Donald Lambro

Her story told of airline passengers suddenly being faced with a lot of different fares from competing airlines, often on the same routes. To her, it was "all so confusing," as the story told of one man who paid more for a flight, before he found another passenger who got a cheaper fare from a competitor.

Of course, this was nothing but old-fashioned price-cutting competition, as the government-run, single-set pricing system was being junked in favor of market reforms that freed airlines (within parameters) to set their prices without seeking the approval of the Civil Aeronautics Board, which was abolished.

This healthy but sometimes messy competition led to a revolution in super-saver fares that opened up air travel to millions of ordinary, lower-income Americans.

The enactment of tax-deferred or tax-free Individual Retirement Accounts seemed confusing, too, at first, as banks offered a multiplicity of plans and inducements and interest rates. But the industry adjusted, and tens of millions of savers who opened accounts have benefited from them.

In the same way, Bush's prescription-benefits bill is opening up the drug industry to more competition by allowing a multitude of private discount companies to sign up customers, offering a variety of plans that may seem a little confusing at first but allow seniors to shop around for the best deal.

The Democrats overwhelmingly opposed Bush's prescription drug plan, largely because they hate the idea of turning anything over to the private sector.

The drug-discount program was "fundamentally flawed" because private businesses were delivering the benefit, Kennedy said last week. But this is, in fact, the program's strongest attribute, giving competitors every incentive to offer deeper discounts to sign up new members.

I wasn't a supporter of this program because I thought it was too big and too costly, adding heavier financial obligations onto a Medicare program that was already facing huge liabilities without the drug benefit add-on.

But there are recent signs that the cost projections may not be as high as initially feared. New estimates suggest the subsidy bills will be billions of dollars less than forecast.

If that's the case, it will be due in part to the program's market-oriented structure. That's something that needs to be broadened and improved in the legislative fine-tuning that will no doubt be done in the years to come.


Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.