The Schumer Manchin Inflation Reduction Act Could Kill You

Washington, D.C. – There’s something about the way laws are made and the impact they have on the nation that many people may not understand. Oh, they may know what it is intuitively, and that much of how Congress does its business doesn’t make sense, but they can’t explain why.

That means they can’t propose ways to fix it. This isn’t a failing on their part and it’s not because they don’t understand the democratic process or how a bill becomes a law. It’s the lawmakers themselves who have made the legislative process so opaque, with so many moving parts, that it’s hard for people who are not part of the professional political class to figure out what it means, how it works and how to improve it.

That’s useful to those who favor the continual growth in the government’s size and authority, especially at the federal level. The constant obfuscation allows deception and permits those few policymakers who are still politicians holding elective office to change positions on the spot without having to worry too much that the people who keep them in office will hold them accountable.

That’s how, for example, West Virginia Democratic Sen. Joe Manchin, who’d won plaudits for his opposition to President Joe Biden’s Build Back Better bill, was able to make a deal with Senate Majority Leader Chuck Schumer, D-N.Y., to produce, even take the lead on something which is called the Inflation Reduction act but is just a slimmed down, slightly less woke version of what he’d previously opposed. As a side note, it doesn’t do much of anything – say such neutral arbiters of its effect on the economy like the Congressional Budget Office and Congress’s Joint Tax Committee – to reduce inflation. According to them, it could make it worse than it otherwise might be before it finally levels off.

The Manchin-backed bill, which could just as easily and more accurately be called the Inflation Resuscitation Act as anything else, is chock full of the same kinds of tax increases, special interest spending, unnecessary regulatory crackdowns, sweetheart political deals (Arizona Sen. Krysten Sinema, we’re looking in your direction) and green energy mandates and subsides as Build Back Better. In the bigger picture, the differences between the two are insignificant enough that they hardly matter at all. Except that the Inflation Reduction Act could also be responsible for your death.

It won’t kill you, at least not literally, unless you happened to be walking by the U.S. Capitol when and if some unhappy Republican throws a bound copy of the bill out an open window and it lands on your head. It’s a big bill. What you need to know is the imposition of price controls on certain categories of prescription drugs contained within it will depress pharmaceutical industry research and development into new drug therapies by an estimated $663 billion according to a paper by Tomas Phillipson published by the University of Chicago.

Says the professor in an essay he penned for Newsweek, a reduction in funding of that size “will amount to a loss of 330 million life-years, about 30 times the loss from COVID-19 so far. The associated loss in value is more than $66 trillion, with longevity conservatively valued at half the amount used by agencies such as FDA and EPA.”

In layman’s terms, that means the cures that could be coming down the pike for Alzheimer’s, Parkinson’s disease and certain kinds of cancers – just to name a few of the ultimately fatal maladies we face as we get older – won’t arrive because they’ll never get out of the gate. Sorry, Boomer.

As Kevin Murphy and Robert Topel write in their study, The Value of Health and Longevity (also published by the University of Chicago) “Economic evidence shows that growth in life-expectancy is as important as GDP growth in lifting U.S. well-being. Put differently, few people would give up a year of their lives in order to gain an inflation-free year with marginally higher growth. Emphasizing the reduced economic effect of the so-called Inflation Reduction Act is akin to rejoicing that a hurricane spared the house, even though its owners died.”

This shouldn’t be hard to understand. If the legislative process and the impact of a given bill were explained to the American people with the same level of detail that goes into the analysis of the New York Mets’ pitching power, it wouldn’t be. So, without going too deeply into the weeds, if you accept that price controls affect profit margins by pushing them lower, you also have to accept they eliminate incentives to innovate.

Too many people, especially those who take their cues on economic issues from Karl Marx and AOC, view words like “capital, “profit” and “property” as dirty ones. When they are applied to the American model, they become glorious, responsible for the incentives that make living standards in the United States among the highest in the world and the envy of just about every other country.

The debate over this issue is not an honest one, with all sides getting a fair hearing. If it were, you’d know the vast majority of Americans oppose the idea of the government negotiating price controls with pharmaceutical companies when they understand the consequences that would ensue.

Government price controls are popular, according to just about every public poll, when people think all that will happen is the price of drugs will come down. Why pay more when you can pay less, right? When they learn it also means forcing manufacturers to negotiate on price with the government takes away from doctors the ability to prescribe medicines that in their opinion best meet the needs of their patients, the support for price controls drops considerably. A survey conducted by the Kaiser Family Foundation found support for capping schemes dropped the moment respondents became aware it might lead to less research and development of new drugs or limit access to newer prescription drugs. A March 2022 Ipsos poll conducted for the industry’s trade association found just 14 percent of those participating in the survey would support them if they resulted in limited access to newer prescription medicines.

If this information were planted as firmly in the public’s mind as the idea that the government can lower the price of drugs through negotiation or fiat, it would be easy to predict what the politicians would do. But it isn’t, so the fact price controls would kill innovation in the industry in the U.S., leading to the development of fewer breakthrough drugs is easy to hide.

The evidence is there if anyone cares to look for it. By burying their scheme in a bill that’s supposed to bring down inflation – and the pharmaceutical sector is one area where prices have continued to be relatively stable and have even come down – no one does. That’s the biggest benefit to legislating as Schumer and Manchin are doing. There are too many moving parts that will produce too many adverse outcomes for people to keep track of it all. The solution for the mess it will cause, when it comes, will be another big bill that doesn’t fix the problems the Inflation Reduction Act will cause while making the mess even bigger.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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