Sen. Joe Manchin (D-WV), a longtime holdout on the Build Back Better Act, has once again up-ended talks on the bill.
Democrats had hoped to put together a slimmed down version of the original $2 trillion package, narrowly focused on health care, climate, and tax reforms. Manchin, however, has expressed opposition to additional climate and tax policies at this time, and it now seems the party will have to settle for a smaller bill than leaders wanted.
Manchin said Friday that he remains concerned about the impact new climate spending could have on inflation, and worried raising taxes on businesses could stymie their growth.
“Inflation is absolutely killing many, many people,” Manchin said in a recent interview with MetroNews’s Hoppy Kerchaval, noting that he was particularly alarmed by the recent Labor Department report. “Can’t we wait to make sure we do nothing to add to that?”
Manchin remains supportive of Democrats’ prescription drugs package as well as an extension to Affordable Care Act subsidies, which are due to sunset at the end of this year. And he has said he may be willing to negotiate again on taxes and climate in September, when lawmakers have more information about where inflation stands.
At this point, Democrats have to determine if they want to advance policies that they have agreement on or wait to see if they can get a more expansive bill later this year. If they choose the latter, they run the risk that Manchin might still not agree in two months’ time. What’s more, waiting until the fall means negotiations will run up against both the midterm elections and a September 30 deadline for passing Build Back Better through the streamlined budget reconciliation process.
On Friday, President Joe Biden urged Democrats to advance the pared down health care legislation even though it’s missing key climate provisions. If they stay united, Democrats could pass a substantial bill that would enable Medicare to negotiate drug prices and help reduce health care costs for millions of people. That said, a health care centered version of Build Back Better would fall far short of the transformative climate and social spending package that many lawmakers and activists have been pushing for for months.
“When Manchin sabotages climate change, this is for future generations,” Sen. Bernie Sanders (I-VT) said in an ABC News interview on Sunday. “This is an existential threat to humanity.”
What Democrats have agreed on
Thus far, Democrats are aligned on their prescription drugs plan as well as an extension of ACA subsidies.
The drug provisions could be significant, though they are narrower than what Democratic lawmakers were considering last year — and don’t include proposals some in the party were fighting for, like a $35 per month cap on insulin costs.
Here are the provisions that Democrats agree on so far:
Prescription drugs plan
- Allowing Medicare to negotiate drug prices: Medicare has historically been barred from negotiating on most prescription drug prices, meaning it pays drug prices set by manufacturers. This bill would change that. In doing so, it could mean drastic price reductions on specific drugs for people covered by Medicare, since the government has huge buying and negotiating power.
The savings would not apply to people covered by private insurance, however, Reuters reports. The legislation guarantees that Medicare can begin negotiations in 2023, starting with 10 drugs, which will be chosen by the Department of Health and Human Services.
- Capping out-of-pocket drug costs for Medicare recipients: The legislation would cap annual out-of-pocket drug costs for Medicare recipients at $2,000. After that, Medicare would pay for additional expenses. It would be a major change since there is currently no cap, meaning people sometimes spend thousands more for a single drug.
- Requiring rebates for price hikes: If pharmaceutical companies raise the costs of a drug at a rate faster than the rate of inflation, this bill requires them to refund the difference to people paying for the drug. This tenet is intended to check companies that try to make exorbitant annual increases on a drug.
- Expanding prescription drug subsidies for low-income seniors: Currently, seniors who are at or below 150 percent of the federal poverty line are able to receive a partial subsidy for their prescription drugs. The legislation would enable them to receive a larger subsidy for these expenses.
- Making vaccines free for seniors: The legislation would make all vaccines free for seniors, a notable change in coverage. Currently, Medicare covers some vaccines, like the flu shot, but not all immunizations are included.
ACA subsidy extensions
- ACA subsidies: As part of the American Rescue Plan, Congress expanded the subsidies available for health insurance coverage under the Affordable Care Act, including reducing premium costs for those who fall between 100 percent and 400 percent of the federal poverty level. These subsidies, however, are due to sunset at the end of the year if Congress does not renew them; Manchin has said he’s willing to consider a two-year extension.
Democrats are trying to do what they can before the midterms
Although Democrats’ electoral chances in the Senate are looking better than they are in the House, it’s possible the party loses control of one or both chambers of Congress following the November midterms. With the elections fast approaching, Democrats are rushing to capitalize on their existing majorities in case they are no longer able to pass legislation next year.
That’s likely to mean approving whatever version of Build Back Better the Senate Democratic caucus can agree on. Notably, this reconciliation bill could be the party’s last major chance to advance new prescription drug and health care policy if Republicans retake just one chamber of Congress. And if they are able to make quick progress, it’s possible that Democrats could hold a vote on the health care legislation by the end of July, though Manchin has previously expressed uncertainty about this timeline.
To successfully pass a reconciliation bill, Senate Democrats will need all 50 members of their caucus on board, as well as approval from the parliamentarian — who can advise against including provisions if they aren’t seen as sufficiently related to taxing and spending. It seems they now have the former for health care components and they’ll need to wait for the latter, as the parliamentarian reviews the prescription drug proposal this week.
Update, July 18, 12:30 pm ET: This story has been updated to include new information on Manchin’s statements about climate and tax policy.