By ALAN FRAM and FARNOUSH AMIRI – Associated Press
WASHINGTON (AP) — The Senate Houseman on Saturday dealt a blow to Democrats’ plan to cut drug prices but left the rest of their sprawling economic bill largely intact as party leaders braced for the first votes on a package that many of the top residents of President Joe Biden contained goals.
Elizabeth MacDonough, the chamber’s nonpartisan rules arbiter, said lawmakers must remove language that imposes severe penalties on drugmakers who inflate their prices in the private insurance market beyond inflation. These were the bill’s key price protections for the roughly 180 million people whose health insurance comes from private insurance, either through work or through their own insurance.
Other key provisions were left intact, including the power to negotiate Medicare what it pays for medicines for its 64 million elderly recipients, a longtime Democrat goal. Drugs sold to Medicare would face penalties for manufacturers for exceeding inflation, and there is a $2,000 annual cap on drug costs and free vaccines for Medicare beneficiaries.
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Their decisions came as Democrats planned to begin Senate voting on Saturday on their sweeping package on 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 get the legislation through the 50-50 Senate, with Vice President Kamala Harris’ undecided vote and a solid Republican opposition.
“This is a huge win for the American people,” Senate Majority Leader Chuck Schumer, DN.Y., said of the bill both parties are using in their campaigns to pinpoint blame for the worst inflationary bout in four years. And a sad comment on the Republican Party, which is actively campaigning against regulations that lower costs to the American family.”
In response, Senate Minority Leader Mitch McConnell, R-Ky., said Democrats “misunderstand the outrage of the American people as a mandate for another reckless tax and spending spree.” He said Democrats “have robbed American families once before with inflation, and now their solution is to rob American families a second time.”
Eliminating penalties for drug manufacturers reduces incentives for drug companies to limit their fees, increasing costs for patients.
Deleting that language will reduce the $288 billion over 10 years that Democrats estimated would generate overall from drug restrictions — a reduction of perhaps tens of billions of dollars, analysts said.
Schumer said MacDonough’s decision on the price cap for private insurance was “an unfortunate decision.” But he said the surviving drug price language represented “a major victory for the American people” and that the accounts “remained largely intact.”
The ruling followed a 10-day period in which Democrats revived key components of Biden’s agenda that seemed dead. In quick deals with the two most unpredictable Democratic senators — first West Virginia conservative Joe Manchin, then Arizona centrist Kyrsten Sinema — Schumer pulled together a broad package that, while Manchin derailed a fraction of previous, larger versions, the give would party a performance against the background of the congressional elections this fall.
The MP also signed a fee for excessive emissions of methane, a major contributor to greenhouse gases, from oil and gas drilling. She also allowed environmental grants for minority communities and other initiatives to reduce carbon emissions, said Senate Environment and Public Works Committee Chair Thomas Carper, D-Del.
She agreed to a provision that would require 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 cars and trucks assembled in the United States.
The overall measure met with unanimous opposition from Republicans. But provided Democrats resist a nonstop “vote-a-rama” of amendments — many drafted by Republicans to derail the measure — they should be able to get the measure through the Senate.
The home run could come if this chamber returns briefly from break on Friday.
“What will Vote-a-rama look like? It’s going to be like hell,” South Carolina Sen. Lindsey Graham, the top Republican on the Senate Budget Committee, said Friday of the upcoming GOP changes. He said that by supporting the Democrats’ bill, Manchin and Sinema are “empowering legislation that will make life harder for the average citizen,” by driving up energy costs through tax hikes and making it harder for businesses to hire workers.
The bill offers spending and tax incentives to transition to cleaner fuels and support coal by helping to reduce carbon emissions. Expiring subsidies that help millions of people pay for private insurance premiums would be extended by 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 make over $1 billion annually but pay far less than the current corporate tax rate of 21%. It would also levy a 1% tax on companies buying back their own shares traded after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped up to bolster its tax revenues.
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, plus billions more for health care. It would yield more than $700 billion in tax and drug revenue savings for the government and leave about $300 billion for deficit reduction – a modest portion of the many trillion dollars projected 10-year deficits .
Democrats are using special procedures that would allow them to pass the measure without having to win the 60-vote majority that legislation often requires in the Senate.
It is the job of the parliamentarian to decide whether portions of legislation need to be dropped because they violate these rules, which include the requirement that regulations aim primarily to interfere with the federal budget and not impose new policy.
Associated Press writer Matthew Daly contributed to this report.
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