WASHINGTON (AP) — The Senate parliamentarian on Saturday dealt a blow to Democrats’ plan for curbing drug prices but left the remainder of their sprawling economic bill largely intact as party leaders prepared for first votes on a package containing a lot of President Joe Biden’s top domestic goals.
Elizabeth MacDonough, the chamber’s nonpartisan rules arbiter, said lawmakers must remove language imposing hefty penalties on drugmakers that boost their prices beyond inflation within the private insurance market. Those were the bill’s chief pricing protections for the roughly 180 million people whose health coverage comes from private insurance, either through work or bought on their very own.
Other major provisions were left intact, including giving Medicare the facility to barter what it pays for pharmaceuticals for its 64 million elderly recipients, a longtime goal for Democrats. Penalties on manufacturers for exceeding inflation would apply to drugs sold to Medicare, and there may be a $2,000 annual out-of-pocket cap on drug costs and free vaccines for Medicare beneficiaries.
Her rulings got here as Democrats planned to start Senate votes Saturday on their wide-ranging package addressing climate change, energy, health care costs, taxes and even deficit reduction. Party leaders have said they imagine they’ve the unity they’ll have to move the laws through the 50-50 Senate, with Vice President Kamala Harris’ tiebreaking vote and over solid Republican opposition.
“That is a significant win for the American people,” Senate Majority Leader Chuck Schumer, D-N.Y., said of the bill, which each parties are using of their election-year campaigns to assign blame for the worst period of inflation in 4 a long time. “And a tragic commentary on the Republican Party, as they actively fight provisions that lower costs for the American family.”
In response, Senate Minority Leader Mitch McConnell, R-Ky., said Democrats “are misreading the American people’s outrage as a mandate for yet one more reckless taxing and spending spree.” He said Democrats “have already robbed American families once through inflation and now their solution is to rob American families yet a second time.”
Dropping penalties on drugmakers reduces incentives on pharmaceutical firms to restrain what they charge, increasing costs for patients.
Erasing that language will cut the $288 billion in 10-year savings that the Democrats’ overall drug curbs were estimated to generate — a discount of perhaps tens of billions of dollars, analysts have said.
Schumer said MacDonough’s decision in regards to the price cap for personal insurance was “one unlucky ruling.” But he said the surviving drug pricing language represented “a significant victory for the American people” and that the general bill “stays largely intact.”
The ruling followed a 10-day period that saw Democrats resurrect top components of Biden’s agenda that had seemed dead. In rapid-fire deals with Democrats’ two most unpredictable senators — first conservative Joe Manchin of West Virginia, then Arizona centrist Kyrsten Sinema — Schumer pieced together a broad package that, while a fraction of earlier, larger versions that Manchin derailed, would give the party an achievement against the backdrop of this fall’s congressional elections.
The parliamentarian also signed off on a fee on excess emissions of methane, a robust greenhouse gas contributor, from oil and gas drilling. She also let stand environmental grants to minority communities and other initiatives for reducing carbon emissions, said Senate Environment and Public Works Committee Chairman Thomas Carper, D-Del.
She approved a provision requiring union-scale wages to be paid if energy efficiency projects are to qualify for tax credits, and one other that may limit electric vehicle tax credits to those cars and trucks assembled in the USA.
The general measure faces unanimous Republican opposition. But assuming Democrats fight off a nonstop “vote-a-rama” of amendments — many designed by Republicans to derail the measure — they need to have the ability to muscle the measure through the Senate.
House passage could come when that chamber returns briefly from recess on Friday.
“What’s going to vote-a-rama be like. It would be like hell,” Sen. Lindsey Graham of South Carolina, the highest Republican on the Senate Budget Committee, said Friday of the approaching GOP amendments. He said that in supporting the Democratic bill, Manchin and Sinema “are empowering laws that may make the common person’s life harder” by forcing up energy costs with tax increases and making it harder for firms to rent employees.
The bill offers spending and tax incentives for moving toward cleaner fuels and supporting coal with assistance for reducing carbon emissions. Expiring subsidies that help thousands and thousands of individuals afford private insurance premiums could be prolonged for 3 years, and there may be $4 billion to assist Western states combat drought.
There could be a recent 15% minimum tax on some corporations that earn over $1 billion annually but pay far lower than the present 21% corporate tax. There would even be a 1% tax on firms that buy back their very own stock, swapped in after Sinema refused to support higher taxes on private equity firm executives and hedge fund managers. The IRS budget could be pumped as much as strengthen its tax collections.
While the bill’s final costs are still being determined, it overall would spend greater than $300 billion over 10 years to slow climate change, which analysts say could be the country’s largest investment in that effort, and billions more on health care. It might raise greater than $700 billion in taxes and from government drug cost savings, leaving about $300 billion for deficit reduction — a modest bite out of projected 10-year shortfalls of many trillions of dollars.
Democrats are using special procedures that may allow them to pass the measure without having to succeed in the 60-vote majority that laws often needs within the Senate.
It’s the parliamentarian’s job to come to a decision whether parts of laws should be dropped for violating those rules, which include a requirement that provisions be chiefly geared toward affecting the federal budget, not imposing recent policy.
Associated Press author Matthew Daly contributed to this report.