Floor Statements

Madam Speaker, I was unexpectedly delayed. Had I been present, I would have voted NAY on Roll Call No. 513 (H.R. 8404).

Mr. Speaker, this week, we honor the legacy of Representative Jackie Walorski by renewing our commitment to help moms and babies thrive. I thank Chairman Davis and our Republican leader, Dr. Wenstrup, for their leadership on this issue.

Throughout her life, Jackie served vulnerable families, from the mission field in Romania to the halls of Congress, where she proudly represented the men and women of Indiana's Second Congressional District.

She reached across the aisle and worked closely with Chairman Davis to move this important bipartisan bill forward. My last conversation with Jackie was by Zoom on this bill itself.

We miss her very much. We are proud to dedicate the product of her collaboration today to her because she has been such an inspiration in these efforts.

Jackie knew that this was a critical program that supports vulnerable families and improves the health of moms and babies through pregnancy into the early years of a child's life.

This program builds upon decades of research that proves home visits by a nurse, social worker, or other trained professional during pregnancy, and in the very first years of a child's life, help to prevent child abuse and neglect, support positive parenting, improve maternal and child health, and promote the development of kids and school readiness.

This is a bipartisan bill that reflects many of our Republican priorities, including increasing transparency about outcomes and results for families and targeting dollars to the neediest communities.

Most Federal programs, unfortunately, operate in a black box. Less than $1 out of every $100 the government spends is backed by even the most basic evidence and research to make sure the money is spent wisely and succeeds.

Unlike many of those programs, MIECHV is evidence-based, so we know the real impact on families and children. We are able to direct funding toward what works for them.

The Walorski home visiting program will gradually increase funding from $400 million a year to $800 million a year over a 5-year period and introduces a State match so we can stretch those dollars even further back home.

The principle is simple. Where the States see value in investing, the Federal Government will also invest. It also ensures the new matching funds are allocated to States based on the number of kids under 5 living below poverty, so funding goes where the needs and the kids are.

The bill increases transparency by creating what I love, which is a State-by-State outcomes dashboard so all of us can see how these interventions are helping families, and it maintains the current focus on high standards.

I take this moment to thank my friend, Dr. and Representative Wenstrup, who serves today as acting Republican leader of the Subcommittee on Worker and Family Support. He stepped up to the plate to carry on Jackie's legacy with grace and determination, and I thank him for his hard work.

I think all of us can think of no more fitting tribute to Jackie than the bipartisan support coming together for something that helps our most needy families.

I, like many of us today, am grateful we are getting this bill across the finish line together in her honor.

Madam Speaker, I rise to honor the distinguished career and public service of my Texas constituent and good friend, Mrs. Lyn Hawthorne Howard. Lyn is a cherished business leader, philanthropist, community leader, and artist. Passionate about Texas history and culture, she has led significant efforts to restore and preserve historic buildings and homes in and around Conroe, Texas.

Lyn was born in Shreveport, Louisiana. But as they say, she ``got to Texas as soon as she could.'' She attended Texas Woman's University, graduating with a degree in Education. Lyn was also a member of the famous Kilgore Rangerettes--one of America's most prestigious dance and drill teams. As a Rangerette, Lyn grew a deep appreciation for Texas culture as she traveled and performed throughout our great state.

Lyn is a principled business leader, and her devotion to hard work has served as an inspiration to women all over Texas. Lyn broke through the glass windshield, becoming the first woman to own and manage a successful Toyota dealership. Invited to visit Japan with a group of American car dealers, the Toyota Company was surprised to learn there was a woman in the group. The company suggested she may be more comfortable participating in the tours arranged for ``dealers' wives.'' Confidently, Lyn replied, ``no, thank you,'' and reminded her Japanese hosts that she too was a car dealer and insisted on attending all the meetings with her fellow Toyota auto brokers. Another one of Lyn's successful business ventures was her investment in the San Antonio- based LDS Telecom company. As a result of Lyn's leadership, she led the business to become a major telecom company in Texas, and she sold her stake in the early 1980s with tremendous results.

Lyn always puts her community first, playing a vital role in preserving Texas's history. Recently, Lyn is devoted to preserving the history of Conroe, Texas. She purchased and restored the original home of Conroe city founder, Isaac Conroe and has played a leading role in several important historic preservation and restoration projects. She has long been a leader and organizer of Conroe's annual Founder's Day celebration.

Lyn is also a passionate member of multiple historical preservation societies. In 2021, she was recognized as a fifty-year member of the Daughters of the Republic of Texas in two chapters: The Alamo Missions Chapter and The Judge Nathaniel Hart Davis Chapter.

Lyn has been involved in beauty pageants for over forty years, winning titles of Miss United America Elite 2012 and Miss United Royal 2013. She is also a talented singer, dancer, and painter. Always seeking new artistic challenges, Lyn recently became interested in sculpture which has become her latest passion. She has sculpted bronze busts of her husband and another bust of President Donald Trump which has been displayed in Washington. Currently, she is working on a sculpture of Conroe founder Isaac Conroe.

For her decades of leadership and service, I am honored to recognize and commend Lyn for her many significant contributions to the Conroe community and the great state of Texas.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I join Chairman Neal in expressing our heartbreak and sorrow in losing Congresswoman Jackie Walorski, our colleague, as well as Zachery and Emma. She was so proud of her Team Walorski folks.

The truth of the matter is, Jackie lit up every room she was in with her passion and her brilliance and her friendship and warmness. There is no question she could do everything. She was all in on everything and worked hard to find common ground wherever she could.

Last week was a shocking week and a week to mourn. This week is a time to celebrate Jackie, her legacy, and her life.

Sadly, this massive Senate bill, drawn in secret, stuffed with government checks to the wealthy and favored interests, and rushed through Congress is a hoax on the American people. It fails to reduce inflation, fails to reduce the budget deficit, and fails to reduce the world's temperature.

Who in their right mind raises taxes in a recession? The answer is only President Biden and his supporters in Congress who bungled this economic recovery think that is a good idea. You remember them. They told you they would defeat COVID, that inflation was a rich person's problem, that their $2 trillion spending spree last spring would strengthen the economy.

Instead, what did their promises deliver? The worst inflation in 40 years, a recession, and a crippling worker shortage that continues to hammer Main Street businesses.

Today, we have a shrinking economy, shrinking paychecks, and a shrinking workforce. Families are skipping meals, running up credit card debt to pay for daily essentials, delaying retirement, and struggling to afford gas just to drive to work. Yet, Democrats today insist inflation doesn't even exist. They say it is zero.

The truth is, most Americans have lost confidence in President Biden's failed handling of the economy. By contrast, the majority of the jobs in the COVID recovery came under President Trump, and under Republican leadership, paychecks grew twice as fast as prices. The economy was surging, not shrinking like it is today, and 600,000 more Americans were working than today under this unpopular White House.

Why would you trust the same Democrats responsible for this cruel economy with another of their misguided spending bills?

While other countries are lowering taxes to fight inflation, Democrats imposed over $350 billion in taxes that land on local manufacturers that build right here in America. It will kill jobs, slow the economy, and raise prices even higher.

Small businesses, which hire nearly half of all workers in America, get hammered with $50 billion in new taxes.

Senior citizens and savers will bear the impact of $74 billion in new taxes that punish companies from investing in their stock value.

All these taxes will hurt the economy, drive inflation further, and harm workers' paychecks, according to the independent Tax Foundation.

Democrats promise that no American will ``see a penny'' of tax hikes, yet Congress' own budget office debunks that claim, confirming the largest burden of higher taxes will come from middle-class families starting next year.

President Biden is violating his own pledge not to raise taxes on middle-class Americans. He is denying that truth.

Yesterday, House Democrats insisted there are no new IRS agents funded in this bill. Read their lips: No new IRS agents. They say it is all fearmongering, and they are just hiring replacements.

Unfortunately, the fact is the IRS budget already budgets for those who are leaving through attrition, and the Treasury Department itself outlines the next decade of adding 87,000 new IRS agents. That is what this bill unleashes.

In fact, the Congressional Budget Office reports ``audit rates will increase for every income level,'' that almost 90 percent of unreported tax income comes from who? The middle class.

How will Democrats collect $204 billion in more taxes? With thousands of new agents targeting what I would call Walmart shoppers. You know them. They are real, hardworking American families. They are my constituents. They are my neighbors in my district. They are living paycheck to paycheck, struggling with inflation and higher gas prices. They will be hit with over 700,000 new audits, thanks to a skyrocketing surge in IRS agents.

Maybe that is why Democrats blocked any language in the Senate that protects Walmart shoppers and other value-shopping families against

these new IRS audits. But, man, this bill, they love the wealthy. If the Green New Deal and corporate welfare had a baby, it would look like this. Nearly one-quarter of a trillion dollars in Green New Deal subsidies, government handouts, go to the wealthy and to the biggest, most successful businesses in America.

Look at this: A single working mom will pay higher taxes so they can be sent in a government check to wealthy investors and massive corporations. A yardman will send his taxes in a government check to the very well-to-do family whose lawn he is cutting so they can splurge on an $80,000 luxury electric vehicle.

Incredibly, to fund all these government handouts, every Senate Democrat and the Vice President chose to impose higher taxes on small businesses so that millionaires and billionaires would be protected from higher State and local taxes.

Everyone facing devastating diseases like cancer, Alzheimer's, ALS, and Parkinson's will pay a deadly price.

This crazy bill increases the cost of healthcare and medicines and kills new lifesaving cures while providing ObamaCare subsidies for the wealthy and those choosing not to return to work, making the worker shortage harsher.

Congress' nonpartisan scorekeeper, the Penn Wharton School of Business, and the University of Chicago all confirm the government price-fixing scheme could be a death sentence for patients, raising the costs of new drugs, crushing innovation, and killing hundreds of cures.

Higher taxes, harassing IRS audits on our Walmart shoppers, no relief from inflation, all as America battles a recession.

Let me ask again: Do you really trust the same President and Democrats who drove this economy into recession and drove prices sky high with yet another spending spree?

Madam Speaker, I strongly urge my colleagues to vote ``no'' on this bill, and I reserve the balance of my time.

Madam Speaker, I include in the Record Page 16 of the Department of the Treasury's tax compliance plan, which shows the agency intends to hire 87,000 new IRS employees.

Restoring IRS Resources

The first step in the President's efforts to restore IRS

enforcement capability is a sustained, multi-year commitment

to rebuilding the IRS. This involves spending nearly $80

billion on IRS priorities over the course of the decade

including hiring new specialized enforcement staff,

modernizing antiquated information technology, and investing

in meaningful taxpayer service--including the implementation

of the newly expanded credits aimed at providing support to

American families. Importantly, the additional resources will

go toward enforcement against those with the highest incomes,

and audit rates will not rise relative to recent years for

those earning less than $400,000 in actual income.

The President's proposal includes two components: a

dedicated stream of mandatory funds ($72.5 billion over a

decade) and a program integrity allocation ($6.7 billion over

a decade). These mechanisms provide for a sustained, multi-

year commitment to revitalizing the IRS that will give the

agency the certainty it needs to rebuild.

The IRS proposal includes year-by-year estimates of the

additional resources that will be directed toward the agency

as well as the specific activities that these resources would

support. The design ensures that the IRS is able to absorb

and usefully deploy additional resources over the entire 10-

year horizon and keeps budget growth manageable at around 10

percent per year.

Madam Speaker, I yield 1 minute to the gentleman from Oklahoma (Mr. Hern).

Madam Speaker, I include in the Record a CBO letter,

which confirms the Affordable Care Act subsidies will boost inflation and reduce the incentive for people to work.

U.S. Congress,

Congressional Budget Office,

Washington, DC, August 4, 2022.

Re Economic Analysis of Budget Reconciliation Legislation

Hon. Lindsey Graham,

Ranking Member, Committee on the Budget,

U.S. Senate, Washington, DC.

Dear Senator: Yesterday, the Congressional Budget Office

published a cost estimate for H.R. 5376, the Inflation

Reduction Act of 2022, which is the latest version of the

reconciliation legislation in the Senate.\1\ This letter

provides answers to four questions you asked related to that

bill and broader economic conditions.

Is the United States Currently in a Recession?

The U.S. economy shows signs of slowing, but whether the

economy is currently in a recession is difficult to say. It

is possible that, in retrospect, it will become apparent that

the economy moved into recession sometime this year. However,

that is not clear from data that were available at the

beginning of August. Some key metrics indicate a decline in

economic activity as the first half of this year progressed,

whereas others indicate continued growth, though generally at

a slower rate than previously.

Real gross domestic product (that is, GDP adjusted to

remove the effects of inflation) and industrial production

have both declined. In particular, real GDP declined by an

average of 1.25 percent (at an annual rate) in the first two

quarters of 2022. Industrial production grew from January to

April, was essentially unchanged in May, and then declined in

June.

Other key indicators of economic activity have continued to

increase in the first half of 2022, though generally at a

slower rate than they had previously. For instance, real

gross domestic income (GDI) increased at an annual rate of

1.8 percent in the first quarter of 2022 after growing by an

average rate of 6.3 percent in the second half of 2021.\2\

(Second-quarter data for GDI are not yet available.) Real

personal income minus transfer payments to people by federal,

state, and local governments grew at an average annual rate

of 0.5 percent in the first half of 2022 versus 3.1 percent

in the second half of 2021. And real personal consumption

expenditures grew at an average annual rate of 1.4 percent in

the first half of 2022 (with somewhat slower growth in the

second quarter than in the first), compared with 2.2 percent

in the second half of 2021. One reason for the deceleration

in personal consumption expenditures is higher inflation,

which has eroded consumers' purchasing power. Another reason

is that real disposable personal income has declined in the

first half of 2022. Savings accumulated during the

coronavirus pandemic, including from transfer payments, have

continued to support consumption.

The labor market remains tight, with low unemployment and

elevated job vacancies, but both measures have softened in

recent months. Net gains in nonfarm payroll employment

averaged 375,000 jobs per month in the second quarter of 2022

compared with 539,000 jobs, on net, added per month in the

first quarter and 590,000 jobs, on net, added per month in

the second half of 2021. In June 2022, the unemployment rate

was 3.6 percent (unchanged since March and near its

prepandemic low) and there were about 1.8 job vacancies for

every unemployed worker (one of the highest readings in the

near 22-year history of this series though down from its

highest level of 2.0 in March).

How Would Enacting the Bill Affect Inflation in 2022 and 2023?

In calendar year 2022, enacting the bill would have a

negligible effect on inflation, in CBO's assessment. In

calendar year 2023, inflation would probably be between 0.1

percentage point lower and 0.1 percentage point higher under

the bill than it would be under current law, CBO estimates.

That range of likely outcomes reflects uncertainty about how

various provisions of the bill would affect overall demand

and output, the supply of labor, the persistence of

disruptions in the supply of goods and services, and how the

Federal Reserve would respond to offset any increase in

inflationary pressure. Responsiveness to the enhancement of

health insurance subsidies established by the Affordable Care

Act is the most important factor boosting inflationary

pressure, and responsiveness to the new alternative minimum

tax on corporations is the most important factor reducing

inflationary pressure. The range applies to multiple measures

of inflation: the GDP price index, the personal consumption

expenditures price index, and the consumer price index for

all urban consumers.

In its analysis of the inflationary effects of the bill,

CBO used an approach similar to that underlying the agency's

estimates of the short-term effects of legislation enacted in

2021.\3\ The agency augmented its analysis to account for the

effects of supply disruptions and for the amount of tightness

or slack in the economy on the inflationary effects of fiscal

policy.

Key inputs into the analysis of inflation were the effects

of the bill on overall demand for goods and services. In the

short term, changes in fiscal policies affect the economy

primarily by influencing the demand for goods and services by

consumers, businesses, and governments, which leads to

changes in output. Factors increasing overall demand push

inflation up and those decreasing overall demand push

inflation down. To estimate the effects of changes in federal

spending and revenues on overall demand and output, CBO

considered evidence about the effects of similar policies in

the past and used results produced by macroeconomic

models.\4\

CBO expects different provisions of the legislation to

affect overall demand and output differently.\5\ For example,

provisions that directly increase government purchases of

goods and services would add to overall demand on a dollar-

for-dollar basis. Increases in financial support to people,

such as through enhanced health insurance subsidies, would

boost spending more among lower-income people than among

higher-income people, partly because lower-income households

typically consume a higher fraction of their additional

disposable income than higher-income households do. Thus,

financial assistance to lower-income households would boost

the overall demand for goods and services more than financial

assistance to higher-income households would. Changes to

business taxes that affect after-tax profits on past

investments--as opposed to the return on new investments--

would have relatively small effects on overall demand, in

CBO's assessment.

CBO used its estimates of the bill's net effects on the

deficit as the starting point for its analysis of overall

effects on demand (see Table 1). The enhanced health

insurance subsidies and energy-related subsidies were the

largest contributors to increases in the deficit. The new

alternative minimum tax on corporations was the largest

contributor to reductions in the deficit. For each dollar

change in the deficit, the increases in subsidies would

probably have larger effects on overall demand (boosting it)

than the increases in revenues (which would reduce overall

demand). Those factors could contribute to the effects on

output and inflation being positive even when the overall

deficit was reduced.

Madam Speaker, I yield 1 minute to the gentleman from Texas (Mr. Arrington).

Madam Speaker, I include in the Record the Joint Committee on Taxation analysis that shows that families earning $75,000 or $100,000 are four times more likely to have a tax hike under this bill than a tax cut.

Nonpartisan Tax Scorekeeper: Average Working Family Is More Likely To

Be Worse Off Than Better Off Under Democrats' Tax Plan

Working families will be worse off under Democrats' higher

taxes, according to a new analysis from the nonpartisan Joint

Committee on Taxation. This is another devastating blow for

families after the Congressional Budget Office revealed that

Democrats' supercharged IRS expects to grab $20 billion from

lower- and middle-income earners.

Working Families at High Risk of Tax Hikes

Democrats have once again tried to hide the real effects of

this bill. New analysis from the nonpartisan Joint Committee

on Taxation (JCT) shows that the average working family is

more likely to be worse-off than better-off under Democrats'

tax plan.

For median-income families earning $50,000-$75,000,

households are 33 percent more likely to have a tax hike than

a tax cut.

It gets worse for every dollar earned--families earning

$75,000-$100,000 are four times more likely to have a tax

hike than a tax cut, and families earning $100,000-$200,000

are more than ten times more likely to have a tax hike than a

tax cut.

The bill does nothing--or makes things worse--for regular

working families. More than 92 percent of households with

incomes under $200,000 get no benefit--or a tax hike--under

Democrats' bill.

What's more, these tax hikes on working families do not

include the bill's superfund or methane taxes on American

energy, which disproportionately harm middle- and lower-

income households through higher prices at the pump and

bigger utility bills.

High-Income Households Enjoy Big Benefits

The JCT analysis shows the landscaping company owner and

his workers pay more, while the wealthy homeowner gets checks

from Washington for the solar panels on their roof. That's

because the ``winners'' under Democrat's tax plan are the

earners at the very top. Democrat's reckless spending plan

includes more than $250 billion in Green New Deal subsidies

that benefit the wealthy the most.

The percentage of $1 million-plus households getting a tax

cut (19.4 percent) is twice as high as any other income

group.

The group with the next highest proportion of tax cuts is

those earning $500,000-$1 million.

Over the long term, 72.5 percent of households with income

over $1 million will receive a tax cut.

More Bad News: $10.6 Billion in Tax Hikes on Working Families Next Year

Separate analysis by JCT isolates the effects of Democrats'

tax plan without the Obamacare subsidies that flow to a

limited number of households in an attempt to bribe them into

one-size-fits-all Obamacare plans. In 2023, Democrats would

increase the total tax burden on Americans under $200,000 in

income by $10.6 billion.

Madam Speaker, I yield 1 minute to the gentleman from Tennessee (Mr. Kustoff).

Madam Speaker, I include in the Record a letter from the Congressional Budget Office, which confirms this bill will actually increase the cost of new drugs.

U.S. Congress,

Congressional Budget Office,

Washington, DC, August 4, 2022.

Re Additional Information About Prescription Drug Legislation

Hon. Jason Smith,

Ranking Member, Committee on the Budget,

U.S. House of Representatives, Washington, DC.

Dear Congressman: This letter provides additional

information that you and your colleagues requested about

subtitle I of the reconciliation recommendations of the

Senate Committee on Finance regarding prescription drug

legislation. You asked about how provisions involving

inflation rebates and the negotiation of drug prices would

affect launch prices for new drugs and the introduction of

new generic drugs. You also asked how a provision to

stabilize premiums as a part of the redesign of Medicare's

benefits would affect the federal budget and premiums.

Effect of the Inflation-Rebate and Negotiation Provisions on Launch

Prices

The Congressional Budget Office projects that the

inflation-rebate and negotiation provisions would increase

the launch prices for drugs that are not yet on the market

relative to what such prices would be otherwise. That effect

would primarily be driven by the inflation-rebate provisions

(sections 129101 and 129102), which would begin to apply to

prices within 12 months of a given drug's entering the

market. Under those provisions, manufacturers would have an

incentive to launch new drugs at a higher price to offset

slower growth in prices over time. The negotiation provision

(section 129001) would have less of an impact on launch

prices, CBO expects: Although the ceiling for a drug's

negotiated price is based on its price from a prior year,

negotiation could not occur until drugs were on the market

for a number of years--at least 7 for small-molecule drugs

and 11 for biologics.

Higher launch prices would primarily affect spending for

drugs in the Medicaid program, CBO projects, because an

increase in that program's basic rebate brought about by the

higher launch prices would only partly offset those prices.

Higher launch prices would also tend to affect spending for

drugs covered by Part B of the Medicare program because that

program's payments for those drugs are based on the average

sales prices. Over time, slower price growth would attenuate

the effect of higher launch prices.

In the commercial and Medicare Part D segments of the

market, spending would be less affected by higher launch

prices, CBO estimates, because manufacturers would have more

flexibility to manage rebates to maximize their revenues in

those sectors.

Effect of the Negotiation Provision on the Introduction of New Generic

Drugs

CBO has not analyzed the effects of the negotiation

provision on the introduction of new generic drugs. In

projecting the effects of the negotiation provision, CBO

estimated the share of spending that would be subject to

negotiation each year and the average reduction in prices

that would stem from the negotiations. But the agency did not

analyze how the provision would affect prices or spending on

specific drugs, nor did it quantify any impact on the

introduction of new generic drugs.

Effects of the Premium-Stabilization Provision

Under the premium-stabilization provision (section 129201),

the federal government would subsidize any growth in

beneficiaries' base premiums for Medicare Part D exceeding 6

percent from one year to the next over the 2024-2029 period.

The provision subsequently would lower the base premium

percentage (the percentage of the average cost of standard

Part D coverage that is used to calculate beneficiaries'

premiums) to ensure that premiums did not grow by more than 6

percent between 2029 and 2030. That subsidy and subsequent

reduction in premiums would increase federal spending by

roughly $40 billion over the 2024-2031 period, CBO estimates.

Beneficiaries' spending on premiums would be lower under the

premium-stabilization provision than it would be without it.

That estimate is an average effect among the possible paths

of premiums that CBO considered when modeling the uncertainty

of future outcomes. Under some of those paths, premiums would

grow by less than 6 percent a year, and the provision would

have no cost; under others, premiums would grow faster, and

the provision would generate costs.

I hope this information is useful to you and your

colleagues. Please contact me if you have further questions.

Sincerely,

Phillip L. Swagel,

Director.

Madam Speaker, I yield 1 minute to the gentleman from Arizona (Mr. Schweikert), my colleague on the Committee on Ways and Means.

Madam Speaker, I include in the Record a Congressional Budget Office report from this morning, while we were on the House floor, which confirms IRS audits will generate tens of billions of dollars for middle-class families making less than $400,000.

CBO has received a number of questions regarding our

estimate of an amendment offered by Senator Crapo during the

floor debate on H.R. 5376 last weekend. That amendment,

#5404, would limit the use of additional funds for the

Internal Revenue Service. If the amendment had been adopted

none of the additional funds could have been used to audit

taxpayers with taxable incomes below $400,000.

CBO did not complete a formal cost estimate in advance of

consideration of the amendment but the agency did provide the

following information to the Senate Budget Committee:

CBO estimates that the amendment 5404 would have the

following effects:

No effect on outlays in the one or ten year budget windows;

would reduce outlays in the five year budget window.

No effect on revenues in the one year budget window; would

reduce the ``non-scorable'' revenues resulting from the

provisions of section 10301 in the five and ten year budget

windows.

No effect on outlays after 2031 but would decrease the

``non-scorable'' revenue resulting from the provisions of

section 10301 after 2031.

CBO has not completed a point estimate of this amendment

but the preliminary assessment indicates that amendment 5404

would reduce the ``non-scorable'' revenues resulting from the

provisions of section 10301 by at least $20 billion over the

FY2022-FY2031 period.

Thanks,

Leigh Angres,

Director of Legislative Affairs,

Congressional Budget Office.

Madam Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Kelly), my colleague from the Committee on Ways and Means.

Madam Speaker, I include in the Record the following report from 2020 from a group that tracks government spending, which details how the IRS is currently armed with 4,600 guns and 5 million rounds of ammunition. That is not fear-mongering; these are the facts.

IRS Has 4,600 Guns and Five Milion Rounds of Ammo: Will Dem Bill Grow

Arsenal?

The IRS has 4,600 guns and five million rounds of

ammunition according to a report from OpenTheBooks published

in 2020. With Democrats on the verge of passing $80 billion

in additional funding to facilitate the hiring of 87,000 new

agents, how much will this arsenal grow?

The Democrats' push to increase the size and power of the

IRS has significant criminal justice and basic due process

ramifications.

An OpenTheBooks report titled The Militarization of U.S.

Executive Agencies shows that, even without the proposed $80

billion increase in funding, the IRS Criminal Investigation

Division (IRS-CI) is already heavily armed at the expense of

the American taxpayer.

The current 4,600-gun stockpile includes:

3,282 pistols

621 shotguns

539 rifles

15 fully automatic firearms

4 revolvers

According to the Government Accountability Office the

ammunition breakdown is as follows:

Pistol and revolver rounds: 3,151,500

Rifle rounds: 1,472,050

Shotgun rounds: 367,750

Fully automatic firearm rounds: 56,000

When OpenTheBooks directly asked the IRS for an accounting

of its gun locker, the agency responded, ``We don't have one

[an inventory], but could create one for you, if important.''

There are seven reasons to be concerned about the IRS

having more power, more money, and more guns:

1. irs fails to ensure armed agents receive required firearms training

In order to carry or use an IRS-owned weapon, agents must:

engage in handgun firing training at least once each quarter,

shoot at least the minimum of 75 percentage points on the

firearms qualifying test using the issued handgun during two

nonconsecutive quarters, participate in biannual firearms

building entry exercises, participate in an annual briefing

on firearms safety and security policies and IRS-CI's

directives and procedures regarding the safe handling and

storage of firearms, and participate in a briefing each

quarter regarding the policy of discharging a firearm at a

moving vehicle.

IRS-CI's National Criminal Investigation Training Academy

(NCITA) is responsible for implementing the formalized

firearms training and qualification program nationwide. This

includes developing the firearm qualification requirements

they are expected to meet and the training special agents

will undergo. Despite these requirements, CI agents have

regularly failed to stay up to date on training or report

incidents, endangering the taxpayers they are supposed to

protect.

According to reports from the Treasury Inspector General

for Tax Administration (TIGTA), the IRS has repeatedly failed

to ensure that procedures relating to firearms are properly

followed:

``there is no national-level review of firearms training

records to ensure that all special agents meet the

qualification requirements.''

Special agents are required to surrender their weapons when

they fail to participate

in this training, however this often does not happen.

As noted by the Inspector General:

``However, there is currently little consequence for

special agents who fail to meet the training requirements

listed on the checklist.''

The Inspector General noted the IRS failed to secure the

firearms of those who did not meet their requirements:

``controls did not ensure that CI personnel properly

secured firearms when special agents failed to meet the

biannual standard qualification requirement. CI was only able

to provide evidence that firearms were surrendered in nine of

the 27 instances when special agents did not qualify. The

Criminal Investigation Management Information System was only

updated to reflect the custody change in four of those nine

instances.

The Inspector General noted that the IRS lapses torpedo its

ability to effectively try cases:

``Court decisions in the past have held law enforcement

entities liable because their law enforcement agents did not

have training that reflected the environment that they would

likely encounter, such as training involving moving targets

and low-light conditions. Other court decisions underscored

the importance of properly documenting firearms training. One

decision dismissed the claims against a law enforcement

entity that maintained thorough records that showed the law

enforcement personnel had been trained. Another decision

upheld a jury's conclusion that undocumented police training

did not constitute adequate training.''

The IRS failure to conduct proper internal oversight of its

weapons could have grave consequences for the public. As

noted by the Inspector General:

``If there is insufficient oversight, special agents in

possession of firearms who are not properly trained and

qualified could endanger other special agents and the

public.''

2. irs agents accidentally fire their weapons more often than they

intentionally fire them

A TIGTA report found that special agents at the IRS

Criminal Investigation Division (IRS-CI) accidentally fired

their weapons more often than they intentionally fired them:

``According to documentation provided by all 26 CI field

offices, the NCITA, and the TIGTA OI, there were a total of

eight firearm discharges classified as intentional use of

force incidents and 11 discharges classified as accidental

during FYs 2009 through 2011.''

3. irs conceals details of accidental gun discharges

The agency's lackadaisical approach to firearm safety has

led to easily preventable accidents. The Inspector General

cryptically references IRS accidental discharges that caused

``property damage or personal injury'':

``In three of the four accidental discharges that were not

reported, the accidental discharges may have resulted in

property damage or personal injury.''

The details of these incidents are--for some reason--

redacted in the report:

IRS-CI management is required to be notified when a special

agent discharges their weapon. CI must report all accidental

discharge incidents externally to the TIGTA OI and internally

to the NCITA and the Director of Field Operations. Despite

these directives, CI did not always properly disclose

accidental discharges:

``we found that four accidental discharges were not

properly reported. This included two that were not reported

to both to the TIGTA OI and the NCITA. one that was not

reported to the TIGTA OI, and one that was not reported

internally to the NCITA.''

4. IRS AGENTS DO NOT ALWAYS UNDERGO REMEDIAL TRAINING AFTER DISCHARGES

Madam Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Smucker).

Madam Speaker, I include in the Record the following Joint Committee on Taxation analysis that shows that American manufacturers are hardest hit by the Democrats' made in America tax--$200 billion-- and they will pay over half of that tax.

Congress of the United States,

Joint Committee on Taxation,

Washington, DC, August 11, 2022.

Memorandum

To: Redacted

From: Thomas A. Barthold

Subject: Revenue Estimate

This memorandum is in response to your request for an

estimate of how the burden of the corporate minimum financial

statement income tax as contained in section 10101 of an

amendment in the nature of a substitute to H.R. 5376. ``An

Act to Provide for Reconciliation Pursuant to Title II of S.

Con. Res. 14'' as passed by the Senate on August 7, 2022,

would fall across different industrial sectors.

Business income tax returns ask taxpayers to report the

industry in which they are primarily engaged, identifying the

industry by the code numbers established under the North

American Industrial Classification System (``NAICS code'').

This is self-reported and the Internal Revenue Service does

not verify the accuracy of the classification stated by the

taxpayer. The NAICS code system allows data to be aggregated

at different levels of general categorization. Two-digit

codes are the broadest categorization. For example, code 31

encompasses all manufacturing. As we project that only

approximately 150 taxpayers annually will be subject to the

proposed book minimum tax, in the accompanying table we

generally report results by two-digit reporting to protect

the privacy of the tax return data on which we base our

analysis.

We estimate the corporate minimum financial statement

income tax as contained in the amendment in the nature of a

substitute to H.R. 5376 as passed by the Senate would have

the following effect on Federal fiscal year budget receipts.

Madam Speaker, I yield 1 minute to the gentleman from North Carolina (Mr. Murphy).

Madam Speaker, I include in the Record the following letter of opposition, which represents America's independent natural gas and oil production industry, which says this bill will only exacerbate--make worse--our Nation's energy crisis.

August 11, 2022.

Hon. Nancy Pelosi,

Speaker, House of Representatives,

Washington, DC.

Hon. Kevin McCarthy,

Republican Leader, House of Representatives,

Washington, DC.

Dear Speaker Pelosi and Leader McCarthy: The undersigned

trade associations, representing thousands of businesses

across the United States that collectively employ millions of

Americans, write to express our opposition to the Inflation

Reduction Act (IRA) as passed by the U.S. Senate. Further, we

write to urge you to reconsider policies within the

legislation before proceeding.

The United States has experienced its second consecutive

quarter of negative GDP growth, and American consumers are

facing record high inflation. We share the goal of addressing

climate change, as evidenced in the policies we support and

in the actions that we take every day. However, the

considerable tax increases and new government spending in the

IRA amount to the wrong policies at the wrong time.

We are also facing the most significant global energy

crisis since the 1970's, and U.S. energy security--and that

of our strategic allies abroad--is being put to the test.

Further, U.S. energy costs have increased 40 percent over the

past twelve months, creating a serious strain on American

household incomes.

With these current conditions as the backdrop for this

legislation, there are several specific policies included in

the IRA which are particularly troubling and deserve re-

consideration. We would like to draw your attention to three

such provisions:

1. The IRA imposes a new corporate minimum tax, increasing

taxes on Americans by more than $300 billion over the next 10

years. As President Obama noted in 2009, ``the last thing you

want to do is raise taxes in the middle of a recession.''

2. The IRA imposes an $11.7 billion tax on crude oil and

petroleum products. At a time of record-high energy prices,

Congress should not add additional costs on American energy

companies competing globally.

3. The IRA imposes additional constraints on the ability of

companies to develop and produce the energy that Americans

need to fuel our economy and strengthen our energy security.

This includes increased fees on domestic production and the

establishment of a new $6.3 billion natural gas tax.

Finally, the IRA fails to address permitting reform, which

is desperately needed and is essential to effectively deliver

affordable, reliable energy to consumers in a growing

economy.

To date, neither the House nor the Senate have introduced

comprehensive permitting reform legislation. We urge Congress

to quickly consider and pass permitting reform without delay.

For the above-stated reasons, we express our opposition to

the IRA and request that you reconsider passage of this

legislation.

Sincerely,

American Petroleum Institute; American Exploration and

Production Council; American Fuel & Petrochemical

Manufacturers; Independent Petroleum Association of America;

Energy Workforce & Technology Council; Plumbing-Heating-

Cooling Contractors--National Association; Manufacture

Alabama; The Coalbed Methane Association of Alabama; Arkansas

Independent Producers and Royalty Owners; Arkansas Oil

Marketers Association; California Independent Petroleum

Association; Colorado Oil and Gas Association; West Slope

Colorado Oil & Gas Association; Colorado Wyoming Petroleum

Marketers Association; Associated Industries of Florida;

Florida Independent Petroleum Producers Association; Florida

Natural Gas Association; Florida Petroleum Marketers

Association; Florida Propane Gas Association; Florida State

Hispanic Chamber of Commerce.

Florida Transportation Builders Association; Floridians for

Better Transportation; The James Madison Institute; Georgia

Association of Convenience Stores; Georgia Mining

Association; Illinois Fuel Retails Association; Illinois

Manufacturers Association; Illinois Retail Merchants

Association; Chemistry Industry Council of Illinois; Fuel

Iowa; Kansas Independent Oil & Gas Association; Louisiana

Association of Business and Industry; Louisiana Oil and Gas

Association; Michigan Association of Convenience Stores;

Michigan Oil and Gas Association; Michigan Petroleum

Association; Minnesota Service Station & Convenience Store

Association; Associated Industries of Missouri; New Mexico

Business Coalition; New Mexico Oil and Gas Association.

North Carolina Chamber; North Carolina Petroleum &

Convenience Marketers Association; North Dakota Petroleum

Council; Ohio Energy and Convenience Association; Ohio

Manufacturers Association; Ohio Oil and Gas Association; The

Petroleum Alliance of Oklahoma; Pennsylvania Chamber of

Business & Industry; Pennsylvania Grade Crude Oil Coalition;

Pennsylvania Independent Oil & Gas Association; Pennsylvania

Independent Petroleum Producers; Pennsylvania Manufacturers

Association; South Dakota Petroleum and Propane Marketers

Association; Texas Alliance of Energy Producers; Texas

Independent Producers & Royalty Owners Association; Permian

Basin Petroleum Association; Associated Builders &

Contractors West Virginia; Petroleum Association of Wyoming.

Madam Speaker, I yield 1 minute to the gentleman from Georgia (Mr. Clyde).

Madam Speaker, may I inquire how much time Chairman Neal and I have remaining.

Madam Speaker, I include in the Record this Penn Wharton School of Business analysis that debunks the Inflation Reduction Act, showing how this bill will reduce inflation by less than a tenth of 1 percent in the first 5 years, with zero impact on inflation after that.

[From Penn Wharton]

Senate-Passed Inflation Reduction Act: Estimates of Budgetary and

Macroeconomic Effects

key points

PWBM estimates that the Senate-Passed Inflation Reduction

Act, as written, would reduce cumulative deficits by $264

billion over the 10-year budget window.

The Act would have no meaningful effect on inflation in the

near term but would reduce inflation by around 0.1 percentage

points by the middle of the first decade. These point

estimates, however, are not statistically different from

zero, indicating a low level of confidence that the

legislation would have any measurable impact on inflation.

Relative to current law, the Act would slightly reduce GDP

in the first decade while slightly increasing GDP by 2050.

These estimates include the impact of debt reduction, carbon

reduction, and tax incentives on investments and working

hours.

Most, but not all, of the tax increases fall on higher

income households. However, future generations, including

higher-income households, gain from the improved economy,

including a reduction in carbon emissions.

introduction

On Sunday August 7th, the U.S. Senate passed the Inflation

Reduction Act of 2022 under FY2022 budget reconciliation

instructions. PWBM recently analyzed a previous version of

the bill. We also compared our analysis against that of the

Joint Tax Committee and Congressional Budget Office who use

an older economics baseline from July 2021.

In this brief, PWBM analyzes the budgetary, macroeconomic,

and distributional effects of the final Senate passed

version. In line with the previously released version of the

bill, the Act provides for new spending and tax incentives

related to the adoption of clean energy technology, both at

the industrial and consumer level. It extends a temporary

expansion of Affordable Care Act (ACA) health insurance

subsidies for an additional two years. To offset these

deficit-increasing initiatives, the bill imposes new taxes on

certain businesses, reduces government outlays on

prescription drugs through pricing reforms. It also provides

for new IRS funding which PWBM estimates would increase

revenue collections above new outlays.

provision descriptions and estimated budgetary effects

The final version of the Act makes several key amendments

to the version we previously analyzed. First, the new

corporate minimum tax no longer restricts the tax benefit of

accelerated depreciation, and private equity firms are

exempted from the tax. Second, the carried interest provision

was removed. Third, new revenue raising provisions (a tax on

stock buybacks and a restriction on pass-through loss

deductions) were added. Fourth, due to Senate rules, drug

price inflation caps for private insurance plans were

removed.

More specifically, the Act proposes the following policy

changes:

Extension of expanded ACA subsidies. Extends the temporary

expansion of Premium Tax Credits through 2025. The expansion,

which offers eligibility to households above 400 percent of

the poverty line, is scheduled to expire at the end of 2022

under current law.

Climate and energy provisions. Includes tax rebates and

credits to lower energy costs for households; tax credits,

research, loans, and grants to increase domestic

manufacturing capacity for wind turbines, solar panels,

batteries, and other essential components of clean energy

production and storage; tax credits to reduce carbon

emissions; programs to reduce the environmental impact of

agriculture; a new fee on methane emissions; and more.

Minimum tax on corporations' book income. Creates a new 15

percent corporate alternative minimum tax based on the

financial statement income of corporations with at least $1

billion in such income. Allows for bonus and accelerated

depreciation deductions when calculating taxable book income.

Tax on share repurchases. Imposes a new 1 percent tax on

corporations' net repurchase of stock.

Extension of excess noncorporate losses limitation. Extends

the limitation on the deduction of pass-through losses

through tax year 2028, which under current law is scheduled

to expire at the end of 2026. The maximum deductible loss,

which is indexed to inflation, is $540,000 for married

taxpayers in 2022.

Prescription drug price reforms. Allows Medicare to

negotiate the price of certain prescription drugs; limits the

price growth of certain drugs paid covered under Medicare to

inflation; repeals the implementation of a ``rebate rule''

scheduled to increase drug-related Medicare outlays beginning

in 2027; redesigns Medicare Part D benefit formula and caps

out-of-pocket costs for beneficiaries.

IRS funding. Appropriates approximately $80 billion over

the next decade for IRS enforcement activities including the

hiring and training of new auditors, IT systems

modernization, and taxpayer services.

Table 1 presents PWBM's estimate of conventional budgetary

effects over the 10-year budget window defined in the FY2022

reconciliation instructions. We estimate the Act would reduce

cumulative noninterest deficits by $264 billion from FY2022

through FY2031.

estimated effects on inflation

We estimate that the Inflation Reduction Act as passed by

the Senate would have a very modest impact on inflation over

the next decade. The Act produces some upward pressure on

prices in 2023 and 2024, but its effects are too small to

meaningfully affect measured the Personal Consumption

Expenditures (PCE) inflation rate as reported by the Bureau

of Economic Analysis. The Act would reduce annual inflation

by around 0.1 percentage points in about five years, once

major deficit-reducing provisions of the legislation are

fully implemented, but the Act would have no measurable

impact on inflation after 2028. All these point estimates are

not statistically different from zero, indicating a low level

of confidence that the legislation would have a measurable

impact on inflation.

other macroeconomic effects

Government spending rises because of the climate-related

spending and the extension of the ACA subsidies are greater

than the savings from prescription drug pricing reforms.

However, additional tax revenues are greater than the

spending increases, which leads to a decrease in government

debt. Government debt goes down by 4.1 percent in 2040 and 8

percent in 2050, which crowds-in investment in productive

private capital.

The provisions which increase taxes on business activity

lower the after-tax return to investment, which offsets the

positive effects on investment from lower government debt.

Net of these two effects, private productive capital declines

by 0.2 percent in 2031, is unchanged in 2040 and increases by

0.3 percent in 2050. The drop in productive capital in 2031

leads to a 0.1 percent decline in GDP.

Nonetheless, as government debt declines, private capital

increases by 0.3 percent by 2050, and workers become more

productive. Higher worker productivity is reflected in wages

that increase by 0.1 percent in the same year. Moreover, the

increase in private capital combined with the accumulated

productivity increases from the climate and energy effects,

described in a previous brief, leads to an increase in GDP,

which grows 0.1 percent in 2050.

distributional tax effects: conventional estimates

The Inflation Reduction Act contains a wide array of

subsidies, taxes, and pricing reforms, each with varying

impacts on households and businesses. For example, some large

businesses would face higher tax bills; individuals buying

certain health insurance plans would face lower out-of-pocket

costs; some households who evade taxes would be made to pay;

and pharmaceutical companies would earn lower revenues.

Though not responsible for remitting taxes assessed on

business activity, households bear some of the economic

burden of such taxes. Shareholders receive lower after-tax returns, and workers earn lower wages with fewer productivity-enhancing investments.

Distributional analysis traditionally focuses on the

effects of revenue-raising tax provisions since attempting to

allocate all spending--including for roads, education,

national defense, some transfer programs, and the bill

inherited by future payers for current deficits--is

challenging and subjective. Put differently, distributional

analysis typically is not intended to be a holistic

incidence. Instead, distributional analysis attempts to

estimate answers the narrower question: for a given set of

spending benefits

and change in debt, who finances the costs under the

explicitly stated revenue provisions in the bill? In the case

of this Act, the revenue is raised from the corporate minimum

tax as well as the tax on share repurchases.

Conventional distributional analysis measures the long-run

incidence of tax increases imposed at a single point in time.

PWBM assumes that 75 percent of corporate income taxes are

borne by owners of capital with the remainder borne by

labor--magnitudes consistent with empirical research and

scorekeeping convention. We apply this incidence assumption

when analyzing the corporate minimum tax provision. However,

for the stock buyback tax, we assume that shareholders bear

100 percent of the burden because it is assessed on a

discretionary balance sheet transaction rather than on income

from economic production.

We find that all income groups would bear some of the

additional burden of the 2023 revenue-raising business tax

changes. Average burden ranges from $5 for the lowest

quintile, to $55 for the middle quintile, to $61,520 for the

top 0.1 percent of tax units. At lower incomes, the tax

incidence largely reflects lower wages over time relative to

baseline, whereas at high income the tax incidence mostly

reflects more immediate changes in the value of financial

assets.

distributional effects: dynamic estimates

PWBM's dynamic distribution metric shows how benefits and

costs accrue across generations when accounting for

macroeconomic effects, including the increase in productivity

from lowering carbon emissions relative to baseline. While

this analysis is less granular than conventional

distributional analysis, the dynamic ``equivalent variation''

measure captures important dynamics like lifetime income

trajectories, the ``insurance value'' of means-tested

benefits and changes in wages and returns to capital

investments.

Table 4 reports the equivalent variation for households at

different ages (relative to the year 2022) and incomes. Each

value shown in Table 1 corresponds to the one-time benefit

that the corresponding household receives from the

legislation. For example, the value of -$700 for a household

age 40 in the bottom income quintile indicates that this

household is worse off by $700 under this legislation,

including at age 40 and the remainder of his or her lifetime.

Put differently, this household is indifferent between the

adoption of the Inflation Reduction Act and making a one-time

payment of $700 that avoids the adoption of the Act. However,

a household in the bottom quintile who is born in 20 years

(-20 age in 2022) would be $1,900 better off.

Notice two main effects that vary by both income and

generation:

First, current workers and retirees prefer current law over

the provisions in the Inflation Reduction Act. People alive

today bear the burden of business tax increases in the form

of lower investment returns and lower wages in the near term.

However, future generations gain from the adoption of the

Act, including positive gains to capital formation from

reducing the debt as well as the increase in total factor

productivity from reducing carbon emissions relative to

baseline.

Second, current higher-income households bear a

substantially larger share of the tax burden while future

higher-income households also gain the most from the improved

economy. In the long run, the Inflation Reduction Act leads

to lower government debt, higher wages, higher total factor

productivity and higher GDP. Although older workers and

retirees prefer current law, this growth leads to significant

gains for younger households in all income brackets. As lower

government debt crowds in additional productive private

capital, wages increase. In addition, these younger workers

begin to benefit from the accumulating productivity benefits

from climate investments. Therefore, workers in the future

will receive higher wages and income, which is reflected in

larger equivalent variations for younger cohorts of workers.

Madam Speaker, I yield 1 minute to the gentleman from Tennessee (Mr. Rose).

Madam Speaker, I would note that every Democrat in Congress, in the House and Senate, strongly opposed providing prescription drugs for seniors in Medicare part D, and then-Leader Pelosi at the time said, it would end Medicare as we know it to help seniors with these lifesaving medicines.

Madam Speaker, I include in the Record the following study from the University of Chicago which shows the Democrats' drug pricing scheme and controls could kill up to 342 cures, many of them lifesaving cures, in the next two decades alone.

[From University of Chicago, Sept. 2021]

The Evidence Base on the Impact of Price Controls on Medical Innovation

(By Tomas J. Philipson and Troy Durie)

Executive Summary

This issue brief reviews the evidence on the impact of

price controls on biopharmaceutical innovation and calibrates

what this evidence implies for recent price control proposals

in the US. A large academic literature estimates the effect

of future drug revenues on R&D spending with a mid-range

effect of a 1 percent reduction in revenue leading to a 1.5

percent reduction in R&D activity. Using the range of such

effects found in the literature we find the proposed price

controls of US bill HR3, the Lower Drug Costs Now Act, would

lead to a 29 to 60 percent reduction in R&D from 2021 to 2039

which translates into 167 to 342 fewer new drug approvals

during that period. The mid-range effect of the evidence

implies a 44.6 percent decline in R&D and 254 fewer new drug

approvals. As a benchmark on the large size of the adverse

health effects this implies, we conservatively find the loss

in life from the price controls the next 10 years is 20 times

larger than the loss from COVID-19 to date in the US. We

argue this is a conservatively low estimate of the impact of

such proposals even though it is as much as a ten times

larger reduction in new drugs compared to a recent CBO

analysis.

Section 1: Introduction

A national debate has emerged again about the effect of

price controls on pharmaceutical innovation. Many proponents

of price controls for pharmaceutical drugs argue that they do

not impact innovation while opponents argue they will lead to

fewer new drugs. This issue brief attempts to provide insight

into the likely effects of recent price control proposals by

analyzing how the debate can be informed by basic economics

and the prevailing empirical evidence.

While the United States has less stringent price

regulations when compared to other nations, the Biden

Administration has recently announced plans to lower drug

prices through policies similar to those outlined in a recent

bill referred to as the Lower Drug Costs Now Act (H.R. 3)

that passed the House of Representatives in December 2019 and

was reintroduced in April 2021. This proposal would create

price controls for the government's highest expenditure drugs

and then apply price controls to firms conducting private

sector transactions. This issue brief reviews the evidence on

how sensitive innovation is to changes in revenues and

applies the evidence to estimate the effect of proposed price

controls.

Section 2: Evidence Base on Revenue Effects on Innovation

Biopharmaceutical companies routinely project future market

size and profits for their products to determine the rate of

return on investment (ROI) from R&D. A large body of evidence

suggests that these market practices translate into a

predictable positive relationship between realized revenues

and R&D spending in the economy in general and for biomedical

innovation in particular.

A rich academic literature quantifies this relationship

between future revenues and pharmaceutical innovation. For

assessing evidence related to revenue effects on R&D, it is

important to recognize that global profits drive innovation

and that revenues from different countries have different

effects on those global profits because of different profit

margins across countries. Expected earnings, not revenues,

drive R&D investments. Therefore, decreases in US revenue

will have larger effects on global profits than revenue

losses in price controlled markets in Europe due to higher

profit margins in the US. Goldman and Lakdawalla (2018) find

that pharmaceutical profits in the United States accounts for

64 to 78 percent of global profits, similar to an estimate

from the Council of Economic Advisers (CEA) (2018).

Consequently, the evidence finds that studies focusing on US

revenue losses show larger R&D effects than those studying

revenue losses in Europe.

In particular, a set of papers looks at the expansion of

the Medicare prescription drug benefit, Medicare Part D,

which provides the most relevant evidence for assessing the

revenue effects of Medicare policy changes. They find that

companies recognized this expansion and increased innovation

in drugs treating diseases prevalent in the elderly

population more so than innovation in non-elderly diseases

(Blume-Kohout and Sood 2013). Quantifying that relationship,

a 1 percent increase in market size due to Medicare Part D

leads to a 2.8 percent increase in new drug approvals.

Another often cited paper finds a 1 percent increase in

potential market size leads to a 4-6 percent increase in the

entry of new drugs (Acemoglu and Linn 2004) in the US. Though

other studies have found lower effects in Europe of the

relationship between potential market size and the number of

new treatments, a clear strong positive relationship exists

(Dubois et al. 2015). Other studies show that a 1 percent

increase in price leads to a 0.22-1.33 percent increase in

innovation. Another extensive literature illustrates how

companies change their investments in lower quality drugs due

to price controls and other regulations that decrease how

much can be charged for high-quality drugs.

We synthesized the evidence base by computing the average

R&D elasticity with respect to revenue estimated from 10

different studies looking at the effect of a price change,

expected market, and overall revenue on R&D. Table 1

illustrates the elasticities used from each paper, and the

average elasticity across these 10 studies is 1.54.

Note: Acemoglu and Linn (2004) find an elasticity range of

4-6 based on if all approved including generics are included

or not. We take the midpoint of this range. Abbott and Vernon

(2005) find a price cut of 40 to 50 percent lowers R&D by 30

to 60 percent. Taking the midpoint of these numbers gives a

45 percent price cut leads to a 45 percent decrease in R&D,

or an elasticity of 1.

To assess the impact on the number of new drugs from

reductions in R&D spending, a common approach is to divide

the reduction in R&D spending by an estimate of the costs of

bringing a drug to market. This is a useful approach and

implies a proportional reduction in new drugs to the

reduction in R&D spending regardless of the particular cost

per drug. In other words, using this methodology, a 10

percent reduction in R&D spending leads to 10 percent fewer

drugs regardless of the cost per drug estimate used. The

elasticity of R&D spending with respect to revenue in this

case therefore also represents the elasticity of new drugs to

revenue.

Despite the evidence, there is some debate among law makers

concerning whether revenue or price controls affect

innovation at all. However, the evidence is consistent with

common market practices of biopharmaceutical innovation--a

positive relationship between investment and earnings. Such

market practices include the use of net present value (NPV)

calculations to determine a new drug's ROI. Biopharmaceutical

companies determine the demand for new drug therapies by

analyzing the prevalence of disease, insurance coverage of

the population affected by the disease, and reimbursement by

payers managing patients' care. The pharmaceutical industry

spent more than $91 billion on R&D in 2020. In obtaining such

R&D funding, companies have relied on venture capital

funding, licensing agreements, or mergers and acquisitions as

well as their own revenue. All rely on ROI assessments to

evaluate R&D investments. Indeed, markets routinely assess

the enterprise value of firms by estimating the present value

of expected cash flows across all business lines and

projects.

section 3: Calibration of the Impact on Innovation of Proposed US Price

Controls

This section evaluates what the evidence implies for the

innovation effects of proposed US price controls. We

calibrate that the price controls implemented in the United

States would lead to a 29.2 to 60.0 percent reduction in R&D

from 2021 to 2039. This equates to $952.2 billion to $2.0

trillion in lost R&D spending and 167 to 342 fewer new drug

approvals during this period. This means annual new drug

approvals will be 11.7 to 24.0 percent lower per year from

2021 to 2029 and 45.0 to 92.4 percent lower from 2030 to

2039. We discuss how these findings, as well as findings from

other studies, differ from CBO (2019), which finds only 37

fewer new drug approvals over this time period, which is

550.2 to 1,024 percent lower than our estimates. Our

estimates are conservative as the entire evidence base is

considered and not only the evidence base for the more R&D

sensitive US market.

It should be noted, however, that making comparisons to CBO

estimates is made more difficult due to the highly non-

transparent discussion of their underlying analysis, which

makes third-party replication of their results impossible.

This ``black-box'' nature of analysis is often the case with

government reports and raises larger issues with the

difficulty for private parties and taxpayers--who funded the

analysis--being able to assess their accuracy. In contrast,

we believe the presentation of the evidence discussed above,

and the innovation effects they directly imply, is highly

transparent as it simply documents the findings of the

studies and their implied effects.

3.1 The Proposed US Price Controls

The United States has fewer restrictions on price than

other countries, but the Biden Administration has announced

their goal to lower drug prices through greater price

regulation, as set forth in a recent bill referred to as H.R.

3. This proposal would change the way certain single-source

brand drugs are priced for Medicare beneficiaries by

requiring drug manufacturers to ``negotiate'' drug prices

with the Secretary of Health and Human Services. A

prohibitive excise tax of 65 to 95 percent will be applied to

a company's annual gross sales if they refuse to negotiate,

making the requirement largely equivalent to mandatory price

controls. Drug prices set by the Secretary may not exceed the

prices in specified countries by more than 20 percent and

price increases would be capped at the rate of inflation (CBO

2021).

In addition, these price controls would also be extended to

private transactions by employer-based plans as stated on

August 12, 2021 by President Biden and as implied by the

proposed legislation. Private payers can choose the lower

prices negotiated by the government, which they presumably

will.

3.2 CBO's Estimated Effects and Alternative Estimated Effects

of the Proposed Price Controls

CBO (2019) previously estimated that a drop in future

revenues due to H.R. 3 would lead to 8 fewer drugs from 2020

to 2029, which would then expand to 30 fewer drugs from 2030

to 2039). In August 2021, CBO (2021b) updated its estimated

impact of price negotiations to be 2 fewer drugs in the first

decade (0.5 percent), 23 fewer in the second decade (5

percent), and 34 fewer drugs in the third decade (8 percent).

Since the development process takes about a decade, the long

run effects of the bill will be larger than its short-run

effects. To align these estimates with our time period of

2021-2039, we lower their estimate to 7 fewer drugs from 2021

to 2029 and keep the estimate of 30 fewer drugs from 2030 to

2039.

Consistent with our analysis, other analysts' assessments

of CBO's 2019 analysis of H.R. 3 conclude that CBO (2019)

likely underestimates the impact of H.R. 3. Charles River

Associates (2021) finds the CBO study underestimates the

company revenue impact by assuming companies will be able to

set their price at the high end of the allowed price

range, and that companies will be able to increase their non-

U.S. price. Both assumptions may not be true due to

uncertainty around behavioral responses in negotiations.

Further, for the loss-of-revenue impact on R&D, CBO

extrapolates price control effects from smaller markets, and

they do not account for the larger impact on targeted disease

groups most impacted by the policy like rare diseases and

oncology. CBO's analysis relies on Dubois et al. (2015) to

estimate the effect of H.R. 3 on R&D, but CRA notes that this

estimated effect is smaller than most of the other

literature, too dependent on specific assumptions, and may

not be as relevant to a policy of H.R. 3's magnitude.

Other analysts' estimates of the impact of the price

controls introduced in H.R. 3 show a considerably larger

impact on global revenues and R&D than assumed by CBO.

Stengel et al. (2020) estimate drug manufacturer revenues

would fall 34 to 44 percent, which would equate to about $1.3

to $1.7 trillion in total lost global revenues from 2020-

2029. Vital Transformation (2021) estimates annual earnings

would fall 56 percent, or on average $102 billion a year,

starting in the year 2024. This fall in earnings when fitted

to past data would have lowered new approved drug therapies

in their sample from 68 new drugs to 7 new drugs, an 89.7

percent decline from 2010 to 2019.

3.3 Effects of the Proposed Price Controls Implied by the

Evidence Base

In light of the reported shortcomings in the CBO (2019)

report, we used the broader evidence base discussed in this

issue brief to assess the effect H.R. 3's proposed price

controls would have on innovation. We create a range of the

estimated drop in global drug manufacturer revenues by taking

the CBO's lower estimate of 19 percent and the midpoint

revenue effect of alternative studies, 39 percent, from

Stengel et al. (2020).

As discussed earlier, a conservatively low estimate of the

elasticity of revenue on either R&D or the introduction of

new drugs is 1.5 based on current evidence. We apply this

elasticity to the 19 to 39 percent decline in revenues to

derive a percentage reduction in R&D. This percentage

reduction is thereafter used to calibrate the reduction in

absolute R&D spending or number of approved drugs which is

applied to the CBO baseline trend in absolute values. In

other words, the reduction in R&D spending and the number of

new drug approvals during 2021 to 2039 is obtained by

determining how much would be lost in each of those measures

with the number of approved drugs being compared to CBOs

baseline trends given the percent reduction in R&D. We create

our own trend for R&D spending by taking a time series from

PhRMA's 2021 Membership Survey showing pharmaceutical R&D

spending from 2000-2019 and calculated the compound annual

growth rate to get a trend for expected R&D spending through

2039. We then applied the impact on R&D to each year and

summed these values to get a total. For new drug approvals,

we use the 30 new drug approvals baseline from CBO (2019) and

applied the impact on R&D for each year and summed.

Table 2 illustrates our main findings. Using the average

elasticity on the 19 to 39 percent drop in global revenues,

innovation through R&D is expected to drop 29 to 60 percent.

Using the middle of our range, this would equate to lost R&D

spending of up to $1.5 trillion. We find that this drop in

spending will lead to 167 to 342 fewer new drug approvals.

Our estimates are therefore 550.2 percent to 1024.0 percent

larger than CBO (2019)'s estimated 37 fewer new drug

approvals, adjusted to our time period. CBO (2019) points out

that lower R&D spending will take time to be reflected in new

drug approvals due to the long development process, so the

reduction in revenue results in 7 fewer new drug approval,

18.9 percent of their total estimate, in the first 9 years

and 30 more in the following decade, 81.l percent of their

total estimate. We assume this breakdown as well, so new drug

approvals will fall by 32 to 65 approvals from 2021 to 2029

and 135 to 277 approvals from 2030 to 2039. These significant

drops in new drug approvals will lead to delays in needed

drug therapies, resulting in worse health outcomes for

patients.

The failure to discover and get new drug approvals leads to

worse health outcomes. CEA (2019) did an early analysis of

H.R. 3 finding 375 million to 100 million life years lost due

to this policy's impact on R&D spending through 2029. For

comparison, using death data through September 22, 2021,

SARS-CoV-2 has directly reduced health outcomes by 7.5

million life years. The 7.5 million life years lost is only

just over 10 percent as large as the midpoint of CEA (2019)'s

estimate due to H.R. 3. We calculate this loss in life years

by applying life expectancy estimates conditional on age from

CDC to the age distribution of deaths from SARS-CoV-2 from

CDC updated through September 22, 2021. Then we multiply the

life expectancy at each age grouping by the number of deaths

and sum to get 7.5 million life years lost. A prior study

shows how every $2,000 spent on pharmaceutical research and

development increases population health by one statistical

life-year (Lichtenberg 2002). When applied to our R&D

spending estimates, this would lead to 159.3 million to 326.9

million life years lost by 2029 which increases to 476.1

million to 977.2 million by 2039. This amounts to the direct

negative health effects of SARS-CoV-2 to be only 3.1 percent

as large as our midpoint estimate by 2029 and 1.0 percent as

large by 2039. Price controls have significant health costs

to the U.S. population.

Our analysis likely underestimates true innovation effects,

which, if considered fully could make our findings even

further away from the CBO estimates. This is because the

average R&D elasticity of 1.5 used included studies of non-

U.S. markets with lower earnings effects than U.S. markets.

Given that the U.S. has higher margins, price controls are

expected to have a larger impact on earnings. Thus, only

using the larger estimated elasticities from U.S. markets,

which would double the elasticity of 1.5, would yield

proportionally larger differences between the evidence base

and the CBO estimates.

Madam Speaker, I yield 1 minute to the gentleman from Florida (Mr. Rutherford).

Madam Speaker, I insert in the Record the following analysis which shows the top 10 manufacturing industries hit hardest by the Democrats' made-in-America manufacturing tax. These are predominantly minority communities and working-class Americans.

Madam Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Davidson).

Madam Speaker, I include in the Record the following editorial from The Wall Street Journal, which shows this bill will only reduce global temperatures by, at best, 0.028 degrees Fahrenheit throughout this century and as little as 0.0009 degrees over the entire century.

[From The Wall Street Journal]

Tilting at Climate Windmills

Nearly all of Washington--Democrats, the press, lobbyists--

is taking a victory lap with Senate passage of the Schumer-

Manchin tax, climate and drug price control bill. The climate

lobby is especially thrilled, claiming a historic victory

that will reduce temperatures, hold back the rising sea, and

save the planet.

Or, maybe not. Our contributor Bjorn Lomborg looked at the

Rhodium Group estimate for CO2 emissions reductions from

Schumer-Manchin policies. He then plugged them into the

United Nations climate model to measure the impact on global

temperature by 2100. He finds the bill will reduce the

estimated global temperature rise at the end of this century

by all of 0.028 degrees Fahrenheit in the optimistic case. In

the pessimistic case, the temperature difference will be

0.0009 degrees Fahrenheit.

In other words, the climate provisions in this ballyhooed

legislation will have no notable impact on the climate.

This isn't surprising. No matter what the U.S. does to

reduce greenhouse-gas emissions, it will be dwarfed by what

the rest of the world does. China, India and Africa aren't

about to stop burning fossil fuels as they develop, and China

is sprinting ahead to build huge new coal capacity despite

its pledge to start reducing emissions after 2030.

Barring a breakthrough in battery or other technology,

carbon emissions will continue to increase. No one knows how

much the Earth's temperature will warm, though even the U.N.

model has modified its estimates from the apocalyptic

predictions of some years ago.

Schumer-Manchin won't reduce inflation, won't reduce the

budget deficit, and it won't reduce the world's temperature.

What it will do is transfer some $369 billion from taxpayers

and drug companies to the pockets of green energy businesses

and investors. It will tighten the hold that politicians have

on the allocation of capital, as they pick winners and losers

with their grants and tax credits. Everyone will get a nice

warm feeling as they pretend they are cooling the climate.

Madam Speaker, I yield 1 minute to the gentlewoman from New York (Ms. Malliotakis).

Madam Speaker, I include in the Record the following article by Americans for Tax Reform, which debunks the Inflation Reduction Act by describing the top five budget gimmicks in this bill, showing over $330 billion in fake savings, more than the so-called deficit reduction in the bill.

5 Gimmicks in Democrats' Reconciliation Bill

Democrats' reconciliation bill, improperly named the

``Inflation Reduction Act,'' contains numerous gimmicks

designed to deceive voters and circumvent congressional

rules.

This bill uses several budget gimmicks: a short extension

of Obamacare subsidies, a repeal of the ``rebate rule'' that

never has nor never will go into effect, and supersizing the

Internal Revenue Service (IRS) to ``solve'' an overstated tax

gap, This bill attempts to circumvent the Byrd rule by

erroneously calling a mandate ``a tax.'' The bill would also

violate President Biden's tax pledge to not raise taxes on

anyone making less than $400,000 a year.

1. The Obamacare subsidies in this bill are only extended until 2025,

despite expectations that they will be extended again.

In the American Rescue Plan (ARP), President Biden and

congressional Democrats expanded Obamacare subsidies--

specifically the advanced refundable premium tax credit--by

increasing benefits for households at every income level and

expanding them to households earning more than 400 percent of

the federal poverty level. Because these enhanced benefits

are set to expire later this year, Democrats are attempting

to extend them through 2025 in this legislation.

Once these expanded subsidies have been in place for five

years total, it will be extremely difficult to get rid of

them. Given the high likelihood--and expectation--that these

subsidies will be extended once they're set to expire again,

the three-year extension is a clear gimmick.

If the expanded subsidies were extended indefinitely, the

10-year budget deficit reduction falls from $248 billion to

$89 billion, according to the Penn Wharton Budget Model.

2. The bill repeals the ``rebate rule,'' despite the fact that it was

never going into effect.

Under the Trump administration, the HHS released the rebate

rule which sought to lower drug prices by altering payments

from drugmakers to pharmacy benefit managers. The Trump

administration never went through with this rule nor has the

Biden administration taken it back up again (to be clear,

they never will).

Even so, Democrats claim the repeal would reduce the

deficit by $120 billion. Clearly, it would not.

Already, between the likely extension of Obamacare

subsidies and this rebate rule, the bill doesn't actually

reduce the deficit at all.

3. The IRS would be supersized to solve an overstated ``tax gap.''

The Joint Committee on Taxation estimates that $80 billion

in additional funding to the IRS would increase tax revenue

by $125 billion. While increasing tax enforcement would

certainly raise more money from unsuspecting small

businesses, the Left has assumed that this can and will be

done through increased enforcement on the wealthy.

In reality, wealthy individuals and large corporations are

almost always tax compliant. The wealthy and large

corporations already have armies of lawyers and accountants

that ensure they legally take advantage of the plethora of

credits and deductions offered by the tax code. Further, the

IRS already audits the largest corporations at high rates. It

doesn't matter how much more the agency receives in funding--

they will not find violations in the law that do not exist.

Thus, the IRS won't find much more revenue from their big

targets.

Additional funding will instead be used for invasive, time-

consuming, and non-fruitful audits of middle-class Americans

and small businesses. The IRS previously announced a goal to

increase small business audits by 50 percent.

As previously reported by CNBC, experts say a fattened-up

IRS would go after small businesses that necessarily depend

on cash transactions.

4. The bill implements price controls through a 95 percent tax,

The bill would give the Health and Human Services Secretary

the authority to ``negotiate'' the price of prescription

drugs on behalf of Medicare. By ``negotiation,'' Democrats

mean drug manufacturers will pay a 95 percent excise tax on

prescription drug profits unless they accept price controls

set by the Department of Health and Human Services (HHS). In

2023, the Secretary would be able to determine the prices of

10 prescription drugs. The determined price would go into

effect in 2026. The number of drugs the HHS Secretary could

set prices for would then increase to 15 in 2028 and 20 in

2029.

That tax itself is forecasted to raise zero revenue.

Neither the JCT analysis nor any independent analyses

estimate that any company would pay this exorbitant tax. A 95

percent ``tax'' on revenue is just a stick to enforce a

mandate for government price controls. This is a way to

circumvent the Byrd rule, which requires that all the

provisions in a reconciliation bill directly change federal

spending or revenue. While a tax is obviously protected under

this rule, it's not clear that mandates of this kind are.

5. The reconciliation bill raises taxes on those making less than

$400,000, violating President Biden's tax pledge.

Throughout the ten-year window, the JCT estimates that

nearly every single income group will see their taxes raised.

Those Americans making less than $200,000 will see their

taxes raised by nearly $17 billion. For those making between

$200,000 and $500,000 (as the JCT doesn't cut off brackets at

$400,000), their taxes would increase by another $14 billion.

Senate Finance Ranking Member Mike Crapo (R-Idaho) rightly

points out that at least half of all new tax revenue raised

by this bill would come from those earning under $400,000.

Clearly, this tax hike violates President Biden's pledge

not to raise one penny of taxes on any American earning less

than $400,000 per year.

If Biden and Harris want to keep their pledge, they must

veto the bill or instruct Democrats to change the bill.

I yield 1 minute to the gentleman from Tennessee (Mr. Fleischmann).

Madam Speaker, I include the following polling reality study in the Record, which shows that once Americans learn the details of the so-called Medicare negotiation, which is price setting, that their choices and access to lifesaving cures will be limited, public support for negotiation plummets.

Analysis: Americans Don't Support Surrendering Innovation for

Democrats' Drug Price Controls

Democrats are selling their socialist drug pricing scheme

as a way to lower prices, but Americans oppose it once they

learn that this kills cures and life-improving treatments.

What they aren't telling you is this: Their drug price

control scheme will kill innovation, mean fewer new

treatments and cures, and a loss of jobs in the biopharma

industry.

Once Americans learn about these consequences they reject

it outright. Furthermore, this isn't a ``negotiation''--

Democrats' proposal has Washington dictate prices under

threat of exorbitantly higher taxes on medical innovators.

Key Takeaways:

The vast majority of Americans oppose government negotiation

if it results in fewer new medicines being developed in

the future

A 50-state Morning Consult/PhRMA poll shows two thirds of

Americans oppose price controls if they put the government in

charge and take away power from doctors to prescribe

medicines that best meet the needs of patients.

The Kaiser Family Foundation also finds that Democrats'

price control scheme drops in popularity the moment

respondents see that it could lead to less research and

development of new drugs or limit access to newer

prescription drugs.

A March 2022 Ipsos/PhRMA poll reveals only 14 percent of

Americans support Washington price controls if they limit

their access to newer prescription medicines. Even if it

``only'' delays access, only 15 percent support the proposal

then.

The same poll shows that seniors are even more skeptical--

10 percent support the price controls when they learn of how

it delays people's access to new medicines.

Numerous studies show the proposal would kill new treatments,

including a University of Chicago study that shows the

number going up to 342

Democrats' price-fixing scheme would kill up to 342 cures,

according to a study by the University of Chicago, yet they

claim it's merely a ``negotiating'' approach that would lower

the price of drugs.

A new study from Vital Transformation finds that if drug

price controls under consideration in the Senate had been

enacted during the last decade, only six of 110 currently

approved therapies would have made it to patients.

Madam Speaker, I yield 1 minute to the gentleman from Texas (Mr. Gohmert).

Madam Speaker, on behalf of many diabetes patients, I include the following article in the Record, which includes a quote from my fellow Texan, Representative Lloyd Doggett, where he accurately states that the insulin caps policy included in this bill ``does not lower the price of insulin by one penny,'' but, rather, shifts costs to others.

Insulin Copay Cap Passes House Hurdle, But Senate Looks for a Broader

Bill

(By Michael McAuliff)

The chances of passing election-year legislation to help

people afford insulin--which weeks ago seemed mired in

political fighting--are looking brighter as a bipartisan

effort to tackle the issue takes root in the Senate.

That effort is still in the early stages, but it is moving

forward with the support of Senate Majority Leader Chuck

Schumer, who tapped Sens. Susan Collins (R-Maine) and Jeanne

Shaheen (D-N.H.) to craft a compromise that members of both

parties could accept. Adding pressure to the Senate's efforts

was a vote by the House on March 31 to pass a different bill

that caps out-of-pocket insulin costs for many patients with

insurance at $35 a month.

Collins said in an interview March 30 that the two senators

had come up with an outline based on a bill they worked on

three years ago that goes beyond capping what diabetes

patients pay and aims to bring down the prices drugmakers

charge.

``It tackles the broader issue of the high list price for

insulin, and the conflicts of interests that occur in the

chain from manufacturer to the consumer buying it at the

pharmacy counter,'' Collins said.

The idea of reducing patients' out-of-pocket insulin costs

is immensely popular, and more than half of the public sees

it as a ``top priority'' for Congress, according to a KFF

poll out last week.

It had been a key selling point of President Joe Biden's

Build Back Better plan, but when that legislation stalled,

Biden and Schumer gave Sen. Raphael Warnock (D-Ga.) an open

lane to promote a stand-alone measure identical to the House

bill that caps insulin costs at $35 a month for people with

private insurance and Medicare coverage.

The political climate, however, presented roadblocks. The

odds that a bill sponsored by a Democrat facing a tough

reelection in the fall could get enough Republicans in the

Senate on board seemed slim, and even some Democrats were

nervous about stripping the insulin provisions from a

possible revised version of the Build Back Better bill. So

Schumer embraced a different option from Collins and Shaheen

that would include a cap on out-of-pocket costs and possibly

draw more votes.

Insulin prices have spiked dramatically since the early

2000s, with Americans paying 10 times what people in other

developed countries pay.

Although Collins said details are still being worked out,

her legislation would be based on the pair's earlier bill,

the Insulin Price Reduction Act of 2019, which aimed to roll

insulin costs back to what they were in 2006. It would have

done that by barring rebate payments for insulin to pharmacy

benefit managers--those intermediaries who negotiate price

breaks for insurance companies and determine which drugs the

insurance plans cover.

Collins and other critics of PBMs believe they inflate

prices because they favor higher-priced drugs from which they

can extract a larger rebate and therefore more profit, which

gives drugmakers extra incentive to raise list prices.

Under that 2019 plan, drug manufacturers who agreed to

return to 2006 costs could then raise prices each year only

at the rate of medical inflation. The senators estimated the

plan would lead to a 75 percent cut in prices from those

listed in 2020.

``There's a very complex system which essentially

encourages high list prices, because the pharmacy benefit

managers frequently receive a percentage of the list price,''

Collins said. ``So their incentive is to choose one that is

higher-cost. And so we are trying to address that broader

issue, as well as looking at the out-of-pocket costs.''

Warnock's proposal to cap the cost of insulin is silent on

list prices and benefit managers, an omission some Democrats

complained about even as they voted for the similar bill in

the House. They noted that since insurers would likely be

forced to absorb the costs no longer paid by patients, the

companies would likely raise premiums.

``This bill does not lower the price of insulin by one

penny,'' said Rep. Lloyd Doggett (D-Texas). ``It just shifts

the burden of paying for the insulin off of the shoulders of

insured insulin users, and shifts it on to the rest of all of

us who are paying insurance premiums.''

Collins also noted that the uninsured would not benefit

from the House cap, which applies to Medicare and insurance

companies but doesn't affect drugmakers' prices.

``It doesn't help someone who's uninsured,'' Collins said.

``When you address the high list price, then it's going to

help more people.''

Collins warned that much could change as lawmakers keep

working with various stakeholders on a final bill, including

diabetes advocacy groups, the Centers for Medicare & Medicaid

Services, and the Congressional Budget Office. And as caps on

out-of-pocket expenses and list-price changes start

interacting, things get complicated, indeed.

``We're talking to CBO, which says it's so complex that

they need a new model,'' Collins said.

The politics also remains tricky. Collins and Shaheen never

got their measure close to the Senate floor in 2019 and 2020

when Senate Minority Leader Mitch McConnell was majority

leader. They did attract some praise from both sides of the

aisle, and conservative North Dakota Republican Sen. Kevin

Cramer was a co-sponsor.

While that opens the door to GOP support, Collins said she

was still only at the stage of circulating among her

colleagues what she called a discussion draft.

Republicans in the House who voted against the $35-cap bill

panned it as a political stunt, saying Democrats should have

advanced ideas that had been worked on with Republicans.

Such objections could not block the bill in the House. But

in the Senate, Democrats command only 50 votes, and it would

take 60 to pass the legislation.

Although GOP members of the upper chamber might also be

opposed to Warnock's bill, one of the House sponsors argued

that having the House advance a dramatic cut in insulin

costs--with the support of only a dozen Republicans--would

raise the stakes for the Senate.

``If 10 Republicans stand between Americans being able to

get access to insulin or not, that's a good question for 10

Republican [senators] to have to answer when they go back

home,'' Rep. Dan Kildee (D-Mich.) said ahead of the House

vote. ``So we're gonna pass this bill, and this will put the

pressure on the Senate to act.''

He and his fellow Democratic co-sponsors also signaled

their willingness to take a measure that included the Shaheen

and Collins additions.

``Any train that's leaving the station that gets folks

affordable insulin--I'm open to any vehicle,'' Kildee said.

``We think this is a solution that would work. How it gets to

the president's desk, I'm agnostic on that question. Any way

we can get it there.''

Madam Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Jordan).

Madam Speaker, on behalf of seniors who rely on generic drugs, I include in the Record the following letter from generic and biosimilar manufacturers, which explains the price controls in this Democrat bill will reduce competition from lower-cost generic and biosimilar medicines. That means fewer options for patients and worsening drug shortages.

The Biosimilars Council,

Washington, DC, July 11, 2022.

Hon. Charles E. Schumer,

Majority Leader, U.S. Senate,

Washington, DC.

Dear Leader Schumer: The Association for Accessible

Medicines (AAM) and its Biosimilars Council share in the goal

of lowering prescription drug costs for America's patients

and seniors. However, in an effort to target high prices on

brand-name drugs, the proposed prescription drugs reforms--in

particular the Medicare negotiations framework--being

considered as part of a revised reconciliation package will

reduce patient savings from lower-cost generic and biosimilar

medicines. Even though competition from generic and

biosimilar medicines is the only proven solution to

consistently lower the cost of prescription drugs, the

proposed price setting scheme will reduce competition, harm

future savings from generic and biosimilar medicines, and

increase costs for employers and patients with private

insurance. We thus urge all U.S. Senators to oppose the

prescription drug reforms under consideration as part of a

revised Build Back Better reconciliation package.

America's patients rightfully expect Congress to address

the ever-increasing prices of brandname prescription drugs.

High launch prices on new brand biologics, combined with an

increasing trend of anti-competitive patent and rebate ploys

designed to delay or prevent competition from more affordable

biosimilars and generics, are keeping access to medicines out

of reach for too many patients. These dynamics are compounded

by flawed policies that reward health plans and pharmacy

benefit managers (PBMs) for the use of high-cost, high-rebate

brand drugs and that allow plans and PBMs to raise out-of-

pocket costs for generics, even as the prices for those same

generics are falling. As a result, patients, including

Medicare's seniors, are missing out on billions of dollars in

savings from biosimilars and generic drugs each year.

However, the proposed price setting approach fails to

adequately address these challenges, while dampening future

competition and reducing savings from generic and biosimilar

medicines.

Negotiations Framework Increases Uncertainty for Generic and Biosimilar

Developers

The proposal increases the risks associated with developing

generic and biosimilars without addressing the fundamental

barriers to competition from lower-cost medicines, such as

abuses of the patent system and brand rebate traps. The

proposed timelines for when the Secretary can initiate the

price setting process will significantly increase the risk to

develop new lower-cost generics and biosimilars. Although the

proposal exempts drugs with generic or biosimilar competition

from the price setting process, the bill only does so through

unrealistic timelines for that competition to enter the

market. For many complex generics and biosimilars, it can

take 8-10 years to develop new, more affordable medicines.

And it can take many more years to conclude patent litigation

and then launch a complex generic or biosimilar medicine. But

the new price setting process would not begin until years

after a developer commits to developing a lower-cost generic

or biosimilar. This means that generic and biosimilar

manufacturers will have no way to know whether a brand-name

drug will be selected for negotiation or what the negotiated

price may be. This dynamic fundamentally changes the ability

of generic and biosimilar manufacturers to plan and make

investment decisions that can be up to and exceed $250

million per drug.

While the revised bill includes a provision that could

allow for a temporary delay of the negotiated price if the

Secretary determines a biosimilar launch was imminent, there

are a number of limitations on the provision make it

difficult to utilize. By way of example, a biosimilar

developer would need to show a ``high likelihood'' of

biosimilar competition by a ``clear and convincing''

evidentiary standard. Moreover, the narrow two-year window to

launch does not appropriately account for how long it takes

developers to challenge brand-name patents. Large patent

estates and time-consuming patent litigation are currently

and will continue to prevent biosimilars from being able to

launch within two years of receiving FDA approval. These

dynamics will likely deter manufacturers from making

investments in biosimilar and generic medicines in some

instances--and will result in less competition and ultimately

higher costs for patients.

Generic and Biosimilar Medicines Savings Exceeds Potential from

Negotiations Framework

After years of high-risk investment, biosimilar developers

are poised to deliver tremendous savings to the U.S. health

care system, improving access for patients and lowering

prescription drug costs. New

biosimilars are expected to launch for a range of treatments

for patients with diabetes, arthritis, macular degeneration,

oncology and more. In the next few years, 42 biosimilars are

on track to launch. Gold-standard data firm IQVIA estimates

biosimilar savings of $30 billion annually as a result. In

comparison, the Congressional Budget Office estimates the

negotiations framework saves $18-24 billion per year from

2028 to 2031. Thus, more savings is projected from market-

based competition than from the Build Back Better proposal

and it starts now. In addition, as more complex generics,

biosimilars, and interchangeable biologics become available,

there is the potential for even greater savings to the U.S.

health care system as providers and payers take advantage of

the opportunities to increase access and reduce costs for

patients.

Negotiations Framework Increases Costs on Employers and Patients with

Private Coverage

Reduced competition from generic and biosimilar medicines

impacts all patients, not only Medicare beneficiaries. The

dampening effect this legislation would have on competition

would cause employers and patients with private insurance to

lose savings these populations have historically enjoyed from

robust generic competition and growing biosimilar

competition. Instead, there may be fewer new, more affordable

generic and biosimilar medicines, leaving the commercial and

employer markets captive to the high cost of brand-name

drugs.

When reviewing a nearly identical proposal in the House-

passed Build Back Better Act, AAM's Biosimilars Council

assessed the potential lost savings to the commercial market

for medicines used to treat asthma (Xolair) and rheumatoid

arthritis (Orencia), as examples. For just two products, lost

savings would be between $4-$7 billion between 2027-2030.

This is lost savings that would otherwise be used to lower

patient out of pocket costs and reduce insurance premiums for

employers and employees.

For these reasons, we must oppose the Medicare negotiations

framework and its impact on patient access to lower-cost

medicines. There are other bipartisan steps to address patent

abuse and brand rebate traps that are already under

discussion in Congress that can meaningfully reduce drugs

costs without harming generic and biosimilar savings. We

strongly encourage Congress to reconsider its approach.

Sincerely,

Dan Leonard,

President and CEO.

Madam Speaker, I yield 1 minute to the gentleman from Tennessee (Mr. Burchett).

Madam Speaker, I yield myself the balance of my time.

I include in the Record the following list of 586 credible voices of opposition to this bill. They include business leaders, taxpayer advocates, economists, and thought leaders who all say this bill will hurt Americans if passed today.

BBB2.0/ IRA Groups Opposed

Alvere; American Action Forum; American Benefits Council;

American Coalition for Taxpayer Rights; American Enterprise

lnstitute; American Experiment; American Exploration &

Production Council (AXPC); America First Policy Institute

(AFPI); Americans for Prosperity KEY VOTE; American Petroleum

Institute; Americans for Prosperity; Americans for Tax Reform

KEY VOTE; Americans for Tax Reform KEY VOTE; Amgen; Arizona

Chamber; Associated Builders & Contractors (ABC); Associated

General Contractors of America; Association for Accessible

Medicines (AAM); Association for Accessible Medicines (AAM);

Association of Mature American Citizens (AMAC).

AstraZeneca Pharmaceuticals LP; Beer Institute; Biocom

California; Biotechnology Innovation Organization (BIO);

Biotech Leaders (RA Capital Management, Viscient Biosciences,

No Patient Left Behind, Bay City Capital); Boehringer

Ingelheim; Business Roundtable; Bristol Myers Squibb;

California Biotech CEOs; California Life Sciences; Can

Manufacturers Institute; Catholic Vote KEY VOTE; Center for a

Free Economy; Center for Individual Freedom 2021; Center for

Urban Renewal and Education; Coalition of Minority Owned

Businesses (2021); Coalition of 14 Real Estate Organizations

(2021); Competitive Enterprise Institute (2021); Concerned

Women for America KEY VOTE.

Council for Affordable Health Coverage; Council for

Citizens Against Government Waste; Council of State

Bioscience Associations; Club for Growth; CTIA; CURE: Center

for Urban Renewal and Education; Domestic Energy Producers

Alliance; Eli Lilly & Company; Exelon; Family Research

Council KEY VOTE; FDA Law Blog; Freedomworks KEY VOTE;

Gilead; Genentech; Heritage Action KEY VOTE; Heritage

Foundation (2021); Independent Electrical Contractors;

Independent Petroleum Association of America (IPAA);

Independent Women's Forum; Job Creators Network.

Juneau Oil and Gas; Koch Network; The Libre Initiative;

Main Street Employers; AAHOA; AICC, The Independent Packaging

Association Air Conditioning Contractors of America; American

Building Materials Alliance (ABMA); American Hotel and

Lodging Association; American Pipeline Contractors

Association; American Supply Association; Associated Builders

and Contractors; Associated Equipment Distributors;

Associated General Contractors of America; Brick Industry

Association; Ceramic Tile Distributors Association;

Construction Industry Round Table; Convenience Distribution

Association; Distribution Contractors Association; Education

Market Association; Family Business Coalition.

Financial Executives International (FEI); Foodservice

Equipment Distributors Association; Forest Resources

Association; Heating, Air-conditioning, & Refrigeration

Distributors; International Illinois Farm Bureau; Independent

Bakers Association; Independent Electrical Contractors;

Independent Insurance Agents & Brokers of America;

Independent Office Products & Furniture Dealers Association;

International Association of Plastics Distribution (IAPD);

International Foodservice Distributors Association

International Housewares Association; Main Street Employers

Coalition Manufactured Housing Institute; Material Handling

Equipment Distributors Association; Metals Service Center

Institute; National Association of Electrical Distributors;

National Association of Home Builders; National Association

of Professional Insurance Agents; National Association of

Sporting Goods Wholesalers; National Association of

Wholesaler-Distributors; National Cattlemen's Beef

Association; National Community Pharmacists Association.

National Federation of Independent Business (NFIB);

National Grocers Association; National Independent Automobile

Dealers Association (NIADA); National Lumber & Building

Material Dealers Association; National Marine Distributors

Association; National Onion Association; National Restaurant

Association; National Roofing Contractors Association;

National Stone Sand and Gravel Association; National Wooden

Pallet & Container Association Nebraska Cattlemen; North

American Association of Food Equipment Manufacturers (NAFEM);

North American Equipment Dealers Association (NAEDA); Oregon

Cattlemen's Association; Outdoor Power Equipment and Engine

Service Association Plumbing-Heating-Cooling Contractors--;

National Association Power and Communication Contractors

Association; Reserve Organization of America (ROA) Retail

Bakers of America; S Corporation Association; Small Business

& Entrepreneurship Council Society of Collision Repair

Specialists (SCRS); Spray Polyurethane Foam Alliance.

Subchapter S Bank Association; Textile Care Allied Trades

Association; The Hardwood Federation; Tile Roofing Industry

Alliance; Truck Renting and Leasing Association; WASDA--Water

and Sewer Distributors of America Western States; Roofing

Contractors Association; Wisconsin Grocers Association;

Wisconsin Small Businesses United Wyoming Farm Bureau

Federation; Wyoming Farm Bureau Federation; Managed Funds

Association; March for Life Action KEY VOTE; Merck; National

Association of Home Builders; National Association or

Manufacturers (NAM); National Association of Small Trucking

Companies; National Association of Wholesaler-Distributors;

National Black Chamber or Commerce (2021); Nebraska Farm

Bureau; NFIB.

National Multifamily Housing Council (2021); National

Restaurant Association; National Right to Life KEY VOTE;

National Taxpayers Union KEY VOTE; National Taxpayers Union

KEY VOTE; National Taxpayers Union KEY VOTE; National Venture

Capital Association; Nebraska Farm Bureau; Novartis; Novo

Nordisk; Pacific Research Institute; Paragon Health

Institute; 31 Pharmaceutical CEOs (CA); PhRMA; Pfizer; Pink

Sheet: Informa Pharma Intelligence; Rapport: Biotech; Real

Estate Roundtable; R Street Institute; Sanofi.

Small Business and Entrepreneurship Council; States Trust;

Susan B. Anthony Pro-Life America KEY VOTE; Taxpayers

Protection Alliance (2021); Taxpayers Protection Alliance;

USA Retirement; U.S. Chamber of Commerce; U.S. Natural Gas

and Oil Industry Trade Groups; American Exploration and

Production Council (AXPC);

American Fuel & Petrochemical Manufacturers (AFPM); American

Petroleum Institute (API); Arkansas Independent Producers and

Royalty Owners; Arkansas Oil Marketers Association;

Associated Builders & Contractors West Virginia; Associated

Industries of Florida; Associated Industries of Missouri;

California Independent Petroleum Association (CIPA);

Chemistry Industry Council of Illinois; Colorado Oil and Gas

Association; Colorado Wyoming Petroleum Marketers

Association.

Energy Workforce & Technology Council; Florida Independent

Petroleum Producers Association; Florida Natural Gas

Association; Florida Petroleum Marketers Association; Florida

Propane Gas Association; Florida State Hispanic Chamber of

Commerce; Florida Transportation Builders Association;

Floridians for Better Transportation; Fuel Iowa; Georgia

Association of Convenience Stores; Georgia Mining

Association; Illinois Fuel Retails Association; Illinois

Manufacturers Association; Illinois Retail Merchants

Association; Independent Petroleum Association of America;

Kansas Independent Oil & Gas Association (KIOGA); Louisiana

Association of Business and Industry; Louisiana Oil and Gas

Association; Manufacture Alabama; Michigan Association of

Convenience Stores.

Michigan Oil and Gas Association; Michigan Petroleum

Association; Minnesota Service Station & Convenience Store

Association; New Mexico Business Coalition; New Mexico Oil

and Gas Association; North Carolina Chamber; North Carolina

Petroleum & Convenience Marketers Association; North Dakota

Petroleum Council; Ohio Energy and Convenience Association;

Ohio Manufacturers Association; Ohio Oil and Gas Association;

Pennsylvania Chamber of Business & Industry; Pennsylvania

Grade Crude Oil Coalition; Pennsylvania Independent Oil & Gas

Association (PIOGA); Pennsylvania Independent Petroleum

Producers; Pennsylvania Manufacturers Association; Permian

Basin Petroleum Association; Petroleum Association of Wyoming

(PAW); Plumbing-Heating-Cooling Contractors--National

Association; South Dakota Petroleum and Propane Marketers

Association; Texas Alliance of Energy Producers; Texas

Independent Producers & Royalty Owners Association (TIPRO);

The Coalbed Methane Association of Alabama; The James Madison

Institute; The Petroleum Alliance of Oklahoma; West Slope

Colorado Oil & Gas Association; WSJ Editorial Board.

I include in the Record the following letter from dozens of Main Street businesses opposing the Democrats' bill because of the IRS' targeting of their business under the bill and tax hikes on small businesses.

August 11, 2022.

Hon. Nancy Pelosi,

Speaker of the House,

House of Representatives,

Washington, DC.

Hon. Kevin McCarthy,

House Minority Leader, House of Representatives,

Washington, DC.

Hon. Charles Schumer,

Senate Majority Leader, U.S. Senate,

Washington, DC.

Hon. Mitch McConnell,

Senate Minority Leader, U.S. Senate,

Washington, DC.

Dear Speaker Pelosi, Leader McCarthy, Leader Schumer, and

Leader McConnell: The undersigned organizations represent

millions of Main Street businesses and employ tens of

millions of workers and we oppose the Senate-passed Inflation

Reduction Act.

Inflation is at 40-year highs, we have had two consecutive

quarters of negative economic growth, and we are witnessing a

shrinking small business sector, yet the Inflation Reduction

Act does nothing to address these immediate issues even as it

increases the burden of the tax code shouldered by America's

small and family-owned businesses.

The Biden Administration claims the savings in the IRA are

``front-loaded'' and will reduce the deficit in the short-

term, helping to ease inflationary pressures. That is simply

not the case. Recent analysis by the Congressional Budget

Office, Penn-Wharton, and others shows the Inflation

Reduction Act would increase prices in the short term and do

little to bring them down in the long run.

At the same time, the bill would give the IRS an additional

$80 billion in funding, more than half of which would pay for

thousands of additional IRS agents to conduct millions of

additional audits. We support addressing the tax gap and

oppose illegal tax evasion, but as former National Taxpayer

Advocate Nina Olson observed recently, it is wrong and

counterproductive to characterize the entire tax gap as

willful tax evasion. From experience, we know many, if not

most, of these additional audits will be conducted on the

owners of family businesses who have fully complied with the

tax code.

Finally, the Warner Amendment adopted at the last minute

presented the Senate with a clear choice between Wall Street

and Main Street, and the Senate chose Wall Street. The

amendment extends for two years the Section 461(l) cap on

losses a business owner is permitted to claim. This $52

billion tax hike on pass-through businesses was adopted with

almost no consideration, and the revenues it raises were used

to offset the cost of exempting private equity investors from

the fifteen-percent corporate minimum tax. The cap on active

pass-through less deductions is bad policy at any time, but

it is particularly harmful when the economy is weak and an

increasing number of businesses are suffering losses. The

timing of this amendment's adoption could not have been

worse.

The Inflation Reduction Act would fail to reduce price

pressures even as it raises the cost of the tax code to small

and family-owned businesses at a time of economic weakness.

We ask that you reject the IRA's Main Street tax hike when it

is considered by the full House.

Sincerely,

AAHOA; AICC, The Independent Packaging Association; Air

Conditioning Contractors of America; American Building

Materials Alliance (ABMA); American Hotel and Lodging

Association; American Pipeline Contractors Association;

American Supply Association; Associated Builders and

Contractors; Associated Equipment Distributors; Associated

General Contractors of America; Brick Industry Association;

Ceramic Tile Distributors Association; Construction Industry

Round Table; Convenience Distribution Association;

Distribution Contractors Association; Education Market

Association; Family Business Coalition; Financial Executives

International (FEI); Foodservice Equipment Distributors

Association.

Forest Resources Association; Heating, Air-conditioning, &

Refrigeration Distributors International; Illinois Farm

Bureau; Independent Bakers Association; Independent

Electrical Contractors; Independent Insurance Agents &

Brokers of America; Independent Office Products & Furniture

Dealers Association; International Association of Plastics

Distribution (IAPD); International Foodservice Distributors

Association; International Housewares Association; Main

Street Employers Coalition; Manufactured Housing Institute;

Material Handling Equipment Distributors Association; Metals

Service Center Institute; National Association of Electrical

Distributors; National Association of Home Builders; National

Association of Professional Insurance Agents; National

Association of Sporting Goods Wholesalers; National

Association of Wholesaler-Distributors.

National Cattlemen's Beef Association; National Community

Pharmacists Association; National Federation of Independent

Business (NHB); National Grocers Association; National

Independent Automobile Dealers Association (NIADA); National

Lumber & Building Material Dealers Association; National

Marine Distributors Association; National Onion Association;

National Restaurant Association; National Roofing Contractors

Association; National Stone Sand and Gravel Association;

National Wooden Pallet & Container Association; Nebraska

Cattlemen; North American Association of Food Equipment

Manufacturers (NAFEM); North American Equipment Dealers

Association (NAEDA); Oregon Cattlemen's Association; Outdoor

Power Equipment and Engine Service Association; Plumbing-

Heating-Cooling Contractors--National Association; Power and

Communication Contractors Association.

Reserve Organization of America (ROA); Retail Bakers of

America; S Corporation Association; Small Business &

Entrepreneurship Council; Society of Collision Repair

Specialists (SCRS); Spray Polyurethane Foam Alliance;

Subchapter S Bank Association; Textile Care Allied Trades

Association; The Hardwood Federation; Tile Roofing Industry

Alliance; Truck Renting and Leasing Association; WASDA--Water

and Sewer Distributors of America; Western States Roofing

Contractors Association; Wisconsin Grocers Association;

Wisconsin Small Businesses United; Wyoming Farm Bureau

Federation.

Madam Speaker, a year ago, we met to consider another disastrous version of this bill. Since then, American families and Main Street businesses have been facing and continue to face historic inflation and, now, a recession.

This bill is a hoax on the American people. Americans who are suffering the most in President Biden's cruel economy will soon know this firsthand. They will know it because inflation will get worse, according to the Penn Wharton School of Business analysis.

Parents sitting up at night will notice higher taxes, fewer jobs, and lower wages as they pay for the vast majority of any new revenue collected under this bill, according to Congress' own nonpartisan scorekeeper.

A middle-income single mom with two kids who runs her own business will know it when she comes home from Walmart and finds a letter from the IRS telling her she is under audit.

Seniors and loved ones with life-threatening illnesses will arrive at the pharmacy counter and break into a sweat when they see they cannot afford their medicine.

Families with loved ones newly diagnosed with Alzheimer's, or cancer, or ALS, and desperately seeking treatment will wonder whether the cure for their disease will ever come.

The wealthiest and the biggest foreign-owned corporations will do just

fine. They are getting hundreds of billions of dollars of government handouts under this bill. After all, they get the government checks paid for by the middle-class taxpayers who are getting squeezed.

This is a sad day for struggling American families and Main Street businesses. This economy is cruel enough, but by voting to turn this hoax into law, Congress is inflicting one more act of cruelty.

Madam Speaker, I urge opposition to this bill, and I yield back the balance of my time.

Mr. Speaker, I thank Mr. Lucas for his leadership on science, which is of so much importance to our country.

It is official; we are in a recession. Joe Biden's economy is a cruel economy. Americans are finding this out more and more each day.

This morning's economic report shows negative economic growth. Inflation is crushing our families, our small businesses, and our entire economy.

Now, Democrats have confirmed that CHIPS is a green light for higher taxes, corporate welfare, and, even worse, inflation in the future. They are insisting on hundreds of billions of tax increases on companies that build and make in America. They are insisting on unleashing 80,000 new IRS agents on American families, farmers, and small businesses.

Who in their right mind raises taxes as you are entering a recession? Now, even Republican sponsors of the CHIPS bill in the Senate are urging a ``no'' vote.

Good people can disagree on the contents of the semiconductor issues here. My view is that the original bill misses the mark on national security and provides tax subsidies that aren't warranted.

China is targeting 10 of our American technologies and industries, including robotics, biotech, artificial intelligence, and on and on. It is a mistake and missed opportunity to subsidize one and help one while ceding nine of our industries and technologies to China. I believe our approach should be to lift all of our industries up so they can compete and win against China.

I also believe we have the strongest semiconductor industry on this planet. No one sells more chips around the world than we do. We sell nearly half of

all the chips. The sales of the chips in America, the market in the world, we sell nearly half of it. Our production has been growing for 20 years. It is one of our biggest exports, and we have reliable supply chains because almost half of our chips for America are made here in America.

I think there is a smarter way to tackle this issue. I am, like others, stunned by the turnaround--I think the deceit--among Senate Democrats on taxes and tying it, unfortunately, to this bill.

Madam Speaker, today I rise to honor Vita Swarers on the occasion of her birthday, July 24th. Vita serves as the Deputy Director of Casework and the Deputy District Director in my Conroe district office, and she has spent the past 15 years serving the people of the Eighth Congressional District of Texas.

Vita started working for me as a caseworker in January of 2008 when my district office was originally in Orange, Texas. Vita has always been a devoted member of my team and I have experienced the depth of her commitment firsthand. Following the last redistricting of Texas in 2010, Vita chose to relocate her home from Orange to Huntsville in order to continue her work in my new district office.

When Hurricane Ike struck the 8th District, Vita's own home was flooded but she helped countless victims' recover first. Thousands of Texans' lives have been improved because of Vita's tireless efforts on behalf of the community.

In addition to her amazing casework success, Vita also directs our Military Service Academy Program which, because of the academic and athletic accomplishments of our prospective cadets, typically sends 15 or more cadets to the four service academies. The staff of the academy admission offices refer to the program Vita spearheads as a ``model program'' and Vita frequently consults with new Congressional offices on how to set up and run a successful program.

Outside of the office, Vita is a natural caregiver, loves serving others, and gives her all in every aspect of her life. Vita is the type of person who can overcome anything--when life gives her lemons, she throws them right back--very hard. Vita is a devoted mother to three, grandmother to seven, and great-grandmother to four. She loves her family deeply and says that one of her goals in life is to live long enough to meet her greatgreat-grandchildren.

One of Vita's favorite ways to spend time with her family is to compete in local competitions. Vita is a well-decorated Texas champion--holding first place trophies throughout Texas for her famous chili.

On behalf of the Eighth Congressional District of Texas, it is a pleasure to formally recognize Vita for her long years of dedicated service and the instrumental role she has played on behalf of the constituents of the 8th District of Texas. It is an honor to work with someone as special as Vita, and I am grateful for her service. I thank Vita for everything, and wish her a Happy Birthday.

Madam Speaker, I was unavoidably detained. Had I been present, I would have voted yea on Roll Call No. 364.

Madam Speaker, on this day in 1788, the United States Constitution was ratified making that remarkable document the law of this land, and it began with those immortal words: ``We the People.''

So 234 years to the day after that call to create a more perfect Union, the U.S. House of Representatives makes history today with the inspiring swearing in of the first Mexican-born Member of Congress, Mayra Flores of Texas.

There is so much to be impressed by with Mayra. She was born and raised with humble beginnings in Burgos, Mexico. From a young age, her parents and grandparents raised her with strong conservative values of faith, family, and hard work.

She came legally to the United States at 6 years old, and with the enthusiastic help of her father, she became a proud, naturalized American citizen. Growing up, Mayra worked alongside her parents in the cotton fields in Memphis, Texas, to earn extra money for school supplies and clothes. With the support of her family, Mayra graduated as a respiratory care practitioner and has worked ever since to care for the elderly and the disabled.

She did serve on the front lines helping patients combat COVID-19 and remains every day an active member of her community in south Texas. She remains a firm believer in the American Dream--it is a dream she is living--and will always fight so that others can achieve it, as she has.

A proud wife and mother of four, her husband serves as a Border Patrol agent in the Rio Grande Valley working to protect our country during an unprecedented border crisis.

So on behalf of the entire Texas delegation, please welcome with me to the United States Congress the Honorable Mayra Flores, her husband John, and their four beautiful children.

Madam Speaker, I yield to the gentlewoman from Texas (Mrs. Flores).

Madam Speaker, I was unavoidably detained. Had I been present, I would have voted YEA on Roll Call No. 198; YEA on Roll Call No. 199; YEA on Roll Call No. 200; YEA on Roll Call No. 201; YEA on Roll Call No. 202; YEA on Roll Call No. 203; and YEA on Roll Call No. 204.

Madam Speaker, I was unavoidably detained. Had I been present, I would have voted YEA on Roll Call No. 205; YEA on Roll Call No. 206; YEA on Roll Call No. 207; YEA on Roll Call No. 222; YEA on Roll Call No. 223; YEA on Roll Call No. 224; YEA on Roll Call No. 225; YEA on Roll Call No. 226; YEA on Roll Call No. 227; and YEA on Roll Call No. 228.

Madam Speaker, today I rise in celebration of the completed expansion project at Memorial Hermann The Woodlands Medical Center.

For nearly 115 years, Memorial Hermann Health System has been the premier health care provider in the Greater Houston region with 17 hospitals in the area. Located in Houston, the Memorial Hermann Texas Medical Center is one of the nation's busiest Level I trauma centers and serves as the primary teaching hospital for McGovern Medical School at UTHealth.

The Memorial Hermann Health System is famed for its cutting-edge advances in medical science and technology. As a nationally acclaimed Accountable Care Organization, it provides exceptional care in cardiology, neuroscience, orthopedics, women's health, general surgery, and organ transplantation. The Memorial Hermann Life Flight air ambulance service was the first of its kind in Texas, the second accredited air ambulance service in the nation, and is the busiest air ambulance system in the country.

In my district, Memorial Hermann The Woodlands Medical Center has been a valued partner for many years, caring for the community and engaging in numerous community events and activities,

Continuing with the system's tradition of excellence, Memorial Hermann The Woodlands Medical Center houses the Canopy Cancer Survivorship Center. A first-of-its-kind facility, the Canopy Center offers an array of programs and services designed to address the emotional, physical, and social needs of those impacted by cancer.

In November 2019, the Memorial Hermann Health System announced an expansion of its hospital in The Woodlands to meet the needs of patients and their families in the growing Montgomery County community. The new South Tower will provide 8 stories of patient care and house areas in which patients, their families and guests can learn, connect, and relax. The new addition will bring expanded patient and operating rooms to the campus and feature new interventional laboratories to allow Memorial Hermann to better serve the needs of our growing community.

I am honored to join the countless friends and supporters of the Memorial Hermann

Health System in thanking and congratulating them for their decades of service, commitment to excellence in healthcare, and their dedication of the new South Tower of Memorial Hermann The Woodlands Medical Center.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the Senate has finally taken action, and now we move forward on our bill to answer President Zelenskyy's passionate plea to the United States and all free nations to stand with the brave people of Ukraine against Putin's deadly ambitions and heartbreaking genocide.

Putin's onslaught has been relentless. Beautiful town squares have been leveled, children have been killed, and families have been abused. The bill we sent to the President today will stop American dollars from funding Russia's bloodletting.

Today, Mr. Speaker, we are leading, and I thank Chairman Neal for his great leadership and his work on this bipartisan provision to suspend Russia's special trade status.

I was proud to have helped lead this bipartisan effort of the House Ways and Means and Senate Finance Committees. Both parties in Congress came together and worked in good faith on a bipartisan, bicameral agreement to immediately ban purchases of Russian energy and suspend our trading relationship with Russia and Belarus.

We don't take these steps lightly, but Russia's aggression requires this approach. Russia will no longer enjoy the same special trade status with America as the country it is invading so that it will no longer be able to sell made-in-Russia products into the United States at lower tariffs.

Combined with the energy import ban which targets 60 percent of what Russia sells us, this provision targets the remaining 40 percent, hurting Russia's economy and cutting off funding for its war effort. Said another way, American dollars will no longer fund Russia's war machine. This is another step in the right direction and includes further incentives for Russia to end its aggression.

This bill, by the way, includes tough but clear conditions to be met for restoring Russia's trade status--the same conditions as we are requiring to reverse the import ban on Russian energy products.

Going forward, we must continue to work closely with our allies to increase pressure on Russia and ensure this is an effective, global effort.

Neighboring Canada has also taken serious action to do both of these, and other nations have announced their intentions to do the same.

Finally, I am glad this bill no longer includes controversial changes to the Global Magnitsky Act sanctions authority. Instead, this bill merely includes a straight extension of the current Global Magnitsky authority.

Mr. Speaker, I am thankful that the Senate shared our concerns and removed that provision, and I reserve the balance of my time.

Mr. Speaker, I yield 1 minute to the gentleman from Nebraska (Mr. Smith), who is the Republican leader of the Trade Subcommittee.

Mr. Speaker, I yield myself the balance of my time.

This bill has overwhelming support. It is time to act now.

Mr. Speaker, I urge passage, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I join with Chairman Neal in urging the House to take the final legislative step to ending the flow of American dollars toward Russian oil that acts as a treasury for Russia's war machine.

Soon, President Biden will have on his desk a bill that demonstrates we stand with the people of Ukraine.

As Chairman Neal pointed out, the Ukrainian people have been waiting. The action we take today is long overdue but just as necessary.

Since we first debated this bill, the horrors of Putin's war in Ukraine have been on display for the world to see. Today, we will make sure American dollars will no longer fund Russia's war machine by blocking all Russian energy imports.

The bill also strengthens the sanctions by ensuring that before the ban can be lifted, Russia must meet three clear criteria: withdraws its forces from Ukraine; poses no immediate military threat of aggression to NATO; and recognizes the right of the people of Ukraine to independently and freely choose their own government.

This is an important, bipartisan victory. There is still more we can do and should do.

We should turn toward unleashing America's own ability to be energy independent, replace Russian oil with American sources, and use our energy strengths to wean the world from Russian energy.

Mr. Speaker, I yield 1 minute to the gentleman from Nebraska (Mr. Smith), the Republican leader of the Subcommittee on Trade.

Mr. Speaker, I strongly support this great bipartisan work from the House. I thank Chairman Neal and the Ways and Means Democrats for working together with us and the Senate Finance Committee. I urge strong passage in the House.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Madam Speaker, I was unavoidably detained. Had I been present, I would have voted NAY on Roll Call No. 98; NAY on Roll Call No. 99; YEA on Roll Call No. 100; YEA on Roll Call No. 101; and NAY on Roll Call No. 102.

Madam Speaker, I was unavoidably detained. Had I been present, I would have voted YEA on Roll Call No. 90; YEA on Roll Call No. 91; YEA on Roll Call No. 92; YEA on Roll Call No. 93; YEA on Roll Call No. 94; NAY on Roll Call No. 95; YEA on Roll Call No. 96; and YEA on Roll Call No. 97.