South Florida Sun-Sentinel (Sunday)
Dems’ drug price plan dealt a blow
But Senate referee keeps remainder of economic bill intact
WASHINGTON — The Senate parliamentarian on Saturday dealt a blow to Democrats’ plan for curbing drug prices but left the rest of their sprawling economic bill largely intact as party leaders prepared for first votes on a package containing many of President Joe Biden’s top domestic goals.
Elizabeth MacDonough, the chamber’s nonpartisan rules arbiter, said lawmakers must remove language imposing hefty penalties on drugmakers that boost their prices beyond inflation in the private insurance market. Those were the bill’s chief pricing protections for the roughly 180 million people whose health coverage comes from private insurance.
Other major provisions were left intact, including giving Medicare the power to negotiate what it pays for pharmaceuticals for its 64 million elderly recipients, a longtime goal for Democrats. Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is a $2,000 annual out-of-pocket cap on drug costs and free vaccines for Medicare beneficiaries.
MacDonough’s rulings came as Democrats planned to begin Senate votes Saturday on their wide-ranging package addressing climate change, energy, health care costs, taxes and even deficit reduction. Party leaders have said they believe they have the unity they will need to move the legislation through the 50-50 Senate, with Vice President Kamala Harris’ tiebreaking vote and over solid Republican opposition.
“This is a major win for the American people,”
Senate Majority Leader Chuck Schumer, D-N.Y., said of the bill, which both parties are using in election-year campaigns to assign blame for the worst inflation in four decades. “And a sad commentary on the Republican Party, as they actively fight provisions that lower costs for the American family.”
Senate Minority Leader Mitch McConnell, R-Ky., said Democrats “are misreading the American people’s outrage as a mandate for yet another reckless taxing and spending spree.”
Dropping penalties on drugmakers reduces incentives on pharmaceutical companies to restrain what they charge, increasing costs for patients.
Erasing that language will cut the $288 billion
in 10-year savings that the Democrats’ overall drug curbs were estimated to generate — a reduction of perhaps tens of billions of dollars, analysts have said.
The ruling followed a 10-day period that saw Democrats resurrect top components of Biden’s agenda that had seemed dead. In rapid-fire deals with Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema — Schumer pieced together a broad package that, while a fraction of earlier, larger versions that Manchin derailed, would give the party an achievement against the backdrop of this fall’s congressional elections.
The parliamentarian also signed off on a fee on excess
emissions of methane, a powerful greenhouse gas contributor, from oil and gas drilling. She also let stand environmental grants to minority communities and other initiatives for reducing carbon emissions, said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.
She approved a provision requiring union-scale wages to be paid if energy efficiency projects are to qualify for tax credits, and another that would limit electric vehicle tax credits to those cars and trucks assembled in the United States.
Assuming Democrats fight off a nonstop “votea-rama” of amendments — many designed by Republicans to derail the measure — they should be able to muscle the measure through
the Senate.
House passage could come when that chamber returns from recess on Friday.
“What will vote-a-rama be like. It will be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of the approaching GOP amendments.
The bill offers spending and tax incentives for moving toward cleaner fuels and supporting coal with assistance for reducing carbon emissions. Expiring subsidies that help millions of people afford private insurance premiums would be extended for three years, and there is $4 billion to help Western states combat drought.
There would be a new 15% minimum tax on some corporations that earn over
$1 billion annually but pay far less than the current
21% corporate tax. There would also be a 1% tax on companies that buy back their own stock, swapped in after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped up to strengthen its tax collections.
While the bill’s final costs are still being determined, it overall would spend more than $300 billion over 10 years to slow climate change, which analysts say would be the country’s largest investment in that effort, and billions more on health care. It would raise more than
$700 billion in taxes and from government drug cost savings, leaving about $300 billion for deficit reduction.