May 24, 2010
by David Gutierrez
The United States Senate recently rejected two separate proposals that would have allowed the importation of cheaper medication from other countries, apparently in order to preserve a deal between the pharmaceutical industry and the White House.
The proposals were part of a wider effort to reform the U.S. healthcare system, in large part by cutting unnecessary costs.
Drug importation was first proposed by Sen. Byron Dorgan, a Democrat from North Dakota, in an amendment to the healthcare bill. The amendment would have allowed U.S. wholesale and retail drug distributors, including pharmacies, to import products from Australia, Canada, Europe, Japan or New Zealand, where price controls keep drug costs much lower than in the United States. The amendment eventually gained more than 24 sponsors from both major parties.
“This issue isn’t rocket science,” Dorgan said. “The American people are charged the highest prices in the world. They want Congress to stand up for their interests and do something about it.”
According to Dorgan and co-sponsor Sen. John McCain, a Republican from Arizona and former presidential candidate, drug importation could cut $80 billion off the country’s health spending over the next decade.
The United States spends $2.5 trillion on health care every year.
A vote on Dorgan’s proposal was blocked on December 10 by fellow Democratic Sen. Thomas R. Carper of Delaware, who expressed concerns over the safety of imported medications. Like the FDA and the White House, Carper objected that the quality of imported drugs could not be assured.
“Senator Dorgan’s amendment could potentially allow unsafe, counterfeited drugs into the United States, contaminating our drug supply,” Carper said. “This is a complicated issue that affects people’s lives. We should make sure that the FDA says it’s safe before we reimport drugs from other countries.”
“My amendment includes strong safeguards to prohibit drug counterfeiting and other practices that would put the consumer at risk,” Dorgan replied. “It applies only to FDA-approved prescription drugs produced in FDA-approved plants from countries with comparable safety standards.”
Other Senators charged that the real motive behind the claim of safety concerns was to preserve a recent deal between the White House and the pharmaceutical industry, in which the Pharmaceutical Research & Manufacturers of America (PhRMA) agreed to fund $80 billion worth of health care reform by accepting higher taxes and price agreements. According to a number of congressional staffers and pharmaceutical industry lobbyists, the deal included a verbal promise by President Obama to not support drug importation.
“There’s great dissension in the Democrat caucus over Senator Dorgan’s amendment,” McCain said. “If it passes, as it should, it breaks the agreement that the White House made with PhRMA. So the White House, as well as PhRMA, has been over here lobbying furiously.”
PhRMA denied that it had made any such deal, but the group and the White House both made statements earlier in the year saying that drug importation will not be necessary if Congress approves a healthcare bill implementing lower prices on U.S.-made drugs.
The $315 billion pharmaceutical industry has been the biggest healthcare-related industry to support the White House’s healthcare reform effort. It is also one of the most influential lobbies in the country.
“People are walking on eggshells,” Dorgan said. “If we pass legislation allowing people freedom to import drugs, the pharmaceutical industry might not support the health care amendment.”
In the end, Dorgan’s proposal, which needed 60 votes to be incorporated into the healthcare bill, failed 51-48. A separate amendment that would have allowed the importation of drugs specifically approved by the FDA also failed, 56-43.
“The drug industry has a lot of clout in this town, and they demonstrated that tonight,” Dorgan said after the vote. “This is not over.”
April 29, 2010
by Brian Faler
President Barack Obama’s debt commission started grappling with how to reduce the U.S. government’s red ink in the first of a series of meetings aimed at producing a plan to be sent to Congress.
The panel’s three-hour meeting yesterday produced little disagreement over the dimensions of the fiscal challenge, underscored by testimony from Federal Reserve Chairman Ben S. Bernanke and White House Budget Director Peter Orszag on the potential for the nation’s debt eventually precipitating an economic crisis.
The challenge facing the panel is devising a plan proposing hundreds of billions in tax increases and spending cuts that can get backing from at least 14 of the 18 its members, the number needed to forward any plan to Capitol Hill, and then win support in Congress.
“This debt is like a cancer; it’s a cancer that’s going to destroy our country from within,” said Erskine Bowles, White House chief of staff under former President Bill Clinton and the panel’s co-chairman. “The problem is easy to agree on. What is really hard is the solution.”
Calling for “tough choices,” Bowles said the panel can’t effectively reduce the debt solely by cracking down on “waste, fraud and abuse.”
Administration officials and Democrats in Congress are looking to the commission for recommendations on reducing the federal debt, which is currently projected to reach 90 percent of the U.S. economy by 2020. Interest payments are forecast to quadruple to more than $900 billion annually by that year. Moody’s Investors Service has said it would consider cutting the government’s bond rating if the outlook doesn’t improve.
The panel is slated to meet six more times with its recommendations due Dec. 1, after the midterm elections in November. Working groups focused on specific issues will meet weekly. The next meeting of the full panel is set for May 26.
Bowles said Obama, who met privately with the commission before yesterday’s public session, pledged to support its recommendations. The government must overcome its “chronic failure to level with the American people about the cost of the services that they value,” Obama said in remarks at the White House. “Everything has to be on the table.”
The panel is already being targeted by interest groups concerned it may look to their favorite programs for savings. The AARP, the Washington-based advocacy group for the elderly, said yesterday the panel should forswear cutting Social Security, which provides “financial security for millions of older adults — many of whom are kept out of poverty” by it.
Roger Hickey, co-director of the Washington-based Campaign for America’s Future, said “deficit hysteria” was being used to clear the way for painful cuts in Medicare.
Former Republican Senator Alan Simpson of Wyoming, the panel’s other co-chairman, said the group’s members would be attacked by special interest groups spanning the political spectrum. “Anything we eventually do in any way will be met by howls of anguish,” he said. “The extreme right and the extreme left will savage our final product whatever it might be.”
“It’s going to be like giving dry birth to a porcupine,” Simpson said.
Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat who was a driving force behind the commission’s creation and was named to it, said it would be “extremely” difficult for the group to agree on recommendations. “I’m going to make every effort that I can make to try to produce agreement but I also recognize the reality — to get 14 of the 18 to agree, that’s very hard,” Conrad said.
Bernanke said the consequences of failure may be substantial. “The path forward contains many difficult tradeoffs and choices, but postponing those choices and failing to put the nation’s finances on a sustainable long-run trajectory would ultimately do great damage to our economy,” he said. “Our nation should soon put in place a creditable plan for reducing deficits to sustainable levels.”
How to do that was the focus of yesterday’s discussion. Former Congressional Budget Office Director Robert Reischauer told the commission to consider making “significant changes” in Social Security, including reducing benefits for wealthier beneficiaries and raising the retirement age.
Senate Finance Committee Chairman Max Baucus, a Montana Democrat and panel member, said debt-reduction efforts should focus on closing the so-called tax gap — the $300 billion that the Internal Revenue Service estimates is owed every year in uncollected taxes — before cutting Social Security and other entitlement programs.
Representative Dave Camp, the top Republican on the Ways and Means Committee and a panel member, said the group should consider revisiting Obama’s health-care overhaul that became law last month.
Other panelists cautioned that spending cuts could hurt their constituents. Representative Jan Schakowsky, an Illinois Democrat, urged her colleagues not to go about their work like “bean-counters who are looking through green eye shades.”
“Balancing the budget and reducing the debt, in my mind, are not ends in and of themselves — the welfare of the American people has to be the goal,” she said. “We can’t afford to skimp on our children’s education, assuring access to quality, affordable health care, retirement security, achieving energy independence, investing in our infrastructure, supporting medical research.”
March 10, 2010
By Julie Steenhuysen
U.S. researchers estimate that an 18 percent tax on pizza and soda can push down U.S. adults’ calorie intake enough to lower their average weight by 5 pounds (2 kg) per year.
The researchers, writing in the journal Archives of Internal Medicine on Monday, suggested taxing could be used as a weapon in the fight against obesity, which costs the United States an estimated $147 billion a year in health costs.
“While such policies will not solve the obesity epidemic in its entirety and may face considerable opposition from food manufacturers and sellers, they could prove an important strategy to address overconsumption, help reduce energy intake and potentially aid in weight loss and reduced rates of diabetes among U.S. adults,” wrote the team led by Kiyah Duffey of the University of North Carolina at Chapel Hill.
With two-thirds of Americans either overweight or obese, policymakers are increasingly looking at taxing as a way to address obesity on a population level.
California and Philadelphia have introduced legislation to tax soft drinks to try to limit consumption.
CDC director Dr. Thomas Frieden supports taxes on soft drinks, as does the American Heart Association.
There are early signs that such a policy works.
Duffey’s team analyzed the diets and health of 5,115 young adults aged age 18 to 30 from 1985 to 2006.
They compared data on food prices during the same time. Over a 20-year period, a 10 percent increase in cost was linked with a 7 percent decrease in the amount of calories consumed from soda and a 12 percent decrease in calories consumed from pizza.
The team estimates that an 18 percent tax on these foods could cut daily intake by 56 calories per person, resulting in a weight loss of 5 pounds (2 kg) per person per year.
“Our findings suggest that national, state or local policies to alter the price of less healthful foods and beverages may be one possible mechanism for steering U.S. adults toward a more healthful diet,” Duffey and colleagues wrote.
In a commentary, Drs. Mitchell Katz and Rajiv Bhatia of the San Francisco Department of Public Health said taxes are an appropriate way to correct a market that favors unhealthy food choices over healthier options.
They argued that the U.S. government should carefully consider food subsidies that contribute to the problem.
“Sadly, we are currently subsidizing the wrong things including the product of corn, which makes the corn syrup in sweetened beverages so inexpensive,” they wrote.
Instead, they argued that agricultural subsidies should be used to make healthful foods such as locally grown vegetables, fruits and whole grains less expensive.
February 23, 2010
By Jenel Nels
In order to crawl from beneath crushing debt and reach fiscal solvency, Illinois legislators must choose from a series of options that range from bad to worse, according to a prominent watchdog group.
The Civic Federation wants to launch an intervention that includes significant budget cuts and the largest tax increase package in Illinois history, all in an effort to save the state from a $12.8 billion budget deficit.
“Doomsday is here for the state of Illinois,” said Laurence Msall, Civic Federation President, to the Sun-Times.
The group says it would support a state income tax increase from 3 percent to 5 percent. It also recommends the state tax retirees’ pension and Social Security checks be taxed for the first time at the same rate as workers’ paychecks. They want another $1 increase on a pack of cigarettes and to eliminate $181 million in corporate tax breaks.
If implemented, the Federation’s recommendations could shave off $8 billion, but there is a catch.
In order to implement those increases, the Civic Federation says unions should pay more toward their pensions and health care — but the unions aren’t interested.
“Illinois’ fiscal crisis has been many years in the making. It was caused by more than 30 years of pension underfunding and many years of spending unfettered by the state’s shrinking revenue resources,” said Msall.
The group’s plan would help alleviate the deficit by 2012, they say.
The state’s red ink has already caused a backlog of unpaid bills to public universities and schools, transit systems and social services.
“The Civic Federation does not enjoy advocating a significant tax increase in the middle of a difficult recession. However, continuing to do nothing would be by far a worse option,” said the Civic Federation in a statement on the group’s website.
November 11, 2009
Wall Street Journal
By Peter Wallsten & Siobhan Hughes
Divisions among Democrats were on display Thursday in a Senate committee vote approving a climate-change bill.
Sen. Max Baucus (D., Mont.) voted against his own party’s climate-change bill, calling for a scaled-back measure that might win more bipartisan support. Mr. Baucus, a key player in the health-care overhaul debate, said the measure set too ambitious a target for reducing greenhouse-gas emissions by 2020, and hadn’t done enough to protect farmers.
Republicans boycotted the 11-1 vote in the Senate Environment and Public Works Committee. They said more study needed to be done on the potential harm to the economy from the measure’s cap on emissions, and its requirement that businesses buy permits, which could be traded, to emit carbon dioxide and other gases.
The tensions among Democrats point to the wider debate within the party about how aggressively to push the leading issues on President Barack Obama’s agenda after Tuesday’s election setbacks. Moderate Democrats worry about moving too fast for voters, while liberals say swift action on issues like climate change and health care will remotivate the party’s base.
One of the climate bill’s co-sponsors, Sen. John Kerry (D., Mass.), signaled Thursday he was well aware of the political challenges facing his more conservative colleagues. Mr. Kerry has launched discussions with Sen. Lindsey Graham (R., S.C.) and Connecticut independent Sen. Joseph Lieberman to fashion a compromise measure.
Doubts about cap-and-trade played a role in swinging some previously Democratic coal-mining areas of southwestern Virginia toward Republican gubernatorial candidate Bob McDonnell, the winner in Tuesday’s election. Mr. McDonnell attacked his Democratic opponent, R. Creigh Deeds, as a supporter of Mr. Obama’s cap-and-trade energy plans.
Mr. Deeds argued that he would oppose any tax increases related to energy, but lost by a 2-to-1 margin in coal country.
Rep. Rick Boucher, a Democrat whose Virginia district encompasses the state’s coal-mining region, said Thursday the election results in his state should have no bearing on the climate issue or the broader Obama agenda.
But he said any climate measure would have to accommodate industry concerns and minimize costs to consumers, and that candidates in conservative districts next year should be armed with those arguments.
Senate Democrats considered vulnerable in the 2010 election include Majority Leader Harry Reid of Nevada and moderates Blanche Lincoln of Arkansas and Arlen Specter of Pennsylvania.