By now it should be obvious that Chatterbox finds Thrifty Kerry a much more incisive fellow than Demagogic Kerry. Kerry’s criticism of the Medicare drug bill for not allowing the government to negotiate volume discounts certainly deserves more attention. It should be a no-brainer that if the feds occupy so large a proportion of the market for drugs that they acquire leverage over drug companies in setting prices, they should use it. But Republicans have successfully characterized this as government “price controls,” which is something not even liberals believe in anymore. The GOP and the pharmaceutical industry even managed to sell this idea to Alan Murray, who is one of the two or three best economic journalists in Washington (and—full disclosure—Chatterbox’s former boss at the Wall Street Journal). From Murray’s “Political Capital” column in the Nov. 25 Wall Street Journal:
In truth, allowing the federal government to negotiate drug prices is a bad idea for consumers. Why? Because the Medicare market is so large that the government wouldn’t really be negotiating prices—it would be setting them. And if history is any guide, price controls would ruin the pharmaceutical industry. …
But surely an honest definition of price controls would be “the government telling a company how much it may charge a third party,” not “the government telling a company how much it’s willing to pay.” Chatterbox thought allowing the buyer to tell the seller how much he’s willing to pay was called “capitalism.” And historically, this very arrangement has worked out just fine for, say, defense contractors.