PLAN D–D FOR DISGUSTED
I note another dimension of the new Medicare “benefit” that Trudy Lieberman has analyzed so well in “Part D From Outer Space” [Jan. 30]. My wife and I belong to a large HMO/Preferred Provider Medicare plan, which includes prescription drug coverage. We were required to join Part D of Medicare and were automatically enrolled by the HMO. Our co-payments have increased sharply, and drug co-pays of $10 before December 31 are now $200-$300. Curious how hefty subsidies on one end precipitate large price rises on the other.
A critical point not mentioned in Trudy Lieberman’s piece on Part D explains why so many seniors are not signing up for it. Take as an example the AARP plan as offered before Part D. It is underwritten by United Health Care, a major insurer, which also covers (Medigap) doctor and hospital services not covered by Medicare, as well as prescription drugs. The monthly cost has risen every year and there’s no reason to believe it won’t continue to go up. True, it has a deductible, and Part D does not.
But seniors are wary of the new plan because although the Medigap portion will initially be roughly $70 a month less on average, the annual increases will soon wipe out that difference, to say nothing of hikes in drug prices. Last year my monthly AARP fee for Medigap and prescription drugs combined was $228. It was raised this year to $250. The other concern is that although the new plan has no deductible the co-pays are a free-for-all by both pharma and, yes, the druggists! Seniors thought the co-pays would be $5 per prescription. In my case, five are $28 and one is $56 monthly–on top of the $24 monthly premium. Will that rise every year?
Why will the cost of the plan go up every year? Private insurers cannot manage their overhead, which runs around 12 to 14 percent annually. Amazingly, Medicare is an efficiently run program with no more than 4 percent of its operating costs derived from overhead. As The Nation has argued before, Americans need a single-payer system to provide low-cost healthcare for a lifetime.
As an RN who works with Medicare beneficiaries, I find that Part D is a clear and present danger. Trudy Lieberman’s article was dead on, but I would take it a step farther. You don’t have to wear a tinfoil hat to see that Part D could serve a sinister purpose: to turn people off the idea of a national health plan. I hope the whole thing will backfire.
Farmington Hills, Mich.
Trudy Lieberman left out the most glaring flaw in the Part D bill. Signing up is not mandatory, so only those on Medicaid or seniors on drugs will sign up. You could not create a worse scenario for financial disaster, because the program will not have a pool of nonusers of drugs helping to finance the program. Newt Gingrich was instrumental in creating the flawed outlines of Medicare Part D and has helped fulfill his theory that government programs fail. Part D should be rescinded and replaced with a mandatory program free of the K Street lobbying and bribes that characterized the original bill.
GREGORY N. AUSTIN
New York City
Gregory Austin is correct. Signing up is not mandatory. And if enough people don’t sign up, the risk pool is likely to contain only sick people who need drugs. That ultimately means that the cost of the program will go through the roof, because there won’t be enough healthy people contributing premiums. Time will tell whether the penalties for not signing up will be sufficient to coax people to join the program.
‘CAPITALIZATION’ IN BOLIVIA
Daphne Eviatar’s “Evo’s Challenge in Bolivia” [Jan. 23] provides many thoughtful reflections on the presidential election there but contains an implied, and unjustified, criticism of the reforms of the past twenty years. (I served as representative of the Inter-American Development Bank in Bolivia between 1994 and ’99, but these opinions are entirely my own.)
The measures adopted in the mid-1980s served to reduce significantly and ultimately eliminate hyperinflation, whose principal victims were the poor. Inflation levels that virtually no other country in the world has suffered–more than 20,000 percent per year–created a chaos that made impossible the investment so necessary to provide Bolivia with an economic base to begin to fight that poverty. In fact, greater economic stability by the early 1990s provided a basis for another round of reforms that Eviatar mistakenly characterizes as “privatization.” Those were in fact measures of “capitalization,” a novel formula by which 50 percent of the shares of the companies are passed to the Bolivian people and benefits from that investment are in turn provided in the form of annual payments to senior citizens, most of whom are very poor. A perfect solution it may not be, but–among other benefits–in less than two years it encouraged long-delayed exploration, which determined that Bolivia sat on the second-largest proven gas reserves in South America. Sufficient to quickly turn around the condition of the indigenous poor it may not be either. But capitalization certainly maintains a presence in Bolivia in the development of its natural resources and promotes growth and some equity, and deserves to be recognized as such. Also, over the past twenty years, particularly the past ten, public investment in Bolivia, supported by more socially oriented policies of the government and resources from international financial institutions, has increased measurably in the health and education sectors. As a result, the socioeconomic conditions of Bolivians, while far from acceptable for the majority, have nonetheless begun to show improvement. Despite Eviatar’s suggestions to the contrary, I expect the support of the international financial community for economic and social reform in Bolivia to continue.
DAVID B. ATKINSON
Daphne Eviatar paints the worst-case scenario for Bolivia. She predicts that Evo Morales will not risk alienating the international financial institutions that have their chains around the necks of Bolivia and other Latin American states, and his failure to deliver will result in civil war. But there is another path I think is more likely because we are already seeing it. Venezuelan President Hugo Chávez will use his oil largesse to pay down Bolivia’s debt, and China will become the new investor in Latin America.
Chávez has already bought Argentine bonds to finance the payoff of its IMF debt, and he bought some of Ecuador’s bonds as well. He will likely continue to do the same for other Latin American countries as part of his vision of liberating them from foreign pressures and engineering an integrated Latin American economy that does not have to submit to the neoliberal privatizations and restructurings that have crippled them. I see no reason to think that oil prices will fall anytime soon. So another scenario is… US dollars flow to China to buy goods. China invests those dollars in Latin America, taking the place of US and US-associated multinational corporations, which will be shut out as a result of years of IMF- and World Bank-forced privatizations and restructurings, which have fueled hatred of the US government. The oil wealth of Venezuela, the natural gas wealth of Bolivia and trade with China will provide the money to pay off Latin America’s Western debts. China stops buying US bonds and financing our deficit. The United States becomes a bad place to invest in and Latin America the better choice. Then perhaps they all move to the euro? How will Uncle Sam respond to being shut out of his own backyard markets, over which he has asserted ownership for a century? Will we see the bloodshed of the 1980s all over again? Will China defend its new trading partners and protect its energy interests in the region?
There’s no denying that Bolivia was in an economic crisis by the mid-1980s. Unfortunately, the medicine prescribed was as harmful as the disease it was meant to cure. “Shock therapy” may have stabilized the currency and vastly improved conditions for investment, but it also threw tens of thousands of Bolivians out of work and pulled the public safety net out from under them.
What David Atkinson and the Bolivian government call “capitalization” but that almost everyone else would call “privatization”–the selling off of controlling shares of state-owned companies to private ones–was a great deal for foreign investors. They were able to buy Bolivian companies and commodities at bargain prices. Even the pension funds Atkinson refers to were controlled by private multinational pension firms.
But the greatest bargains were the sales in the oil and gas industry. Enron got a major share in Bolivia’s pipeline system, while a range of private oil companies got valuable licenses to explore and eventually own and control what turned out to be Bolivia’s enormous supply of natural gas. The private companies paid only 18 percent royalties and no taxes. Even World Bank experts now admit that’s way under the going rate in the region. The multilateral banks advising the Bolivian government didn’t require transparency in the “capitalization” process, though, so all those contracts between the oil companies and the government remained secret for years. It was only after local activists started demanding disclosure that they realized what their government had given away. Now, many Bolivians insist all of those contracts are illegal, among the many reasons they took to the streets to throw out their last two presidents.
The policies adopted at the urging of multilateral banks may seem “novel” to economists, but the political upheaval in recent years suggests that they still weren’t addressing the most pressing problems of ordinary Bolivians. Many are also understandably skeptical of the motives of those institutions, controlled as they are by member nations whose companies are the very same foreign investors hungry for those Bolivian bargains. Like Atkinson, I hope the international financial community will continue to support economic and social reform in Bolivia. But I hope that this time it pays more heed to the interests and desires of the Bolivian people.
As for China, there’s no doubt it will invest in Bolivia and across Latin America. But there’s no reason to believe it will be any less aggressive than Western corporations at trying to profit from Bolivia’s natural resources. Bolivia would be wise to approach any new investment offers–whether from China, Venezuela or ExxonMobil–with caution, and to make sure it retains the right to renegotiate the terms of those investments as its political and economic future unfolds.
HOW GREEN WAS MY LANDFILL
It was our pleasure to host Heather Rogers on a tour of our King George County Landfill for her article “Titans of Trash” [Dec. 19]. This Next Generation Landfill project is one of ten such research, test and development facilities run by Waste Management Inc. (WMI) and one of many others in operation or being started in the private and public sectors. All such projects are supported by the Energy Department as potentially viable sources of green energy, and all are monitored by the EPA and the states. WMI is proud to be a part of this effort to create new and improved landfills and landfill gas-collection systems.
In a consumer society like ours, we have choices about how to handle the waste we generate. We can reduce, reuse, recycle–the Three Rs–or we can dispose. How successful we are at the Three Rs depends on businesses and individuals. And for waste that must be disposed after the Three Rs, WMI is there and fully committed to safeguarding the environment.
The days of dumping waste into a pit to decompose with no one controlling the release of methane are long gone. Today’s landfills are responsible for less than 2 percent of greenhouse gas emissions. The nation’s greenhouse gas emissions have risen by about 13 percent since 1990, but because of technical innovations landfill emissions have dropped by 40 percent during the same time frame. WMI disposes of waste in an environmentally responsible manner and in full compliance with all regulations, including air emissions standards.
Boosting recycling rates and using captured methane from landfills to produce renewable energy are immediate opportunities to reduce dependence on fossil fuels and prevent atmospheric pollution. Currently WMI has more than 100 landfill gas-to-energy facilities in operation, supplying enough gas each year to create more than 250 megawatts of energy. That’s enough to power 225,000 homes and replace 2 million barrels of oil per year. And that’s just the beginning.
Facilities like King George County Landfill are part of research and development to take us to the next level. By introducing nontoxic liquids into the landfill for faster decomposition and creating new and improved gas-collection systems, we hope to further reduce greenhouse gas emissions. Bioreactor landfills also have the potential to extend the life of an active landfill, reducing the need for new landfills and helping the land to be reclaimed sooner after the landfill has been closed.
WMI is the largest recycler in North America. We have invested hundreds of millions in the infrastructure for the collection and processing of recyclable materials, and in doing so have helped many customers achieve 50 percent recycling rates. Through our Upstream subsidiary, we are working with industry customers to reduce the amount of waste they generate. And it is our long-term vision to change today’s landfill into a source of clean energy to power our homes and fuel our vehicles.
The waste disposal industry should not be derided for investing in more efficient, effective ways to dispose of the waste we all create. Nor should Waste Management’s commitment to environmental stewardship be questioned for envisioning a future in which the landfill becomes a form of resource recovery instead of merely disposal.
LYNN C. BROWN
Vice President, Corporate Communications Waste Management Inc.
In her predictably greenwashed letter, Lynn Brown is definitely on message. Saying that in a “consumer society like ours” we can choose what we do with our wastes is misleading, to put it mildly. With firms like WMI in charge of a huge proportion of the nation’s waste disposal, the possibility of reducing waste, reusing materials and recycling is constricted in the extreme. Revealing a crack in her eco-veneer, Brown does not dispute that WMI makes the lion’s share of its profits from landfilling and therefore has an incentive to bury as much of our discards as it can–instead of maximizing the “opportunities” of the Three Rs.
In addition, the failed logic of the landfill as a source of “green energy” is important to unpack. If we weren’t throwing out so much, we’d use a lot less energy to begin with. Reducing power consumption would be far greener than sending our wastes through the capital-intensive, and hardly foolproof, process of collaring the gases from underground rubbish decomposition.
Brown’s assessment of the decrease in landfill greenhouse-gas emissions is based on speculative arithmetic. Collecting airborne emissions from landfills is a crude science. There has been little independent research to verify how much gas is secured using current technology. And according to Eric Lombardi, executive director of EcoCycle, one of the nation’s oldest recyclers, the EPA has not done field studies to test the capture-rate data it and firms like WMI use.
There are other problems with this “green energy” source. As explained by Peter Anderson, executive director of the Center for a Competitive Waste Industry, in order to prevent uncontrolled fires, the vacuum force that landfill-gas wells use must be kept at a low suction point. Bioreactor landfills are not capped; they are only topped with a few feet of earth cover. If the vacuum is too strong, the wells will draw in air from above ground and can trigger an explosion. Preventing such dangerous mishaps by using lower pressure means that unknown amounts of toxic greenhouse gases escape undetected from even the most high-tech landfills. Also, with the uneven settling common in all landfills, the well’s pipes can easily shift and break, seriously weakening the system’s ability to collect the gas efficiently. This method for gathering the vaporous byproduct of buried garbage is still new, and still has flaws. To accept, as Brown does, that this is a perfectly functional system is to turn away from reality.
Brown mentions the bioreactor’s potential to help “the land to be reclaimed sooner after the landfill has been closed.” Bioreactors represent an opportunity for the waste giants to absolve themselves of post-closure liability for disposal sites, which currently stands at thirty years. Today, many waste handlers, as well as the EPA, admit that landfills, even the most advanced, will leak. It’s not a question of if, it’s when. Publicly traded firms like WMI are simply too risky an investment with such an albatross around their necks. If corporations like WMI can shed this responsibility, they will reduce their future financial obligations, enabling them to attract more capital to grow profits in the short run. That seems antithetical to the “environmental stewardship” Brown and her bosses profess. But we know what business these guys are really in–making money.
THE LOVE THAT DARE NOT BLEAT ITS NAME
How I have loved Alexander Cockburn’s columns over the years, but can’t he slam W. without making up stuff about us Alabamians? [“Beat the Devil,” Jan. 9/16] We don’t fornicate with farm animals–that’s Georgia.
At a recent meeting of the displaced Great Plainers’ SWLA (Sex With Livestock Anonymous), it was discussed and resolved: (1) Donate to the ASPCA; (2) Resist temptation and evil thought by becoming vegan; (3) Recognize that our despicable actions are nothing compared with drug-crazed, carpetbaggin’ Yankees mugging and raping the elderly… Uh-oh, did we slip into Cockburn mode?
OMISSION & CLARIFICATION
The translator for Bernard-Henri Lévy’s “A Letter to the American Left,” which appeared in the last issue, was Charlotte Mandell.
In Jeremy Scahill’s “Exile on K Street” [Feb. 20], after noting that “it is a federal crime for a departed senior Congressional staffer to lobby his former boss for one year after leaving,” the article highlights the case of Patrick McSwain, who served as chief of staff for former Congressman Randy Cunningham. The article quotes Alex Knott, head of the Center for Public Integrity’s LobbyWatch, saying, “There’s a strong chance” that McSwain violated federal law by lobbying Representative Cunningham immediately after leaving his staff in August 1999.
McSwain points out that under the applicable law, it is only Congressional staffers who make at least 75 percent of the Congress member’s basic pay rate during any sixty-day period in their final year of employment who are precluded from lobbying their former bosses. While Congressional pay records indicate that McSwain, as Cunningham’s highest-paid Washington staffer, received compensation above that level in the period immediately prior to his termination, the excess was apparently attributable to accrued vacation time, which does not count toward the 75 percent threshold. Accordingly, it appears that McSwain was not legally precluded from lobbying Cunningham.
The Nation regrets any misimpression that may have been created as to the legality of McSwain’s activity. The fact that it may have been legal, however, doesn’t make it right. We continue to find the spectacle of senior-aides-turned-lobbyists exploiting their insider connections in Congress to be unseemly and antidemocratic.