A much-needed step toward lowering prescription drug costs
It’s become tiresome to see progressive politicians act like pouting teenagers who seem to think it’s a sin to ever admit satisfaction with anything. Their lukewarm reaction to Senate passage of the admittedly ill-named Inflation Reduction Act won’t help energize the voters Democrats need to avoid conservatives regaining Congress in the upcoming midterm elections.
“This reconciliation bill goes nowhere near far enough in addressing the problems facing struggling working families,” said Sen. Bernie Sanders (I., Vt.) after voting for the measure Sunday. “But it is a step forward and I was happy to support it.”
Sanders is shortchanging legislation that may not reach his loftier goals but takes major strides toward them. Perhaps the most significant is it’s finally allowing Medicare to negotiate some prescription drug prices, a goal advocates have sought and failed to reach for decades.
Since not all drugs will immediately be subject to the new law, some Medicare beneficiaries may not initially pay less for their prescriptions. Still, the Congressional Budget Office estimates Medicare will achieve $102 billion in savings by being able to negotiate prices.
The legislation will limit Medicare recipients’ out-of-pocket costs for prescription drugs to $2,000 annually, which will be a huge blessing to the 1.4 million beneficiaries with cancer or other debilitating diseases who spend much more than that every year.
It extends for three years pandemic subsidies that lowered premiums for lowand middle-income families to buy health insurance under the Affordable Care Act and allows higher-income families who became eligible for subsidies during the pandemic to keep them during the extension.
And while the legislation is no Green New Deal, it can impact global warming by offering up to $28,500 in tax incentives and rebates to consumers who buy energy-efficient home appliances, install solar panels, and purchase electric vehicles. That could help cut U.S. greenhouse gas emissions to 40% below peak 2005 levels by 2030.
The new law will also make the nation’s tax system fairer by requiring corporations with more than $1 billion in annual profits to pay at least 15% in taxes. It will also boost the Internal Revenue Service’s funding by $80 billion so it can better audit large corporations and high-income earners who have the means to exploit loopholes that cost the treasury billions of dollars.
For years, Republican-controlled Congresses playing footsie with monied interests have refused to appropriately fund the IRS. With limited personnel and outdated technology, the agency has been largely limited to pursuing underpayments of taxes made by low- or middle-income filers who made mistakes on their returns.
More than half of IRS audits in 2021 were directed at taxpayers with incomes less than $75,000, and nearly half of those audits targeted families receiving the earned income tax credit, which is an anti-poverty measure. “God help us,” exclaimed Sen. Lindsey Graham (R., S.C.) in response to the possibility of the IRS hiring up to 87,000 new agents. It’s easy to guess who he meant by “us.”
What the legislation won’t do is greatly impact inflation. An analysis by the Wharton School of the University of Pennsylvania concluded it would “very slightly” increase inflation until 2024 and decrease inflation thereafter. “These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation,” the analysis said.
Even so, this legislation that deserved a less deceitful name is a major step toward what the nation aspires to be in the 21st century — fairer, healthier, wealthier, wiser and more prepared for the next 100 years.