A House committee dealt an ominous setback Wednesday to President Joe Biden’s social and environment package, derailing a money-saving plan to let Medicare negotiate the price it pays for prescription drugs.
The House Energy and Commerce Committee vote to drop the proposal from its piece of Biden's signature 10-year, $3.5 trillion spending plan was not a fatal blow. The separate House Ways and Means Committee kept it alive by approving nearly identical drug-pricing language.
Even so, the provision's rejection by one committee underscores the clout that moderates looking to curb new spending — or any small group of Democrats — have as Biden and party leaders try pushing the entire package through the narrowly divided Congress.
Facing unanimous Republican opposition, Democrats will be able to lose just three House votes and none in the 50-50 Senate to send the overall measure to Biden. That's a precarious margin for what will be an enormous bill laced with numerous politically sensitive initiatives and spending and taxes.
The committees' votes on pharmaceutical drugs came as Biden was holding face-to-face meetings with two moderate Democratic senators who have said the overall size of the $3.5 trillion proposal is too big. The sessions with Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia underscored a steppe- up White House drive to avoid Democratic defections.
The Energy and Commerce vote on the drug-pricing language was 29-29, with three moderate Democrats joining Republicans to oppose it: Reps. Scott Peters of California, Kathleen Rice of New York and Kurt Schrader of Oregon. Tie votes in Congress are usually insufficient to keep legislative provisions alive.
Henry Connelly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said lowering drug costs “will remain a cornerstone” of the party’s push for the overall bill, Biden’s top domestic priority.
Democrats are counting on the drug-pricing provisions to pay for a modest but significant part of their $3.5 trillion plan to bolster the safety net, address climate change and fund other programs. Proponents say it could save $600 billion over the coming decade.
The legislation would authorize Medicare to negotiate with pharmaceutical companies, using lower prices paid in other economically advanced countries as a yardstick. The savings produced would be used to expand Medicare coverage by adding dental, vision and hearing benefits.
The Energy and Commerce vote showed “real concerns with Speaker Pelosi’s extreme drug pricing plan,” Debra DeShong, top spokesperson for the Pharmaceutical Research and Manufacturers of America, said in a statement. The industry says the drug negotiation plan would lead to price controls that reduce investment in research into promising new cures and treatments.
Biden met with Sinema Wednesday morning on the overall bill and planned a later session with Manchin. Centrists' unrest over the legislation's cost has prompted a delicate hunt by party leaders for a topline figure that moderate and progressive lawmakers can endorse.
Sinema spokesman John Labombard had a positive assessment of the senator's White House session, a good sign in a process that has seen the party's progressives and moderates stake out conflicting demands.
“Today's meeting was productive, and Kyrsten is continuing to work in good faith with her colleagues and President Biden as this legislation develops," Labombard said.
Biden and congressional Democratic leaders endorsed the $3.5 trillion figure, but in recent days have been more tentative about its ultimate size. The enormous package faces unanimous opposition from Republicans, who say its proposals are wasteful and would wound the economy.
The measure would push utilities to produce cleaner energy, expand Medicare coverage, create new child care and family leave programs and provide free pre-kindergarten and community college.
There would be a slew of tax breaks to help families cope with the costs of health care and raising children. Much of it would be paid for by boosting taxes on the wealthy and corporations.
The two House panels that voted Wednesday were among the last of 13 committees that were completing work Wednesday on their individual sections of the overall bill.
House Budget Committee Chairman John Yarmuth, D-Ky., said in an interview Tuesday that his panel would be ready next week to combine all 13 sections and send the overall bill to the full House. That might be delayed as lawmakers wait for the nonpartisan Congressional Budget Office to produce a cost estimate for the legislation, Yarmuth said.
The Senate has yet to produce its own legislation, but Senate leaders and other lawmakers have been in talks with the House. Differences remain over taxes, health programs and other issues.
Democratic leaders would love to send completed legislation to Biden for his signature in the coming weeks, but many think resolving the policy and political complications the party faces will take much longer. White House press secretary Jen Psaki told reporters Wednesday that they expect Congress to move the legislation before an international climate conference in November.
Manchin has been an especially outspoken critic of the overall bill. He’s called for a “pause” on the legislation, and said Sunday that he could not support $3.5 trillion, suggesting instead a topline figure in the $1 trillion to $1.5 trillion range.
Progressives, who initially demanded a $6 trillion plan, have said cutting the package to Manchin’s range would be unacceptable.
At the House Ways and Means Committee, Democrats led by Chairman Richard Neal, D-Mass., rejected Republican amendments aimed at preventing tax increases on the rich and corporations that would roll back tax breaks enacted in 2017 under then-President Donald Trump.
That panel's revenue package includes $2.1 trillion in higher taxes, mostly on the rich and corporations. It also claims savings from its drug-pricing language, stronger IRS tax enforcement and an assertion that the legislation itself would spark economic growth.
Democrats ridiculed that claim when Republicans used it to claim past GOP tax cuts would be paid for.
Democrats would raise the top income tax rate rise back to 39.6% on individuals earning more than $400,000, or $450,000 for couples. There would be a 3% surtax on wealthier Americans with adjusted gross income beyond $5 million a year.
For big business, the proposal would lift the corporate tax rate from 21% to 26.5% on companies’ annual income over $5 million.
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