Medicare Drug Pricing Reform Fails in Committee: Congress Update
(Bloomberg) -- House Democrats are on track Wednesday to advance through committee the tax provisions to pay for President Joe Biden’s economic agenda, sending revenue measures worth some $2 trillion to the Budget Committee.
It’s still unclear how Democrats will handle key tax provisions, including removing or boosting the $10,000 cap on the federal deduction for state and local taxes, or SALT. Also undecided is the fate of a proposal to require banks and other financial institutions to report data on customers’ account outflows and inflows to the IRS -- bolstering tax-collection efforts.
In the Senate, Democratic leaders are trying to get the full caucus behind the size and scope of the legislative package, the largest such undertaking in decades. Budget Committee Chairman Bernie Sanders paints the current price tag as a compromise relative to his initial $6 trillion, while moderates led by West Virginia’s Joe Manchin -- who along with Arizona’s Kyrsten Sinema are meeting with Biden Wednesday -- want a bill smaller than $3.5 trillion under consideration. Republicans have vowed to oppose the bill, requiring unity in the Democratic caucus.
Key Stories and Developments:
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Medicare Drug Pricing Reform Fails in Committee (3:04 p.m.)
A trio of House Democrats blocked approval of a sweeping drug-pricing proposal at the U.S. House Energy and Commerce Committee, threatening their party’s health care agenda.
The measure failed on a 29-29 tie vote. Democrats Kurt Schrader of Oregon, Scott Peters of California and Kathleen Rice of New York joined Republicans in opposing the bill, which would allow the government to demand lower prices from drugmakers and cap price increases on some medicines at the inflation rate.
The trio sought passage of a similar but narrower drug pricing measure. -- Alexander Ruoff
House Considers New Bank-Reporting Requirements (1:19 p.m.)
House Democrats are working with the Biden administration to add bank account reporting requirements to their tax bill, a revenue raiser that could be used to pay for a modification of the cap on the federal deduction of state and local taxes.
Ways and Means Committee Chairman Richard Neal said his committee and Treasury officials are discussing boosting reporting requirements to the Internal Revenue Service to address tax cheats without burdening the middle class. He said he has received a letter from Treasury Secretary Janet Yellen and IRS Commissioner Chuck Rettig urging the inclusion of the reporting requirement to raise revenue.
Those funds could potentially pay for changes to the current limit on the deduction for state and local taxes.
“I’ve heard it discussed,” House Ways and Means Committee member Bill Pascrell told Bloomberg Wednesday. But he also noted that several proposals are under consideration and he’s not sure how serious this one is.
A senior congressional aide familiar with the ongoing talks confirmed there has been what the aide termed as chatter about using the bank reporting revenue to pay for the SALT change.
The reporting proposal, previously proposed by President Joe Biden, would require banks and other financial institutions to report customers’ account flows of $600 or more to the IRS. The administration has estimated that that would generate nearly $463 billion in revenue over 10 years, but Congress’s official tax scorekeeper has yet to weigh in.
Pascrell said earlier in the day that House Democrats are looking at several options for the SALT deduction, which was capped at $10,000 under Republicans’ 2017 tax law. Ideas include raising that cap and eliminating it for a few years. -- Erik Wasson, Allyson Versprille, Billy House and Kaustuv Basu
Biden Summons Manchin, Sinema to White House (9:55 a.m.)
President Joe Biden will meet separately today with Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, according to a person familiar with the plans.
Both are moderate Democrats who are pivotal in determining whether the president can achieve passage of his broad economic agenda.
Senate Democrats need all 50 members of their caucus to agree on a final package that will raise taxes on companies and the wealthy, while also expanding social spending in areas including climate change, immigration, health care and elder care. Both Manchin and Sinema have balked at the current $3.5 trillion price tag, and Manchin also has called for a “strategic pause” in deliberations amid soaring debt and rising inflation.
Sinema is meeting with Biden mid-morning, while Manchin is scheduled for Wednesday evening, according to the person familiar with the matter. -- Laura Litvan and Jennifer Epstein
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