February 15, 2001
EDISON, NJ – New Jersey Citizen Action released a new report by USAction and Citizens for Tax Justice called, Bad Policy, Bad Medicine, which finds that the Bush’s tax giveaway to America’s wealthiest citizens would drain the federal funding needed to pay for a comprehensive Medicare prescription drug benefit for all seniors. New Jersey Citizen Action, the state’s largest consumer watchdog organization with 60,000 members and 90 affiliate organizations, called on Congress to take care of our seniors who lack a prescription drug plan.
Bridget Devane, Organizer for New Jersey Citizen Action, asked, "Why is the Bush administration creating a $775 billion tax giveaway for one million millionaires and depriving 39 million seniors of the Medicare prescription drug coverage they deserve?" Devane added, "This is outrageous, during a time when seniors are having to choose between food and prescription drugs, because the drugs they need to survive cost them hundreds or thousands of dollars."
Senior citizens called on President Bush and Congress to be fair and to do first things first: pass a comprehensive Medicare prescription drug coverage and take care of working families before giving massive handouts to the wealthiest Americans. Seniors have been the victims of skyrocketing drug costs and pay more out of their pockets for prescriptions as a percentage of their incomes than any other group.
"The average single taxpayer would receive $249 from the Presidents tax plan, which is not nearly enough to pay the premiums in a Medicare managed care plan," said Mildred Fruhling, United Senior Alliance. "Seniors are already facing trouble with paying skyrocketing prescription drug costs and escalating Medicare HMO premiums, which are signs of what is yet to come. Seniors cannot afford to let this tax cut proposal stop us from getting a comprehensive solution for an affordable Medicare prescription drug plan," added Fruhling.
The report reveals that over a ten-year period the wealthiest one percent will receive a total of $774 billion in tax giveaways under the Bush plan. On average they will receive an annual tax cut of $46,000. In contrast nine out of ten taxpayers would receive less than $1,600 in tax cuts, while 27 percent would receive no tax cut at all. They typical single taxpayer would get $249 a year; the typical couple would save $1,028; and overall, the median tax cut would be $453.
"A narrow slice of the population – the wealthiest one percent, whose incomes average over one million dollars – would receive almost 43 percent of the total tax cut, 200 percent that of the typical taxpayer," said Bob McIntyre, director of Citizens for Tax Justice.
Seniors without prescription drug coverage paid an average of $463 out of pocket in 1996. For elderly couples, the percent of the average Social Security benefit consumed by prescription drug spending has increased from 8.4 percent in 1992 to 13.5 percent in 1999. Median income for elderly married couples grew 30.7 percent from 1993 to 1999, but average expenditures on prescription drugs grew 82.1 percent during the same time period. Under the Bush "Helping Hand" drug proposal only one percent of Medicare beneficiaries would receive direct compensation for their high drug costs because just one percent of Medicare beneficiaries spend more than the plan’s threshold of $6,000 a year out-of-pocket on prescription drugs.
"President Bush has made his choice clear. He favors a huge tax cut for the wealthy and an inadequate prescription drug plan that will only help one percent of seniors, " said Bob Max, co-chair of the Senior Legislative Issues Coalition of Union County. "Today we are calling on Congress to put first things first. Take care of filling the prescriptions for our seniors instead of filling the bank accounts of one million millionaires," added Max.
USAction is the nation’s largest consumer organization, with 37 affiliates representing over 4 million members. USAction advocates for quality, affordable health care for all Americans. Through working with key lawmakers and organizing at the grass-roots to raise awareness, USAction has led the fight for prescription drug benefits at both the state and national levels. USAction also advocates for quality public schools for all students, a safe and clean environment and consumer rights.
Citizens for Tax Justice, founded in 1979, is a 501 (c)(4) public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for:
Copies of "Bad Policy Fad Medicine: Bush Plans for Taxes and Prescription Drugs Unfair to Working Families and Seniors" are available upon request, by contacting Bridget Devane, NJCA Organizer at (732) 246-4772. The report is also available on the Internet at: http://www.usaction.org/issues/shs/badpolicybadmedicine.pdf