The Senate MP dealt a blow to Democrats’ plan to cut drug prices on Saturday, but left the rest of their sprawling economic bill largely intact as party leaders prepared for the first votes on a package that would affect many of the major domestic goals of President Joe Biden.
Elizabeth MacDonough, the chamber’s impartial arbitrator, said lawmakers should scrap language that imposes harsh penalties on drug makers who inflate their private insurance market prices above inflation. Those were the bill’s main price protections for the roughly 180 million people whose health insurance comes from private insurance, either through work or purchased alone.
Other key provisions were left intact, including giving Medicare the power to negotiate what it pays for drugs for its 64 million elderly recipients, a long-standing goal for Democrats. Sanctions for manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there is a $2,000 annual co-payment in drug costs and free vaccines for Medicare beneficiaries.
Her statements came as Democrats planned to begin voting in the Senate on Saturday on their comprehensive package covering climate change, energy, health care costs, taxes and even deficit reduction. Party leaders have said they believe they have the unity they need to pass the legislation through the 50-50 Senate, with Vice President Kamala Harris expected to vote to cut ties as all Republicans oppose the bill. will resist.
“This is a major victory for the American people,” Senate Leader Chuck Schumer, DN.Y., said of the bill, which both parties are using in their election campaigns to blame the worst period of inflation in four years. decades.
“At a time of seemingly impenetrable deadlock, the Inflation Reduction Bill will show the American people that when the moment demands it, Congress is still able to take big steps to solve big challenges,” Schumer said. “We will show the American people that, yes, we are able to pass a historic climate package and rein in pharmaceutical companies and make our tax code fairer.”
In response, Senate Leader Mitch McConnell, R-Ky., said Democrats “misinterpret the outrage of the American people as a mandate for yet another reckless tax and spending wave.” He said Democrats “have already robbed American families through inflation once and now their solution is to rob American families a second time.”
Eliminating drug manufacturers’ fines reduces incentives for pharmaceutical companies to limit what they charge, increasing costs for patients.
Erasing that language will reduce the $288 billion in 10-year savings that Democrats estimated total drug restrictions would bring — a reduction of perhaps tens of billions of dollars, analysts have said.
Schumer said MacDonough’s decision on the price cap for private insurance was “an unfortunate decision”. But he said the lore for drug pricing was “a major victory for the American people” and that the general bill “remains largely intact.”
The ruling followed a 10-day period in which Democrats were reviving key parts of Biden’s agenda that appeared to be dead. In quick deals with the Democrats’ two most unpredictable senators — first West Virginia conservative Joe Manchin, then Arizona’s Kyrsten Sinema, Schumer put together a broad package that, while a fraction of earlier, larger versions Manchin derailed, left the party a achievement against the backdrop of this fall’s congressional elections.
The MP also signed a fee for excess emissions of methane, a potent source of greenhouse gases, from oil and gas drilling. She also withdrew environmental grants to minority communities and other initiatives to reduce carbon emissions, said Thomas Carper, chair of the Senate Environment and Public Works Committee, D-Del.
She passed a provision requiring union-scale wages to be paid if energy efficiency projects qualify for tax credits, and another that would limit electric vehicle tax credits to those cars and trucks assembled in the United States.
The measure has been met with unanimous Republican opposition. But assuming Democrats are fighting a nonstop “vote-a-rama” of amendments — many designed by Republicans to derail the measure — they should be able to force the measure through the Senate.
The House returns on Friday to vote on the bill.
“How will vote-a-rama be. It will be like hell,” South Carolina Senator Lindsey Graham, the highest-ranking Republican on the Senate Budget Committee, said Friday of the approaching GOP amendments. He said that by backing the Democratic bill, Manchin and Sinema would “strengthen legislation that will make life harder for the average person” by raising energy costs with tax hikes and making it more difficult for companies to hire workers.
The bill provides spending and tax incentives to switch to cleaner fuels and support coal to help reduce carbon emissions. Expiring subsidies that help millions of people pay private insurance premiums would be extended for three years, and there is $4 billion to help Western states fight the drought.
There would be a new minimum tax of 15% for some companies that earn more than $1 billion a year but pay much less than the current 21% corporate tax. A 1% tax would also be levied on companies that bought back their own shares, traded in after Sinema refused to support higher taxes on managers of private equity firms and hedge fund managers. The IRS budget would be pumped up to bolster tax collections.
While the final cost of the bill is still being determined, it would spend a total of 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 bring in more than $700 billion in taxes and drug savings from the government, leaving about $300 billion for deficit reduction — a modest bite out of the projected 10-year deficits of many trillions of dollars.
Democrats use special procedures that allow them to pass the measure without getting the 60-vote majority that legislation often needs in the Senate.
It is the MP’s job to decide whether parts of the legislation should be scrapped for violating those rules, including requiring provisions to focus primarily on the federal budget and not on imposing new policies.