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One of the planks of the conservative agenda is that anything government can do the private sector can do better. And more cost-effectively. Yeah right

The intense struggle in Congress last week over a relatively modest Medicare reform bill has underscored a disturbing truth: many of the private plans that participate in the huge government-sponsored health insurance program for older Americans have become a far too costly drain on Medicare’s overstretched budget.

Private health plans were promoted in the 1980s and 1990s in the belief that they could reduce costs and improve care through better management. And for a while they did. But policy changes that were championed by the Bush administration and a Republican-controlled Congress led to exactly the opposite outcome.

These private plans — that now cover a fifth of the total Medicare population — receive large subsidies to deliver services that traditional Medicare provides more cheaply and more efficiently by paying hospitals and doctors directly. Congress was right — for reasons of equity and of fiscal sanity — to pass a bill that would at least begin to remove some of the subsidies.

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One of the things that the Bush administration is breaking now is public transportation for school children. Why? So that private businesses like the owner of Greyhound Bus Lines can open up new lines of business offering more expensive private bus service to school districts.
The Federal Transit Administration last month closed its comment period on a new regulation that will cut off federal funding for bus routes that it believes primarily exist to get children to and from school. Under the new rules, a school system could subsidize a child's bus ride on public transit, but a public bus system could not significantly order its routes or schedules for the convenience of these children.
The regulations are a response to a federal court ruling in January that allowed the regional transportation authority in Rochester, N.Y., to do just that. The authority, at the urging of the school board, had created a network of new bus routes after the board changed the class times for its high schools and after the private bus service that the board had contracted with said it could not provide service during the new times. The FTA's regional administrator, Brigid Hynes-Cherin, said the authority's actions violated regulations governing federal mass transit funding because even though the routes could be used by general public, they weren't primarily for the general public. Plus, she added—and here is where we get to the real nub of the issue—public bus systems can't use federal money to provide services that compete with, or crowd out, private sector bus companies.

The court ruled, however, that Rochester was fully operating within the rules as they had been interpreted over the years by the FTA. Defeated in the courts, the FTA's administrator, James S. Simpson, ordered the rules rewritten.

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The Council of the Great City Schools, representing some of the nation's largest urban school districts, said in comments to the FTA that the regulations "would prevent public transit systems from ... adapting transportation routings and timetables to reflect the dynamic changes required to meet the needs of urban demographics, urban education reform, and federal education mandates." Other serious concerns have been voiced by groups such as Public Advocates, a California-based nonprofit legal organization that works on civil rights issues, which wrote in its comments that the regulations would "eliminate the only transportation option available" to low-income students in districts where "yellow bus service" would not be viable. The Maryland Transit Administration's statement raised concerns about creating a two-tier system in the Baltimore school district, where some students get to ride in private school buses while others don't.
Of course, there are cost concerns. The Washington Examiner reported June 27 that the District of Columbia public school system pays the regional Metro system $5 million a year to give its public school children subsidized rides. Neighboring Arlington County, Va., pays a private company $12 million to ferry a school population half the size of the District's.

So which company would benefit from this?