WASHINGTON — The Senate congressman on Saturday dealt a blow to the Democrats’ plan to cut drug prices, but left the rest of their sprawling economic bill largely untouched as party leaders geared up for the first votes on a package containing many of President Joe Biden’s major national goals.
Elizabeth MacDonough, the nonpartisan arbiter of the chamber rules, said lawmakers must remove language imposing stiff penalties on drugmakers who raise prices above inflation in the private insurance market. . These were the bill’s main rate protections for the roughly 180 million people whose health coverage comes from private insurance, either through work or purchased on their own.
Other important provisions remained intact, including giving Medicare the power to negotiate what it pays for pharmaceuticals for its 64 million elderly beneficiaries, a longtime goal for Democrats. Penalties on manufacturers for overshooting inflation would apply to drugs sold to Medicare, and there is a $2,000 annual cap on free drug and vaccine costs for Medicare beneficiaries.
His decisions came as Democrats planned to begin votes in the Senate on Saturday on their sweeping agenda covering 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 the legislation through the Senate 50-50, with Vice President Kamala Harris’s deciding vote and a strong Republican opposition.
“This is a major victory for the American people,” Senate Majority 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. “And a sad commentary on the Republican Party as it actively fights cost-cutting provisions for the American family.”
In response, Senate Minority Leader Mitch McConnell, R-Ky., said Democrats are “misinterpreting the outrage of the American people as a mandate for another reckless fiscal and spending spree.” He said Democrats “have already robbed American families once through inflation and now their solution is to rob American families a second time.”
Abandoning penalties on drugmakers reduces incentives for pharmaceutical companies to restrict what they charge, which increases costs for patients.
Erasing that language will shave off the $288 billion in 10-year savings the Democrats’ global drug cuts were supposed to generate — a reduction of perhaps tens of billions of dollars, analysts say.
Schumer said MacDonough’s private insurance price cap decision was “an unfortunate decision.” But he said the lingering drug pricing language represented “a major victory for the American people” and that the overall bill “remains largely intact.”
The decision followed a 10-day period in which Democrats resurrected key elements of Biden’s agenda that seemed dead. In quick deals with the Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia and then Arizona centrist Kyrsten Sinema — Schumer pieced together a vast package that, although a fraction of earlier versions bigger than Manchin has derailed, would give the party a feat in the context of the legislative elections this fall.
The parliamentarian also signed a levy on excess emissions of methane, a potent contributor of greenhouse gases, from oil and gas drilling. She also left environmental grants to minority communities and other carbon reduction initiatives, said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.
She approved a provision requiring union-wide 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 USA.
The blanket measure faces unanimous Republican opposition. But assuming Democrats fight an unbroken “vote-a-rama” of amendments — many of which are designed by Republicans to derail the measure — they should be able to force the measure through the Senate.
The switch to the House could take place when that House returns briefly from recess on Friday.
“What the vote-a-rama will look like. It’ll be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of the approaching GOP amendments. He said that by supporting the Democratic bill, Manchin and Sinema are “strengthening legislation that will make life harder for the average person” by forcing energy costs with tax increases and making it harder for businesses to hire workers.
The bill proposes spending and tax incentives to switch to cleaner fuels and support coal with help to reduce carbon emissions. The expiration of subsidies that help millions pay private insurance premiums would be extended by three years, and $4 billion is earmarked to help Western states fight drought.
There would be a new minimum tax of 15% on certain corporations that earn more than $1 billion a year but pay significantly less than the current corporate tax of 21%. There would also be a 1% tax on companies buying back their own shares, traded after Sinema refused to back higher taxes for private equity firm executives and hedge fund managers. The IRS budget would be inflated to strengthen its tax collections.
While the final costs of the bill are still being determined, overall it would spend more than $300 billion over 10 years to slow climate change, which analysts say would be the country’s biggest investment in this. effort, and billions more for health care. This would raise more than $700 billion in taxes and government drug cost savings, leaving about $300 billion for deficit reduction – a modest portion of projected 10-year deficits of several trillions of dollars. dollars.
Democrats are using special procedures that would allow them to pass the measure without having to achieve the 60-vote majority that legislation often needs in the Senate.
It is the parliamentarian’s job to decide whether parts of the legislation should be dropped for violating these rules, which include the requirement that the provisions are intended primarily to affect the federal budget, not to impose new policy.
Associated Press writer Matthew Daly contributed to this report.
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