Kamala Harris Takes Aim at ‘Price-Gouging’ Drug Companies

Plus - Trump's tariffs aren't paying the bills By Michael Rainey Kamala Harris Takes Aim at ‘Price-Gouging’ Drug Companies Presidential candidate Sen. Kamala Harris (D-CA) rolled out a proposal Tuesday to lower drug prices by cracking down on pharmaceutical firms. The plan is similar to proposals from both fellow presidential candidate Sen. Bernie Sanders (I-VT) and President Trump, which would empower the federal government to set reimbursement levels for some drugs. Under Harris’s [proposal]( titled “People Over Profit,” the Department of Health and Human Services would have the authority to set a “fair price” for drugs based on the prices in other industrialized countries, such as Canada and Germany. Pharmaceutical companies would get hit with a 100% tax on profits generated by prices above that level, with the tax revenues paid to consumers as rebates. “As President, I will not stand idly by as Americans pay thousands of dollars for prescription drugs while big pharmaceutical companies rake in massive profits,” Harris said in a statement. Some other notable details from the proposal: - Harris wants to end the tax deduction for direct-to-consumer advertising expenses, which she said totaled $6 billion in 2016. The revenues associated with the elimination of the deduction would be dedicated to the National Institute of Health for research. - If Congress fails to act within the first 100 days of a Harris administration, the senator said she would “take executive action to lower drug prices herself,” including an investigation “of all major prescription drugs whose pharmaceutical companies are price-gouging patients.” - Drugmakers that are found to be price-gouging could face competition from lower-priced imports. - For high-priced drugs that were developed with federal funding, Harris would deploy the Bayh-Dole Act, passed in 1980, to “march in” and license drugmakers’ patents to competitors. Harris cited HIV prevention drug Truvada, which was developed using taxpayer funds and costs more than $20,000 per year, as an example. Debt Ceiling and Budget Deal Hinges on $22 Billion for Veterans Health Care House Speaker Nancy Pelosi (D-CA) said she’s “hopeful” that she can make a deal with Treasury Secretary Steven Mnuchin that would both raise the debt ceiling and set spending levels for the next two years. But an agreement had proved elusive so far, and lawmakers are beginning to talk about what to do if the deal falls through before the House leaves town at the end of next week for its August recess. One key point of disagreement is how to account for $22 billion in spending on veterans health care, Erik Wasson of Bloomberg News [reports](. Pelosi doesn’t want all of those funds to count against the cap on nondefense spending, though she has signaled that she is willing to negotiate on that point. A short term fix? Meanwhile, House Minority Leader Kevin McCarthy (R-CA) said that lawmakers should pass a 30-day extension of the debt ceiling if lawmakers and the White House can’t make a deal before Congress goes on its summer break. It’s not clear what a short-term extension would actually do, Roll Call’s Katherine Tully-McManus [said]( though waiving the debt limit until late September is one possible option. Probably not. With Pelosi focused on a two-year deal, House Majority Leader Steny H. Hoyer (D-MD) threw cold water on the idea of a stop-gap solution, saying Tuesday that House Democrats are “not interested in a temporary increase in the debt limit.” Hoyer said he thinks a deal could be reached “very soon,” with a floor vote coming next week if there’s an agreement in the next few days. House Budget Chairman John Yarmuth (D-KY) had a different take, however, [telling]( reports that he thinks the most likely scenario involves postponing any action until after Labor Day. Why it matters: The Washington Post’s Damian Paletta and Erica Werner [provided]( a reminder of what's at stake in the negotiations: “Mnuchin has warned that the Treasury Department could run out of money in early September if a debt ceiling deal isn’t crafted before the August recess, a position that some outside experts have also said is accurate. If the debt ceiling isn’t raised in time, and the Treasury Department is squeezed for cash, it could lead to a spike in interest rates and stock market crash, among other things, because it could call into question the full faith and credit of the United States.” Spread the word! Tell your friends they can [sign up here]( to get their own copy of this newsletter. Send your tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. Tariff Revenues Aren’t Covering the Cost of Trump’s Trade War According to data from U.S. Customs and Border Protection, the tariffs President Trump has imposed on Chinese imports have generated $20.8 billion so far, Ana Swanson and Jim Tankersley of The New York Times [reported]( Tuesday. Trump has [portrayed]( this revenue as a great victory, with billions of dollars “pouring into the coffers of the U.S.A.” But Swanson and Tankersley point out that the president has committed about $28 billion to payments for American farmers hurt by his trade war, leaving a net loss on that basis alone. The economic cost is no doubt considerably larger, since farmers aren’t the only ones being hurt by the tariffs, Swanson and Tankersley said, citing “myriad other businesses, including plane makers, technology companies and medical device manufacturers, that have lost contracts and revenue as a result of Mr. Trump’s tariffs and China’s retaliation against American goods.” And despite Trump’s insistence that Chinese firms are paying the tariffs, they are in fact coming out of the [pockets of American]( consumers and manufacturers. Writing in The Washington post Tuesday, economists Chad P. Bown and Douglas A. Irwin [note]( that tariffs were once a significant source of federal government revenues, but haven’t been so for about 100 years, as you can see in the chart below. 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So the Company Started Charging the Disabled, the Unemployed and Students]( – ProPublica - [Welfare's Once-Popular Cap on Kids Loses Favor in States]( – Governing Views and Analysis - [Abolish the Debt Ceiling — No Strings Attached]( – Catherine Rampell, Washington Post - [White House Expects a $1 Trillion Deficit in 2019, and Nobody Cares]( – Philip Klein, Washington Times - [Bidencare Has the Potential to Go Bold]( – Max Nisen, Bloomberg - [Joe Biden’s Health Care Plan, Explained]( – Matthew Yglesias, Vox - [The Capital Gains Tax Indexation Debate Is Back]( – Alan D. Viard, American Enterprise Institute - [Beware the Digital Tax Trap]( – Douglas Holtz-Eakin, The Hill - [How Bad Is the State and Local Pension Crisis Really?]( – Finn Schuele and Louise Sheiner, Brookings Institution - [A $15 Minimum Wage Is Exactly What Our Economy Needs]( – Reps. Mark Pocan and Pramila Jayapal, The Hill - [What Happens When No One Is Running the White House]( – Jonathan Bernstein, Bloomberg - [While Likely to Be Repealed, the “Cadillac Tax” Would Control Health Care Costs]( – Scott Eastman, Tax Foundation - [The House Should Repair, Not Repeal, the ACA’s Cadillac Tax]( – Howard Gleckman, Tax Policy Center [Like Us on Facebook]( [Follow Us on Twitter]( [Read Us On the Web]( Copyright © 2019 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( If someone has forwarded this email to you, consider signing up for The Fiscal Times emails on our [website](. Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.