Are Democrats Too Afraid of the T Word?

Pelosi Pushes Ahead on Drug Bill Despite Clashes With Trump

House Democrats are pushing ahead with their plan to lower prescription drug prices, even as the already fraught relationship between Speaker Nancy Pelosi and President Trump, her main bargaining counterpart of the issue, appeared to take a turn for the worse this week.

Two key House committees voted largely along party lines Thursday to advance the legislation, which would require Medicare to negotiate prices for at least 35 of the most expensive drugs, using lower prices in other developed countries as a basis for costs here. Drugmakers who don’t negotiate or offer the agreed-upon prices to private insurers would face stiff penalties.

The bill would save Medicare $345 billion over seven years, according to a preliminary analysis by the Congressional Budget Office done when the minimum number of medications subject to negotiations was 25. (Read more about Thursday’s marathon markup sessions and resulting changes to the legislation by the Energy and Commerce committee and the Education and Labor committee here.)

“The American people, both Republicans and Democrats, are rightfully outraged that they are paying three, four or ten times more for the same drugs than people are paying in other countries,” Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) said at Thursday’s markup. “It’s time we finally negotiate a better deal for the American people.”

Pelosi is reportedly moving her bill quickly toward a floor vote, which reportedly could take place as soon as the week of October 28. She announced that the legislation will be renamed for Rep. Elijah Cummings (D-MD), who died Thursday morning.

But congressional Republicans remain adamantly opposed to allowing the federal government to negotiate prices, and Pelosi’s bill stands no chance of passing the GOP-controlled Senate — unless the president supports it.

The CBO analysis also found that some new medications likely won’t reach the market as a result of changes that would lower pharmaceutical companies’ revenues, leading Rep. Kevin Brady (R-TX), the top Republican on the House Ways and Means Committee, to say at the panel’s Thursday hearing on the legislation that the bill represents “government price fixing and extortion” and “is best described as the Fewer Cures for Patients Act.”

Rep. Greg Walden (R-OR) urged Democrats to turn away from what he described as an “unnecessary, political exercise in futility” and instead embrace a package of other drug-pricing bills developed by members of both parties. Democrats called that legislation inadequate.

"This is a big split between the two parties because we do believe that direct negotiation is the best way to bring down significantly the cost of drugs," Rep. Anna Eshoo (D-CA) said, according to the Washington Examiner.

The political stakes: “If Trump’s anger over the Pelosi-initiated impeachment probe sinks the effort, lawmakers of both parties would face voters next year with nothing to show on a top consumer issue,” notes Ricardo Alonso-Zaldivar of the Associated Press.

Charts of the Day

The list prices for most drugs covered by Medicare Part D, including 20 of the top 25, increased faster than inflation between 2016 and 2017 — in some cases nine times as much — according to a new analysis by the Kaiser Family Foundation. “Our analysis suggests the potential for savings if drug manufactures limited price increases to the rate of inflation or paid a rebate to the federal government, as has been proposed in recent legislation,” the report says.

Are Democrats Too Afraid of Raising Taxes?

Centrist Democrats including Joe Biden and Amy Klobuchar have criticized Elizabeth Warren for her evasion of a key question on her call to switch to a Medicare-for-All system: Would middle-class taxes go up?

In this framing, voters have an easy choice between a shockingly expensive universal health care system that they’ll pay for with massive tax increases, or smaller reforms that will leave much of the current system in place and taxes roughly the same.

Critics charge that those Democratic attacks on Medicare for All are simply repeating Republican talking points. While Klobuchar has bristled at that critique — “I’m tired of hearing, whenever I say these things, oh, it’s Republican talking points,” she said at the debate — New York magazine’s Eric Levitz says the problem is real, with implications far beyond one health-care proposal. The portrayal of Medicare for All as wildly expensive, and the demonization of tax increases that would pay for it, undermines the Democratic agenda as whole, Levitz wrote Thursday.

Levitz makes three related points to bolster the case for being more open about Medicare for All:

1. The much-cited $32 trillion cost of Medicare for All (on a 10-year basis) is basically what the country as a whole will spend on health care in any event — and it may be less. In other words, there’s nothing particularly expensive about Medicare for All, and the program is intended to reduce overall costs, not increase them, even as it covers more people.
2. In virtually every other developed country, some form of universal, publicly funded health care produces better care at lower cost, and Medicare for All offers a path toward that goal in the U.S.
3. There is no practical difference between health care taxes and health care insurance premiums and out-of-pocket spending. Both are unavoidable for the great majority of people, and both come out of people’s paychecks.

The framing deployed by Biden and Klobuchar ignores these basic insights, and plays into more typically Republican fears of large government programs and tax increases. “Equating support for middle-class families with opposition to increasing their tax rates is a conservative project,” Levitz says. “There is no reason for any Democratic candidate to be advancing it — no matter their position on single-payer.”

The situation is made worse, according to Levitz, by a media that treats private and public spending quite differently:

“Under the norms of mainstream political journalism, costs imposed on the American people by the private sector require no justification or defense; only costs imposed by the public sector do. If you are committed to abetting the meteoric rise of private health-insurance premiums, a debate moderator will not ask you to level with the American people about how much your approach to health-care policy will cost them. If you are committed to reducing overall health-care costs by expanding the public sector’s role in medical provision, you will be ritually scolded for the extraordinary (and extraordinarily decontextualized) fiscal price of your program.”

That political bias in the media, which both shapes and reflects popular opinion, may be one good reason for Democrats to be cagy when it comes to discussing the costs of major social programs like Medicare for All. Accordingly, it may make sense for even the most progressive Democrat to back more moderate reform plans for health care, including the creation of a public option alongside the existing system.

But even Democrats who reject Medicare for All should avoid following the Republican mode of attack that seeks to delegitimize both social spending and the taxes that fund it, Levitz argues: “A political discourse that treats taxation as presumptively suspect (even as it treats private rentierism as presumptively legitimate) will not be a favorable one for any Democratic president.”

Embracing a line of criticism that echoes the opposition’s positions will only damage Warren or Sanders politically and make it that much harder to govern should either win the White House. And it could hurt efforts to create more robust social programs in the future, should Democrats ever have the chance.

Your Prize for Making It Through the Week

The 2019 Wildlife Photographer of the Year winners were announced this week, and they’re simply stunning. The winning image below, by Yongqing Bao from the Chinese province of Qinghai, captures the life-or-death standoff between a Tibetan fox and a marmot. 

News

• How Pending Decision on Obamacare Could Upend 2020 Campaign – New York Times
• Five States, Including Some Crucial to Trump, Just Hit All-Time Low Unemployment Rates – CNBC
• Fed Rate Cut Looks Almost Certain as Blackout Period Starts – Bloomberg
• Sallie Mae Execs Tan at Maui Retreat While Student Debt Crisis Tops $1.6 Trillion – NBC News
• Health Benefits Won't Change for GM Workers – Axios
• Health Insurers Have to Give Back $1.4 Billion, and Kansans Get the Fattest Checks – KCUR
• Watching California Kick Off Expansion Experiment for Clues About Obamacare’s Future – Washington Examiner
• Whistleblower Alleges Medicare Fraud at Iconic Seattle-Based Health Plan – Kaiser Health News
• Google Appoints Former Obama Health Official Karen DeSalvo to New Chief Health Officer Role – CNBC
• Billionaire Says Rich Worried About Warren Should ‘Lighten Up’ – Bloomberg
• The Supreme Court Will Decide if Trump Can Fire the CFPB Director. The Implications Are Enormous – Vox
• What's Behind the Research Funding Gap for Black Scientists? – NPR
• If You Want the American Dream, ‘You Ought to Move to Canada,’ Says Ford Foundation President – CNBC

Views and Analysis

• Perhaps Sanders and Warren Are the Ones Being Politically Expedient – Catherine Rampell, Washington Post
• Warren's $30 Trillion Medicare for All Problem Has a Solution – Max Nisen, Bloomberg
• Speaker Pelosi, Together With Dems, We Can Lower Drug Prices -- Let's Get to Work – Reps. Kevin Brady (R-TX), Virginia Foxx (R-NC) and Greg Walden R-OR), Fox News
• Pelosi’s Drug Pricing Plan Puts Medical Innovation at Risk – Stephen J. Ubl, STAT
• Lowering Prescription Drug Prices: At What Cost? – Grace-Marie Turner, Forbes
• Chicago Teachers Strike Highlights America’s Top 3 Economic Threats – Jake Novak, CNBC
• Out With the Old, In With the Young – Astra Taylor, New York Times
• The Tax Cuts and Jobs Act: Lessons for the Future – Mindy Herzfeld, American Enterprise Institute
• How Democrats Should Be Talking About Race and Class – Joan C. Williams, Bloomberg
• Basic Income Can’t Do Enough to Help Workers Displaced by Technology – Dylan Matthews, Vox
• STDs Are on the Rise. They Must Be Combated. – Washington Post Editorial Board