The Law to Reduce Inflation, which could be approved next week, will reduce health costs, invest in clean energy and impose a minimum tax rate for large companies
It’s not often that Joe Biden can boast of a good week, but this one is. He began by liquidating the leader of Al Qaeda in Afghanistan, with a surgical operation without collateral victims. He continued on Wednesday with the ratification in the Senate of the admission to NATO of Finland and Sweden. And it ends this Friday with the debate in the Senate on what would be the most significant law of the year and one of the most important of his mandate. The one that will allow the Democrats to breastfeed during the holiday recess, the starting gun for the electoral campaign with which Congress will be renewed.
The so-called Law to Reduce Inflation is a diverse package of social spending, fiscal control and environmental investment, among other large sectors. It contains formulas for practically everything, except for controlling inflation, because as columnist Jennifer Rubin said in the Washington Post, “just because it has it in the name doesn’t mean it does.” In fact, most economists believe that any reduction will be minimal, because that depends more on the price of energy, affected by the war in Ukraine, or production, which the covid stopped in its tracks.
The title is the least important, the important thing is the content. Biden could boast of achieving something Democrats have been promising for 30 years, lowering drug prices for retirees. It is about authorizing the semi-public Medicare insurance to negotiate prices with pharmaceutical companies. It seems simple, but that lobby has prevented it by convincing the country that any government interference in the market would be equivalent to price control, which would slow down innovation and prevent pharmacological advances.
Moreover, critics question whether to reduce health costs it is necessary to start with pharmaceutical companies, instead of going to hospitals, which have a greater impact on the global cost. However, medications are the ones that most affect health insurance policies and retirees’ pockets.
a stratospheric universe
When talking about health in the US, a stratospheric universe is addressed that escapes the understanding of the European reader. For example, the new law would exempt all drugs that have been on the market for less than nine years and limit the cost of retirees in copays to just $2,000 a year. So relative is the damage that will be done to pharmaceutical companies, with whom a 25% discount would begin to be negotiated for galloping price medicines such as those for diabetes, whose 80% falls on the Government. According to the Kaiser Foundation, no more than 20 medications, other than insulin, would qualify for those discounts.
In the same line of relativity is the “tax increase” that has scandalized the Republican opposition. The establishment of a minimum corporate rate of 15% only affects those companies with profits of more than one billion annually. Taking into account that the average citizen pays 22% on average, it seems reasonable that large corporations with more benefits pay at least 15%.
According to the Institute for Fiscal and Economic Policy, 55 large multinationals such as Amazon, Fedex and Nike pay absolutely nothing in federal taxes. Senator Joe Manchin himself, one of the two most conservative Democrats in the party, who in this case takes credit for having introduced the legislation, insists that the only thing being done is closing legal loopholes to prevent them from escaping through those holes. tax authorities are the ones with the most lawyers and accountants at the service of tax engineering.
All eyes are on Arizona Sen. Krysten Sinema, the Democrats’ killjoy in the Senate. Due to the Solomonic division left by the polls, the party needs to square each and every one of its senators so that the vice president can exercise the tiebreaker vote. For now, Sinema allows herself to be courted in silence, with the complicity of her best friend in her chamber, Manchin, father of the law.
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