Senate Arbitrator Rules Weakens Democrat Anti-Drug Plan in Economic Bill

WASHINGTON (AP) — The Senate lawmaker on Saturday dealt a blow to Democrats’ plan to cut drug prices, but left the rest of her sprawling economic bill largely untouched as party leaders braced for the first votes on a package containing many of President Joe Biden’s main internal issues. goals.

Elizabeth MacDonough, a nonpartisan House rules arbiter, said lawmakers should remove language that imposes heavy penalties on drugmakers who raise their prices beyond inflation in the private insurance market. Those were the bill’s main price protections for the estimated 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 longstanding goal for Democrats. Manufacturer penalties for exceeding inflation would apply to drugs sold to Medicare, and there is an annual out-of-pocket cap of $2,000 on drug costs and free vaccines for Medicare beneficiaries.

His failures came as Democrats planned to start votes in the Senate on Saturday on their sweeping package that tackles 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 push the legislation through the Senate 50-50, with Vice President Kamala Harris’ tie-breaking vote and solid Republican opposition.

“This is a huge victory for the American people,” Senate Majority Leader Chuck Schumer, DN.Y., said of the bill, which both parties are using in their election-year campaigns to blame the worst period of inflation in four years. decades. “And a sad comment on the Republican Party as they actively fight provisions that cut costs for the American family.”

In response, Senate Minority Leader Mitch McConnell, R-Kentucky, said Democrats “are misreading the outrage of the American people as a mandate for another reckless wave of taxing and spending.” He said the Democrats “have already robbed American families once through inflation and now their solution is to rob American families a second time.”

Removing sanctions on drugmakers reduces pharmaceutical companies’ incentives to restrict what they charge, which increases costs for patients.

Deleting that language will cut the $288 billion in 10-year savings that Democrats’ blanket drug restrictions are estimated to generate, a reduction of perhaps tens of billions of dollars, analysts said.

Schumer called MacDonough’s price-cap decision for private insurance “an unfortunate decision.” But he said the surviving drug pricing language represented “a huge victory for the American people” and that the overall bill “remains largely intact.”

The ruling followed a 10-day period in which Democrats resurrected major components of Biden’s agenda that seemed dead. In quick deals with the two most unpredictable Democratic senators: Conservative first Joe Manchin of West Virginiathen Arizona centrist Kyrsten Sinema — Schumer put together a broad package that, while a fraction of the earlier, broader versions Manchin derailed, would give the party a win in the context of this fall’s midterm elections.

The MP also signed a tariff on excess emissions of methane, a powerful greenhouse gas contributor, from oil and gas drilling. He also set up environmental grants to minority communities and other initiatives to reduce carbon emissions.said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.

He passed a provision requiring union-level wages to be paid if energy efficiency projects qualify for tax credits, and another that would limit electric vehicle tax credits to cars and trucks assembled in the United States.

The blanket measure faces unanimous Republican opposition. But assuming Democrats fight off a relentless “branch vote” on amendments, many designed by Republicans to derail the measure, they should be able to force the measure through the Senate.

House approval could come when that chamber briefly returns from recess on Friday.

“What will vote-a-rama look like? It’s going to be like hell,” Sen. Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee, said Friday of the upcoming Republican amendments. He said that by supporting the Democratic bill, Manchin and Sinema “are fueling legislation that will make life more difficult for the average person” by driving up energy costs with tax increases and making it harder for businesses to hire workers.

The bill provides tax and spending incentives to move toward cleaner fuels and support coal with assistance to reduce carbon emissions. Expiring subsidies that help millions pay 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 minimum tax of 15% for some corporations that earn more than $1 billion annually but pay much less than the current corporate tax of 21%. There would also be a 1% tax on companies buying back their own shares, swapped after Sinema refused to back higher taxes on private equity firm executives and hedge fund managers. The IRS budget would be inflated to strengthen its tax collection.

While the final costs of the bill are still being determined, overall it would spend more than $300 billion over 10 years to curb climate change, which analysts say would be the nation’s largest investment in that effort and billions more in health care. It would raise more than $700 billion in taxes and drug cost savings from the government, leaving about $300 billion for deficit reduction, a modest bite from projected 10-year multi-trillion deficits. of dollars.

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

It is the parliamentarian’s job to decide whether portions of the legislation should be struck down for violating those rules, which include the requirement that provisions be primarily intended to affect the federal budget, not impose new policy.


Associated Press writer Matthew Daly contributed to this report.

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