Connect with us

News

Democrats’ latest attempt at resurrecting Build Back Better, explained

Lawmakers are scrambling to get a deal done before August.

Published

on

Democrats are hoping to revive some of the Build Back Better Act this month after the larger package failed to pass last year. They have so far come to an agreement on a plan to reduce the price of prescription drugs, but they are still negotiating about more divisive tax and climate policies.

The prescription medicine proposal was formally submitted to the Senate parliamentarian for assessment last week, and lawmakers aim to introduce more parts of the bill in the coming days. They just reached an agreement on a tax plan that will impose an extra tax on the income that top earners receive via pass-through enterprises. However, they are still debating other potential adjustments to tax and climate policy, such as whether to amend the rules governing corporate taxation and how to impose levies on methane producers.

This still-under-development plan is the Democrats’ most recent attempt to move a measure through the budget reconciliation procedure, which enables legislation that affects taxes and spending to pass the Senate with 51 votes instead of the 60 required to avoid a filibuster. With this strategy, Democrats expect to pass more ambitious legislation on prescription medications, taxation, and the environment than they would be able to if they had to rely on Republican cooperation.

Democrats’ main challenge up to this point has been internal conflict within their own caucus, including Sens. Joe Manchin (D-WV) and Kyrsten Sinema’s (D-AZ) resistance to earlier iterations of Build Back Better. This time, Senate Majority Leader Chuck Schumer has been in close contact with Manchin to discuss important clauses; nevertheless, it is still unclear where Sinema sits on some of the outstanding concerns.

Advertisement

Democrats are rushing to pass this more condensed version of Build Back Better before the end of July in order to prove to voters that they can accomplish things and to take advantage of their majority in the House and Senate while it is still possible as the midterm elections get near. It will be nearly hard for the party to pass increased climate and social spending through reconciliation if it loses either chamber in the elections in November.

Democratic consensus thus far

Democrats have only agreed on their prescription medication plan and one tax idea so far.

Although they are more limited than what Democratic lawmakers were debating last year, the medication measures might be substantial. The plan excludes ideas that some members of the party fought for, such as a $35 monthly cap on insulin costs.

Advertisement

The following are the clauses the Democrats have so far agreed to:

Plan for prescription medications

enabling Medicare to bargain over drug prices Medicare has traditionally been prohibited from bargaining on the majority of prescription drug costs, so it pays medicine prices decided by the market. This proposal would alter that. Considering that the government has enormous purchasing and negotiating power, this could result in significant price reductions on a number of medications for Medicare beneficiaries.

However, according to Reuters, those with private insurance would not be eligible for the discounts. In accordance with the law, Medicare will be able to start negotiating in 2023 with a set of 10 pharmaceuticals that will be determined by the Department of Health and Human Services.

Advertisement

Medicare recipients’ out-of-pocket drug expenses being capped The proposed law would limit Medicare users’ yearly out-of-pocket prescription expenses to $2,000 per year. After then, Medicare would cover any further costs. Since there is now no cap, people frequently pay thousands more for a single prescription, therefore this would be a significant improvement.

The proposed law would limit Medicare users’ yearly out-of-pocket prescription expenses to $2,000 per year. After then, Medicare would cover any further costs. Since there is now no cap, people frequently pay thousands more for a single prescription, therefore this would be a significant improvement. Pharmaceutical companies would be required to repay the difference to customers who are paying for the drug if their price increases are greater than the rate of inflation. This principle is meant to rein in businesses who strive to boost prescription prices exorbitantly every year.

Pharmaceutical companies are required to repay the difference to patients who pay for the drug if they increase drug prices at a rate that is higher than the rate of inflation. This principle is meant to rein in businesses who strive to boost prescription prices exorbitantly every year. Increasing the amount of low-income seniors who are eligible for prescription medication subsidies: Currently, seniors who are at or below 150 percent of the federal poverty threshold are eligible for a partial prescription drug subsidy. The proposal would make it possible for them to get a bigger subsidy for these costs.

Currently, seniors can get a partial prescription drug subsidy if their incomes are at or below 150 percent of the federal poverty level. The proposal would make it possible for them to get a bigger subsidy for these costs. All immunizations will be provided without cost to seniors under the proposed legislation, a significant improvement in coverage. Medicare now covers some vaccines, including the flu shot, but not all immunizations.

Advertisement

tax strategy

Pass-through firms’ income tax: Which tax ideas will be included in the legislation’s final form is still up for debate among Democrats. However, they have settled on one that would impose a 3.8 percent tax on pass-through business revenue earned by individuals earning more than $400,000 annually.

The majority of businesses in the US are pass-through businesses, which means that their profits are taxed as part of the owners’ personal income taxes rather than being subject to a separate corporate income tax. Independent contractors, small businesses, and major corporations are all included in these businesses. According to NBC News, this levy is expected to generate around $200 billion over the course of ten years, and that money will go toward addressing Medicare’s solvency issues.

Before the midterm elections, Democrats are making their best effort.

Advertisement

Even while Democrats appear to have a higher chance of winning the Senate than the House after the midterm elections in November, it’s still possible that they lose control of one or both chambers of Congress. Democrats are scrambling to take advantage of their current majorities as the elections get near in case they are unable to pass legislation next year.

This reconciliation package may be the party’s last significant opportunity to pass legislation affecting taxes, climate change, and prescription medications, all of which would be far less likely to pass if Republicans gained control of just one chamber of Congress. Democrats might conduct a vote on the reconciliation by the end of July if they can move quickly in the upcoming weeks, though Manchin has expressed skepticism about this timetable.

Republicans are opposing these initiatives as well: Unless Democrats give up reconciliation, Senate Minority Leader Mitch McConnell has threatened to withdraw support for the US Innovation and Competition Act, a bipartisan initiative designed to invest in the US supply chain. Democrats’ response has been to assert that McConnell is attempting to block the reconciliation bill in order to save pharmaceutical firms.

Senate Democrats will require the support of all 50 members of their caucus in order to pass a reconciliation package, as well as the parliamentarian, who can advise against inserting provisions if they are not seen to be sufficiently relevant to taxing and spending. Additionally, it would require support from House Democrats, many of whom have previously pushed for a more comprehensive plan. Recent remarks from Nancy Pelosi, the speaker of the House, imply that some legislators may be amenable to a lesser bill if it meant passing a portion of the package.

Advertisement

Even though other aspects have not yet been approved, Democrats are still committed to moving forward as seen by the submission of the existing proposals to the parliamentarian.

Updated at 3:40 PM on July 11: The proposed tax on pass-through business income has been amended to reflect new information.

Advertisement