OPINION:
Senate Democrats keep paring back President Biden’s coveted Build Back Better tax-and-spend legislation in hopes of garnering the critical 50th vote it needs to pass.
It’s now down to two provisions, both bad. One, the extension of Obamacare subsidies, is inflationary as all get-out. The other, a new system of price controls for prescription drugs under Medicare, is going to come as an exceptional disappointment to seniors hoping it will bring them relief on drug prices at the pharmacy counter.
This legislation is supposed to save government money over the course of 10 years, but that projection relies on typical Washington budget shenanigans. As usual in budget bills, the costs are front-loaded, and the savings only show up in the out years. Meanwhile, programs are scheduled to expire to obscure their cost in the 10-year budget window — in the expectation that a future Congress will find other gimmicks to extend them.
That’s why the legislation is inflationary. The extension of Obamacare subsidies starts costing the government in January 2023, and in their first two years runs up a net tab of more than $40 billion in new deficit spending. The provisions of the legislation that are supposed to produce major savings, however, don’t kick in until 2025 and 2026.
But we have an inflation crisis on our hands right now. The consumer price index hit a new 40-year high of 9.1% in June. In response, the Federal Reserve increased interest rates significantly in June and is reportedly planning an additional large bump upward for July — setting the table for a serious recession.
Having triggered this inflationary spiral with more than $3 trillion in deficit spending last year — the monster COVID-19 relief and infrastructure spending bills — Democrats now want to extend it further, making the Fed’s job all the harder and the more painful for Americans.
Now, about those savings provisions. Democrats are salivating at the prospect of announcing they’re giving the government the power to negotiate with drug makers for lower prescription costs in Medicare. This idea polls well.
Unfortunately for Democrats, that’s because seniors and others think they will be paying less for their meds — relief many desperately need. But for the most part, they won’t be paying less at the pharmacy. It’s the government that will be saving the money. The shabbiness of this deception will result in many hard feelings of betrayal once the truth comes out.
One especially ironic note is that prescription drug prices have actually had a moderating impact on inflation. They’ve gone up 2.5% in the past year, less than every other major category of goods and services.
If Democrats really wanted to bring prescription costs for seniors down, they’d tackle the middlemen, such as insurers and pharmacy benefit managers, who now rake in more than half of each dollar spent on brand-name prescriptions. But they’d rather jab a finger in the eye of drug makers than provide real relief.
All we need is one Democrat in the Senate to come to his or her senses and kill the last elements of the Build Back Better monstrosity. Unfortunately, that’s asking a lot.
• Saul Anuzis is president of 60 Plus, the American Association of Senior Citizens.
Please read our comment policy before commenting.