by Mitch Kokai
Senior Political Analyst, John Locke Foundation
You really can’t make this stuff up. After Sen. Joe Manchin, D-W.Va., said he opposed a massive new tax-and-spending bill, how did Democrats respond? Beyond throwing bile at Manchin for nixing the latest version of Build Back Better, reporters said that “Democrats’ remaining best-case scenario is passing drug price reforms and a temporary extension of enhanced Obamacare subsidies.”
Translation: A dozen years after Democrats raided Medicare to pay for Obamacare, lawmakers want to go back to the well again, plucking money from seniors to fund an extension of Obamacare insurance subsidies to the wealthy. It sounds like a line from a Democratic attack ad against Republicans — but it’s what Democrats want to ram through Congress in the weeks ahead.
The Congressional Budget Office (CBO) recently released its analysis of Democrats’ updated drug pricing legislation. According to CBO, the revised language will save a total of $287.6 billion in the coming decade. Nearly half of the supposed “savings,” or $122.1 billion, comes from repealing a rule the Trump administration proposed in its waning days and that has never gone into effect — a budget gimmick included in prior versions of Build Back Better.
But the remaining $165 billion or so in Medicare reductions would come from imposing price controls on pharmaceutical companies, accompanied by a 95 percent tax (no, that’s not a typo) on those companies who fail to “negotiate.” CBO admitted in its updated analysis that the bill would lead to the introduction of fewer new prescription drugs in its first decade, and in decades to come after that.
Where would some of that money taken out of Medicare go? To extending the “temporary” increase in Obamacare subsidies included in last year’s “Covid relief” measure. But CBO previously admitted that most of the spending on these subsidies will go to people who already had health insurance, in no small part because wealthy individuals will now qualify for welfare assistance.