Senate Congresswoman Elizabeth MacDonough will continue to host Democratic and Republican aides behind closed doors today (no press allowed) to cleanse the reconciliation bill for potential breaches of the Byrd rule.
MacDonough broke the hearts of progressives several times last year, including when she removed the minimum wage from the Covid relief bill, which was passed by reconciliation, and rejected three different versions of the reform of immigration from the Democratic reconciliation bill that was ultimately scrapped in December. .
Republican budget nerds scrutinizing the latest reconciliation bill still believe they can eliminate some provisions. On Thursday, for the latest episode of the Playbook Deep Dive podcast, we sat down with two of the party’s top experts on the process: Eric Ueland, who spent 25 years in the Senate, including as staff director of the budget committee , and lobbyist Greg D’Angelo, who spent nearly a decade on the committee. Both men were intimately involved in drafting the language of reconciliation bills in the Trump years – including the successful effort to use reconciliation to open the Arctic National Wildlife Refuge to oil drilling and end the mandate Individual Obamacare.
The struggle over the individual mandate is instructive. MacDonough rejected the GOP’s original plan to repeal the legal requirement to have coverage, which she said violated reconciliation rules because the political effect of the repeal outweighed any budget effect, one of the main tests of what is allowed in a reconciliation bill. The Democrats thought they had won the fight. But D’Angelo came back to MacDonough with a new idea: Rather than eliminating the warrant, what if they simply eliminated the tax penalty used to enforce it? MacDonough agreed that keeping the warrant on the books but reducing the penalty to zero was within the rules. (His advice on the matter led to a heated exchange behind closed doors when Democratic staff learned what he perceived to be his reversal.)
In the current Byrd Bath debate, D’Angelo said he would “focus like a laser” on three policies.
1. The Drug Negotiation Pricing Agenda in the Democrat Bill. The policy allows Medicare to negotiate prescription drug prices, which would reduce costs for beneficiaries. To extend these savings to Americans outside of Medicare, drug companies would have to offer prescription drugs to private insurers at Medicare prices or face a 95% excise tax.
“It’s a penalty tax that generates no federal revenue,” D’Angelo said. “IE has no effect on the budget, and it seems designed with the sole purpose and intent of changing behavior: to force the drugmakers to the table. So I would say it’s not budget.
If MacDonough can be convinced that it’s “merely incidental to the political motive of forcing manufacturers to the table”, then she might hit him. (Democrats say they are confident the policy will survive any challenges.)
2. The repeal of the Trump administration’s drug reimbursement rule. “Questions are being raised about whether it’s appropriate to step in and in one sentence repeal a 300-page rulebook, entire,” D’Angelo said. “It’s a huge political element, despite the huge budgetary effect.”
3. Force rebates on drug manufacturers that raise prices faster than inflation. “It has huge effects with huge costs that are huge policy changes,” he said.
In this GOP Byrd Bath dream scenario, every domino would bring the bill closer to collapse. Each of these three policies has savings of approximately $100 million. “If you can eliminate any of those or even some of those, you’re significantly reducing the savings expected from this bill,” D’Angelo said. “And I think that complicates the deal that the majority seem to have reached.” (Senator Joe Manchin (DW.Va.) insisted on $300 billion in deficit reduction.)
Ueland added: “If enough of them get eliminated or changed, then suddenly you’re on the verge of not reducing the deficit.”
The moment : MacDonough’s decisions on the bill’s prescription drug provisions could come as soon as today, according to Burgess and Marianne.