Lobbyists are rushing to influence the law on reducing inflation

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While the Democrats rush to finalize The $ 739 billion tax, health and climate legislation that was resumed last week to the surprise of most Washington insiders, corporate lobbyists and advocates of the issues are working to support, modify or completely derail the design of law.

The measure, dubbed the Inflation Reduction Act, would provide the largest investment in US history in clean energy and other efforts to combat climate change. It also aims to reduce health care costs by allowing Medicare to negotiate prescription drug prices, and would impose a new minimum corporate tax and strengthen the Internal Revenue Service budget to pursue tax tricks.

The sudden relaunch of the legislation last week launched a flurry of efforts by pro and anti-it groups, who are using TV and newspaper advertisements and personal contacts to try to get Democrats on their side ahead of the Senate vote. .

Much of the fiercest lobby has focused on the health provisions of the bill.

Research from Patients for Affordable Drugs Now, which claims lower prices, found that leading pharmaceutical lobby PhRMA and its allies have spent at least $ 18.6 million on television and digital advertising since July 1, including $ 1 million on new TV commercials alone since the Democrats deal was announced on July 27. That $ 1 million figure doesn’t include announcements that were already underway when the deal was announced.

“Clearly, the pace of spending has increased over the past month or so,” said David Mitchell, president of Patients for Affordable Drugs Now. “They spent a lot of money trying to stop this reform.”

Some of the pharmaceutical lobby announcements monitored by Mitchell’s group include one published in July and August claiming that Medicare’s “pricing” – the government that negotiates drug prices with manufacturers, as allowed by the bill. law – would interfere with seniors’ ability to get the medications they need. That ad ran in Washington, Georgia, Nevada, West Virginia, and other markets, according to the research.

The announcement was published by the Partnership to Fight Chronic Disease, a nonprofit group that has posted other announcements against Medicare negotiation. A spokesperson, Jennifer Burke, said the current proposals “will eventually create an even greater burden on our already ailing health system.”

A targeted announcement from the Partnership to Fight Chronic Disease tells Senator Raphael G. Warnock (D-Ga.) That “Medicare pricing is the wrong prescription.” (Video: Partnership to Fight Chronic Disease)

A PhRMA spokesperson declined an interview request. The lobby group held a briefing last week in which executives said the drug pricing measures would reduce the supply of life-saving medicines.

On the other side of that politics, a number of groups that see it as a way to reduce healthcare costs for Americans are backing the measure, including AARP, which on Thursday launched a new advertising purchase in Arizona, Nevada and Georgia that will run until Monday. and for a total of approximately $ 700,000. The group also has a $ 3 million advertising purchase running in the Washington area and beyond national cable, urging senators to oppose Big Pharma.

AARP members across the country are contacting their lawmakers to urge them to support the package, and the group is scheduling meetings with senators and their staff to take the case forward, said Bill Sweeney, senior vice president for group governance affairs.

“This is common sense,” he said in an interview Wednesday. “Our AARP members are excited about this and are ready.”

The bill also includes hundreds of billions of dollars in investments to combat climate change and reduce planet-warming greenhouse gas emissions, and outlines requirements for tax credits of up to $ 7,500 for vehicle purchases. electrical.

Starting from the end of 2023, the EV provision allows credits to be used only for vehicles with batteries manufactured or assembled outside of troubling countries such as China. At the end of 2024, a similar requirement will extend to critical minerals contained in batteries.

The Zero Emission Transportation Association (ZETA), which released a statement last week urging approval of the bill, is asking senators to consider extending deadlines by a year or more to make compliance easier by part of the companies, said Joe Britton, executive director of ZETA.

In a press conference on Tuesday, Senator Joe Manchin III (DW.Va.), a key player in the Democratic deal, signaled that he was not open to flexibility on the provision.

“Tell them to get aggressive and make sure we’re mining in North America, we’re mining in North America and stop relying on China,” Manchin said. “I’ve been very, very adamant that we shouldn’t build this mode of transportation on the backs of foreign supply chains, and I won’t.”

Carmakers say the climate bill sets impossible targets

The bill also places price limits of between $ 55,000 and $ 80,000 on electric vehicles for which the tax credit can be used. Rivian, a manufacturer of electric pickup trucks and SUVs, is asking lawmakers for a change that gives him and other manufacturers a two-year transition period before those limits apply, said James Chen, the company’s vice president for policy. public.

Although many of Rivian’s vehicles start at prices below the threshold, they are “right on the cusp” and could easily go further when options are added, Chen said. The company has contacted Senate leadership and senators in states where it has operations or plans a future factory, including Michigan, Georgia and California, it said.

Meanwhile, some businesses and GOP groups are focusing on derailing key tax measures in the bill by targeting moderate Democratic Senator Kyrsten Sinema (Ariz.) With their outreach. Sinema only announced Thursday night that he would vote for the bill after the Democrats agreed to some changes to the tax provisions.

The United States Chamber of Commerce, for example, ran a full-page ad in Arizona newspapers that struck the initial tax provisions. In recent days, Sinema has also heard of Arizona companies, many of which have urged her to oppose the minimum corporation tax under the legislation.

The Arizona Chamber of Commerce and Industry, for example, delivered its message directly during a Zoom call Tuesday afternoon. Business leaders in manufacturing, pharmaceuticals and energy sectors, digitally joined by their key lobbyists, have begged Sinema to reject policies that include a proposed minimum 15% corporate tax. That provision, as initially written, would raise $ 315 billion, a good chunk of the bill’s total revenue.

Danny Seiden, the chairman of the local chamber, said Sinema “wanted to hear from us [if] this bill was written in a way that had a negative impact on business, “adding,” He wanted as much information as possible. “

Seiden said the companies essentially told Sinema that the policy would limit capital investment by restricting national supply chains. But he said that Sinema “gave us no indication” of his views of him during the Zoom.

Meanwhile, the America First Policy Institute, a group founded by President Donald Trump’s former economic aides, gathered 75 conservative organizations for a conference call Wednesday night to work out strategies on how to stop the bill. The Prosperity Committee, which focuses on Arizona, is running announcements that question spending items such as the postal service truck retrofit, said Stephen Moore, a former Trump adviser who sits on the board of directors of Trump. group.

Moore said GOP donors are “turned on” for the bill and determined in particular to oppose the increase in the IRS budget.

“We are trying to put together a campaign that is effective,” Moore said. “We are trying to figure out what is the main vulnerability here, what is the least popular part of this bill. … This line that now is not a good time to raise taxes generally resonates with people. The truth is, we don’t have a silver bullet and we’re looking for one. “

But a K Street lobbyist, speaking on condition of anonymity to discuss sensitive speeches, he said the opposition between the industry groups was eased in part because just last year they had prepared for multi-billion dollar tax hikes, rather than the scaled-down measures that emerged. Small businesses have successfully eliminated the higher taxes on pass-through entities, while larger companies have managed to keep the corporate rate at 21%.

The Democrats had pushed to raise the corporate tax rate to 28%, which would have affected far more companies than their final plan to impose a minimum tax that would only fall on companies that now pay less than 15%.

“If you told people a year ago that they should have settled for a minimal fee, it sucks, but it’s definitely a mitigated result,” the lobbyist said. “I think a year ago, people would have got it in the blink of an eye.”

The head of a conservative organization, citing conversations with major donors, agreed.

“My anecdotal impression is that there won’t be a big push against this from the business community, and there are some pieces that are likely good for business,” the person said., speaking on condition of anonymity to discuss private interviews.

Even if it passes, the provisions of the bill may not be safe for long.

Doug Holtz-Eakin, former director of the Congressional Budget Office and a White House economist under President George W. Bush, he said Republicans are ready to attack “everything” in the bill if it passes. If the GOP resumes Congress in this fall’s midterm elections, it could make a push to eliminate the 95% excise tax on the pharmaceutical industry, believing that this will force the rest of the Democrats’ attempt to revise drug prices to plummet. .

“Once it’s gone, the whole thing falls apart,” Holtz-Eakin said. “If you choose to use reconciliation to get something across party lines, then irrelevant of merits, it becomes a political goal: [Affordable Care Act] it was a political goal; the 2017 tax law was a political goal; this too will become a goal “.

Tony Romm contributed to this report.

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