President Bush: "Giving Away The Store" with Medicare Drug Benefit

On March 17, 1992, just a few weeks before Sam Walton's death, President George H.W. Bush awarded him the Medal of Freedom. At that event he called Mr. Walton

"an American original who embodied the entrepreneurial spirit and epitomized the American dream."

And how did Mr. Walton manage to procure the "American dream" as the first President Bush described his work?



Wal-Mart, where "Everday Low Prices" have been made famous does this by both keeping their labor costs low, and by pressure on their suppliers who visit headquarters in Bentonville, Arkansas, and find that they better give Wal-Mart their lowest possible price for merchandise.

As John Lehman, a former Wal-Mart store manager described the process:

Well, it's very one-sided. There is no negotiation. There's not much negotiation at all. The manufacturer walks into the room. I've been in these little cubicles, I've seen it happen. The buyer says, "Look, we want you to sell it to us for 5 percent on a dollar – at cost – lower this year than you did last year."

They know every fact and figure that these manufacturers have. They know their books. They know their costs. They know their business practices– everything, you know? So what's a manufacturer left to do? They sit naked in front of Wal-Mart. You know, Wal-Mart calls the shots. "If you want to do business with us, if you want to stay in business, then you're going to do it our way." And it's all about driving down the cost of goods.

Wal-Mart knows, that the most profitable way to do business is to keep your costs down and to make sure that your suppliers sell to you at the lowest possible cost. It is the American way of business.

Recently, the cost of the Medicare Drug program has been raised from $400 billion to $720 billion for the next ten years.

As Congressman Pete Stark of California stated:

"I told you so. We can't trust numbers provided by administration officials. They'll say anything to get a bill passed. And if the new drug benefit costs more, the extra money goes to their friends in the pharmaceutical industry, not to senior citizens."

But is that a fair criticism? Extra money going to the pharmaceutical industry?

Yes it is.

As part of this legislation, the federal government is prohibited from negotiating for lower prices with their suppliers. But didn't Sam Walton teach us the lesson that negotiations can bring down costs?

As Congressman Mike Ross of Arkansas states on his website:

"First, the Republican Leadership, at the request of the big drug manufacturers, actually put language in the bill that says the federal government shall be prohibited from negotiating with drug companies to bring down the high cost of prescription drugs! The Secretary of Health and Human Services cannot use the collective purchasing power of 40 million Medicare beneficiaries to negotiate deep discounts."

This federal largesse would be bad enough if we were running close to a balanced budget. But we cannot afford such "generosity" to the large pharmaceutical firms when our nation is mired in I.O.U.'s.

The national debt, which was at $5.8 trillion on 9/28/01, already nine months into the first term of the Bush Administration, has increased to $7.6 trillion as of 2/10/05.

We cannot tolerate "no-bid contracts" for Halliburton, as we were made to pay under President Bush. And we cannot afford "no-negotiating" payment plans to the big drug companies, no matter how much they have donated to the political campaigns of our politicians elected to serve us. There is simply not enough money in the federal cookie jar to throw it away!


And what has Senator Kerry said about deficits?

During his last campaign he stated:

"We can't restore fiscal responsibility unless we have a president willing to bring our divided parties together, and ready to be straight with the public about what we can and can't afford,"

Can't we learn about the lessons of Sam Walton in negotiating with suppliers to bring down the cost for all of us and for Americans of future generations saddled with intolerable debt?

Senator Kerry, please leave that door open for 2008! We need a leader to pull us out of the water of irresponsible government spending that "gives away the store" to corporate interests!

Bob