TITLE: Medicare Prescription Drug, Improvement, and Modernization Act of 2003Use of appropriated funds for flyer and print and television advertisements, B-302504, March 10, 2004
BNUMBER: B-302504
DATE: March 10, 2004
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Medicare Prescription Drug, Improvement, and Modernization Act of 2003A*Use of
appropriated funds for flyer and print and television advertisements, B-302504,
March 10, 2004
B-302504
March 10, 2004
The Honorable Frank R. Lautenberg
The Honorable Edward M. Kennedy
The Honorable John F. Kerry
The Honorable Jon S. Corzine
United States Senate
The Honorable Jan Schakowsky
The Honorable Frank Pallone, Jr.
The Honorable Pete Stark
The Honorable Charles B. Rangel
The Honorable Jim Davis
United States House of Representatives
Subject: Medicare Prescription Drug, Improvement, and
Modernization Act of 2003*Use of appropriated funds for flyer and print
and television advertisements
This responds to your requests for our legal opinion regarding the
Department of Health and Human Services*s (HHS) use of appropriated funds
to produce and distribute a flyer and print and television advertisements
concerning the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (MMA).Specifically, you ask whether HHS*s use of appropriated
funds constitutes a violation of the *publicity or propaganda*
prohibitions in the Consolidated Appropriations Act of 2004, Pub. L. No.
108-199, Div. F, Tit. VI, S: 624, 118 Stat. 3 (2004), and the Consolidated
Appropriations Resolution of 2003, Pub. L. No. 108-7, Div. J, Tit. VI,
S: 626, 117 Stat. 11, 470 (2003). The prohibitions in both Acts contain
the same language:*No part of any appropriation contained in this or any
other Act shall be used for publicity or propaganda purposes within the
United States not heretofore authorized by the Congress.*118 Stat. 3, 117
Stat. at 470.
As agreed, this opinion addresses the text of: (1) the cover letter and
flyer that HHS provided us on February 25, 2004;[2] (2) a transcript of a
television commercial entitled *The Right Answer,* dated January 22, 2004;
and (3) an advertisement placed in the February 5, 2004, issue of Roll
Call.[3] We have enclosed copies of these materials. To respond to your
requests, on February 6, 2004, we wrote HHS for factual information
regarding its plans and its legal justification for its use of
appropriations for this purpose. Letter from Gary L. Kepplinger, Deputy
General Counsel, United States General Accounting Office (GAO), to Alex
Azar, General Counsel, HHS, February 6, 2004 (Kepplinger Letter). Because
of your concerns about the political nature of the flyer, we asked HHS to
justify specific statements in the flyer, including references to Health
Savings Accounts and the statement that MMA *preserves and strengthens*
Medicare. At your request, we also met with the staff of concerned
Members who wanted to express their views.[4] In addition, we had a
telephone conversation with majority staff of the House Committee on
Energy and Commerce for the same purpose.
On February 25, 2004, HHS replied. Letter from Dennis G. Smith, Acting
Administrator, Centers for Medicare & Medicaid Services (CMS) to Gary L.
Kepplinger, Deputy General Counsel, GAO, February 25, 2004 (Smith
Letter). In its reply, among other things, HHS defended its use of the
phrase *preserves and strengthens.* It also made changes to the text of
the flyer that was posted on its website and provided to us by Senator
Lautenberg in his January 29, 2004, request. HHS deleted the references
to Health Savings Accounts, which are not available to those eligible for
Medicare. In addition, HHS revised the statement that Medicare
beneficiaries could keep their coverage *exactly the same,* and the flyer
now reads that beneficiaries who are *happy with* their current Medicare
coverage *can keep it.*
As we explain below, HHS*s use of its appropriations to produce and
disseminate the materials at issue does not violate the publicity or
propaganda prohibitions in the appropriation acts.[5] We note that HHS
has explicit authority to inform Medicare beneficiaries about changes to
Medicare resulting from MMA and, thus, its justification for the materials
is afforded considerable deference. However, we point out that the HHS
materials have notable omissions and other weaknesses. For example,
enrollees for the drug discount card program to start in June 2004 may be
charged an annual fee, and savings from the discount cards may vary across
covered drugs. In our view, the materials are not so partisan as to be
unlawful in light of our prior decisions and opinions.
In this legal opinion, we do not examine nor do we express a view on the
overall economy, efficiency, or effectiveness of these print and
television advertisements. We do question, however, the prudence and
appropriateness of HHS's decision to communicate with Members of Congress
and congressional staff by placing an advertisement in Roll Call. There
are any number of more effective vehicles to communicate with Members of
Congress, and at less cost, than advertising in a newspaper.
BACKGROUND
After lengthy and contentious debate, MMA was enacted on December 8,
2003. See Pub. L. No. 108-173, 117 Stat. 2066. It made numerous changes
to Medicare, the federal health insurance program under title XVIII of the
Social Security Act that serves beneficiaries 65 and older, certain
disabled individuals under 65, and individuals with end-stage renal
disease. Among other things, MMA established a voluntary prescription
drug benefit program. See MMA S: 101(a), 117 Stat. 2071-2150 (adding new
sections 1860D-1*1860D-42 to the Social Security Act) (to be codified at
42 U.S.C. S:S: 1395w-101*1395w-152). Beginning in 2006, the program will
assist beneficiaries with the cost of outpatient prescription drugs by
permitting them to enroll in private-sector prescription drug plans that
meet requirements set out in MMA. Id. at 117 Stat. 2071-2131. In
addition, MMA authorized Medicare to endorse prescription drug discount
cards that beneficiaries may purchase beginning in June 2004 to obtain
discounts on covered prescription drugs until the drug benefit becomes
available. Id. at 117 Stat. 2131*48. Further, MMA established the
Medicare Advantage Program to replace Medicare*s managed care option known
as Medicare+Choice, under which beneficiaries may elect to receive
benefits through managed care organizations rather than through the
traditional fee-for-service arrangement. See MMA S:S: 201*241, 117 Stat.
2176*2221. MMA contains provisions unrelated to the Medicare program as
well. For example, it amended the Internal Revenue Code to allow
qualifying taxpayers to make tax-free contributions to Health Savings
Accounts for their future medical expenses. See MMA S: 1201(a), 117 Stat.
2469-2476 (adding new section 223 to the Internal Revenue Code) (to be
codified at 26 U.S.C. S: 223).
Flyer and Cover Letter
HHS has advised us that to inform beneficiaries of new Medicare program
benefits, it will mail flyers to all Medicare beneficiaries. Smith
Letter, Enclosure 1 at 7, Enclosure 2 at 1. This mailing will contain a
cover letter signed by Secretary of HHS Tommy G. Thompson and a flyer
entitled *The Facts about Upcoming New Benefits in Medicare.* Id. The
cover letter states: *As a result of a new law, Medicare is making some of
the most significant improvements to the program since its inception in
1965.* The cover letter also briefly explains some of the new benefits in
three discrete sections. Specifically, it indicates that beneficiaries
can save money on prescription drugs through Medicare-approved drug
discount cards starting in June 2004, and through prescription drug
coverage starting in 2006. It also states that Medicare will include
benefits such as a *Welcome to Medicare* physical exam for beneficiaries
when they join Medicare and screening tests for the early detection of
heart disease and diabetes, which it characterizes as *better preventive
care.* Finally, it states that *the new law makes substantial investments
in the health care system to promote the highest quality of health care
for people with Medicare,* with additional help for those in rural
communities.
A two-page flyer, accompanying the letter, advises beneficiaries that
*[t]his new law preserves and strengthens the current Medicare program,
adds important new prescription drug and preventive benefits, and provides
extra help to people with low incomes.* The flyer then contains
highlighted banners, announcing *Drug Discount Cards Start in 2004,* *New
and Improved Preventive Benefits Start in 2005,* and *Prescription Drug
Plans Start in 2006.* Under each banner, brief statements appear about
the relevant provisions of MMA. With respect to drug discount cards, the
flyer contains very general information concerning the Medicare-approved
drug discount cards, savings for low-income individuals with the drug
discount cards, and the new Medicare Advantage plans. With respect to
preventive benefits, the flyer identifies new preventive benefits,
including screening for cardiovascular disease and diabetes and a one-time
initial wellness physical exam within the first six months of enrollment.
The section on prescription drug plans lists five general characteristics
of the plans, although it notes that plans may vary. This section
explains that *extra help will be available* for some people with low
incomes and limited assets, and the choices will be expanded under
Medicare Advantage to include regional preferred provider organization
plans. The flyer also advises beneficiaries that the benefits are
voluntary and that they can choose to remain in the traditional Medicare
plan. Finally, a section entitled *Questions about Medicare?* directs
beneficiaries to visit www.medicare.gov or to call 1-800-MEDICARE to
obtain *the latest information about Medicare.*
An earlier version of the flyer that you enclosed with your request and
that had appeared on HHS*s website, but was not mailed to beneficiaries,
had an additional banner entitled *News for All Americans,* which
announced the availability of Health Savings Accounts, to which eligible
taxpayers will make tax-free contributions, even though Health Savings
Accounts will not be available to those eligible for Medicare. Our
February 6, 2004, letter to HHS questioned the inclusion of this section
in a flyer to Medicare beneficiaries. Kepplinger Letter at 2.
Subsequently, after receiving our letter, HHS edited the flyer and removed
the reference to Health Savings Accounts. Smith Letter, Enclosure 1 at
11-12. The revised flyer contains other changes as well. For example, on
the first page of the earlier version of the flyer, HHS had stated: *If
you are happy with the Medicare coverage you have, you can keep it exactly
the same.* HHS deleted the phrase *exactly the same,* and the flyer now
reads: *If you are happy with the Medicare coverage you have, you can
keep it.*
Advertisements
HHS has already run advertisements on MMA in print media and on national
television networks. On February 5, 2004, a full-page advertisement
appeared in Roll Call, [6] a newspaper directed primarily to Members of
Congress, congressional staff, and those whose work brings them into
regular contact with these officials. Entitled *Same Medicare. More
Benefits,* this advertisement sets out five bolded questions with answers
in smaller print. The advertisement emphasizes that beneficiaries may
choose to keep the same coverage they currently have or take advantage of
the new benefits available. The advertisement highlights the
Medicare-approved drug discount card program to start in June 2004,
prescription drug care coverage to start in 2006, and preventive benefits
to start in 2005. Additionally, the advertisement directs beneficiaries
to 1-800-MEDICARE and www.medicare.gov for more information regarding
benefits.
Similar to the Roll Call advertisement, the television advertisement also
contains a question and answer format, in which actors playing Medicare
beneficiaries ask a series of questions that are answered by the announcer
and title cards that follow each question. Like the print advertisements,
the television advertisement involves the assertion that changes to
Medicare involve the *Same Medicare. More Benefits.* However, this
advertisement focuses only on the new provisions allowing for savings on
prescription drugs, specifically the drug discount card and the
prescription drug benefit. Like the other materials, the television
advertisement ends in a frame with the 1-800-MEDICARE telephone number on
the screen and the announcer directing the public to call the number for
more information.
DISCUSSION
At issue here is the prohibition on using appropriations for the purpose
of publicity or propaganda. HHS has obligated fiscal year 2004/2005 CMS
program management appropriations (a two-year appropriation) for the flyer
and beneficiary mailing. Smith Letter, Enclosure 1 at 2. For the two
advertisements, HHS obligated fiscal year 2003 CMS program management
appropriations. Id. These program management funds are derived from the
Federal Hospital Insurance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund. See MMA S: 1015(a), 117 Stat. 2446
(appropriating amounts from the trust funds for carrying out MMA under the
heading *Funding start-up administrative costs for Medicare reform*) and
117 Stat. 316-17 (appropriating amounts from the trust funds for carrying
out Title XVIII of the Social Security Act, among other things, under the
heading *Program Management*). The prohibition applicable for fiscal year
2003 was enacted in Pub. L. No. 108-7, Div. J, Tit. VI, S: 626, 117 Stat.
11, 470 (2003) and the prohibition applicable to fiscal year 2004 was
enacted in Pub. L. No. 108-199, Div. F, Tit. VI, S: 624, 118 Stat. 3
(2004). The language of these provisions is the same: *No part of any
appropriation contained in this or any other Act shall be used for
publicity or propaganda purposes within the United States not heretofore
authorized by the Congress.* 118 Stat. 3, 117 Stat. at 470.
History of Publicity or Propaganda Prohibitions
The prohibition on the use of appropriated funds for publicity or
propaganda first appeared in the Labor-Federal Security Appropriation Act,
1952, Pub. L. No. 134, ch. 373, S: 702, 65 Stat. 209, 223 (Aug. 31,
1951). The provision, in language almost identical to the prohibitions at
issue here, provided that *[n]o part of any appropriation contained in
this Act shall be used for publicity or propaganda purposes not heretofore
authorized by the Congress.* 65 Stat. at 223. Congress did not define
the phrase *publicity or propaganda* in the legislation nor is there a
definition in the legislative history.
The legislative history does indicate that the sponsor of the provision,
Representative Lawrence H. Smith, introduced it in reaction to 18 speeches
made across the nation by Oscar R. Ewing, Federal Security Agency
Administrator. 97 Cong. Rec. 4098 (1951). During the course of the
debate on this provision, a Member, who was concerned that the use of the
term *propaganda* might jeopardize the efforts of the Children*s Bureau to
distribute informational pamphlets on the growth and education of
children, questioned Mr. Smith about a definition of *propaganda.* Mr.
Smith replied, in essence, that one can easily identify propaganda: *We
can well distinguish between what is propaganda and what is educational
matter.* Id. At the same time, Congress was considering a similar
provision that was eventually enacted as section 603 of the Independent
Offices Appropriation Act, 1952, Pub. L. No. 137, ch. 376, S: 603, 65
Stat. 268, 291 (Aug. 31, 1951). During debate on section 603, Senator
Harry F. Byrd remarked that the restriction was needed to curtail the use
of appropriated funds to produce materials that constituted *[i]ndividual
glorification of bureaucrats.* 97 Cong. Rec. 6734 (1951). Furthermore,
Senate discussion regarding section 603 suggested that any prohibition
should not impair the government*s duty to keep its citizens *fully and
accurately informed.* Id.
Given the absence of definitional guidance in the statute and its
legislative history, we have struggled over the years to balance the need
to give meaning to this prohibition with an agency*s right or duty to
inform the public regarding its activities and programs.[7] B-178528,
July 27, 1973 (noting the difficulty of distinguishing between permissible
informational activity and other activity constituting publicity or
propaganda); B-212069, Oct. 6, 1983 (stating that the statute lacks
guidelines to help distinguish between legitimate informational activity
and proscribed publicity or propaganda). Our decisions reflect societal
values in favor of a robust exchange of information between the government
and the public it serves. B-184648, Dec. 3, 1975 (discussing an agency*s
*legitimate interest in communicating with the public*). This includes
the right to disseminate information in defense of an administration*s
point of view on policy matters. B-223098, Oct. 10, 1986 (stating that
public officials *may report on the activities and programs of their
agencies, may justify those policies to the public, and may rebut attacks
on those policies*); B-130961, Oct. 26, 1972 (noting that agencies *have a
duty to inform the public on Government policies and, traditionally,
policy-making officials have utilized Government resources to disseminate
information in explanation and defense of those policies*).
Accordingly, as part of our efforts to strike the right balance, we have
historically afforded agencies wide discretion in their informational
activities. We generally will defer to an agency*s justification for such
activities, only *overrid[ing] administrative determinations and
justification of propriety . . . where they are so palpably erroneous as
to be unreasonable.* B-178528, July 27, 1973. In assessing an agency*s
justification, one important factor is the agency*s statutory authority to
disseminate information. The more explicit an agency*s authority to carry
out promotional or informational activities, the stronger is its ability
to justify its activities. See, e.g.,
B-301022, Mar. 10, 2004; B-184648, Dec. 3, 1975; B-161686, June 30, 1967.
This, of course, is not to say that the *publicity or propaganda*
restriction is without meaning. We have, through 50 years of decisions,
identified a number of inappropriate activities subject to the
restriction. In this regard, we have noted that one of the main targets
of the publicity or propaganda prohibition is one in which the *obvious
purpose is *self-aggrandizement* or *puffery.** See, e.g., B-284226.2,
Aug. 17, 2000; B-229257, June 10, 1988; B-223098, Oct. 10, 1986; B-178528,
July 27, 1973. We have defined self-aggrandizement as *publicity of a
nature tending to emphasize the importance of the agency or activity in
question.* B-212069, Oct. 6, 1983 (quoting 31 Comp. Gen. 311 (1952), our
first decision interpreting the publicity or propaganda prohibition). For
example, an agency would be prohibited from expending
appropriated funds to issue a press release that attempted *to persuade
the public as to [its] importance . . . as a Government agency.*
B-212069, Oct. 6, 1983 (finding OPM press releases informing the public of
the Administration*s position on pending legislation unobjectionable).
In 2000, we concluded that a Department of Housing and Urban Development
(HUD) brochure that was deeply critical of the HUD budget reductions
proposed by the House Appropriations Committee was not
*self-aggrandizement.* B-284226.2, Aug. 17, 2000. The brochure purported
to detail the consequences for HUD programs and communities nationwide if
Congress enacted the funding reductions. HUD*s use of appropriations to
pay for the brochure did not violate the publicity or propaganda
prohibition because the brochure did not *tend to emphasize the importance
of HUD or HUD programs such that they constitute *puffery* or
*self-aggrandizement.** Id. We agreed with HUD that the brochure was
*important and timely information about the impact of the reductions to
HUD*s programs . . . .* Id.
We also have interpreted the restriction on publicity or propaganda as
prohibiting what we refer to as covert propaganda, that is, materials that
*are misleading as to their origin.* B-223098, Oct. 10, 1986. In 1987,
the State Department hired consultants to prepare newspaper articles and
op-ed pieces in support of the Reagan Administration*s Central America
policy. However, these pieces were published *as the ostensible position
of persons not associated with the government . . .* 66 Comp. Gen. 707
(1987). We concluded that such activities violated the publicity or
propaganda restriction because they were *misleading as to their origin.*
Id.
The publicity or propaganda restriction also prohibits the use of
appropriated funds solely for partisan purposes. See, e.g., B-178528,
July 27, 1973;[8] B-147578, Nov. 8, 1962; B-144323, Nov. 4, 1960.
Appropriated funds may never be used *in a general propaganda effort
designed to aid a political party or candidates.* B-147578, Nov. 8,
1962. However, *the lines separating the nonpolitical from the political
cannot be precisely drawn.* B-144323, Nov. 4, 1960. Agencies, of course,
have a legitimate right to explain and defend their policies and respond
to arguments against those policies. Our decisions recognize that as a
practical matter, it can be difficult to distinguish between agencies*
disseminating information *in explanation and defense* of their policies
and *other activities, similar in nature but for purely political or
partisan purposes.* B-130961, Oct. 26, 1972. The use of appropriated
funds is improper only if the activity is *completely devoid of any
connection with official functions* or completely *political in nature.*
B-147578, Nov. 8, 1962. If, however, an agency justifies its activity as
*made in connection with official duties,* and we find a basis for that
justification, we will not raise a legal objection to the use of
appropriated funds. B-144323, Nov. 4, 1960.[9]
Application of Publicity or Propaganda Prohibition to Flyer and
Advertisements
In our view, the HHS materials are neither *covert propaganda* nor
*self‑ aggrandizement.* All the materials identify HHS as the
source. Also, neither the flyer and its cover letter nor the
advertisements attribute the enactment of new benefits to HHS or any of
its agencies or officials.[10] Cf. B-212069, Oct. 6, 1983 (finding that
OPM*s press releases informing the public of the Administration*s position
on pending legislation was not self-aggrandizement; there was no attempt
to persuade the public of the importance of OPM as a government agency).
There remains, however, the concern that the materials violate the
prohibition because they represent purely partisan activities.
HHS justifies its materials as an exercise in informing beneficiaries of
new benefits provided by MMA. In his February 25, 2004, letter, the
Acting Administrator said, *In our view, MMA not only authorizes, but in
fact requires that we inform beneficiaries of the new benefits provided in
the MMA. Our letter, print and broadcast advertisements are designed to
meet this obligation and respond to the requirements of the statute.*
Smith Letter. With regard to the flyer and its cover letter,
specifically, the Acting Administrator said, *[W]e were following this
clear statutory mandate.* Id., Enclosure 1 at 7.
Indeed, MMA does require HHS to inform individuals about certain changes
to Medicare made by the act. Like existing statutory provisions,[11]
these provisions are designed to help beneficiaries make fully informed
choices among the various options available to them. Specifically, a new
statutory provision requires HHS to *conduct activities that are designed
to broadly disseminate information* to eligible individuals regarding
prescription drug coverage authorized under MMA. See MMA S: 101(a), 117
Stat. 2075 (adding new section 1860D-1(c) to the Social Security Act) (to
be codified at 42 U.S.C. S: 1395w-101(c)). Among other things, it
requires HHS*s activities to be similar to those carried out in connection
with the Medicare+Choice program, including by disseminating comparative
information regarding prescription drug plans. [12] Id. See also H.R.
Conf. Rep. No. 108-391 at 432-3 (2003) (emphasizing the importance of
public outreach in connection with the new benefit and instructing the
Secretary to ensure that lower income beneficiaries are aware of the
additional benefits available). Another provision requires HHS to conduct
activities *to broadly disseminate information to discount card eligible
individuals* regarding enrollment in the discount card program, the
features of the program, and the transitional assistance available to
certain low-income individuals. See MMA S: 101(a), 117 Stat. 2136 (adding
new section 1860D-31(d) to the Social Security Act) (to be codified at 42
U.S.C. S: 1395w-141(d)). It also requires HHS to provide for the
dissemination of comparative information about discount cards and, to the
extent practicable, to coordinate these activities with the dissemination
of educational information on other Medicare options. Id.
The flyer and advertisements do not provide beneficiaries with
comprehensive information about the benefits available as a result of MMA,
or comparative details about these benefits. In addition, they do not
address the impact of MMA on those eligible for both Medicaid and Medicare
and those with Medicare supplemental policies. They do, however, identify
the new benefits, note when they will become available, and, as we relate
in the *Background* section of this opinion, provide some information
describing the new benefits. Notably, the materials refer beneficiaries
to other sources for further information, including the toll-free
telephone number and the Internet site for Medicare. According to HHS,
the flyer and the advertisements are only one part of an overall campaign
that began in the fall of 2003 to raise beneficiary awareness about
important changes to the Medicare program. HHS expects this campaign to
continue into the fall of 2005. Smith Letter, Enclosure 1 at 3-4. In
this regard, the flyer*s cover letter, which HHS has said it will mail to
all beneficiaries, advises beneficiaries to *[l]ook for more information
about these [drug discount] cards in the next few months. Then in 2006,
Medicare will offer prescription drug coverage.* In this context, we
would not expect the flyer and advertisements to provide beneficiaries
with details on the array of options available to them under the
prescription drug benefit or drug discount card programs, or
individualized information that a beneficiary may need to choose from
among the available options.
On the other hand, given HHS*s stated interest in informing beneficiaries
of changes to Medicare, we observe several noteworthy omissions in HHS*s
materials. For example, while all materials mention the new drug discount
cards, none of them mention that the cards may not be free--that is
individuals enrolling may be charged an annual fee of up to $30--and that
savings may vary across covered drugs. See MMA S: 101(a), 117 Stat.
2131-48 (adding new section 1860D-31 to the Social Security Act) (to be
codified at 42 U.S.C. S: 1395w-141). These omissions are particularly
notable in the flyer, where HHS supplies more detailed information about
the 2006 prescription drug benefit than about the June 2004 discount
cards.[13] Since beneficiaries may enroll in discount card plans
beginning in May of this year, we would have expected at least as much
information about the drug discount cards as about the prescription drug
benefit.
The flyer suffers, too, we believe, in its discussion of the new
prescription drug benefit. For example, the flyer indicates that
beneficiaries will pay a premium of *about $35 a month* for the
prescription drug benefit. This figure, however, is the estimated average
premium to be charged rather than an established amount. Also, the flyer
overstates the access beneficiaries will have to the prescription drug
benefit program. In actuality, beneficiaries will have only a limited
amount of time to enroll for the benefit program, and failure to enroll
will result in penalties for late enrollment. See MMA S:101(a), 117 Stat.
2072-75, 2104-06 (adding new sections 1860D-1(b) and 1860D-13(b) to the
Social Security Act) (to be codified at 42 U.S.C. S:S: 1395w-101(b) and
1395w-113(b)).
The omissions notwithstanding, we do not find the content of the flyer and
its cover letter or the advertisements to be purely partisan in violation
of the publicity or propaganda prohibition. This is not to say that the
content is totally free of political tone. For example, the theme of both
advertisements is *Same Medicare. More Benefits,* and the flyer,
apparently picking up on the same theme, announces that *[t]he new law
preserves and strengthens the current Medicare program . . . .* Although
one can rationalize these sentiments in light of the benefit-related
provisions of the new law, they fail to recognize the legitimate concerns
of many about the long-term financial implications of the recently enacted
benefits on the Medicare program.[14] As noted in the fiscal year 2003
Financial Report for the United States Government, the Medicare program
faces a funding gap of over $15 trillion in net present value terms based
on the next 75-year period alone. The new drug benefit will add trillions
to this funding gap.[15] In addition, some critics of MMA assert, for
example, that provisions requiring Medicare beneficiaries to rely on
private insurance plans or managed care organizations for prescription
drug benefits reflect a fundamental change in the nature of this public
program.[16] Without a doubt, the future of the Medicare program is the
subject of ongoing and highly spirited discussion and debate at the
national level. In this context, the references in the flyer and print
and television advertisements to *Same Medicare. More Benefits* and
*preserve and strengthen* may appear to some as an attempt to persuade the
public to the Administration*s point of view regarding the newly enacted
benefit.
The publicity or propaganda prohibition, however, does not bar materials
that may have some political content or express support for a particular
view. On the contrary, we have recognized that the publicity or
propaganda prohibition does not preclude an agency from communicating with
the public with materials that include some political content. In 2000,
we concluded that an arguably more questionable information campaign by
the Department of Housing and Urban Development (HUD) using a widely
disseminated publication entitled, *Losing Ground: The Impact of Proposed
HUD Budget Cuts on America*s Communities*[17] had not violated the
prohibition. B-284226.2, Aug. 17, 2000. In the publication, signed by
HUD Secretary Andrew Cuomo, HUD criticized what it called *deep cuts* in
appropriations that were proposed by the House Appropriations Committee
for particular HUD programs. The publication stated that, if enacted, the
*cuts would have a devastating impact on families and communities
nationwide.* We found the publication to be a legitimate informational
activity. Id. Noting that the executive branch has a duty to inform the
public regarding government policies, we said that *[p]ublic officials may
report on the activities and programs of their agencies, may justify those
policies to the public, and may rebut attacks on those policies.* Id.
See also B-223098, Oct. 10, 1986 (holding that SBA did not violate the
prohibition when it printed and disseminated a pamphlet entitled, *The
Future of SBA,* designed to explain the Administration*s proposal to
transfer SBA to the Commerce Department and eliminate some of its small
business assistance functions); B-178528, July 27, 1973 (holding that the
U.S. Ambassador to Great Britain did not violate the prohibition with a
mass mailing of a letter, on State Department letterhead, transmitting
copies of editorials from British newspapers in support of United States
policy).
In another case, we concluded that the Office of Personnel Management
(OPM) had not violated the prohibition when it issued a press release
criticizing members of the House Appropriations Committee for voting to
delay implementation of proposed OPM pay-for-performance regulations.
B-212069, Oct. 6, 1983. In the press release, OPM said that these members
had *separated themselves from the President and the American people who
want more efficient government.* OPM also said that *they clearly do not
represent the majority of the American people who are tired of obstacles
being placed before the kinds of sensible management reforms that would
make government work better.* We viewed the press release as a legitimate
piece of information, and said that *[p]ublic officials may with propriety
report on the activities of their agencies, may expound to the public the
policies of those agencies and of the administration of which they are
members, and may likewise offer rebuttal to attacks on these policies.*
Id. We continued, *To the extent . . . that policy of an agency or
Administration is embodied in pending legislation, discussion by officials
of that policy may well necessarily refer to such legislation and be
either in support of or against it.* Id.
To restrict all materials that have some political content or express
support for an Administration*s policies would significantly curtail the
recognized and legitimate exercise of the Administration*s authority to
inform the public of its policies, to justify its policies and to rebut
attacks on its policies. It is important for the public to understand the
philosophical underpinnings of the policies advanced by elected officials
and their staff in order for the public to evaluate and form opinions on
those policies. Viewed in light of our prior decisions and opinions, the
HHS materials at issue here are not so partisan in nature and HHS*s
explanation *so palpably erroneous* as to violate the publicity or
propaganda prohibition. Notwithstanding the omissions and other
weaknesses in the materials, their content does not constitute a purely
partisan message.
As a final note, we do have serious concerns with HHS*s decision to place
the advertisement in Roll Call. An HHS official informally told us that
HHS placed the advertisement in Roll Call and The Hill newspapers as well
as in several other newspapers, including The Washington Post, The New
York Times, and USA Today. The official explained that HHS thought that
publishing the advertisements in Roll Call and The Hill would make it easy
for Members of Congress and congressional staff to have the information
that it was providing to beneficiaries through advertisements in the other
newspapers.[18] We question the prudence and appropriateness of HHS*s
decision to communicate with Members of Congress and congressional staff
in this manner. There are any number of more effective vehicles to
communicate with Members and staff, and at less cost, than advertising in
a newspaper. The vehicle selected by HHS provided it with little
assurance that Members and staff would receive and understand its message
concerning information supplied to beneficiaries. In addition, the
advertisement would not enable Members and staff to respond efficiently to
questions or concerns about the new legislation.
CONCLUSION
Although the publications contain a number of omissions and raise certain
concerns, the flyer and its cover letter and the print and television
advertisements do not violate the publicity or propaganda prohibition.
The content of these publications does not constitute a purely partisan
message. Accordingly, HHS*s use of appropriations to prepare and
disseminate these materials does not violate the publicity or propaganda
prohibitions of the Consolidated Appropriations Act of 2004, Pub. L. No.
108-199, Div. F, Tit. VI, S: 624, 118 Stat. 3 (2004), and the Consolidated
Appropriations Resolution of 2003, Pub. L. No. 108-7, Div. J, Tit. VI, S:
626, 117, Stat. 11, 470 (2003). In this legal opinion, we do not examine
nor do we express a view on the overall
economy, efficiency, or effectiveness of these print and television
advertisements. Further, other print and television advertising efforts
may raise additional issues that we do not consider in this legal opinion.
If you have any questions, please contact Susan A. Poling, Associate
General Counsel, or Thomas H. Armstrong, Assistant General Counsel, at
(202) 512-5644.
/signed/
Anthony H. Gamboa
General Counsel
Enclosures
------------------------
[1] Senator Frank R. Lautenberg*s letter of January 29, 2004, requesting
our legal opinion was subsequently joined by Senators Jon S. Corzine,
Edward M. Kennedy, and John F. Kerry, and Representatives Jim Davis, Frank
Pallone, Charles B. Rangel, Jan Schakowsky, and Pete Stark by letter of
February 5, 2004. Both letters expressed concerns about the political
nature of the two-page flyer and print and television advertisements that
HHS produced.
[2] Letter from Dennis G. Smith, Acting Administrator, Centers for
Medicare & Medicaid Services (CMS), to Gary L. Kepplinger, Deputy General
Counsel, GAO, February 25, 2004. This reply was supplemented by
discussions with CMS officials.
[3] As agreed, we did not obtain and evaluate information from
beneficiaries concerning the utility to them of these materials.
[4] This meeting included members of your staff and the staffs of Senators
Jon S. Corzine, Edward M. Kennedy, John F. Kerry, and Hillary Rodham
Clinton, the staffs of Representatives Jim Davis, Frank Pallone, Jan
Schakowsky, and Pete Stark, as well as minority staff of the House
Committee on Ways and Means.
[5] We obtained information from HHS regarding the costs to HHS of
printing and mailing the flyer and cover letter, producing and airing the
television commercial, and producing and publishing the Roll Call
advertisement. As agreed, we did not audit that information. The
unaudited cost information is provided in an enclosure to this opinion.
[6] In addition to Roll Call, we understand from informal discussions with
an HHS official that advertisements were placed in several other
newspapers, including The Hill, The Washington Post, The New York Times,
and USA Today.
[7] In two audit reports in the 1970s, GAO characterized publications as
propaganda from an audit, not a legal, perspective. U.S. General
Accounting Office, Problems With Publications Related to the Clinch River
Breeder Reactor Project, EMD-77-74 (Washington, D.C.: Jan. 6, 1978);
Evaluation of the Publication and Distribution of *Shedding Light on Facts
About Nuclear Energy," EMD-76-12 (Washington, D.C.: Sept. 30, 1976). In
neither report did GAO apply the publicity or propaganda prohibition;
instead, the reports set out their own criteria against which to audit the
publications. Consequently, these reports have limited value in
understanding the prohibition.
[8] The date of this opinion is listed incorrectly in Westlaw as July 27,
1978. See 1978 WL 10850.
[9] For example, the White House arranged a series of regional conferences
in 1962 in 12 cities across the country. Some argued that these
conferences had political overtones. The White House justified the
conferences as providing the opportunity to seek the views of state and
local officials and interested citizens on federal programs. We found
this justification reasonable, so we did not object to the use of
appropriated funds. B-147578, Nov. 8, 1962.
[10] While the flyer credits the actions of *President Bush and Congress*
with enacting the legislation and the new benefits, such a statement
describes the constitutional process for enacting legislation.
[11] For example, HHS is required to prepare an annual notice to
beneficiaries explaining the benefits available to them and to provide
information via a toll-free telephone number. See 42 U.S.C. S: 1395b-2
(2000). HHS is also required to provide information to enable Medicare
beneficiaries to evaluate the value of Medicare supplemental policies and
the relationship of such policies to Medicare benefits. See 42 U.S.C. S:
1395ss(e).
[12] HHS is required to provide annual mailings prior to each year*s *open
season* describing the various managed care plans and the traditional
fee-for-service option in specific detail so that beneficiaries can
compare the various options. It also is required to maintain a toll-free
number and Internet site for information about the managed care program.
See 42 U.S.C. S: 1395w-21(d).
[13] Moreover, with respect to the prescription drug coverage, the
information supplied may lead beneficiaries to underestimate the amount
they will need to pay for prescription drugs.
[14] See, e.g., 149 Cong. Rec. S15899 (daily ed. Nov. 25, 2003) (statement
of Senator John McCain); U.S. General Accounting Office, Medicare:
Financial Challenges and Considerations for Reform, GAO-03-577T (Apr. 10,
2003).
[15] Department of Treasury, 2003 Financial Report of the United States
Government, http://www.fms.treas.gov/fr/ downloaded on March 9, 2004;
Fiscal Year 2003 U.S. Government Financial Statements: Sustained
Improvement in Federal Financial Management Is Crucial to Addressing Our
Nation*s Future Fiscal Challenges, GAO-04-477T (March 3, 2004).
[16] See, e.g., 149 Cong. Rec. S15750 (daily ed. Nov. 24, 2003) (statement
of Senator Herb Kohl) (stating that the MMA *fundamentally changes the
nature of Medicare*); 149 Cong. Rec. S15891-2 (daily ed. Nov. 25, 2003)
(statement of Senator Patrick Leahy) (stating that the MMA could force
seniors to leave the traditional Medicare program).
[17] HUD mailed the publication to HUD grantees, public interest groups,
churches, mayors, National Urban League affiliates, Indian tribal leaders,
public housing agencies, business groups, historically African-American
colleges and universities, academics, newspapers and news organizations.
[18] Because we were not aware of the newspaper advertisements at the time
of our February 6 letter to HHS, we did not include any questions about
these advertisements.