Parliamentarian approves energy and drug price provisions in Inflation Reduction Act

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Senate parliamentarian Elizabeth MacDonough has reportedly given the green light for most of the energy and drug pricing provisions in the Inflation Reduction Act to be part of the reconciliation bill.

With the Senate parliamentarian's approval, Senate Democrats will soon be able to wrangle one of their most significant pieces of legislation through the Senate by bypassing the 60-vote threshold needed to overcome a filibuster. Democrats had previously been fretful that the parliamentarian might shoot down some of their drug pricing reform measures in the bill.

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“Democrats have received extremely good news: For the first time, Medicare will finally be allowed to negotiate prescription drug prices, seniors will have free vaccines and their costs capped, and much more,” Senate Majority Leader Chuck Schumer (D-NY) said in a statement.

The parliamentarian had adjusted one key component of the bill that involved an inflation cap on drug prices, but permitted the main piece about allowing Medicare to negotiate drug prices, according to Schumer. She allowed the government to reimburse drug companies based on the inflation cap for drugs it purchases through programs like Medicare, but did not allow the cap to be imposed in the private marketplace.

“This is a major victory for the American people. While there was one unfortunate ruling in that the inflation rebate is more limited in scope, the overall program remains intact, and we are one step closer to finally taking on Big Pharma and lowering Rx drug prices,” Schumer said.

In addition, the parliamentarian also gave her stamp of approval to energy provisions and measures aimed at bolstering the Internal Revenue Service's enforcement of tax laws.

The bill includes roughly $64 billion for extending the Affordable Care Act healthcare premium subsidies and $369 billion on climate and energy initiatives over a 10-year period, per Senate Democrats. To pay for that, Democrats planned to raise $124 billion from IRS tax enforcement, $288 billion from prescription drug pricing reform, $313 billion through a 15% minimum corporate tax rate, and $73 billion from a 1% tax on stock buybacks, Politico reported.

Democrats lack the votes to overpower the Republicans' anticipated filibuster of the landmark bill. As a result, they have been trying to use reconciliation, which allows them to pass the budgetary legislation via a simple majority instead of the 60-vote threshold needed to overcome the filibuster. However, there are strict rules such as the Byrd Rule, which prohibit bills from adding to the deficit past a certain window of time or from including provisions unrelated to the budget.

MacDonough had dashed the Democrats' hopes of passing key reforms via reconciliation in the past. For example, last year, she ruled that a pathway to citizenship could not be included in a reconciliation bill. At one point, she shot down a $15 minimum wage component of a reconciliation bill as well.

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Now that the parliamentarian has issued approval for much of the Inflation Reduction Act, Democrats are waiting for updated estimates from the Congressional Budget Office. They are expected to initiate the process of finagling their marquee legislation through the upper chamber later Saturday.

Once it passes the Senate, the bill will head to the House, where it will need to pass in order to get to President Joe Biden's desk for his signature legislation to become law. The advancement of the Inflation Reduction Act culminates months of Democratic infighting over their social spending objectives. The bill is much smaller in scale than the roughly $2 trillion to $6 trillion iterations of the “Build Back Better” agenda that the Democrats had been eyeing months ago.





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