Base Hit or Double?

The recently enacted “One Big Beautiful Bill Act” is, like much legislation, a mixed bag. Some of its provisions are highly beneficial and important, while other provisions leave much to be desired.

But it’s about what you could expect from a Senate and House with such tight partisan margins—which leave leadership very little wiggle room to obtain a deal. Recall that old saying about the legislative process’s similarity to watching sausage being made. And President Trump’s shadow fell across the already difficult legislative environment, which didn’t necessarily improve prospects for the reconciliation process or product.

Among the disappointments, the overly generous quadrupling of the state and local tax (SALT) deduction from $10,000 to $40,000 rewards liberal havens for their outrageously high taxation and extremely heavy regulatory hand. Those states can continue their antiproperty rights, anti-economic freedom governance. The SALT bailout also subtracts from reducing the federal deficit, i.e., it adds to the spending side of the balance sheet.

The bill also allows Medicaid to continue growing. The fact is, those “cuts” to Medicaid liberals are whining about aren’t actual reductions in spending—you know, when a dollar line item in this year’s budget is 95 cents next year. They’re actually a modestly slower pace of growth. H.R. 1 hardly reduces Medicaid, which ballooned under Obama and Biden. About 11% (38 million) of the U.S. population meets the government’s definition of poverty. Around two and a half times that are enrolled in Medicaid. This piece of the safety net is welfare for well beyond the needy.

That said, several property-rights wins reside in this budget reconciliation package. The bulk of the 2017 Tax Cuts and Jobs Act tax measures were made permanent—protecting the wallets of Americans across income levels and stages of life, and giving certainty to businesses, including those organized as LLCs, S-Corps, etc. Immediate, 100% expensing and a combination of profamily tax provisions ease the tax burden for many Americans.

Also, “Inflation Reduction Act” green energy giveaways, like those designed to further electric vehicle mandates and remove consumer choice of internal combustion-powered vehicles, are reduced or repealed.

Health Savings Accounts, which enhance consumerism in health care, get a significant boost. The Death Tax isn’t repealed, but is less punitive and is indexed to inflation; the estate tax exemption for 2026 rises to $15 million for individuals, $30 million for married couples.

Conservatives for Property Rights member the Taxpayer Protection Alliance gives perspective on the legislation: “It is without doubt a significant accomplishment that lawmakers extended pro-growth tax policy enacted under the TCJA. Unfortunately, tax hikes buried elsewhere in the bill derail the hard-earned promise and progress of tax reform. Remittance taxes will punish millions of hard-working Americans, while new taxes on solar and wind projects will cost thousands of jobs across the country. Tax hikes make everyone poorer, while giving government bureaucrats the power to pick winners from losers. This is true regardless of which party passes them.”

Heritage Action’s assessment is, “This legislation makes headway on conservative priorities to reduce spending and ensure Americans’ tax dollars are not used to further liberal wishlist priorities.”

The mix of this sausage led our coalition to remain neutral on this legislation. The Senate got rid of a good bit of the unfair, punitive tax increases, like those on small businesses and the self-employed that the House bill contained. The final bill is a base hit or maybe a double. But more property-rights priorities remain to be accomplished if the baserunner is to score a run.

Price Controls Aren't Medicaid Reform

Property rights conservatives oppose anything that would inject government price controls, including those known as “most favored nation,” into the Medicaid program (or any other part of our health system). Energy & Commerce and other House and Senate lawmakers should actually reform Medicaid, not import foreign socialists' price controls.

Conservatives for Property Rights has consistently opposed this approach and all government price controls because they threaten both private property rights and medical progress that benefits American consumers and patients suffering from serious diseases.

To import foreign socialized price controls into America’s largest price-controlled program, Medicaid, would do nothing to help Americans afford their medicines. Rather, it likely would reduce U.S. patients’ access to lifesaving medicines. Moreover, MFN would effectively import metrics that undervalue human life—the exact opposite of the QALY ban the E&C Committee passed in the Protecting Health Care for All Patients Act last Congress.

Medicaid already gets the “best price” for prescription drugs. Pharmaceutical innovators are required to provide Medicaid rebates averaging more than 50 percent. Yet, MFN would raise costs and worsen existing market distortions that socialized medicine abroad and, to a lesser extent in U.S. government health programs, already cause. MFN would exacerbate the perverse incentives that cause 340B to drive up health costs. MFN very well could force many manufacturers to pay Medicaid for drugs. Talk about market distortion!

MFN price controls are tantamount to a tax on an industry that supports 5 million good-paying American jobs. The net effect of MFN in Medicaid will be to kill American jobs and American innovation, particularly for addressing the most acute conditions in the Medicaid and Medicare populations. This risks handing U.S. biopharma leadership over to China.

A better alternative for budget reconciliation is actual Medicaid reform. Wrest savings by disqualifying able-bodied people from Medicaid and imposing a work requirement. Restore pre-Obama-Biden qualifications for Medicaid, which weren’t exactly stingy.

Government price controls are a nonstarter. They don’t belong in American health care. Market-based competition and consumer choice are the prescription for curbing costs while improving quality and fostering innovation. Say no to MFN, no to any form of socialized medicine.

Special 301 Report Should Put America First

Conservatives for Property Rights has sent Congress a clear message: the 2025 Special 301 Report must be restored to its rightful purpose — identifying and confronting foreign threats to American intellectual property.

Under the weak leadership of the Biden administration and a complacent Congress, this once-powerful trade tool has been systematically watered down. This gives foreign IP thieves a free pass to steal from American businesses without consequence.

The Special 301 Report was designed to call out and hold accountable nations that undermine American innovation. Yet, for the past four years, Congress has stood idly by as the Biden administration's globalist, America-last approach weakened its impact.

Instead of taking decisive action to protect American jobs, lawmakers have allowed USTR to soften its language — failing to expose the worst offenders and emboldening those who wish to exploit our IP laws.

CPR's letter to Congress urges lawmakers to ensure the 2025 report is a "return to the clear, unequivocal assertions of earlier editions" — reinforcing America's commitment to strong IP protections, in line with President Trump's new "America First Trade Policy."

Congress must act. CPR calls on lawmakers to hold USTR accountable and demand the reinstatement of tough scrutiny on compulsory licensing and other IP abuses in the 2025 Special 301 Report. America's leadership in innovation depends on it.

Please read the full letter we sent to the Senate and House below:

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The Honorable John Cornyn and The Honorable Raphael Warnock

Chairman and Ranking Member

Senate Finance International Trade, Customs and Global Competitiveness Subcommittee

219 Dirksen Senate Office Building

Washington, D.C. 20510

The Honorable Adrian Smith and The Honorable Linda Sánchez

Chairman and Ranking Member

House Ways and Means Subcommittee on Trade

1139 Longworth House Office Building

Washington, D.C. 20515

Dear Chairmen Cornyn and Smith and Ranking Members Warnock and Sanchez:

For nearly 40 years, Congress has tasked the Office of the U.S. Trade Representative with compiling an annual Special 301 report to identify foreign countries that routinely violate American firms' intellectual property.

But under the Biden administration, the USTR deliberately weakened the language of the Special 301 report. The past four annual reports have watered down a number of key U.S. positions on IP rights. This effectively invites other nations to infringe on Americans' patented, copyrighted, and trademarked technologies and products.

With the arrival of a new administration, Congress has a chance to press for wholesale reform -- restoration, rather -- that ensures the Special 301 report once again fulfills its mandate. Conservatives for Property Rights, as an organization dedicated to defending private property as both a fundamental right and a profound social good, respectfully urges you to make sure the 2025 report adheres to its statutory purpose.

Crucially, bringing the Special 301 Report back in line with congressional intent would complement President Trump's newly issued "America First Trade Policy." The Trump administration has made clear that it intends to take a strong stand against unfair trade practices that harm American industries and workers. The Policy explicitly directs the USTR to "undertake a review of, and identify, any unfair trade practices by other countries and recommend appropriate actions to remedy such practices." Furthermore, it calls for the USTR to "review existing United States trade agreements and sectoral trade agreements and recommend any revisions that may be necessary or appropriate."

The USTR does not need to wait for new processes to be established to begin this important work. The Special 301 Report already provides a structured mechanism for identifying unfair IP-related trade practices around the world and can help lay the groundwork for a fairer, more balanced trade policy that protects America's most innovative industries.

Specifically, the 2025 report should return to the clear, unequivocal assertions of earlier editions, such as the 2020 report's straightforward declaration that "IP infringement undermines U.S. competitive advantages in innovation and creativity, to the detriment of American businesses and workers." This is the statement of principle upon which the entire issue hinges, and the institution of a mealy-mouthed alternative under the Biden administration has created the impression that America has gone soft on IP rights.

The stakes couldn't be higher. IP-reliant industries drive the U.S. economy. A report from the U.S. Patent and Trademark Office found that, in 2019 just before the pandemic, 127 IP-intensive industries contributed $7.8 trillion in economic output and accounted for 33% of jobs nationwide. The 2024 Special 301 Report lacks the language from previous reports about this economic impact.

In addition to this language, the report must restore long-standing positions concerning compulsory licensing of U.S. patents -- the practice of foreign governments authorizing their domestic industries to make use of American patents without the permission of the patent-holders. Long understood as a last-resort emergency measure, compulsory licensing is now deployed willy-nilly to infringe on the rights of firms that hold valuable intellectual property they developed at great risk and cost.

Recent Special 301 reports have essentially removed all mention of compulsory licensing. Just last year, Colombia issued an unprecedented compulsory license for dolutegravir, a vital drug used in the treatment of HIV. The Colombian government took this extraordinary step despite repeated efforts by the IP owner to reach an agreement to distribute dolutegravir in the country without infringement of its patents. Indeed, Colombian government officials have declared that more compulsory licenses are coming, and have stated that Colombia will "lead or support the position of abolishing patents." This is the kind of abuse that the USTR used to call out in Special 301 reports, but ceased to do so under the Biden administration.

Biden officials planted the seeds of this new status quo during the COVID-19 pandemic. In May 2021, then-USTR Katherine Tai announced that "[t]he [Biden] Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines." Tai claimed the "extraordinary circumstances" of "a global health crisis" as justification for the move.

But in reality, there was no need for such an extreme, precedent-breaking measure. Vaccine patent owners were already inking scores of voluntary licensing deals with manufacturers in the developing world. And both developed and developing countries quickly accumulated a glut of vaccine doses. The United States ended up sitting on 82 million unused vaccine doses, and countries around the world halted production due to a lack of demand. To date, not a single country had notified the WTO that it planned to utilize the waiver to make its own vaccine.

Nevertheless, proponents seized on the USTR's formulation to declare innumerable additional "extraordinary circumstances" supposedly justifying waivers or compulsory licensing. One year after Ambassador Tai's announcement, U.N. Secretary-General António Guterres called for the removal of "intellectual property constraints" in order to enable "a rapid and fair renewable energy transition." His logic is backward. New technologies are the result of strong IP rights and a pro-innovation economy. Technologies like carbon capture and storage, alongside other innovations key to both sustainable and established energy production, benefit greatly from IP protections that incentivize innovation.

The 2025 report must also offer an accurate and unflinching account of the countries where burdensome patenting restrictions make U.S. engagement impractical. The 2020 Special 301 report -- the last before the Biden administration took office -- addressed this issue head-on. In Argentina, for instance, the USTR noted that "unduly broad limitations on patent-eligible subject matter … have interfered with the ability of companies investing in Argentina to protect their IP and may be inconsistent with international norms."

While Argentina remained on the Priority Watch List in the 2024 report, all mention of patentability criteria went missing. This change did not go unnoticed: the Argentine Chamber of Pharmaceutical Laboratories gleefully noted that the report "no longer includes criticism regarding the existence of undue limitations on the patentability of pharmaceutical and biotechnological products in Argentina, nor questions to the patentability guidelines in force since 2012."

The clear message: the United States no longer stands in defense of its citizens' IP rights. This posture effectively signals to international actors that they are free to infringe on American IP with impunity -- and de facto U.S. approval.

Were this lackadaisical attitude to continue at the USTR, the firms that have been responsible for so much American innovation and wealth creation would have a much harder time justifying the expense and risk of developing new technologies. If they lose confidence in the security of IP protection, the result will be the withering of dynamic industries on which so many American jobs depend.

That is why a strong Special 301 report is so important. We urge Congress to use its oversight authority to ensure that the USTR restores consideration of compulsory licensing and other urgent IP matters that the Biden administration eliminated from or downplayed in its Special 301 reports.

The world needs to see a clear restatement in the 2025 report of the fundamental U.S. commitment to IP protection -- alongside detailed descriptions of specific cases of abuses abroad. After four years of weak-willed indifference, it's time for the USTR to send a message of warning to those seeking to undermine the basis of American innovation.

Sincerely,

James Edwards

Executive Director

Conservatives for Property Rights