March 18, 2004

Mysterious Fax Adds to Intrigue Over the Medicare

A developing, blockbuster White House scandal wholly
ignored by SeeBS, AnythingButSee, NotBeSeen and

New York Times: Late one Friday afternoon in January,
after the House of Representatives had adjourned for
the week, Cybele Bjorklund, a House Democratic health
policy aide, heard the buzz of the fax machine at her
desk. Coming over the transom, with no hint of the
sender, was a document she had been seeking for
months: an estimate by Medicare's chief actuary
showing the cost of prescription drug benefits for the

Cleanse the White House of the Chickenhawk Coup and
their Corrupt Cronies, Show Up for Democracy in 2004:
Defeat Bush (again!)

March 18, 2004
Mysterious Fax Adds to Intrigue Over the Medicare
Bill's Cost

ASHINGTON, March 17 Late one Friday afternoon in
January, after the House of Representatives had
adjourned for the week, Cybele Bjorklund, a House
Democratic health policy aide, heard the buzz of the
fax machine at her desk. Coming over the transom, with
no hint of the sender, was a document she had been
seeking for months: an estimate by Medicare's chief
actuary showing the cost of prescription drug benefits
for the elderly.

Dated June 11, 2003, the document put the cost at
$551.5 billion over 10 years. It appeared to confirm
what Ms. Bjorklund and her bosses on the House Ways
and Means Committee had long suspected: the actuary,
Richard S. Foster, had concluded the legislation would
be far more expensive than Congress's $400 billion
estimate and had kept quiet while lawmakers voted on
the bill and President Bush signed it into law.

Ms. Bjorklund had been pressing Mr. Foster for his
numbers since June. When he refused, telling her he
could be fired, she said, she confronted his boss,
Thomas A. Scully, then the Medicare administrator. "If
Rick Foster gives that to you," Ms. Bjorklund
remembered Mr. Scully telling her, "I'll fire him so
fast his head will spin." Mr. Scully denies making
such threats.

These conversations among three government employees
an obscure Congressional aide, a little-known actuary
and a high-level official remained secret until now,
and Ms. Bjorklund still does not know who sent the
fax. But Mr. Foster went public last week, and details
of his struggle for independence within the Bush
administration are now emerging, raising questions
about whether the White House intentionally withheld
crucial data from lawmakers.

The administration says Democrats, whose Medicare
proposals would have cost nearly $1 trillion, are
exploiting the controversy for political gain at the
expense of the elderly. But some Republicans are
openly questioning the White House, and the Senate
Democratic leader, Tom Daschle of South Dakota, said
he saw a "growing scandal over the Medicare drug

Senator Edward M. Kennedy, the Massachusetts Democrat
and a leading critic of the Medicare bill, put the
issue in stark, Watergate-era terms, saying, "What did
the president know; when did he know it?"

Those questions have not been answered. But interviews
with federal officials, including Mr. Foster and Mr.
Scully, make clear that the actuary's numbers were
circulating within the administration, and possibly on
Capitol Hill, throughout the second half of last year,
as Congress voted on the prescription drug bill, first
in June and again in November.

But the figures were either discounted or ignored, as
lawmakers and the White House grappled with the
political imperative to pass the legislation.

At a hearing on Feb. 10, Tommy G. Thompson, the
secretary of health and human services, told lawmakers
that "we knew all along" that the administration's
cost estimates would be higher, but said he did not
have a final figure, of $534 billion, until Dec. 24,
after the bill was signed into law. Nonetheless, Mr.
Thompson said he and Mr. Scully had shared their
estimates with House and Senate negotiators and with
the White House throughout the legislative process.

"There were individuals in the White House who knew
that our preliminary estimates were higher," Mr.
Thompson testified.

Yet as late as November, Mr. Scully continued to cite
the $400 billion figure, which came from the
Congressional Budget Office. In a letter to The New
York Times published on Nov. 20, Mr. Scully wrote, "We
are spending $400 billion."

One House negotiator, Representative Nancy L. Johnson,
Republican of Connecticut, said she knew of the higher
estimates last year, but discounted them because she
thought Mr. Foster's assumptions were flawed.
"Absolutely, we knew about these numbers," she said.

But Representative Tom DeLay, the House majority
leader, who was also a negotiator, said on Wednesday
that he did not learn of the higher estimates until
January, when he attended a Republican leaders'
retreat. An aide to Mr. DeLay said Joshua B. Bolten,
President Bush's budget director, presented the $534
billion final figure at that meeting.

"The leaders about took his head off," said the aide,
Stuart Roy, adding, "It was very clear that none of
the leaders in that room had ever heard those numbers

Mr. DeLay told reporters on Wednesday that the
actuary's numbers are "irrelevant to the policy that
we passed." In any event, he said, Congress is
required to use the estimates of the Congressional
Budget Office.

But Mr. Foster's figures do have significance. The
Medicare bill was President Bush's highest legislative
priority going into the election year, and
Congressional forecasts about its cost were highly
uncertain. At the same time, conservative lawmakers
were up in arms over the expense, and were threatening
to vote against the measure.

Ultimately, the legislation squeaked through the House
by a final vote of 220 to 215, but only after
Republican leaders kept the roll call open for nearly
three hours while they twisted the arms of
recalcitrant party members. Had the cost estimates
been higher than the Congressional Budget Office
figures, lawmakers of both parties say, it is possible
the Republican-backed bill would have been doomed, or
at least significantly altered.

Democrats, sensing a political opportunity in an
election year, are now calling for hearings. On
Wednesday, Representative Henry A. Waxman, Democrat of
California, threatened to sue Mr. Thompson to get
access to Mr. Foster's estimates. Some Republicans are
also demanding answers.

"If anyone was truly pressured by a superior to
withhold information from Congress, that is profoundly
unethical and inappropriate," said Representative
Trent Franks, an Arizona Republican who voted
reluctantly for the bill.

Seeking to quell the furor, Mr. Thompson announced
Tuesday that he had ordered an independent inquiry by
the office of the inspector general in his department.

"We have nothing to hide," the secretary said.

This is not the first time Medicare's chief actuary
has been caught in a political tempest. In 1997,
Republicans, frustrated in their efforts to get
information from the actuary under the Clinton
administration, wrote into law provisions protecting
his independence and stating that he "may be removed
only for cause."

Ms. Bjorklund said Democrats routinely made direct
requests of Mr. Foster, who has held the actuary's job
since 1995. But in an interview on Wednesday, Mr.
Scully said that from the time he took office in 2001,
he disagreed with Mr. Foster over how much
independence the actuary should have.

"Rick felt he was an independent operator," said Mr.
Scully, who resigned in December to join a law firm.
"My view was that the actuary is part of the executive
branch. We had to have some ability to know what he
was doing."

Mr. Foster said that he was told in June 2003 that he
should not respond directly to certain Congressional
requests, and that `the consequences of
insubordination would be very severe." Moreover, he
said, "there was a pattern of withholding information
for what I perceived to be political purposes."

The tensions peaked that month, when, Ms. Bjorklund
said, she learned Republicans were drafting a
provision that would set up competition between
private health plans and the traditional
government-run Medicare program. On June 17, she sent
Mr. Foster an e-mail message asking him to estimate
the proposal's cost. On June 24, still lacking the
information, she telephoned him.

"He said, `I cannot give it to you. I'm afraid I could
be fired,' " Ms. Bjorklund said. After reminding him
that he could be fired only for cause, she said, she
called Mr. Scully, who, she said, declared that he
could fire Mr. Foster for "insubordination directly
defying my orders."

Mr. Scully remembers a heated conversation, but says
he never threatened to fire Mr. Foster. But the
exchange was so upsetting to Ms. Bjorklund, she said,
that she told her boss, Representative Pete Stark of
California, the senior Democrat on the health
subcommittee of the Ways and Means panel.

The next day, June 25, Mr. Stark put out a news
release about it, without mentioning Mr. Foster by
name. But with the House preparing to vote on the
Medicare bill, Mr. Stark said, his accusations were
lost in the bigger battle. On June 26, just hours
before the vote, Ms. Bjorklund said, she received a
part of the information she had requested from Mr.
Foster, but still no cost estimates.

Over the months that followed, Ms. Bjorklund said, she
continued to ask for the actuary's estimates, without
success. Not until Jan. 30, when the anonymous fax was
sent, did she get a peek at those numbers.

Posted by richard at March 18, 2004 03:19 PM