MP weakens Democrats’ drug plan in law on reducing inflation as Senate prepares to vote

The Senate MP dealt a blow to the Democrats’ plan to cut drug prices on Saturday, but left the rest of their vast economic bill largely intact as party leaders prepared for the first ballots on a package containing many of President Joe Biden’s major national goals.

Elizabeth MacDonough, the non-partisan arbiter of the house rules, said lawmakers must remove the language by imposing heavy penalties on drug makers who raise their prices beyond inflation in the private insurance market. Those were the bill’s main tariff protections for the roughly 180 million people whose health coverage comes from private insurance, through work, or bought on their own.

Other important provisions remained intact, including granting Medicare the power to negotiate what it pays for pharmaceuticals for its 64 million elderly beneficiaries, a long-standing goal for Democrats. Manufacturers penalties for excess inflation would apply to drugs sold to Medicare, and there’s an annual $ 2,000 cap on drug costs and free vaccines for Medicare beneficiaries.

His rulings came as Democrats planned to begin Senate voting on Saturday on their broad package that addresses climate change, energy, health care costs, taxes and even deficit reduction. Party leaders said they believe they have the unity they will need to push legislation through the 50-50 Senate, with Vice President Kamala Harris expected to vote to break ties, since all Republicans should oppose. to the bill.

“This is a great victory for the American people,” Senate Majority Leader Chuck Schumer, DNY, said of the bill, which both parties are using in their election campaigns to blame the worst period of inflation in the country. four decades.

“In a seemingly impenetrable stalemate, the inflation reduction act will show the American people that when the moment calls for it, Congress is still capable of taking big steps to solve major challenges,” Schumer said. “We will show the American people that, yes, we can pass a historic climate package and curb drug companies and make our tax code fairer.”

In response, Senate Minority Leader Mitch McConnell, R-Ky., Said the Democrats “are misinterpreting the outrage of the American people as a mandate for yet another reckless taxation and spending madness.” He said the Democrats “have already robbed American families once because of 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 what they charge, increasing costs for patients.

Clearing that language will cut the $ 288 billion over 10-year savings that Democrats’ overall drug cuts are estimated to generate – a reduction of perhaps tens of billions of dollars, analysts said.

Schumer said MacDonough’s decision on the price limit for private insurance was “an unfortunate ruling.” But she said the surviving language on drug prices was “a great victory for the American people” and that the general bill “remains essentially intact.”

The ruling followed a 10-day period that saw Democrats resurrect key components 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 centrist Kyrsten Sinema – Schumer has put together a broad package that, although a fraction of the older and larger versions than Manchin derailed, would have given the party a result against the backdrop of this fall’s Congressional elections.

The lawmaker also signed a tax on excess emissions of methane, a powerful contributor to greenhouse gases, from drilling for oil and gas. It also left open environmental subsidies to minority communities and other initiatives to reduce carbon emissions, said Senate Environment and Public Works Committee chair Thomas Carper, D-Del.

It passed 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.

The general measure must face unanimous republican opposition. But assuming Democrats are fighting an uninterrupted “vote-a-rama” of amendments – many designed by Republicans to derail the measure – they should be able to push the measure through the Senate.

The House is back on Friday to vote on the bill.

“What it will be like to vote for a rama. It will be like hell,” Senator Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of upcoming GOP amendments. He said that in supporting the Democratic bill, Manchin and Sinema “are enforcing legislation that will make the life of the average person more difficult” by increasing energy costs with tax hikes and making it more difficult for companies to hire workers.

The bill offers tax and spending incentives to move to cleaner fuels and support coal with assistance in reducing carbon emissions. The 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 fight drought.

There would be a new 15% minimum tax on some companies that earn over $ 1 billion annually but pay far less than the current 21% corporation tax. There would also be a 1% tax on companies that repurchase their own shares, traded after Sinema refused to incur higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be pumped to bolster its tax collection.

While the final costs of the bill are still being finalized, overall it 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. for health care. It would raise more than $ 700 billion in taxes and government drug cost savings, leaving about $ 300 billion for deficit reduction – a modest bite of the many trillion dollars expected over 10 years.

Democrats are using special procedures that would allow them to pass the measure without having to reach the 60-vote majority that legislation often needs in the Senate.

It is up to the parliamentarian to decide whether parts of the legislation should be abandoned for violating these rules, which include the requirement that the provisions are primarily intended to affect the federal budget, not to impose new policies.

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