Once again Robert Reich explains economic impacts on citizens that the rich fight tooth and nail against (4:40)
As you may already know, three “moderate” Democrats voted against the drug pricing portion of the legislation that would have allowed Medicare to negotiate drug prices. This was once a feature of Medicare before Republicans took it away in 2006.
Democrats had a neat plan for their health care agenda. As part of the $3.5 trillion spending bill they’re putting together as I type, they would finally, after years and years of pledges to do so, pass legislation to cut the costs of prescription drugs. This would have two wonderful benefits for the Democrats. First, the obvious: They would fulfill a campaign promise to cut the costs of prescription drugs. Fulfilling popular promises is good! Second, the Medicare drug negotiations—price negotiations between the government and pharmaceutical companies— would save the government hundreds of billions of dollars that Democrats could then use to pay for the rest of their health agenda: covering new services under Medicare, bringing the ACA’s Medicaid expansion to all 50 states, and making permanent the improvements Democrats made to Obamacare’s insurance exchanges in their COVID relief bill earlier this year.
<< skip >>
This week, the Energy and Commerce Committee met to discuss drug pricing. The legislation that House Democrats wanted to pass has an aggressive mechanism for making sure drug manufacturers complied with negotiated prices. And if they didn’t, the government would slap the companies with an escalating tax that would ultimately reach 95 percent of sales. The criticism from pharmaceutical companies, then, was that this wasn’t much of a negotiation at all, but instead the government setting rates at gunpoint. They further explained, as they often do, that these funds would severely hamper pharmaceutical innovation.
Their lobbying efforts got somewhere. Three moderate members of the committee—California Rep. Scott Peters, Oregon Rep. Kurt Schrader, and New York Rep. Kathleen Rice—announced that even though they had voted for this idea in 2019, they had since changed their minds, and now had grave concerns about pharmaceutical innovation. (It is also worth noting that Peters, in particular, has accumulated sizable donations from the pharmaceutical industry this year.)
The three members held strong, and all three voted against the drug-pricing proposal in a Wednesday committee vote. That was just enough to create a tie, and the drug-pricing plan failed to advance. PhRMA, the pharmaceutical lobby, crowed in a statement afterward that “the House markups on health care demonstrate there are real concerns with Speaker Pelosi’s extreme drug pricing plan and those concerns are shared by thoughtful lawmakers on both sides of the aisle.” (And themselves, they left out.)
I also want to note that while the big scary number for the infrastructure bill of $3.5 trillion is being pushed in all the headlines, the actual bill calls for the cost to be spread over 10 years.
That would be $350 Billion per year. Still a sizable sum, but it pales in comparison to the Defense budget proposal of $753 Billion. It also pales in comparison to what we wasted in Iraq and Afghanistan which are not covered by the defense budget. Wars are extras.
And it is nowhere near the Trump tax cuts of 2017 that cost us nearly $5.5 trillion over 10 years while creating little to nothing in economic return.
Cost of wars pic.
One of the best things about the Democratic infrastructure plan is that create huge economic returns for all Americans, something that wars and tax cuts do not do.