Pelosi’s Drug Bill Would Save Medicare $345 Billion: CBO

Pelosi’s Drug Bill Would Save Medicare $345 Billion: CBO

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Plus, Bernie Sanders wants to undo Trump’s corporate tax cut
Tuesday, October 15, 2019

What Voters Want to Hear About Health Care

Given the House impeachment inquiry into President Trump and the turmoil in Syria in the aftermath of the president’s controversial decision to withdraw U.S. troops, health care is likely to be somewhat less of a focus at tonight’s Democratic presidential debate than previous times the candidates squared off on stage.

But Democratic voters and Democratic-leaning independents still want the candidates to address key health-care issues, based on the results of the latest Kaiser Family Foundation tracking poll.

The poll finds that 58% of those voters say Democratic candidates are spending too little time talking about women’s health care, including access to reproductive health services, and surprise medical bills. Half say they want candidates to talk more about ways to lower what people pay for care and 47% say they want to hear more about drug costs.

On the other hand, only 35% want to hear more about Medicare for All, and the polls finds that support for a government-run health plan has ebbed in recent months while support for a public option has grown.

Some other notable findings from the poll:

  • Just 37% of Americans are aware that Trump has promised to release a plan to replace the Affordable Care Act, and 62% are “not too confident” or “not at all confident” that Trump will deliver on his promise to provide better health care at a lower cost. (More than eight in 10 Republicans say they are very or somewhat confident Trump will deliver on health care, compared to just 4% of Democrats and 37% of independents.)
  • The public is narrowly divided on whether the impeachment inquiry will prevent Congress from addressing health-care issues including drug prices and surprise medical bills, with 47% saying it will and 45% saying Congress can work on multiple things at once.

Pelosi’s Prescription Drug Bill Would Save Medicare $345 Billion: CBO

House Speaker Nancy Pelosi’s bill to reduce prescription drug prices would save Medicare $345 billion from 2023 through 2029, according to a preliminary analysis released Friday by the nonpartisan Congressional Budget Office.

The CBO analysis looked only at one major provision of the legislation: its requirement that the federal government negotiate prices with the manufacturers of at least 25 of the most expensive prescription drugs and apply those negotiated prices to the private market as well.

“We expect even bigger savings when the CBO completes its full analysis of the entire bill,” House Majority Leader Steny Hoyer said in a statement.

A separate analysis issued Friday by actuaries at the Centers for Medicare and Medicaid Services found that the Pelosi bill would lower U.S. spending on health care by $481 billion over a decade, including $158 billion saved by households as the result of lower premiums and out-of-pocket costs, according to The Hill.

At the same time, CBO’s analysis also found that the legislation would have wide-ranging effects on the drug market — both in the U.S. and internationally — and would reduce pharmaceutical companies’ revenues. As a result, it said, manufacturers would cut spending on research and development, which would lead to fewer new drugs being introduced over time. CBO projected that a reduction in revenues of $500 billion to $1 trillion would lead to about 8 to 15 fewer drugs coming to market over 10 years, out of approximately 300 drugs in total that might be approved over that time.

“CBO’s report confirms House Democrats’ ‘dictate or destroy’ price controls only serve to hurt the development of future cures and damage American innovation,” Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said in a statement.

The Kaiser Family Foundation’s tracking poll finds that 88% of Americans favor allowing the federal government to negotiate prices with pharmaceutical companies for Medicare, though that support shrinks to 33% or less when people are told that the policy could lead to less drug research and development or limit access to newer medications.

For its analysis, CBO assumed Pelosi’s legislation would be enacted by the end of this year, and House Democrats reportedly hope to bring it to a vote as soon as the end of the month as part of an effort to signal that they remain focused on American’s pocketbook issues even as they pursue an impeachment inquiry into President Trump. But GOP lawmakers oppose Pelosi’s bill and the idea of allowing Medicare to negotiate drug prices — and progressives are reportedly working on a list of changes they’d like to make to the plan.

“Congressional Republicans have said they want to work with Democrats on much smaller drug pricing legislation, for example speeding the introduction of cheaper generic drugs,” The Hill’s Peter Sullivan writes. “Pelosi is still hoping that if Trump, who has railed against high drug prices, endorses the bill, it would put pressure on congressional Republicans. Still, the measure faces dim hopes in the Senate, where Senate Majority Leader Mitch McConnell (R-Ky.) has vowed to block it.”

Bernie Sanders Wants to Undo Trump’s Corporate Tax Cut – and Much More

Democratic presidential candidate Bernie Sanders wants to raise the top corporate income tax to 35%, the same level it was before the Tax Cuts and Jobs Act lowered it to 21 percent.

In a sweeping collection of policy proposals released Monday, the independent senator from Vermont said he intends to repeal all tax breaks under President Trump and close all corporate tax loopholes. Together, the tax rule changes would raise $3 trillion over 10 years, Sanders said, with two thirds of that money being used to fund a Green New Deal.

The corporate tax plan is part of a larger economic package that is intended to attack the “greed and corruption and income and wealth inequality” in the U.S., Sanders said in an interview with ABC News. Here are some of the key components of Sanders’ plan to enhance “corporate accountability and democracy”:

  • Give workers an ownership stake in their businesses. Employees at large firms would be given 20% of shares in the company and control 45% of the seats on the board of directors.
  • Require “stakeholder charters” for many firms. Publicly traded companies and all those with $100 million or more in revenue or net worth will require charters, issued by a new Bureau of Corporate Governance, that recognize the interests of all stakeholders, “including workers, customers, shareholders, and the communities in which the corporation operates.”
  • Ban stock buybacks, which will be treated like stock manipulation.
  • Create a $500 million “ownership bank” to help workers buy the businesses that employ them.
  • Share the wealth with laid-off employees. Companies that eliminate jobs due to outsourcing or automation would be required to give shares to laid off employees.
  • Break up monopolies and reverse all mergers that have taken place since 2017.

Sanders told the Associated Press that the broad concept behind his proposals is how to “create a democratic society in which working people have more control over their lives.” He added that he plans to bring up his ideas on how he wants to change corporate taxes and governance in Tuesday’s Democratic debate, “to the degree that you can get them across in 45 seconds.”

A Quick Look at How Far Corporate Tax Rates Have Fallen

A chart from Howard Silverblatt of S&P Dow Jones Indices shows just how far corporate tax rates have fallen since the Tax Cuts and Jobs Act was passed. According to his calculations, the average income tax rate for companies in the S&P 500 index was 18.59% in the second quarter of 2019. In the second quarter of 2017, before the tax cuts took effect, the rate was 25.89%.

On an annual basis, the tax rate for S&P 500 firms was 17.72% in 2018, compared to 24.37% in 2017.


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