"Build Back Manchin" Is Inflationary Tax-and-Spend

From a property rights perspective, the Democrats’ budget reconciliation bill that Sens. Joe Manchin and Chuck Schumer brokered turns out to be pretty much as bad as Build Back Better 1.0 a year ago. Call this one the “Build Back Manchin Act.”

Here are some of the worst-of-the-worst provisions of the Manchin-Schumer-Biden tax-and-spend bill:

• It raises taxes on Americans across the income spectrum.

• It increases inflation during a budding economic recession.

• It worsens inflation by handing billions of taxpayer dollars to future Solyndras—“green” energy fraudsters and opportunists—and subsidizes Obamacare premiums for 3 years—a downpayment on permanent subsidies of health insurers’ ever-rising premiums. Its electric vehicle subsidies disadvantage gas and diesel engine vehicle purchasers and manufacturers. All this is government picking winners and losers—something Manchin has opposed.

• Its drug price controls—government dictating the price it will pay biopharma innovators for certain drugs, with a 95% punitive tax as the gun to their heads—will actually result in fewer new medicines, less innovation, higher initial new drugs’ prices, shifting $40 billion in new Medicare Part D costs to taxpayers and reducing generic drug competition.

• Its 15% corporate book tax hits manufacturers hardest and spills over to employees, investors and those saving for retirement in IRAs and 401(k)s.

• It inflates American families’ and businesses’ natural gas bills with a tax on natural gas. Increasing households’ and businesses’ natural gas costs is effectively an increase of inflation--having to pay more for the same thing.

• It threatens America’s energy supply, reliable power grids and thousands of existing energy jobs. This means more blackouts and higher power bills across the country. The Texas blackout-electicity-bill-spike fiasco and California’s overloaded power grids are going national.

• It weaponizes the IRS and sics the tax enforcers on self-employed, small businesses and low-income earners who file for refundable tax credits. There’ll be many more IRS audits and related unpleasantness.

• It increases the national debt. That adds to the fiscal burden of taxpayers for generations.

And this is what the “moderate” Democrats are fine with!

What the Dems do hiking taxes and spending speaks louder than empty rhetoric about wanting more domestic manufacturing and shorter, more reliable supply chains, or not taxing anybody earning less than $400,000.

The Wall Street Journal sums up the legislation well: “New taxes and price controls to pay for green corporate welfare for the politically favored.”

House Energy & Commerce GOP leaders warn, “The Democrats’ latest tax and spending spree will weaken our economy, kill American jobs, and make energy less reliable, less secure, and more expensive.”

Apparently, no Democrats in Congress or the Biden administration grasp the foreboding situation in which they giddily aim to increase taxes and manipulatively spend taxpayer money.

• Inflation’s spiked a 41-year-high 9% in the past year.

• The Fed’s rapidly raising interest rates—the price of borrowing money.

• The economy’s sputtering into recession.

• Inflation is outpacing wage gains and purchasing power.

• The Biden administration—aided and abetted by the Democrat Congress—has deliberately blocked, frustrated and refused to allow the private sector to ramp up things like building pipelines, increasing oil and gas exploration and production, and mining critical minerals needed for batteries, electric vehicles, green energy, etc.

• Democrats are hitching their wagon to President Biden, whose approval ratings rival Jimmy Carter’s unpopularity during ‘70s stagflation. The RealClearPolitics average for Biden job approval is 39.5%; 72.8% of Americans think the country is on the wrong track.

• Generally, the tax hikes and other nasty stuff in Build Back Manchin start immediately, while supposed benefits are several years in the future. Early pain, later-if-ever gain.

In short, Build Back Manchin doubles down on wrong-track policies. The whole country will pay for their hubris.

Attention, congressional Democrats: Y’all fixin’ to get schooled!

A Closer Look at the Drug Pricing Scheme

Thanks to Sen. Joe Manchin, other politicians in his party have seen item after socialist item fall from the budget reconciliation package to the cutting room floor. Thank heaven!

He’s given reality checks to extremist mischief. The past several months, Senate Majority Leader Chuck Schumer has wisely listened to and heeded the demands of his colleague from red state West Virginia.

Sen. Manchin’s prudence deserves praise. He’s carefully scrutinized the excesses his colleagues of the Left have pushed and pushed, much of it outright socialism.

Another item that amounts to socialistic policy remains on the budget reconciliation table. The wisest Democrat in the Senate hasn’t yet recognized its danger.

The Manchin goal is to help seniors struggling to pay inflation-fueled costs for their health care, food, gas and housing. The senator supports provisions sold as reducing prescription drug prices through direct negotiations. He’s also on board with extending extra Affordable Care Act premium subsidies ostensibly for two more years.

His goals are laudable. The problem and danger are the approach taken to reduce drug costs.

This pernicious policy—socialist policy—is the government dictating the price it pays for certain medicines.

It ensures a my-way-or-the-highway situation: The government sets the price. The brand drug company either takes the dictated price or faces punitive taxation.

There’s no level playing field. There’s no honest negotiation. There’s only artificially low payment for a valuable medicine used to treat patients for serious conditions or else a 95 percent inflation penalty on those drugs’ sales above inflation. This tax applies to sales not only in Medicare Parts B and D, but also in commercial markets.

Sen. Manchin’s crafty colleagues who concocted this scheme apparently haven’t given him the full picture.

Beyond the arming of bureaucrats with socialist price-control and tax weapons, other crucial aspects deserve sound-minded lawmakers’ consideration.

First, drug costs comprise less than 10 percent of U.S. health spending. Prescription drug prices have risen 2.5 percent over the past year, compared with 17.3 percent for health insurance and high cost increases for other health services. Medicaid and Part D average net prescription prices have fallen since 2009.

Second, price controls harm patients. The proposed vise will reduce development of new cures and treatments. The Congressional Budget Office underestimates 10-15 fewer new drugs over a decade due to price dictation. The innovation loss will be worse than that, and harshest for rare diseases and hard-to-treat cancers.

Diseases without early pharmaceutical interventions will require more patients’ use of hospitals and doctors’ offices for more extensive, expensive care as diseases progress.

Third, drug price controls will flow to medical providers. The government-set prices will lower provider reimbursement rates. Hospitals will charge commercially insured patients more for the same medicines.

All this comes amidst skyrocketing inflation that’s top of mind for Sen. Manchin. This “hidden tax” stands at 9.1 percent and likely worsening. The Federal Reserve is aggressively raising interest rates, risking recession.

Meanwhile, one-party-ruled Washington has overregulated, overspent, and threatens to do more of the same, with overtaxing on top. The reconciliation bill adds fuel to the raging fire.

The Obamacare subsidies shift costs to other Americans struggling under the highest inflation in 40 years, and carry other economic maleffects. They increase demand. Heightened demand drives politicians to impose price controls, here on the sector that's getting us through COVID. Next stop, rationing access to care and limiting patients’ coverage options.

Subsidies fund health plans that, instead of containing patient costs the past two years, have raised premiums and consumer cost-sharing. The extra monies do nothing to reduce inflation.

These subsidies may modestly improve affordability for some working-age people. It’s not free-market economics, it’s mainly political medicine for vulnerable Democrats potentially at risk when constituents see rising 2023 health premiums, though it isn’t naked socialism.

From the partisan budget reconciliation’s optimistic start a year ago, much of the original “Build Back Better” extremism has failed the Joe Manchin test. He and Sen. Kyrsten Sinema have courageously been the grown-ups in Democratic caucus meetings. They’ve protected America from parts of the Leftist policy agenda—at great personal risk and threats.

For the sake of the seniors and others Sen. Manchin wants to protect, for the integrity of the Medicare program, for the future of medical innovation and its health benefits and long-term cost savings, for the respect of private property rights and U.S. global competitiveness in biopharma, here’s hoping Sen. Manchin reapplies his test to the drug price-fixing-confiscatory-tax scheme.

Lawmakers’ Light Shed on PTAB

Twin hearings in the U.S. Senate and House Intellectual Property Subcommittees recently drew insightful, important questions and thoughts from several conservative lawmakers and others who respect rights to one’s intellectual property. (Conservatives for Property Rights provided the subcommittees input.)

The Senate hearing was tilted to prop up legislation by Sens. Pat Leahy, John Cornyn and Thom Tillis. The renamed “PTAB Reform Act” would further weaponize the Patent Trial and Appeal Board for frequent users from Big Tech and Chinese national champions to easily invalidate issued patents.

The House hearing was definitely no sham front for Infringers Lobby legislation. The House hearing focused on the facts and substance of PTAB’s effects on small businesses. It presented a breadth of witnesses and perspectives on PTAB’s first decade’s performance.

Sen. Ted Cruz reminded the Senate hearing of the fundamental constitutional grounds for IP. “Our Founders included in the United States Constitution the protection [of] not just property rights, but also specifically of intellectual property rights. Article One, Section Eight makes clear Congress's duty to ensure the exclusive right of inventors.”

Sen. Cruz contrasted our Constitution’s provision for securing exclusive IP rights with PTAB’s demolition of IP rights. “I have some concerns when those rights which often amount to a person's livelihood can be stripped away by unaccountable bureaucrats not elected or appointed by the president nor confirmed by Congress.”

PTAB, established by the Leahy-Smith America Invents Act, quickly became a favored weapon of patent infringers. “. . . PTAB became a very friendly forum for Google and other Big Tech firms to challenge the rights of inventors,” Sen. Cruz said.

Sen. Marsha Blackburn focused on large-entity patent infringers running to PTAB to escape accountability. “Over the last several years, a lot of our innovators in Tennessee . . . [have seen] Big Tech companies end up coming at them on patent infringement. And how can we ensure that PTAB is not enabling the larger tech companies to steal patents from small businesses and innovators?”

An inventor and entrepreneur before entering Congress, Rep. Thomas Massie pointed out that “all the people who[‘ve] complained to me about PTAB are small inventors. The Big Tech folks aren't the ones complaining.” He called into question the stated intent for PTAB: “. . . if the PTAB is faster, cheaper and accurate at resolving disputes, why are inventors opposed to it?”

PTAB has made things worse for patent owners. “For example, in 2020 PTAB found 84 percent of the patents it fully reviewed to be invalid,” Sen Cruz said. “And many patent owners that successfully defend their patents against Big Tech in district court are immediately dragged before PTAB, where they have to defend it.”

The Leahy bill runs counter to Sen. Chris Coons’ STRONGER Patents Act’s proposed PTAB reforms. “. . . I’m concerned that eliminating the PTO’s [Patent and Trademark Office’s] ability to consider co-pending litigation in deciding whether to institute [patent validity challenge proceedings] is a step in the wrong direction,” Sen. Coons said. “Because I think hardwiring parallel proceedings into the AIA increases costs by encouraging duplicative proceedings. And in my view that doesn't benefit the public or the patent system. So any statutory provision to address serial petitions also has to adequately protect, versus repeated attacks, potentially valid patents.”

PTAB’s effect of driving investors away from startups commercializing valuable patented inventions emerged in the House hearing. Rep. Massie, sponsor of a bill that among other things would eliminate PTAB, asked the head of medical device incubator ExploraMed, “Would private capital, angel investors, venture capitalists, would they be more likely to invest in new technologies and ideas if PTAB did not exist?” The answer was yes.

By PTAB’s making it easy to quash valuable patents, it also risks U.S. national security. “China has also found PTAB is a useful tool towards invalidating American patents,” Sen. Cruz noted. “Chinese companies, such as ZTE and Huawei, are prolific petitioners at PTAB.”

Rep. Massie pursued a similar vein. “The U.S. military relies on secure communications, technology, equipment, satellites, networks, and do you think that it's possible that PTAB has contributed to lack of development of that here domestically or that possibly China is taking advantage of the fact that we have a weakening patent system due to PTAB, that we don't have enough investment in things that could provide more national security?” Witnesses agreed.

Rep. Massie, owner of 30 patents, pretty well summed up the PTAB quagmire: “[F]orgive me if I'm a little leery of this theory that the PTAB was set up and established and has succeeded in helping small companies and small inventors.”