“We’re going to fight as hard as we possibly can, and we’re going to challenge as much as we believe is properly challengeable,” said Sen. Mike Crapo of Idaho, the top Republican on the Finance Committee, which is in charge of the policies that remain in the proposal.
This week’s wonky faceoff before the Senate parliamentarian is likely to be substantially quicker and less painful for the majority party now that Manchin has sworn off tax hikes, which Republicans were ready to protest as unworkable under the chamber’s rules. But even the central piece that remains after Manchin’s latest ultimatum — policy to lower prescription drug prices — is at risk of dwindling further under the Republican onslaught.
Because Democrats are using the complex path of budget reconciliation to steer the package past a Senate filibuster, the parliamentarian must opine on what can and can’t fly under the special rules that govern that route. Plans that change federal spending or send new cash into federal coffers are fair game, while adjustments that amount more to policy reforms rather than funding decisions enter murky territory.
The procedural gantlet could complicate Democrats’ ambitions to punish companies for jacking up drug prices, for one. Majority-party leaders want to force drug makers to pay back rebates to the government if they raise prices faster than inflation — a penalty expected to direct tens of billions of dollars to the federal government.
Any policies that give specific directives to federal agencies are also under threat. Democrats received a reminder of those limitations last year when they changed their plan for boosting the Child Tax Credit in their last go at a party-line package, tweaking language that would have forced the IRS to send monthly payments. Instead they ended up requiring “periodic” payments throughout the year.
Sen. Tim Kaine of Virginia, a Democrat on the Budget Committee, said majority party leaders have done their homework to avoid significant procedural pitfalls, running their ideas by the parliamentarian while courting Manchin’s support since last summer.
“I’m not expecting a huge number of big … question marks that we’re going to have to work through,” said Kaine. “We have had this idea on the table for more than a year. The parliamentarian has been in the discussion for a very long time.”
Democrats are already familiar with defeat along these lines. When Senate Democrats finalized their $1.9 trillion pandemic aid package using reconciliation last year, the parliamentarian ruled that a $15 minimum wage increase didn’t pass muster, despite Senate Budget Chair Bernie Sanders’ (I-Vt.) arguments to the contrary.
Before Democrats’ latest party-line package can pass the Senate, top budget aides for Sanders and his Republican counterpart Sen. Lindsey Graham (S.C.) are expected to argue for and against the inclusion of specific policies, in an effort to convince the parliamentarian to keep or toss certain provisions.
“Republicans believe this whole enterprise is going to be very inflationary,” said Graham, top Republican on the Budget Committee. “And we will be aggressive in trying to stop it.”
The parliamentarian is now reviewing the latest iteration of the prescription drug reform portion of the proposal. While Republicans are staying mum about the exact challenges they plan to mount, budget experts say the idea of a penalty for drug companies that raise prices on those with private health insurance could pose a problem.
The savings yielded by that mandate could be considered “incidental,” or a budget “side effect” of the policy rather than its main purpose, said Marc Goldwein, who heads the watchdog group Committee for a Responsible Federal Budget. That could run afoul of Senate requirements.
Besides budget-related constraints, the majority party must also ensure that different parts of the bill have been drafted and overseen by the appropriate Senate committees — a seemingly obscure issue that’s important to heeding the rules that guide any bill able to pass with a simple majority.
As chair of the Finance panel, Sen. Ron Wyden (D-Ore.) has been charged with crafting most of the package, calling his committee “the scrubbing department” for rooting out problems the parliamentarian flags in the bill text.
“That’s our job,” Wyden said. “We have very good, technical people.”
That “scrubbing” has been a long slog. More than a year ago, Wyden said his staff was already in the thick of scouring the package to fit within the bounds of the special budget rules. “We are deeply involved with the parliamentarian and looking at all of the procedural issues,” he said almost 13 months ago.
Now time is running out. Democrats don’t have the luxury of spending more months tweaking their party-line domestic policy bill or trying to build enough support to pass it, since their ability to pass any such legislation without a filibuster sunsets Sept. 30, less than 80 days away.
As of Oct. 1, they’ll have to start from square one, with an election right around the corner.
Brian Faler and Nancy Vu contributed to this report.