Washington, D.C. — In anticipation of President Biden’s forthcoming plan to expand government price controls that kill cures, increase taxes, and relies on gimmicks for funding, House Ways and Means Committee Chairman Jason Smith (R-MO) and Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) issued the following statements:
“President Biden is continuing to dismantle Medicare and seniors’ access to life-saving medicines while raising $252 billion in taxes on mom-and-pop small businesses – all to shovel welfare to the wealthy with expanded subsidies for Obamacare and luxury electric vehicles,” said Chairman Smith. “What the White House won’t tell you, is thanks to Democrats’ socialist spending, Medicare faces more than $500 billion in cuts over the next decade. President Biden sweeps these cuts under the rug and is instead showing his true plan: taxes on small businesses, bonafide budget gimmicks, and endangering seniors’ access to care with zero accountability.”
“President Biden’s newfound ‘concern’ for the solvency of Medicare comes only after he raided $716 billion from the program to pay for Obamacare and another $300 billion for more Obamacare subsidies and a down payment on the Green New Deal,” said Chair Rodgers. “Rather than seek bipartisan solutions that strengthen Medicare and preserve benefits that seniors enjoy today, President Biden wants to double down on government price setting policies from the IRA that have already stopped new and potentially life-saving treatments from reaching patients.”
READ: As covered in the Wall Street Journal last November by Visiting Senior Fellow at the USC Schaeffer Center, Joe Grogan, in “the Inflation Reduction Act is Already Killing Potential Cures”:
- “In its Oct. 27 earnings statement, Alnylam announced it is suspending development of a treatment for Stargardt disease, a rare eye disorder, because of the company’s need ‘to evaluate impact of the Inflation Reduction Act.’”
- “On Tuesday, Eli Lilly announced it is canceling work on a drug that had been undergoing studies for certain blood cancers. ‘In light of the Inflation Reduction Act,’ the company wrote to Endpoints News, ‘this program no longer met our threshold for continued investment.’”
Background: In Obamacare, Democrats used $716 billion in Medicare savings to fund their new entitlement schemes. In the so-called “Inflation Reduction Act” they again used Medicare to pay for unrelated programs, including Obamacare subsidies for wealthy Americans.
- Congressional Budget Office (2012): “Spending for Medicare would increase by an estimated $716 billion over that 2013–2022 period.”
- Congressional Budget Office (2023): The largest effect was a $307 billion net decrease in projected outlays for Medicare from 2023 to 2032. The main contributors to that decrease were pricing reforms for prescription drugs, which CBO estimates will reduce prescription drug spending in Medicare Part D and Medicare Part B. That decrease was almost entirely offset by increases in projected outlays for other programs over the 2023–2032 period,”
Democrats are once again pushing higher taxes for small businesses.
- In total, Democrats would add $252 billion in new taxes on America’s family-owned businesses that fought to stay open during COVID and now struggle to find workers and supplies in Biden’s broken economy.
- The expansion of the so-called “Net Investment Income Tax” (or “NIIT”) would hit “sweat-equity” owners of small and family-owned businesses, commonly known as the “Mom & Pop” shops in our communities.
- 75 percent of small businesses are organized as S corporations, partnerships, or sole proprietors—and all get hit by the new tax. This will affect the 52 million Americans they employ, 42 percent of the workforce.
The new tax would do nothing to protect Medicare, contains a huge marriage penalty and has no protection against inflation.
- Democrats repeat their procedural gimmicks from the Obamacare version of NIIT, which did nothing to support Medicare.
- In fact, redirecting this revenue to Medicare would be double counting the taxes that Democrats already are using to pay for Obamacare.
- CBO projects that revenue from this new tax would cover only three years of Medicare funding shortfall, and would do nothing to lower the federal deficit.
- Thousands of families would pay an additional $15,000 to the IRS each year simply because the parents are married.
- The tax will grow to hit more and more entrepreneurs over time, as it is not adjusted to address surging inflation.