Since it is an election year, there will be virtually no legislating before the election: Besides the abnormal amount of dysfunction in Congress, members who might have a tight election would prefer to avoid voting on anything that might provide fodder to their opponents. Any floor votes that do take place before November will either entail some sort of partisan posturing that will never become law or the naming of Post Offices.
But in the two months between the election and the swearing-in of a new Administration (and Congress), the House and Senate leadership will need to pass a number of spending bills to keep the government funded through the next fiscal year.
There are also a number of expiring tax provisions that both sides would like to extend. At the end of most years, Congress debates some sort of tax extender package, although it does not always manage to enact one.
What I learned from my years working in the Senate is that whenever there are must-pass bills, the sponsors of many other less-urgent bills that would otherwise expire will attempt to attach their legislation to one of these must-pass vehicles.
Such a maneuver can be quite difficult to achieve, however. These year-end tax bills must ostensibly be revenue neutral, which means that the tax breaks being parceled out need to be offset via tax increases, spending cuts, or budgetary sleight of hand that produce revenue offsets without having a genuine budgetary impact. (Ask a tax geek about black liquor sometime).
If it is impossible to find revenue offsets (all of the easy ones have been long since used up), Congressional negotiators can ignore Pay-As-You-Go budget rules and simply try to negotiate a deal so that the budgetary cost of the provisions favored by Democrats more or less offsets the provisions favored by Republicans.
The Congressional Budget Office determines the official “score” or budgetary impact of a bill. Because it is so busy, it tends to only score bills that are actually being considered as legislation--that is, a Congressional Committee has scheduled a meeting to consider and potentially vote to send the legislation to the House or Senate Floor.
Last week, the House Ways and Means Committee held a mark-up to consider a minor health-care bill that would potentially be a candidate for an end-of-year extenders package. The bill consists of two main parts. The first part is a two-year extension of pandemic-era Medicare Telehealth subsidies that make it easier for doctors to offer such services. It requires $2 billion in government spending.
The bill’s revenue offset is a requirement that Pharmacy Benefit Managers (PBM) in Medicare Part D get paid in simple service fees rather than pay-for-performance fees. Pharmacy Benefit Managers manage the drug formularies for health care providers--insurers, large companies that self insure, unions, and various government entities, such as Medicare. Part of this entails negotiating discounts from pharmaceutical companies that produce expensive drugs, and the compensation for PBMs typically depends upon the size of the discount it obtains, which gives it an incentive to get the best deal possible for the entities it represents.
But pharmaceutical companies don’t like having to give big discounts, so they have pushed for the government to force PBMs to sever, or “de-link” how much they get paid and how much of a discount they negotiate.
However, there is no reason to think de-linking will save taxpayers money in this instance, and a recent study by University of Chicago professor Casey Mulligan estimates that de-linking policies in Medicare Part D would actually cost taxpayers between $3 to $10 million a year.
The inefficacy of de-linking is not new: CBO has never directly released a score of de-linking in Medicare Part D, but it has scored larger bills that included, among other things, de-linking in Medicare Part D where the sum of its provisions would lower the deficit. It seems that committee staff extricated a score from that other analysis and applied it to this bill.
But that is not how scoring works, and CBO will, I suspect, inform the committee at some point that their bill is not truly revenue-neutral. Which is good, because we don’t want an incorrect idea like de-linking costs the government money incorrectly ratified by Congress.
