With key compensation now removed from the $ 579 billion Senate infrastructure bill, the bipartisan negotiators who crafted this plan are looking for a new source of revenue to help offset its costs.
Among the provisions under review is the Trump-era Medicare discount rule, Sen. Rob Portman, R-Ohio, told CNN’s “State of the Union” on Sunday.
This rule, which has not been implemented, would prevent drug manufacturers from giving percentage discounts to drug benefit managers who manage drugs for insurance plans. Critics of the practice say the discounts encourage higher list prices and don’t reach patients at the pharmacy counter.
Federal markers predicted that insurers would increase premiums to account for lost discounts, but that rule was delayed in court and did not come into effect.
Portman said the potential payment “provides significant income.” A CBO estimate in 2019 was that implementing the rule would cost $ 177 billion over a decade.
The repeal of the rule was among the compensations listed in a $ 3.5 trillion reconciliation deal reached by Democrats in the Senate and the White House last week. A decision to include a postponement of the rule or a full repeal in the bipartisan bill would mean Democrats would not be able to use those savings in the reconciliation measure.
The bipartisan group of Senators, 11 Republicans and 11 Democrats, based their infrastructure framework deal as being fully paid. But the decision over the weekend to remove tax compensation from the deal was a setback.
Negotiators initially said the IRS enforcement provision would have cost $ 40 billion but generated $ 140 billion, or $ 100 billion in revenue, although the CBO later tentatively estimated that it did not. would bring in only $ 60 billion in revenue, according to an assistant familiar with the negotiations.
The execution proposal was quickly met with objections.
Negotiators worried the Congressional Budget Office might not mark it as income, removing a key argument that the plan was fully paid for.
Some conservatives, such as Sen. Ted Cruz, R-Texas, have expressed concern that the IRS is unfairly targeting conservatives, openly fearing the provision would lead to harassment of ordinary taxpayers.
And Portman told CNN’s “State of the Union” on Sunday that Democrats removed the provision in order to use it for their partisan reconciliation bill.
“It will be in the broader reconciliation bill, we are told,” he said, referring to the Democrats’ $ 3.5 trillion reconciliation deal, which Democratic leaders hope to examine in tandem with the infrastructure bill.
The move angered Senator Bill Cassidy, R-La., A negotiator who said the Democrats’ decision to use this payment for the partisan reconciliation deal did not demonstrate good faith.
“We offered compensation, the Republicans did. Good faith payments that both parties agree to are good. And we offer them and the White House takes them and says, no, we want them. We want them for our $ 3.5 trillion.
The continuation of the payments debate comes as Senate Majority Leader Charles E. Schumer, DN.Y., has scheduled a key procedural vote on the infrastructure package for Wednesday, though the package is yet to be released. finished.
Schumer will need 10 GOP voices to move the measure forward. But even some of the Republicans involved in the deal say they’re not ready to do it until negotiations are over.
“How can I vote for closure when the bill is not drafted?” Cassidy asked on Sunday.
“I just don’t know how you have a closing vote when you haven’t written the bill, when you haven’t set the payments,” he added, saying a deal could be ready with greater coordination with the White House and Schumer.
Portman, meanwhile, called the delay “arbitrary.”
On Sunday, he criticized Schumer’s decision to hold the vote to start the debate on Wednesday, saying: “Start the debate on what? We don’t have a product yet.
Even without an invoice to score, individual negotiators turned to the CBO for advice on what apparently could become potential revenue streams.
The CBO last week issued two letters to negotiator Kyrsten Sinema, D-Arizona, who leads the group with Portman, as well as a third letter to Sen. Mark Warner, D-Va., Who is also a member of the Senate Budget Committee. .
A letter from Sinema focused on the cost of the extended unemployment benefit extension adopted during the COVID-19 pandemic. The letter revealed that pandemic unemployment insurance would cost $ 53 billion less than expected due to the early phasing out of additional benefits by states, as well as improving the economy.
Sinema’s other letter dealt with the budgetary impacts of the employee retention tax credit and other tax credits that had not been spent. Warner’s letter, meanwhile, focused on sick leave and family leave tax credits related to the pandemic. In both cases, the CBO said the tax credits cost less than originally expected.
The group had previously agreed to a long list of payments, including auctioning 5G spectrum, selling part of the strategic oil reserve, reallocating broadband funding from previous legislation, adjusting fees. customs and dynamic scoring.
“It’s important that it gets paid,” Portman said. “It’s also important to recognize that this is long-term investment in infrastructure, which is different from government spending on a new social program, for example. It is spending that will not be spent. next year, and most of them will not be spent until the next five to ten years or more.
The plan, agreed in June, would spend $ 579 billion in new money, including $ 973 billion new and baseline over five years and $ 1.2 trillion in new and baseline spending over eight years.
The initial deal would include $ 109 billion for roads, bridges and major projects, $ 11 billion for security, $ 49 billion for public transit, $ 66 billion for rail and $ 7.5 billion dollars for electric vehicle infrastructure.
Lauren Clason and Lindsey McPherson contributed to this report.
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