Senate Democrats are reviving negotiations on a budget reconciliation bill in hopes of scoring some modest wins out of President Biden’s derailed social welfare and climate agenda.
The talks were resumed with significant buy-in from Sen. Joe Manchin III.
Mr. Manchin, a West Virginia Democrat and critical swing vote in the 50-50 Senate, has agreed to anchor the talks around an overhaul of Medicare’s ability to negotiate the price of prescription drugs.
“Sen. Manchin has long advocated for proposals that would lower prescription drug costs for seniors and his support for this proposal has never been in question,” said Sam Runyon, a spokesman for Mr. Manchin. “He’s glad that all 50 Democrats agree.”
As drafted, the proposal would allow Medicare to negotiate the price of life-saving drugs with pharmaceutical giants beginning in 2023. It also caps the out-of-pocket costs for medication at $2,000 per year per patient and expands financial assistance for seniors and low-income individuals.
The proposal further creates an “inflation rebate” for drugs that have genuinely remained stable in cost but have jumped significantly in recent months. As part of the plan, pharmaceutical companies would be forced to make up the difference if they raise drug prices above inflation.
Senate Majority Leader Charles E. Schumer, New York Democrat, said the bill would incentivize the pharmaceutical industry and health insurance providers to keep drug costs low.
Republicans were quick to lambast the revived talks, arguing that with inflation at a 40-year-high the American public could not afford more spending.
“They turned a booming economy into a struggling economy,” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “Now they’re considering doing even more damage and ramming through gigantic tax hikes on party lines.”
Mr. Manchin derailed Mr. Biden’s $1.75 trillion spending package late last year over concerns that it would exacerbate inflation. His opposition effectively killed the legislation since Democrats planned to pass it via budget reconciliation, a procedure that allows some spending and tax measures to bypass the Senate’s 60-vote filibuster threshold. The process would also allow Democrats to pass it in a party-line vote.
Despite Mr. Manchin’s opposition, Mr. Schumer worked to revive the package. After months of back and forth, Mr. Schumer agreed to start with an issue with broad consensus and build it out from there.
That strategy led Mr. Schumer and Mr. Manchin to tackle prescription drug pricing, which Democrats have long said needs an overhaul. The odds are long, however, that they can agree to include other provisions such as climate change spending and tax hikes.
Mr. Manchin, who hails from the coal state of West Virginia, opposes his party’s efforts to phase out fossil fuels. Meanwhile, Democratic Sen. Kyrsten Sinema of Arizona has balked at raising income and corporate tax rates, which the White House has outlined as a way to pay for new social welfare programs.