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>> the rules committee comes to order. i want to take a few minutes to read like our beloved colleague, smiling -- congresswoman jackie pelosi -- i was heartbroken when i heard the news last wednesday. he was a dear friend and someone who cared deeply about lifting the most normal among us. see serve as a missionary -- she

served as a missionary. he carried that same sense of service when she came to washington and we quickly became allies in the fight to end hunger. she was a partner in efforts to combat food balancers and. -- malnutrition. jackie also cochaired with me for the house hunger congress and was an interval player in securing the upcoming white house conference on hunger. he was michael leavitt in helping the biden-harris demonstration to do this conference so we go find a way to end hunger. we were on a call with the white house and affairs -- and ambassador rice before her

tragic accident. she worked across the aisle many food insecurity issues. because she believed in the power of generosity in helping those in need. we will all miss jackie. this is a loss not just for indiana but for congress, the antihunger movement, country. i don't that -- know that emma -- i know this is a terrible loss for you. before i go to my statement, i went to yield to our ranking member mr. cole. >> i associate myself with your remarks and i appreciate your -- you starting this meeting this

way. i need -- i met jackie before she was in congress. she never quit. see cap running and joined us in 2012 -- the cat running and joined us in 2012. she was impossible not to like. she always handled herself professionally and was those double with everyone she dealt with -- was so civil with every once he dealt with -- she dealt with. i know there is grieving with the loss and the country for her loss. i cannot think of anybody in america who would not proud -- be proud to have someone like

jackie walorski in the united states. we that it is impossible to overstate what losing something like that means to the institution. as you know, she was are represented -- representative on the ethics committee. i hate to use the word opportunity to serve on it but it is regarding the integrity of the institution and that is an issue that was before us. you would always appreciate the matter in which she handle it. the fairness in which she shared to callings across the aisle. she and her colleagues worked well together in the wake you hope the committee of that major evenly divided between the two parties and -- could operate so

i feel for loss personally and she had so many friends in this body. and was held in high esteem. she was a national leader on the fight against hunger. that is a working battle -- worthy battle. i went to join you in extending sympathies to her family and constituents and to all of our colleagues who are all reading -- grieving. and remember our friend mr. great served with her on the dean's committee and i want to thank you, mr. ranking member of the trip. you made the point of reading them all and they captured the spirit of the person in the quality of the person and the

loss to the institution that we all feel. i hope we can turn it quickly to dr. burgess. he now he has the association with the callings but with, --e mma. i hope everyone has a chance to reach out -- read the column on the loss of zachary and, --emma. i know we have staff that works try to sleep -- tirelessly. when you lose a member of staff in the course of doing your duty, we have lost members when we were here but usually with more warning. i don't think anyone in my time here were not stop -- in best

that she was working with her staff, serving her constituents and representing the south with honor and dignity and grace as she always did and we will mr. very much missed her -- we will miss her very much. >> can you hear me ok? >> we can't. --can. >> i am on the road back to the capital. this morning, we will have the funeral or the person who served as communication director. he was just 28 years old and he always performed so well never a

harsh word -- and always worked for encouragement. i went to associate myself about our colleague jackie walorski. i feel like you were better off it will be pup -- tough but we will carry on in her memory. thank you for allowing me to share that moment and i will yield back to you. >> thank you very much mr. burgess and mr. cole and we will miss jackie and zachary and emma . let's turn to what this hearing is about today. i know we have been called back to bc from our august district

work period but we have been called back for an important reason, to pass landmark legislation that will make enormous progress and delivered for the american people. we will consider the emotion to her the senate amendment to hr -- inflation reduction act. this bill will reduce health care costs and drug prices. it will extend affordable health coverage to 14 million the --, people, and cap insulin at $34 per month for medicare beneficiaries. i wish we could have done that for everyone but some of our friends at the senate have decided to frustrate the effort. it takes one big pharma, allowing -- second, this bill

will take historic action to address one of the biggest threats in our lifetime. the climate crisis. this bill will put us on a carbon by 40% by 2030, rapidly accelerating the adoption of renewable energy technology and creates good jobs. this will save the average family $120 a year. third, the inflation reduction act accomplishes these goals without raising taxes on small businesses and middle-class americans, and why would president biden's process -- promised to not to raise taxes on anyone making less than $400,000 a year. this raises taxes on only the highest earners and close tax

loopholes on profitable corporations and analysts predict this bill could reduce the federal deficit over $102 the next decade. we are saving money and lowering the national debt. all of these measures will boost the economy and tackle inflation. as an economy -- economist says -- no bill is perfect and there are things i wish we still included in this package. closing the carried interest loophole or funding for housing or -- for universal pre-k or nutrition programs. i was we got bolder about making sure every child in this country had access to a free school

meal. i wish the extension of the child tax credit was here. i wish we cap insulin for $35 per month for everyone. we cannot make the perfect enemy of the good and this is a big deal. the inflation reduction act makes transformational investment. it is the strongest possible version of this bill that can make it to the president's desk. we are taking action to lower drug prices, cut medical costs and provide cheaper cleaner energy all why -- while sided with the american families in putting people over politics. it is a big deal. it has taken its time to get here but i am proud of this process and i am proud of his consequential bill -- this

consequential bill. i will turn into the ranking member mr. cole for any remarks. >> this -- the majority is bringing forward a deeply partisan reconciliation bill. last year, -- at the time, economists warrant that spending this money would inevitably lead to inflation. we are facing now the worst information mary environment -- inflationary environment. today, democrats are bringing us another threat that will only make inflation worse and extend the current session. the same administration party, the service of the american rescue plan wouldn't spark an unprecedented session is now

telling us the latest backs on defense -- even and lincoln d recession. unfortunately, it will be the average american who pays the price they see your as the policies proposed in this bill take hold. that price will, in the form of war inflation, slower growth in a lower standard for living for every family. this bill is coming to us after a truncated process that prevented any house member of having input into the bill. it is better to say here is no process at all. this bill has not gone through any committee and is the product of a back room the association between two democratic senators. business as far from regular order as one can get. that a single house member has had any substantive and in this bill and the same could be said

for all but a small handful of senators. much like the infrastructure bill, this bill is -- having been left with a take it or leave it offer -- i am appalled that the majority is once again choosing to take it. i want it to -- to remind you something you said. the legislation proposed today is a case in point. this bill is lousy. to see why, let's talk about the policies. far and away the most dangerous part of the bill is the recovery taxes. there is a massive text increase

-- tax increase. despite the majority of these point -- claims to the contrary, these new taxes will follow every taxpayer and the irs will focus on different taxpayers. policies like these are bad enough in good times but raising taxes when we are in a recession, violence every basic principle of good economics. as senate majority leader schumer once said, you don't want to take money out of the economy when the economy is strengthening. -- shrinking. this is exactly what these policies have brought us to. i referred my friends to the open letter signed by over 230 economists warning that this bill will perpetuate the same physical policy errors that precipitated the economic

climate and they are correct. taxing and spending the wind majority is proposing to do will only make inflation worse and will bring about an even deeper recession. >> let's talk about what is not in the bill. there is nothing in this bill that will address inflation. this is probably one of the most misnamed bills brought before the body. inflation is the number one problem the nation is facing and it is astonishing majority would push forward this bill that will not help inflation and will make matters worse. there is nothing in this bill that addresses the current energy crisis. while my friends in the majority of arlington portends a billions of dollars into green energy

boondoggles, there is nothing in the bill that will lower the price of diesel or gasoline. nothing to ensure energy independence for america. it is bad for the nation and working americans. it should, as no surprise that not a single republican will vote for this bill, just as not a single republican then vote for the last reconciliation bill. i economists warning us -- one is been that it will lead to inflation. now they are warning us that this bill will make the inflation worse. democrats will do well to take that word seriously. all of the available evidence is that this bill will make inflation worse and will even and lincoln d recession and we cannot tax and spend our way into lowering inflation.

rather than complaining -- we should reject these policies and this bill. ideal back -- i yield back. >> i would like to insert things in the record. one by the statement by former treasury secretary's -- address our climate crisis and lower costs for families. larry summers was one of the former treasury secretary sue said that this bill fights inflation and my republican colleagues over the last several months left to quote him so i got you would be -- impressed by that. and we also asked unanimous consent to put into the record the letter by 100 leading

economists rosa, is last week urging we passed the legislation because it will have a positive impact on the economy and they say this is deficit reducing and it does so by putting dollar pressure on inflation. i want to talk about the process . it needs to be said. this package has been thoughtfully and thoroughly deliberated in both houses. -- that house and the senate. the senate spent hours considering the bill and went republicans use reconciliation to try to appeal deep affordable care act, i recall the most committee meeting to execute something like eight amendments.

i am proud of this process and that it has been used to consider -- this is how it should be done. last november, the health seminar versions of the bill to the senate after 13 jurisdictions spent over 165 hours racking up their visas. other amendments were considered and 22 republican men -- amendments were adopted. the two amendments that were adopted in the senate have been available since sunday and we will consider the legislation. we are having a regular meeting at the rules committee. it has been over 72 hours. let me contrast right -- contrast that with the republican effort to appeal the aca.

the republican majority still executed eight republican amendments over the course of the long stock. what republicans past their tax aid to give abrasions and wealthy people passive tax breaks, -- massive tax breaks, the senate made massive changes in handwriting. i get it. friends may not like the content of his bill and people can have debates over that but i think for the sake of the record, it is important to post the difference between how democrats and republicans handle this. our republican friends use reconciliation to -- at a tax bill that benefits the wealthy and date use it to take away

health care. we are using it to lower drug prices, to combat inflation, to deal with the climate prices and control health care costs and energy costs. there is a contrast so i will not apologize for this process because i think -- i am proud of this product. i think it is going to help people. let me turn to our witnesses to provide testimony on the inflation reduction act. our chairman -- mr. buyer and ranking member brady, we are all delighted you are here. i recognize the gentleman from kentucky. >> thank you very much. thank you ranking members of the

committee. it is honored to be in front of the rules committee to talk about the inflation reduction act and to reiterate much of what the german has said, -- karen has said, this is an important piece of legislation which will not just save american consumers and reduce their health care costs. it will also reduce energy costs and it will take the most significant is that we have ever taken to climate change. after listening to the chairman statement, i have to say that our staff must have worked together for the statements because the one that was drafted to me was almost identical to the one that i know the chairman gave. right, not one of those who subscribe to the often used

personnel. that everything has been said -- the rational theory -- congressional theory that everything has been set --said. other kids who are scared to death on what we are about to do because it is incredibly popular with american people and it does exactly what the american people want us to do, which is deal with climate change and health care costs and energy costs and all we can do now -- they can do now is scare tactics to take -- cast doubt on what will be a meaningful piece of legislation. a question of inflation -- we have heard a lot and we have

pretty did three different outcomes -- >> millions of analytics says that the american rescue plan spending contributed .1% of the 8.5% inflation that on average we've seen over the last few months. very minor portion of the inflationary factors that we're dealing with. so, it's not at all clear that it wasn't the american rescue plan that caused inflation, it was the things we talked about.

supply chain issues, the war in europe, many factors that are really unprecedented and we have not adequately analyzed. here the other thing, we're proposing to spend in this bill $400 billion over ten years. that's on average $40 billion a year. that is .2% of the $20 trillion budget. has going to be increasing. it will be smaller percentage. it defies logic, it defies every economic theory that small amount of spending in a maxive economy is going to effect inflation any measurable way. we're going to hear lot of increasing taxes. let me say that what the republicans saying is totally

wrong. what they are saying -- it's very safe to say, not one american making under $400,000 will see their federal tax bill increase by one penny. the only thing that the republicans are trying to twist in terms of calling it a tax increase is it notion that the person we're raising tax on the most profitable corporations, somehow they'll pass that on to consumers and it will raise their cost and therefore, they are calling that a tax increase. that's not a tax increase. no american will see their federal tax bill, no american making less than $400,000 see their tax bill increase by as much as a penny. i wish we put in this bill, we

didn't, we got an adequate substitute. i wish we dealt with carried interest. we had to take that out to satisfy senator sinema in the senate. we added a 1% surcharge, excise tax or stock buyback. if you recall back in 2017 when the republicans use the reconciliation to pass their massive tax bill to the wealthy corporations and individuals, the promise they made to the american people was, if we lower corporate taxes, 35% to 21% they will take that money and create jobs. we found out in dramatic fashion, was that wasn't the case. as a matter of fact, what happened is, corporations used that tax break to increase

dividends to their stockholders. it's entirely appropriate that we now impose this excise tax 1% on stock buybacks so that massive tax increase that they were given back in 2017, we can get a little bit of that return to the american consumer. with all of those things, i want to conclude by saying, that as chairman mcgovern said, we liked to seen a lot more. we would have liked to see extension of child tax credit and early childhood education. many other things that are important investments for the future of this country. as the chairman said, which i most every democrat agrees, this is still a very important move forward. on the issue of climate, i was asked the other day, well, the

world doesn't think we're doing enough in the united states. that was true. what this bill does, it leapfrogs us ahead of virtually every other country in the world in terms of our commitment to deal with climate change. we will, in fact, become leaders in the effort to combat climate change. that's something i will take pride in. with that, i thank you for time and i yield back. >> thank you very much. i yield to ranking member jason smith. welcome. >> thank you mr. chairman. america is in a recession. under biden's inflation crises, under the wreckless spending policies of the democrat one party rule in washington, americans see their real wages have gone down 4.5%. just this morning, we found out

that inflation was up 8.5% last month. since joe biden became president inflation has risen 13.7%. remember when everyone was saying it was transitory. now they haval piece of legislation trying to reduce something that they didn't believe existed. americans are paying $5900 more this year because of democrats wreckless spending. i wish we can do something about that. we are not. democrats will claim this bill will reduce inflation. naming a bill something does not make it so. the congressional budget office, over 230 economist and even the senate budget chairman bernie sanders, have said that this bill will either do nothing to address inflation or will actually make it worse. it's not hard to see why.

this bill is more of the same taxing and spending from washington democrats. $745 billion in spending when you sunset policy. $599 billion in budget gimmicks and new taxes being thrown on an economy that is in recession. another $146 billion in debt. in fact, even accepting the democrats program sunset in this bill, it still adds $54 billion to the debt over the first five years. 80% of the bill so called savings, do not show up until after the year 2029. democrats will claim they are not raising taxes on hard working americans. the main architects of this bill, senator manchin and senator schumer, are both on record saying they opposed raising taxes during a recession.

this bill is reversal. $17 billion of this tax increases fall on taxpayers making less than $200,000. half of this bill tax increases fall on taxpayers making less than $400,000. this bill funnels $80 billion to the i.r.s. so it can target more americans, so it can conduct more than one million additional audit per year on american making less than $200,000. this is not about going after wealthy americans or corporations. this is about hiring 87,000 new i.r.s. agents. the democrats can implement their plan to snoop on the bank accounts of middle class american. democrats claim this is a massive down payment on the green new bill agenda. with that, i couldn't agree more. over half of the spending in this bill, more than

$400 billion goes to all sort of green new deal program. another $1.3 billion to produce the resell value of electric vehicles. you have $1.5 billion for free equity and another $1.9 billion dedicated in part to fill gaps and canopy coverage. $362 million to help corporate america to build greener buildings. how is that going to fix the supply chain? $12 billion in if you taxes on american made energy, further raise the prices at the pump. the inflation expansion act will do nothing to solve the crises

facing americans. whether it's high prices on groceries and gas, supply chain problem, labor shortage, spiraling debt and now a recession. our democratic colleagues trying to spend their way out of inflation and tax their way out of a recession. it will not work. the american people should not be asked to foot the bill for more of the same failed policies. congress should be focused on fighting inflation. not making it harder for for folks in this country to provide for themselves and their families. i yield back. >> thank you very much. chairman pallone. >> thank you chairman mcgovern for the opportunity to speak before you today in support of the inflation reduction act. thank all the members of the rules committee. this is landmark legislation that will help reduce costs for american families while aggressiving -- aggressively

attacking climate crises. i wanted to focus on the climate and health provisions in this legislation. much of that came from the energy and conference committee. the bill tackles the climate crises and protects our communities from devastating impact because it's a single largest investment in climate action in american history. it makes investments in climate, clean energy and environmental justice while creating new clean jobs and lowering energy costs. one study of the legislation found that the average american household would save $1800 a year on energy bills. this will slash climate pollution 40% by 2030 and puts us on a track to meet our aggressive climate goals. i'm pleased that the bill includes climate and clean energy provisions. the methane emissions reduction

program takes bold action to drive down dangerous methane pollution from the oil and gas industry by stirring innovation. the greenhouse gas reduction fund unprecedented $27 billion to deploy low or zero emission technology nationwide and harden our most vulnerable communities against climate disasters. these and other key provisions such as common sense investments in clean heavy duty vehicles and home energy efficiency upgrades make this one of the greatest victories to helping our climate and community. the bill is one of the most significant pieces of healthcare legislation. it breaks big pharma's monopoly on prescription drug prices. it will lower drug cost for seniors and capping the amount seniors pay at $2000 annually.

it also caps the close of insulin at $35 a month for medicare beneficiaries. nearly 20 years ago, republicans prevented the federal government from negotiating fair prices for seniors and this legislation reverses that egregious thing. it was totally inappropriate to put in medicare part d that we did not negotiate drug prices under medicare. republicans insist the on that and it was a gift to big pharma. now reversing that is going to save seniors and medicare and the federal government a lot of money. the legislation finally levels the playing field and will help ensure seniors are no longer price gouged at the pharmacy counter. it penalizes big pharma by unfairly hiking prices on seniors by linking the price to inflation. if they go above that in their prices and have to pay a rebate back to the federal government.

i'm pleased the legislation will dramatically lower the cost of monthly healthcare premiums. this is the affordable care act provision for million of americans to provide families with a peace of mind. five million americans have gained access to healthcare coverage offer the last two years. when we passed the american rescue plan last year, we provided additional financial assistance for more americans by enhancing the affordable care act marketplace premium subsidy for lower income and middle income americans for the year 2021 and 2022. this makes a real difference for families delivers average savings $2400 to a family of four. i'm pleased that this legislation will extend our effort for three more years.

today marks a break through in response to climate crises. it's critically important that we pass this bill this week. i heard you, chairman mcgovern, talk about how significant this piece of legislation is. i don't think there's anything, maybe with the exception of the affordable care act when it passed over a decade ago, that i'm more proud of these provisions that came out of our energy and conference committee. they are going to make a difference not only to the average american but also to what we mean as a country. thank you, again. >> thank you very much. ranking member rogers. >> thank you mr. chairman. i wanted to start out by thanking you for your inspiring tribute to our dear friend and colleague jackie walorski.

i appreciate you starting this meeting by celebrating her life and her legacy, her leadership in the house. we're all going to miss her. my hope and prayer is we will gain inspiration from jackie to live every day as if it were our last. today, we're at the rules committee. having the same conversation we had almost a year ago. testifying on a proposed massive tax and spending spree by the majority. i'm very concerned about the destruction and harm it will have on our economy, our energy secure and medical care. since under the democrats one party rule, we seen inflation continue to spiral out of control. record level and healthcare costs continue to find, families can't find baby formula and we are in a recession. here we are again debating the same destructive policies under a new name.

the inflation reduction act. i thought tom cole summed it up well. grossly misleading. there's no evidence that this legislation will fix the inflation crises. inflation is an ugly tax on every part of everybody lives from the gas pump to the grocery store. this legislation continues president biden's war on reliable and affordable energy, american jobs and cost of living on hard working american. it will increase the pain at the bump by doubling a tax on refiners and crude oil importers. the natural gas tax will raise cost across-the-board. on everything that comes from natural gas from heating our homes to fertilizer and food. this legislation will send billions to use chinese supply chains to make solar panels, wind turbines and electric car batteries for the rich. for example, consider the epa,

epa budget is tripled. there's $27 billion for national climate. $3 billion in environmental justice and climate block grant program, $5 billion for pollution reduction grant program. a billion for electric garbage trucks and school buses. the department of energy, there's $9 billion for rebate program for electric appliance heat bumps and energy efficient home retrofits. $1 billion to ban fossil fuels, $2 billion for private entities. $200 million to train contractors. an energy company told me last week that without a strong energy mix, that includes natural gas, their customers, electricity bills would double. they said that we need to keep

cost affordable. we need to remember this scandal when they defaulted on $500 million a loan from d.o.e. even worse, $5 billion in taxpayer dollars to cover credit subsidy cost that companies take on these loans that in the past, the panes would have to cover. i would ask, how are we going to make anything in america, how we're going to mine, manufacture, process and build in america without permitting reform. this bill does nothing to include meaningful reforms. what we saw in the senate, the democrats were united against necessary permitting and regulatory reforms. the president continues to block mine and the president and the administration continues to shut down energy infrastructure projects. there's little trust that we are

going to see the majority come to the table on these reforms. regarding the healthcare provisions in this tax and spending spree, i'm very concerned that it will continue, the democrats march towards socialized medicine instead of working on bipartisan lower costs, legislation has been introduced. we got several provisions signed in law. it would cap what seniors pay on their out of pocket for drugs without jeopardizing innovation. unfortunately, this legislation resurrects speaker pelosi's government price control. the legislation, the idea that failed in the energy and conference committee. their scheme will lead to fewer cures in america. i'm very concerned it will

embody -- embolden china's legislation and communist party grip. according to cbo, price controls will lead to 15 fewer drug and treatments coming to the market. other studies suggesting, we could see more than 100. majority democrats stated that this is the price we are willing to give secretary becerra. that price can be hope for patients with cancer, alzheimer's, parkinson, als, hiv aid and much more. cbo confirmed with these price controls which tie drugs covered by medicare to biden's inflation crises will lead to higher cost of future drugs when they

launch. despite the promises for lower cost, this will mean americans will pay more at the pharmacy counter. shockingly, there's no pricing floor for the so called negotiation price. meaning that healthcare bureaucrats can force a drug company to accept a figure as low as a one dollar. that's not negotiation. that's extortion. it's going to drive medical investments overseas into the hands of the ccp. we'll ensure that american seniors no longer reap the benefits of cutting edge medical innovation. the democrats aren't using the supposed savings from the price controls on improving healthcare for seniors. instead, subsidizing obamacare. if this legislation is passed, ten years from now, seniors will end up with no certainty that medicare will be able pay for their healthcare. i will close with a picture where this scheme leads.

blackouts, more unaffordable electricity bills. more tax hikes. jobs. no hope to secure diseases. long lines begging the government for more life saving treatment. harassing hard working americans weak american defenses against adversaries like china and russia. republicans stand ready to lift the regulatory burden, and lower healthcare costs. that's what the american people rightfully want and deserve for a better quality of life. thank you. >> thank you very much. chairman beyer. >> mr. chairman. i appear to testify today. let me begin by saying this morning we found out that inflation last month was 0.00%. that was the inflation from june to july. we come a long way adapting to

the supply chain of covid and russia and ukraine war. gas buddy said the average price of gasoline in america was under $4. we note that we are not in a recession. we delivered 528,000 new jobs in the month of july. 9.5 million new jobs in the first year and a half of the biden administration. national bureau economic research, which is the entity designated -- said that we're not in a recession. there was a small 2nd quarter dip in gdp. due to the selloff of inventory across other businesses. inflation reduction act represents the most substantial commitment to addressing the threat of climate change in our history. it may be the most important environmental legislation that congress has ever created. this bill invest $369 billion in

creating clean energy, clean transportation and energy efficiency. this investment will help achieve an estimated 40% reduction in carbon emission by end of the decade. it will help us keep the commitments we made at cop 46 in glasgow. we're delivering real financial relief to american families. it will reduce by $300 each year. this legislation makes enormous strides for americans struggling to pay for prescription medications. for the highest price prescription drugs, without competition, the bill empowers medicare to negotiate prices with drug companies. this is not price control. the secretary required to set the price based on statutory factors and among others.

this is just a negotiation that is the very essence of capitalism. these reforms that seniors and people with disabilities deserve. overwhelming majority of americans supported this negotiation. it's what they want. the $35 cap on monthly influence copays, terrific. i'm deeply disappointed that the senate republicans blocked that

same $35 cap for million of insulin users with private insurance. that battle is not over. this battle lowers healthcare cost for the millions of americans by expanding the affordable care act tax credit. with this bill, large, hugely profitable corporations will finally pay their fair share just like normal americans do. we accomplished this with 15% corporate tax. claims by corporations and the wealthy that this package will raise taxes on working families is false. five former treasury secretary, democrat and republican administration came together to issue a joint statement calling out this lie. taxes will not increase for any family making less than $400,000 a year.

we also push back that to my friend ways and means, this is not 87,000 new agents. only 11% of i.r.s. employees are agents at all. the current estimate now is the money spent on the i.r.s. over the years will restore the staff to what it was 12 years ago. instead, what it will do allow us to address the 10.2 million unprocessed individual claims that are sitting in i.r.s. cafeteria around the country. it will use. proceeds in climate and access to lifesaving drugs. finally the legislation will

improve services for all taxpayers and make sure that taxpayers with armies of lawyers can no longer shirk their tax obligations with immunity. this transformative legislation is for american pocketbooks and health. i look forward to responding to your questions. >> thank you very much ranking member brady. thank you for being here. i know you have to catch a plane. normally the rules committee will stay here until everything has been asked. i know you're going to indiana. whenever you need to leave, just let us know. we welcome you. >> thank you, chairman mcgovern and ranking member cole. thank you for your tribute to our colleague on ways and means jackie walorski. she was a happy hoosier.

there was nothing jackie couldn't do. we are all shocked and heart broken, yet grateful to be her friend. in the ways and means committee we set up a tribute at her seat where she loved to serve and where she's shown so brightly. thank you for all your prayers. i will be leaving catching the airplane to be at the service here soon. unfortunately, the senate's latest biden version of build back better is a hoax on the american people. this don't say inflation or recession act, fails to reduce inflation, fails to reduce the budget deficit and fails to reduce the world temperature. if the green new deal and corporate welfare had a baby. it would look like this. who pays to raise this poor child. made in america manufacturing, small businesses and wal-mart shopper. who in their right mind raises taxes in a recession?

the answer is president biden and congressional democrats who bungled this economic recovery. other countries are lowering their taxes to fight inflation only democrats think this is a good idea. the biden economy is a very cruel economy. the family skipping meals, eliminating meat and using their credit cards to pay for daily essentials. food inflation is not 0.0. it went up 12.9% this past year on families. inflation is so bad, one out of four americans are delaying retirement. we have a shrinking economy, shrinking paycheck and a shrinking workforce. president biden likes to brag he created nearly 10 million jobs. he's in denial that president trump created 12.4 million jobs

post-covid and lowered unemployment 3.5% for the first time in half a century. here's the difference, under republican leadership, paychecks grew twice as fast. the economy was surging not shrinking. 600,000 more americans were working then than under today. in the impact of $350 billion in taxes, you'll see higher taxes on companies that build here in america. it will kill jobs, slow the economy and raise prices. small businesses who hire nearly half of our workers in america, will have a harder time surviving. in this $50 billion in higher taxes, falls on small business owners who file as individuals. it's unbelievable, raising taxes on companies that reinvest in their own stockholders hurt seniors and other savers.

new energy taxes will drive up costs for families. all senate democrats including vice president harris, voted for higher taxes on these small businesses so they can protect the millionaires and the billionaires. our democratic colleagues love the wealthy. but not so much middle class families. the joint committee on taxation, not larry summers, not list of liberal economist, the joint committee on taxation reports taxes on americans will rise for nearly every income level. i hope no one is tweeting out that no one penny of taxes will be raised. i'm afraid that account could be suspended for misinformation. this bill unleashes 87,000 new i.r.s. agents on american

taxpayers targeting families, farmers and small businesses. the congressional budget office confirmed the largest part of any new taxes collected will come from middle class families. the biggest target wal-mart shoppers living paycheck to paycheck under president biden's raging inflation. with fuel cost making it hard to just drive to the store. they will be hit with 710,000 new audits under the democrat's bill due to the skyrocketing surge of new i.r.s. agents. it's simple. don't say inflation or recession act, contains no language protecting middle class taxpayers. not one sentence and not one word. don't let anyone try to fool you there. this bill democrats love the wealthy. under that act nearly quarter

trillion dollars in green new deal subsidies go to the wealthy into the biggest most successful businesses in america. these are government checks written to the wealthy even if they don't owe any taxes. a single working mom get hit with a tax hike starting next year according to the joint committee on taxation. her taxes will be sent in a government check to a large successful corporation. a yard man will send his taxes in government checks to the families who's lawn he's cutting, so they can by buy an $80,000 luxury vehicle. congress is non-partisan score keeper university of chicago,

all confirmed this socialist price fixing scheme could be a death sentence for some patients. raising cost of new drugs. healthcare inflation is already up 17%. yet, untargeted extension of pandemic era obamacare subsidy do nothing. they provide more affordable healthcare to some jobless than those who reconnect to work. making the workforce shortage even worse. democrats hide the true quarter of trillion dollar cost of making these obamacare subsidies permanent. creating a massive funding cliff despite senator manchin's pledge not to do so. higher taxes, more i.r.s. audits, wal-mart shoppers, greater inflation including healthcare and drug prices will hurt americans as we enter a recession. at the end of the day, you got

to ask yourself, you trust the same president and the same democrat who drove this economy into a recession and drove prices sky high. yet, another economic recovery bill. i urge my colleagues to vote against it. >> thank you very much. i'm going to yield to mr. cole. i think he has couple of questions for mr. brady. i wanted to make sure he get his questions in. then i will ask my end and we'll go back to mr. cole. then rest of the panel. >> thank you very much. we certainly appreciate your indulgence. i will try to be quick. my friend can leave at any point. we know you got important business to take care of. mr. brady, president biden pledged that there wouldn't be tax increases for any americans making less than $400,000.

however, direct tax increases is not the only way to take money from americans. the legislation before us today do what senator schumer and president biden committed to? just close so called corporate loopholes. is it more nefarious than that? >> look, don't take my word for it mr. cole. the joint committee on taxation and independent scorekeeper has reported that almost every income level in america will see higher taxes because of this bill. clearly, you'll see higher inflation because when you tax made in america manufacturing, you know those taxes end up in higher prices. small businesses as well, who will frankly shoulder about $50 billion tax hike here, making it harder for them to write off their losses in bad times as they trying to recover.

you'll see that reflected in higher prices as well that land on americans. of course, the energy taxes super fund taxes and methane fees, they will end up in higher energy prices. often times, more so in the northeast. again, landing on those wal-mart shoppers that are struggling the most under this president's cruel economy. you can't deny that these amounts, billions of dollars of tax hikes won't end up landing on american families and joint committee on taxation report makes that clear. >> one last question. you and i were both in congress when president obama's i.r.s. was found to be targeting conservative groups by misusing his authority surrounding the approval of not for profit status. under this bill, as you pointed

out, the i.r.s. will receive $80 billion to hire 87,000 new agents. do you have any concern about providing the i.r.s. with this amount of money and personnel and no guardrail and accountability? >> every american should be concerned. senate democrats made it clear, they will not put any language in here this bill that protects those wal-mart shoppers and middle class families from those army of i.r.s. auditors. it is clear in the bill, even with backlog of 20 million tax returns and an i.r.s. that rarely even answers the phone, there's 14 times more money here for the i.r.s. army of agents than there is for customer service. taking a look at what the congressional budget office showed about the increased audits by going back to those 2010 rates which will bill does. you will see increased audit at

every level of the i.r.s. and at every income level. i worry because the i.r.s., unfortunately, has track record of targeting americans based on their political beliefs. we saw that certainly under president obama. we saw that last year as under president biden, you saw both more targeting of faith-based organizations. you saw the biggest leak the private taxpayer information in american history to which an investigation has not yet been concluded. there is, of course, a real concern now that the i.r.s. will be weaponized against middle class americans. i do have real concerns about the amount of money and where it's being used. there's no question as republicans, money that was

really focused on customer service working out this backlog, helping families struggling with inflation, who want their tax refund back, there's no question we would have been happy to work with this administration and our democratic colleagues. in this case, you cannot deny with the credible face there will be new army of i.r.s. agents and they will be landing on the wal-mart shoppers of america. >> thank you very much. thank you mr. chairman. your indulgence. i yield back. >> thank you. mr. beyer is there anything in the bill raise taxes on $400,000 or less? >> absolutely not. there's nothing in this bill that suggest this will go only 11% i.r.s. employees are that. mr. chairman, i have a erecent

page on joint committee taxation. taxes go down in the first nine categories next year. not until 2027 taxes go up .1 of 1%. for people making more than $200,000. the whole point is to race taxes -- 95 is the biggest corporations in america pay zero in corporate taxes. only saying if you make more than a billion dollar a year in profit, you have to pay 15% minimum tax. >> basically the people who are opposed to this bill want to tax billionaires? >> this is take the tax cheats to avoid all taxes. >> i've been watching the news shows and we heard it from here today from the some of the testimony. there's a scare campaign going on. i think the republicans do not want to talk about lowering the

cost of prescription drug for people or investing in effort to combat climate change or lowering healthcare costs or energy costs. they want people to look some place else. now we're hearing about this army of i.r.s. auditors. just for the record, am i right, is charles redick, the commissioner of i.r.s. -- >> i'm hoping that wasn't one of the crumb -- corrupt i.r.s. >> who appointed pim? >> president donald trump. >> this is trump's commissioner of the i.r.s. who we're talking about here today. let me read from a letter that he sent to the house of representatives on august 4th. he said these resources that are in this bill are absolutely necessary. these resources are not about increasing audit scrutiny on small businesses. as we've been planning, our

investments is designed around the department of treasury directive that audit rates will not rise for households making under $400,000. other resources will be invested in employees that will allow us to better serve all taxpayers including small businesses and middle income taxpayers. enhance i.t. systems and taxpayer service will mean that honest taxpayers will be better able to comply with the tax laws resulting in a lower likelihood of being audited and reduce burden on them. that is a letter to all of us. this is donald trump's appointed commissioner of the i.r.s. you know, it really -- one of the things people hate about washington and about politicians, people exaggerate the truth. they go to remarkable extremes.

show me showed me a tweet that our former colleague and former governor nikki haley tweeted. biden's i.r.s. will have more staff than the pentagon, state department, fbi and border patrol combined. that's the tweet that she sent out. i heard people repeat that. it's a ridiculous claim. i'm not quite sure where it started. i don't know about you, mr. beyer, we're getting lots of calls to my district office from constituents who are owed money by the i.r.s. a lot of time has gone by. they are wondering where the hell is their check. they have questions and they can't get their calls returned. all because there's this huge backlog. they actually believe we should invest more so that their

returns can be processed in a more timely fashion. estimated staffing number is provided over ten years. many of the additional staff will replace a significant number of people who are retiring, about 50,000 expected to leave over the next six years. let me say it clearly, at no time will the i.r.s. have 87,000 new auditors. when they say more employees than the pentagon, what the hell are they talking about? i wasn't very good in arithmetic. you do a google search and you

can figure this out. there are currently seven times as many civilian employees at the the department of defense than the i.r.s. if you include military personnel, it's 35 times the size of the i.r.s. then we add in all these other departments. to say that, to try to deliberately scare people by misrepresenting the truth so deliberately it's unconscionable. i ask everyone stop spreading this misinformation. i get it. maybe you don't want funding for the i.r.s. because you believe that millionaires and billionaires should escape paying taxes with impunity. big corporations should not pay their fair share and get away with it. more funding means more resources to crack down on wealthy tax cheaters and

corporate tax dodgers and more funding means that my constituents, those who shop at wal-mart and those who are struggling to make ends meet, can get their refunds on time. it's a big deal for them to get their refunds. i think it's important to clarify the record. i don't know if you have anything to add. >> 10 million backlogs. you can't address that without more people. there's nothing in this bill that says how the money has to be spent. by the way, the i.r.s. uses software from the 1960's and 1970's. huge of this is to up do the information technology systems to the 21st century. to deal with this huge backlog. >> i heard a number of claim and

fear mongering about the impact of this bill. chairman yarmouth, how does this bill lowers energy cost for americans? >> thank you chairman mcgovern. what it does, ultimately, give provides tax credits for people to not just by electric vehicles. i'm amused by the rhetoric of our republican friends who talk about luxury vehicles from $80,000. that's the cap on what you can get a credit for. plus, there's also an income level cap of $150,000. the wealthiest people can't use this credit at all. you will be able to have moderate income people be able to $4000 dret -- credit to save

on their energy costs. you have money in this bill to combat -- to mitigate discrimination that affected rural farmers, women, minority farmers, native american farmers. lot of those programs will help increase the income people who have been discriminated against hickly -- historically. what you have is, overall effort to provide incentives for people to invest in solar and other renewable energy sources that will over time significantly reduce their overall energy expenditures. >> mr. pallone, do you have anything to add?

>> the bottom line is that if we continue to rely on fossil fuels, is there primarily from volatile countries. it's a monopoly. it just keeps driving up the price. as you move towards renewables, you're less relying on this vol fill fossil fuel market. as a result, energy prices start come down. the average person pays less. it's that simple. we just can't continue to rely on all these terrible countries overseas, volatile places, venezuela, places that have all kinds of political problems. because, ultimately, it cost us more. it's not only a question of addressing the climate crises and the weather conditions. even the weather conditions, one of the reasons we have problems

with the electricity grid is because of increased in climate change and hot weather and storms and tornadoes and all of that. essentially, what we are doing between this bill and the infrastructure bill that we passed, is hardening the grid. making it easier to move towards renewable. which in the long run, will be much more reliable and bring costs down. long-term, i have a statistics here, i don't want to keep talking, i know that some have to go. i have a statistic here that shows an analysis that found that this bill will save households between $170 in reduce electricity price. we're talking about lower prices for everyone as we move towards renewables. >> thank you. the gentle lady from washington

said in her opening statement that this bill will hurt senior citizens. aarp disagrees. they just sent us a letter on behalf of 38 million of mayor -- their members asking us to pass this bill. they said, the legislation will also give peace of mind to millions of seniors with high drug cost by capping their out of pocket part d spending at $2000 per year. i ask unanimous consent to put that in the record. let me say, allowing medicare to negotiate cheaper drugs and capping the cost is why we popular amongst democrats, independents and even republicans. 73% of the american people support allowing medicare to negotiate prices. 73%. 76 report capping cost. 76%. who doesn't support this?

big pharma doesn't support it. let me ask you chairman yarmouth, how would this act reduce out of pocket cost for medicare beneficiaries? >> you're saving a lot. you're saving millions of americans significant amounts of money. we have many seniors who pay 10, $12,000 or more if they get a cancer diagnosis or another serious illness. when you cap out of pocket expenses $2000, you're saving them enormous amount of money. to be honest, i support the cap,

i don't really like the way it's being done because all we're doing is essentially subsidizing the pricing of the pharmaceutical companies who are making it. i wish we could actually just win the negotiation portion of the bill kicks in 2026. for the next years, we'll be subsidizing their prices today. in terms of the medicare beneficiary capping their out of pocket expenses $2000, it's an enormous benefit. >> mr. pallone, you want to add? >> let me say this. i don't like use the term egregious, i did in this case. i think when the republicans

initiated medicare part d and they insisted on putting in prohibition to negotiate prices by the government, what they did was stifle competition. in other words, every other country in the world negotiate prices because you have ability to do that because you're buying so much drugs through the medicare program. why in the world you not use our -- [ indiscernible ] in a competitive way. if you want to sell all this stuff to the u.s. government for medicare, then you're going to have to negotiate with me. why put in a prohibition that --says you can't? the government could have or they could not have, they could have chose to. they specifically said no. i was there. we're not going to do it. it's a give away to them. that's the biggest problem. every time i tried. i don't want to get into and be

too partisan. that's one thing the republicans would not want to touch. any time we would say, let's talk about lowering drug costs. they might talk about the rebate, the inflation factor. they might talk about capping out of pocket cost. they would never agree to have government negotiate prices. we know that's the biggest thing that brings down prices. every other country in the world does it. we supposed to be an example. why say we can't do it? it's not fair. it's not fair to the seniors. that's the biggest thing that will lower prices for senior citizens in the drug market. >> thank you, mr. beyer? >> very briefly mr. chairman. i think one of the things that was raised by the gentle lady in washington and texas. is the notion we won't develop any new drugs.

the cbo suggest that 1% of new drugs for the next 30 years will not be developed. 99% of the new drugs will be developed. at the same time, today, 25% of americans can't afford the drugs they are already prescribed. it's seem like a huge win to make drugs affordable. by the way, the 99 that will be developed, 99 will have the greatest impact only people's lives. >> just one last question. i just want to make sure. the current commissioner a virus was appointed by which president? >> i believe president trump. >> let me close by saying that

we are here today to lower costs for hard-working american families. -- by 2030. and this bill will start to unrig our tax code by finally making corporations and the wealthy start to pay their fair share in taxes. my constituents all have to pay their fair share. why is it that we have a system where millionaires and billionaires and big corporations can get away, as you pointed out in your opening, by not paying any taxes at all? it is outrageous, an insult. we are doing this all while actually reducing the deficit. i want to point out for the record, something my friends who were last in charge did not care much about. we are actually doing that. this is a good deal for hard-working american families. i am proud to support this

historic legislation and with that i am happy to yield back to my colleague from oklahoma. >> we know you have got to go, but before you do, if you care to respond to anything i want to give you that opportunity. >> thank you. look, when you are selling a hoax to the american people, your best hope is to cry misinformation. but unfortunately, americans can read this bill. i would like to submit the record that the congressional budget office that makes under this, audit rates will quote, rise for all taxpayers. if this would return audit race to the higher level of 10 years ago, then it is virtually impossible for democrats to squeeze enough money out of the wealthy to meet the dollars in this amount. and without question, families making under $200,000 will end

up paying for the vast majority of any new revenue collected under this bill. that is one correction. secondly, democrats probably ought to read their own bill. in this while they say there is no money for much enforcement, there is over $45 billion devoted to more irs agents. a fraction, $3 billion, for customer service. in fact nothing in this bill requires the irs to address the backlog at all. and i have been referencing the obama years with the irs targeting when we saw corrupt irs. commissioner reddick is doing his best at this job, but he, unlike democrats, were not pushing for a private bank surveillance team that would be a dangerous attack on the privacy of families, small businesses, and farmers.

final point, while i love this misinformation about negotiation of drug prices, can you imagine if the federal government walked into, say, a car dealership and said we will set the prices for your vehicles for every buyer. and if you don't agree with us, we will take 95% of the cost of every vehicle that you have. how many auto dealers would say, well, that's a fair negotiation? by the way, since i can no longer afford to sell your vehicles, how many more new vehicles and late models and new innovations will i build if you are going to take virtually everything that i spent developing those new vehicles? that is what is called negotiation in this bill. i will point out, every democrat in congress voted against prescription drug programs for medicare.

in fact, then leader nancy pelosi said it would be the end to medicare as we know it if congress provided life-saving medicine to our seniors. yet today, thanks to republicans, 50 million or more seniors rely on this plan for life-saving measures. in this bill, our democratic colleagues through this up as much as you can. you will see higher prices for new cures and treatments if they are developed. and while some say, oh, don't worry, only a few cures will not be developed. what if that is your cure for alzheimer's, for dementia, for parkinson's, als? the most expensive drug ever is the one that is not developed because of this government. there's no question as well the design of this is so bad, it will actually encourage drug manufacturers to raise prices up

inflation each year. and they goof up the medicare d benefit so badly, the redesign results in higher part d premiums for seniors, so much so, democrats had to put $40 billion in the hope they could keep these prices down for seniors. so at the end of the day, there is no question about this. these taxes will land on middle-class families. you can deny it all you want, but it will. it will drive inflation further. and there is no question irs audits are going to land on walmart shoppers no matter how much you deny it. i yield back, and i apologize. i will be heading to the airport at this point. >> thank you very much, and thank you for your indulgence so mr. brady can go about his business. i will move on with my questions. mr. smith, last time you were

before us to discuss this reconciliation bill, we still have not received a full score from the congressional budget office. is there a full score for the legislation we are considering today? >> it's a practice that is happening quite regularly in the house of representatives. no, there's no cbo score on this bill that was passed out of the senate. there was a cbo score over a week ago, but it has not included the numerous changes that were done during the voter rama in the senate. it has tens of billions of dollars in changes. >> if this will work to pass, we are passing something we don't have a full score on, is that correct? >> that is completely correct. >> ok. again, i am thrilled my democratic colleagues finally came to the realization

inflation is a problem. is there anything in this bill that actually addresses inflation, that would actually lower this extraordinary 40 year high we are in right now? >> mr. cole, i would say that they definitely name to this bill the wrong name. as you know, it is laughable and absurd it is called the inflation reduction act when even the witnesses today, they have spent more time talking about all the green new deal policies being implemented, that in fact that is what they should have called this, instead of the inflation reduction act. if you go through this bill, which i have, the words environment and green are mentioned seven times more than the word inflation. so that is clearly what they should have called it but if you even take the word of over 230

different economists, even the congressional budget office, which is supposed to be the official scorekeeper for congress, they will say this bill will not induce -- reduce inflation. in fact, with its hundreds of billions in near spending, it will increase inflation in some aspects. even bernie sanders has kind of agree with us. whenever he was giving his case down of the legislation over the weekend. so, it definitely should be called the green new deal instead of the reduction inflation -- inflation reduction act. >> the last time our friend from west virginia complained about inflation, he voted for the american rescue plan, which everybody agrees has been a major component in causing the inflation. so i guess he figures if you

just change the name it changes the outcome, but it does not work that way. let me go to ms. mcmorris rodgers if i make it another concerning -- if i may. another concerning thing is the drug pricing component. i wish we were here concerning hr-19, a completely bipartisan bill that would lower out-of-pocket spending and protect access to mail -- to new medicines and cures. can you outline how this washington takeover of drug pricing included in this bill could impact future resource on cures for life-threatening dangerous diseases? >> thank you. i appreciate you asking the question. several years ago we came together and we passed on a bipartisan basis, legislation around cures, that america would

lead the world in cures and breakthroughs, at a time when there is exciting research. it should be our goal to be leading on these exciting breakthroughs. and what this means for millions of americans. unfortunately, the approach taken in this legislation, it really is government price setting. it is government price controls. it is going to have a devastating impact on new breakthroughs for cures and treatments. there have been several independent analysis is. zero treatments will come to market with this approach. on the lower end of the spectrum, cbo estimated up to 15 fewer netizens coming to market. the university of chicago estimates as many as 135 new drugs will never come to market over the next life of drug development. another study concluded that if these price controls had been enacted during the last decade, only six out of the 110 approved

therapies in the study would have made it to the patients. this legislation reward companies for their ability to navigate a health care bureaucracy instead of really focusing on patients. it is going to discourage companies from investing in the rnd. i am very concerned about innovation overseas. cbo also found inflation caps will lead to higher launch prices for new drugs coming to the market. i would urge the members of this committee, members of energy and commerce, to come together around hr-19. chairman mcgovern mentioned their support of a price cap. that is agreed upon. we agreed upon the caps of out-of-pocket seniors. hr-19 is bipartisan. it will actually help our seniors without jeopardizing the innovation and cares that bring hope for so many americans. >> thank you.

let me talk to you about another area. methane is a primary component of natural gas, and this legislation effectively creates a natural gas tax by taxing methane. can you please expand on your concerns with that tax and how it might impact, or negatively impact the energy sector? >> again, i appreciate you raising this issue, because there has been a lot of lip service about bringing down the cost of gas, the cost of energy that is at a record high right now, that impacts everything that we buy. this legislation is only going to make it worse. what is included is absolutely attacks on natural gas. a natural gas tax, our entire economy, you think about the price of food, fuel, manufactured products, this is going to hurt all americans, and essentially our most vulnerable, those already having a tough time paying the bills -- ranking

member brady talked about the walmart shoppers. i was recently talked about that for the family that makes $50,000, a year ago they were spending 20% of their budget on gas and food. today it is 50%. this is absolutely hitting our lowest income the hardest, and this is only going to make it harder. i also want to push back. the chairman of energy and commerce was saying we do not want to be dependent upon other countries. we don't want to be dependent on adversaries like venezuela, or opec for our energy. i would urge the chairman, i would urge the members of this committee, let's unleash american energy rather than taxes on natural gas and other refining. it is only going to make it harder in america. this bill, we are talking $369 billion in clean energy

programs. and i hear from my colleagues on the others of the aisle that they want more renewables. wind, solar, batteries. ladies and gentlemen, those supply chains right now are controlled by china. so what this legislation really means is billions of dollars going to fund manufacturing in china, and supply chains that come from china. we need to unleash american energy, not tax american energy or make it harder for american energy. and we need to figure out how we manufacture. there is nothing in this legislature that addresses permitting. it's impossible to permit a solar farm in the u.s. well, not impossible, but it takes so long that companies cannot meet climate goals. let's come together. let's figure out how we can unleash american energy, bring down gas prices, rather than

this process which will make it harder. >> finally, just looking through the bill, there's an egregiously high amount of funds appropriated. the act is effectively slush fund for democratic and green new deal project. . $27 billion to the epa for greenhouse reduction fund. 3 billion dollars epa climate justice block band. $250 billion in new loan goren tease to the doe. can you expand on any concerns you might have to the existence of these funds and how that money might be used? >> thank you, mr. chairman. it really is an unprecedented amount of money and it is only going to contribute to more inflation and inflation is just a hidden tax on hard-working americans and their families. so much of this legislation is only going to make it harder to produce american energy.

and as you outlined, many of these programs, this is only going to lead to more waste, fraud, and abuse. i think back to president obama had the stimulus that included a similar type of program, and one of the most egregious examples was $500 million that, unfortunately, was lost. this is a $250 billion similar type of a program. i'm deeply concerned about writing blank checks while crippling american energy security. it jeopardizes reliability, affordability. we need to really get focused on unleashing american energy that is cleaner, that is reliable, that is most affordable. it is the best thing we can do to help people right now all

across the country. >> thank you very much. >> thank you. the cbo cost estimate was brought up and i want to stay for the record, everybody knows this bill reduces the deficit. that is not an argument. the only question is by how much. cbl has confirmed it will reduce the deficit. while we don't have a final number yet, i suspect it will be in the tens or hundreds of billions of dollars of savings. one estimate from the committee says it saves almost $2 trillion over two decades. i would say to my republican friends, that is what your tax bill costs. that is what it adds to the deficit. so we don't have a final number, but there is no question at all that this bill will reduce the deficit. happy now to yield to mr. perlmutter. >> thank you, mr. chair.

i am proud to support this bill. it has pieces that i have campaigned on for 16 years and i am going to be very proud to have voted on it before i retire. i want to start with negotiating the drug prices. that, by itself, it enough to support this particular piece of legislation. that is a huge step forward for america. so, i don't know if any of our panelists want to talk about that a little bit, but that is something that has been needed for decades. i see you nodding your head, you may want to comment on it. but i want to talk about that and continuing to provide the

subsidies for low income earners to the affordable care act. >> thank you, mr. perlmutter. let me just say, i listened to the ranking member, and we agree on so many things so i hate to be so contrary here, but i have to be honest. when she has a dialogue with mr. cole, they talk about hr-19, the republican alternative, as i said before, the one thing that is missing is negotiated prices. and everyone will tell you that the main way to keep prices down and reduce costs is negotiated prices. yes, it's true that in the republican alternative there is some effort to cap out-of-pocket costs and deal with the inflation factor, but discussions have never been possible the republican side about negotiating prices. they are just opposed to that. and you know, ms. rogers

mentioned government price setting. this is not government price setting. this is a capitalist, competitive approach. it's saying we're buying all this stuff from you so we want a better price. that is what negotiation is all about. look, i am buying all of the stuff from you, you have to give me a break. that is all it is. that's the essence of capitalism, in my opinion. that is how i perceive capitalism. >> i would say to my friend, you are absolutely right. and i can tell you that people in colorado, it's a complete no-brainer. to try to confuse it and say, oh no, negotiating prices, give me a break. there's a desperation in the republican argument today that i have not heard in a long time. but let me move to something else. i want to move to the climate

change piece of this, because that is something else that is just front and center in the minds of the people that i represent. we get the smoke from the fires in washington. and my people want us to do something about that, and we are taking dramatic steps in this bill to provide incentives to manufacturers. for manufacturers to make solar panels here, to make the windmills here, to do the biomass here, to really advance renewable energy. and we incentivize americans to buy that stuff, so that we can change the direction that our climate is going, instead of just hotter and drier and hotter and drier. >> you are absolutely right.

the approach here is totally incentivizing things. it is not mandating or regularizer -- regulating, it is incentivizing. i agree that china, we have to watch out for beijing, certainly, and they have kind of cornered the supply chain. they make more solar panels, they make more parts for windmills. but we need to turn that around. the only way you are going to turn it around is by giving these investment credits and incentives to develop the capacity for that domestic manufacturing and the components needed for clean energy tax. so don't let china lead the energy transition, let us lead it. let us take that back and create the jobs that are involved with it. i know you didn't mention it, but methane. there's no tax on methane. there is no tax on gas.

it's an incentive to drown down excess methane pollution. so basically it says that it establishes a methane waste commission threshold for petroleum and gas, and it charges those exceeding those thresholds. so it's not a tax, it is a charge that only applies like a fee to waste of methane above these thresholds. again, if you want to pollute and you want to pay more, fine. well, i don't know that anybody would, but we are trying to say, look, we will set a threshold, we want you to stop wasting all this methane. i don't want to keep talking, but if you drive down the turnpike in my district at night, you see those flares from the refineries that people comment about. well, we want to capture that stuff and use it. why send it into the atmosphere? >> let me take that one step further, that i have some other questions. in colorado -- and throughout

our state. we're an energy producing state. but the wells often leak methane, and there is a tremendous opportunity. in a couple of science hearings, we have had testimony from businesses that detect t methanehe -- the methane. this will help incentivize more of this kind of research and manufacturing, and then when you detect the methane, one, you get the pollution out of the air and you keep the gas in the pipeline or at the well, so that you can sell it. so the argument that i heard concerning methane are completely crazy. >> absolutely. again, most people think greenhouse gas emissions are mostly from utilities, coal firing. but when we have the climate conference last year that i went to, i don't know where it was, i

cannot even remember -- oh, in glasgow. the big emphasis was on methane. that is a major source of the warming of the planet. why not capture it and reuse it? provide an incentive to do that. why not? >> two other things, and then i want to talk to mr. yarmuth to talk about economic components, some of the arguments i have just heard. but in the bill, we have a major piece of litigation going on with respect to a very big rural electric co-op here in colorado, where the membership of the co-op would like to advance in terms of their energy production and incorporate more renewable energy, but the co-op still has a lot of legacy-type of utility.

this bill helps both the co-op and the members that would like to get ahead in using renewables by providing incentives for those rural electric co-ops to do renewable energy. i have to look a little closer, but it may help resolve this conflict between this big co-op in one of its major members. that is one thing i wanted to point out. and as a westerner here, in this bill is $4 billion to do with the drought that all of us have suffered in the west. some years it is a little worse than other years. but there is a major piece dealing with the drought mitigation in this particular piece of legislation and it is dedicated to the west. so, for when you guys are having your fires or when we are having

hours, we want to deal with that and this bill provides that. the last thing i want to talk with is with mr. yarmuth. ms. rodgers caught my attention in her testimony today. as i see this thing, there's finally a tax on the biggest corporations that have not been paying tax on profits over $1 billion. this is not misses mcgillicuddy who lives at the end of the street. this is, i don't know, apple, amazon, i don't know who they are. but they have to make $1 billion, and it sets a minimum tax. all of a sudden i am hearing, well, this doesn't do for anything for inflation, inflation is going to get worse under this bill, everyday americans are going to be punished by this bill. and, you know, i had a telephone

town hall monday night. we had 10,000 people on that call. we laid it out. maybe i laid it out -- i think i laid it out in a neutral fashion, but you are never sure about that. 57% of the people on the call supported the bill. 24% did not. 19% did not know. looking at polling across the country, we have seen similar numbers. americans really understand that this is good for the climate, good for health care, and good for the federal budget. mr. yarmuth, i know you had some thoughts about some of the remarks by misses maurice rogers. >> thank you. also, it is good to be with the. -- with you. we've been through this time and time again. statements are made which are

designed only to scare people with absolute no validation, no underlying documentation. she just said minutes ago that people are spending 20% on energy and food costs and that could go to 50%. that's an outrageous statement. i defy her to come up with any documentation that would come to anywhere close. she was talking about a $50,000 income family. that is $4000 a year. that's the total of inflation. how in the world does that go from an additional $4000 to $15,000 a year, which is what she was implying? it's just that, you cannot just scare people that democracy can

survive realistically when you make such irresponsible statements. in high school if you made a statement like that against me and i would challenge you, i would win the debate automatically because basically you could not support the statement you made. in politics you don't have to support the statement you made. this whole nonsense about drug companies and life-saving drugs being forgone because we are going to negotiate prices. i just ran these numbers last week. the top 10 drug companies in the country from 2021 have net income total of over $250 billion. that was not gross income, that was profit. you are telling me that if we

negotiate, let's say, 10% or 20% discount on the drugs they sell us, that all of a sudden they are going to stop r&d efforts when they have so much money they don't know what to do with? all of this defies logic. i watch the ads, we see them all in d.c., the big pharma ads criticizing this bill. they have fought this going back to 2004. sure, they don't like it. they want to set prices wherever they can set them. they want to set insulin prices at 20, 30, 40 times what any reasonable amount would be. i looked at pfizer. fives are -- pfizer is -- by the way, we helped them do that. last quarter, pfizer reported $11.4 billion in profits.

$11.4 billion in profits in one quarter. now, if we had negotiated a different price with them for 20% less, 30% -- and by the way, the government, taxpayers paid for most of the vaccine, would that have hurt them? would it have kept any life-saving drugs off the market? of course not. this is just ludicrous. so let's get real. let's face the fact that there are certain things that right now in this economy that are easily fixable that only huge money going to politicians prevent us from doing that. one of them is lowering prescript and jug prices. this bill for the first time since 2004 does something to help the consumer of pharmaceuticals.

we just need to be honest about that and i wish we could have the kind of responsible debate that could result in much more logical and effective policies. >> i have one last question for mr. buyer. there has been criticism of the title of this inflation reduction act. but from my vantage point, especially after having discussed it on the telephone town hall for a long time. well, how does it reduce inflation? i can certainly see it reducing inflation in the energy arena, i see it reducing costs in health care. but how do you see it? >> mr. perlmutter, thank you very much. i'm not a phd economist, but i am surrounded by them in the

economy. i was in the business for 46 years. simply, when you reduce the budget deficit as this bill does, that is anti-inflationary. and when you raise taxes on corporations making more than $1 billion, that is anti-inflationary. and when you bring down the cost of all fossil fuels, by all the new electrical cars that are not buying gas, that brings down inflation. and when you cut the cost of prescription drugs, that brings down inflation. almost every part of this bill is moving us in the right direction. we are already 0% month over month and we hope more of that will come. by the way, my friend, ranking member ways of means was pulling my leg about negotiating with cars. they used to crush them in crash testing and we would always negotiate. the nice part was we would

negotiate and they walk away. but you never don't want to negotiate. this is the idea of business. you have to get the ask. this so-called high tax only kicks in in the rare case, or even nonexistent case of people not willing to negotiate. u.s. pharma exceeded profits last year, exceeded worldwide global r&d for all businesses. so this is not about cost recovery. cost recovery happens way, way a long time ago in the profit curve. >> i think the gentleman and i yield back to the chair. >> thank you very much. we will come back. we will go -- you have to put your mic on.

although it is ok if you want to keep it off. [laughter] >> thank you. i think that is the most magnanimous thing you have done on this committee to date. i appreciate it. thank you. there was a lot of talk about point you made during your testimony. would you like a chance to expand on your statement or have a rebuttal? >> sure. well, maybe the democrats do not want to recognize how costs are increasing, but over the last year it is dramatic. this last week as i have been around washington i have heard cost increases down at washington state university. new building is 25% above what they thought. new terminal by the airport, they thought they had accommodated for inflation and increased costs and it will still be significantly higher.

and this is real. the cost that people are paying is real. and there is nothing in this bill that is actually going to reduce energy costs, bring down inflation. by spending more money, more taxpayer dollars, that does not reduce inflation. so i would love to talk a little bit more about the prescription drug price controls put in place in this legislation. it is really disappointing that we have not been able to come together because we agree, democrats and republicans agree that we recognize we want to bring down the cost of his kitchen drugs to seniors -- of prescription drugs to seniors, to americans all across the country. that is why we worked on bipartisan legislation that would include a cap on

out-of-pocket costs. but what this bill does is not negotiation. that is why i keep coming back to this. because the bill has a statutory ceiling price which is tied to the drug's nonfederal average manufacturing price. but the kicker there is there is no price forward. if you think about a political appointee at health and human services, secretaries, they get to decide what that price is going to be. it could be well below the market value. there is nothing preventing them from making it as low as one dollar and requiring companies to accept that price. or pay a tax of up to 95% of the gross sales of that product. i would just highlight that there is negotiations in medicare part day. there is no negotiation between

the plants. if you are in medicare part d, if you don't like the plan you have a choice. this takes that away. at the cost of innovation and breakthroughs and cures which i outlined earlier. it is devastating at a time when there is so much hope. we all meet with different disease groups that come to washington, d.c. and walk the hallways. they are soaking neat and hopeful for what they will need for saving lives, curing diseases. this legislation according to many studies and analysis is going to have a devastating impact on new cures and breakthroughs, which is the most disheartening part of this approach. >> thank you. i want to shift gears and talk about energy a little bit. i know we have heard claims that the green new deal policies in

this bill will actually reduce greenhouse emissions. but it is my understanding that we were actually reducing our emissions because we had unleashed the natural gas sector of the economy. do you want to talk about the trade-off we are declaring war, in essence, on the natural gas sector of energy, while doubling down on stale policies of wind turbines and solar panels? >> thank you, i appreciate the question. because we are having this big debate over the methane emissions reduction program. it targets natural gas. and what has been unleashed in the united states in america because of new technology that has allowed us to capture more abundant natural gas, it has driven carbon reduction here in the u.s. and it is the best thing we could do worldwide to bring down carbon emissions is to unleash natural gas.

that is why america today, the united states of america is leading the world and bringing down carbon emissions more than any other country in the world. at the same time, china is now emitting more carbon than the rest of the world combined. and what this legislation does is -- fees are taxes. it increases costs on natural gas. so the companies that are -- oh, and i also wanted to highlight that many companies in the united states, because we do lead the world in bringing down carbon emissions, and we are committed to new technologies, many companies are already capturing methane and voluntarily implementing the technology that will result in us leading the world. but this type of approach, when you add fees, when you add taxes

on natural gas, it's going to make everything more spencer for american families. anything that touches natural gas, all of the supply chains, which sets the price of fuel, fertilizer, food. it only causes then more inflation. and i am concerned that natural gas is just the tip of the iceberg. there's 180 million americans that use natural gas to run their homes, run appliances, for workplaces. this bill gives epa sweeping authority to expand this program, this natural gas tax, to other sectors including agriculture. there is no guard rails around the epa. and we have seen the epa abuse its authority in the past. i won't get into that right now, but that is very concerning to me too. >> thank you, i appreciate it.

in your testimony, you were referencing, i think i wrote it down, small dip in the second quarter, saying we are not currently in a recession. how do you defined recession? >> because there are so many different perspectives on it, the tradition in america for the last many decades is let the national bureau of economic research to find whether we are in a recession or not. most economists see many different signs. most of them signs of strength, including the 528,000 jobs last year, 0% inflation, 9.5 million jobs so far. we have about 11 million jobs advertised, down a little from 11.5 million, which was the most in american history. the ratio of jobs advertised to people looking for jobs is the highest it has ever been in american history. the two pieces that people who

think we might be in a recession point to are the very small decreases in gdp in the first and second quarter. the second quarter by the way is completely explained template by the paydown, the sell down of inventories, not by consumer spending which is up by almost 60%, or wages which grew significantly too. so at this point i think most of us will stick with the national bureau of economic research and say we are not in a recession right now. >> yet the group you reference actually called the 2007 recession years after that started. so, you can take how helpful that group is. would you stipulate historically a recession has been defined as two consecutive quarters of negative gdp growth? >> no. two consecutive quarters of negative gdp growth has been taken as a minimum while fire for a recession -- qualifier for a recession.

the third quarter is going to be much stronger and make the other two orders seem irrelevant. >> i am just talking about the definition of a recession. it is remarkable because the whole time i was wondering about this, whether it be in college or even high school, it has always been defined at two consecutive quarters of gdp decline. i can read you the definition i am pulling from the oxford dictionary. it defines recession as a period of temporary economic decline during which trade and industrial activity is reduced, generally identified by a fall in gdp in two consecutive quarters. >> if you are reading from the dictionary, sure. let me emphasize the word generally. you have to look at the overall economics. what is happening to spending, labor, force participation, many other things. when you put generally in, you

also have to look at the size of the declines. when we are talking .4%, .5%. excuse me. >> logistical yoga, quite remarkable. would you like to try and define recession? >> thank you, representative. i just wish that our colleagues on the other site of the aisle would spend more time focusing on the real issues instead of spending so much effort in titles of bills that don't really represent the bills, are changing and redefining terms. like this administration trying to redefine a mother as a bur -- as a birthing person. this is the kind of stuff the american public is so sick of. a representative for the last 75 years, it has been a common definition among all economists

that when you have two consecutive quarters of negative gdp growth, you are in fact in a recession. and this is the same folks on the other side of the aisle that said that we were not having inflation. then when they said we did have inflation, they said it was transitory. they said it was because of covid, then they said it was because of -- now they have a piece of legislation that is all about green energy, tax credits for the wealthy, and they have defined it in their title as the inflation reduction act. let's focus on what is at hand. if i could, representative, this bill, the american people sees what's going on. this bill spends $745 billion, whenever you look at the budget gimmicks and the fake sunsets, and it spends $745 billion.

and what we have heard today is that we have taken hold. the polls say the american people want this. well, i would like to remind everyone that just over a year ago when they were trying to push through the first reconciliation bill, the american rescue plan back in march, when it passed, march of 2021, we argued their poll numbers on the house floor. they continued to stand up on the house floor sink 64 americans -- 64% of americans wanted to pass this to trillion dollar bill that was supposed to defeat covid. less than 9% of it went towards health care putting shots in people's arms. guess what? once the american people saw what they got in that $2 trillion bill, they were not happy with it. in december of this year, 21% of americans said they benefited from that $2 trillion wasteful

bill. you know what was in that bill? what was in that bill was gifts to their bodies, their -- buddies, their political friends. money for pickleball course in michigan. planting trees in syracuse. and make sure federal prisoners got millions in checks. who had to pay for it? the american taxpayer. because they have seen inflation go up 13.7% since joe biden has taken the oath of office and that means there paying more every day. that is a real cost. $5,900 per family in just an inflation tax is going to cost all americans this year is what is projected. more than one month salary because of reckless government

spending. this body wants to try and spin themselves out of inflation and tax themselves out of recession. the american people ain't having it and there paying attention. >> i want to dive a little deeper into a few points you made. we keep hearing this bill is going to benefit the middle and the working class, and yet there is a litany of subsidies for the wealthiest americans. would you like to go deeper? >> absolutely. chairman grady also hit on it. when you look at a lot of the green tax credits in this piece of legislation, more than a quarter of a trillion dollars is there to benefit the wealthy. even chairman yarmuth mentioned in his testimony that you can qualify for an electric vehicle tax credit if you make $150,00 a year? guess what?

if you are married that is $300,000. let me tell you, i don't know what every district represents, but i can tell you someone who makes $300,000 in the state of missouri is a 1% or that is the wealthiest of the wealthy. a family of four in southeast missouri makes roughly $40,000 a year. so, just the tax credits, the electric vehicle task credits for people making $300,000 a year, the tax credits for people wanting to green up their personal homes, up to $300,000 a year. subsidies for obamacare, families making up to $300,000 a year. i mean, the list goes on. the large corporations that they say that they dislike so much, b illions of dollars to allow them to use tax credits for their green opportunities. the thing about this legislation

is, is that if you follow underneath the command and control of the democrats and you follow underneath their green policies, you will benefit. but if you are not someone who wants to embrace all of their green policies, you are going to face significant tax increases. >> thank you, ranking member smith. ranking member mcmorris rodgers, i know a few times you have referenced ev's before you testified before this committee before. i would find the argument electronic vehicles are going to reduce carbon emissions to be a red herring, because of course the energy power in the electric vehicle is coming from usually a coal burning power plant. so would you like to talk about how ev's relates to these government handouts to the wealthy to get ev's in alternate environmental benefits? >> i think it is an important

point. i would like to see the energy and commerce committee have hearings on the impact of electric vehicles. but we have not done that yet. and the legislation in front of us, as mr. smith was just pointing out, it's billions and billions of dollars in subsidies to some of the most wealthy in america to buy an electric vehicle. i'm very concerned about supply chain issues. we are shutting down american energy, making it harder on natural gas, on american energy producers, more taxes, more taxes on refineries in the united states. and promoting this agenda, hundreds of billions of dollars, to purchase wind, solar, electric vehicles, batteries, that come from china. you think about the average price of an electric vehicle. it is more than $60,000.

that is way out of reach for most americans. less than 1% of those cars on the road today are electric. and just to underscore what mr. smith was saying, this is benefiting the most wealthy. my district come of the median income is $52,000. the comment i made about walmart, the walmart shopper that is making $52,000 a year, year ago they were spending 20% of their income on gas and food. and today it is 50%. that is real. and that is impacting hard-working americans in eastern washington. this idea that you can just buy an electric vehicle, or somehow the government paying a big subsidy to people making up to $300,000 to buy an electric vehicle is going to bring down inflation just does not add up. >> thank you. i appreciate it. ranking member smith, want to

talk about these irs agents. this bill calls for the hiring of 87,000 agents, supposedly to go after billionaires. do you know how many billionaires there are in the u.s. off the top of your head? >> i would not have a clue. i am not one of them, i can tell you that. >> me, either. if i were to tell you there are just over 700 billionaires, with that surprise you? >> that sounds about right, probably. >> would you like to take a stab as to why we would need 87,000 irs agents to go after just after 700 billionaires? >> i mean, i would say that the reason that they have spent so much time justifying this $80 billion is because there is a lot of problems with it, and they are starting to figure out the american people don't want $80 billion to go to hiring 87,000 new auditors. let me just also point out,

there's been a lot of comments, representative, about the irs commissioner that trump appointed. let's talk about the irs commissioner that obama appointed. he just recently said that $80 billion is three times the amount that is needed for the irs. three times as much. so even obama's irs commissioner is saying that this is astronomical, and that he does not see how you can efficiently use this money. and the fact that there is really not a plan exactly how this money is going to be spent is alarming. however, what we do know, and everyone says the facts are the facts, the stat is that only 4% of this is going to be used for customer service. 4% of the $80 billion will be

used for customer service. but 96% goes to enforcement. enforcement sure sounds like auditors to me. and the folks back home, anyone getting a phone call from the irs, they are not looking forward to it. also, another fact is that under this proposal, 700,000 new audits targeting those who less -- who make less than $75,000 a year. these are facts. just because these facts may scare you, these are facts. take the $80 billion out of the bill if you don't like it. don't fund the irs $80 billion. even obama's irs commissioner said $25 billion is the most that the irs would need to get back to the same levels as 2010.

>> i'm going to yield back. >> ms. mcmorris rodgers needs to leave, and i think congressman carter is going to come in at some point, if he is not already here. but we are ok with all of that. >> thank you, mr. chairman. i was going to yield back to you. >> mr. raskin. >> thank you, mr. chairman. i want to add my voice to the chorus of strong support for the inflation reduction act. this is profoundly beneficial and long-overdue legislation with powerful progress on climate rescue, on dramatically reducing prescription drug prices, on reducing inflation, and on making the largest and most profitable corporations in america pay their fair share in

taxes. i've not been here quite as long as you, but even in my third term, i can remember one our gop colleagues would come here and they would openly deny the existence of climate change. they would reject the science, they would blast the scientists, and they would engage in climate propaganda and disinformation. but but now as the country is embroiling under insufferable heat waves, as the west is consumed with forest fires and the midwest with drought, the east and the south with record flooding and heat waves, they don't come forward and deny climate change anymore. they just don't mention it. they should be the grown-up party, responsible party that deals with climate change.

i'm proud to be supporting this legislation which will cut climate solutions by 40% by 2030. i would like to ask you mr. polo ne -- [inaudible] >> the last time the republicans were in the majority, i had tried to include plans for the energy and climate committee having hearings on climate change and they were flatly denied, we were not even allowed to discuss it. i would say a lot of the members of congress have moved, on the republican side, moved from denying it, they say it is there

but it is not human induced. what we hear now more than it's not real is that it is true, the climate is warming, but it is not humid -- human induced. whether it is human induced or not, we should be doing something about it. that's exactly what this does. this goes very far toward addressing the goals of the paris agreement. even if people don't care about the paris agreement, they acknowledge the reality of the fact that the planet is warming. i'm here in new jersey and in my own town, we have not had any significant rain since july 4, and this is the garden state where we grow vegetables and fruit, and we are in a drought. you have to admit that the climate is warming.

bear with me a second because i know the previous conversation with the republicans and macy's rogers was about eegs -- cvs, and if you use electric vehicles, you still have to get power from electricity, using coal-fired. that's not the case. utilities are moving away from coal-fired. most of them switched from coal to natural gas. a lot of them are ♪ investing in renewables ♪ -- a lot of them are investing in renewables. what we do with this bill is investing in $300 million in investment tax credits to get everyone, utilities, industry, manufacturing, individuals, to move towards renewables. if you switch to an electric vehicle, and i'm the first to acknowledge it is not easy because they are expensive and not always available, so that's true and we need to do more in

that respect, but you are definitely cutting down on the amount of pollution cutting down in the atmosphere from using gasoline. and the fact that some of the utilities are still using coal should not be a reason not to do it, because that is diminishing. utilities increasingly are diminishing. what we are doing here is addressing the fact that in so many ways in the bill, whether it is providing financial incentives for utilities to move towards renewables, cutting back on the use of gasoline for transportation, cutting back on methane, these are the three major factors for polluting -- i mean causing greenhouse gases. we are addressing all of them. that is why mr. raskin, when you say this is a reduction of 40%

by 2040, it is all those different factors that contribute to the greenhouse gases and warming of the planet that are addressed here and i have not even touched on a lot of those. rep. raskin: i appreciate that very much. i wanted to ask about one provision which really stood out for me, which is that the bill would give production tax credit to accelerate u.s. manufacturing of solar panels, of wind turbines, domestic manufacturing, energy-efficient batteries, and so on. i'm wondering, can you explain exactly how this provision works and what we hope to accomplish with it? >> thank you. you raise a critical point. some of the republican brands, the chinese battery industry and so forth, this is anything but

that. there's criteria that are placed on the electric vehicles that would be eligible for credits. i saw a number earlier today, something like 70% or so of currently produced electric vehicles would not qualify with subsidies, because too much of them come from batteries or other components produced elsewhere. so this is kind of an initiative to promote the production of domestic batteries. we have a plant that is going to be built not too far from my district in kentucky.

several of these have been announced all over the country. we have new initiatives to promote their production or the processing of certain important minerals that go into the production of the batteries and cars that now we are totally dependent upon. a lot of the initiatives here do exactly what i think the american people would want us to do, which is promote the increased manufacturing of assembly and electric vehicles in the united states and other elements of the renewable economy. in terms of going in the right direction, this is all directional, i think this bill definitely sets us up in the right path. >> thank you, mr. yarmuth. another provision i can hardly contain my glee about like mr.

perlmutter is the one that finally repeals this special interest rider slipped into the medic are -- medicare part d productions, which prevent them from over the cost of prescription drug prices in the social security medicare program, but rather forces us to pay whatever price they set. when i first learned about this, i was told that it was the republicans, specifically the chairman of the house energy and commerce committee, who slipped this in to negotiate prices, a power the government enjoys in the medicaid program and the v.a. benefit program, estimates of like $30 billion

extra for the government every year. apparently just a few months after accomplishing that legislative victory, billy townsend retired from congress and became, what do you know, the president of big pharma, making more than $2 million a year. mr. pollone, i've done some research in the newspaper accounts that seems to verify that account, he occupies the same position you do. is that how this came about? >> it is true, but i will also say that i like mr. townsend quite a bit. [laughter] but the one thing, if i could add, i don't want to contradict you, but they did put it in. the republicans insisted when they created medicare part d. but we had a very robust dialogue at the time saying this was outrageous and pointing all

the things out that you and other democrats have pointed out today, that this is outrageous, anti-competitive, anti-marketplace oriented, and would drive up prices and was a giveaway to pharmaceuticals. billy may have tried to slip it in, but we couldn't. it was a robust style. rep. raskin: i understand. let me go to mr. byers with the policy implications. . you are a successful small business men and auto dealer. which sounds more like the free market to you and something we could describe as corporate socialism? either the big pharmaceutical companies set the price and dictate the price to the government, and we have to accept that, or the medicare program can actually negotiate free-market style with big

pharma to determine what the prices will be? which seems more like the free market and which sounds more like corporate dictates. >> i will think about that for a minute. the second half. clearly negotiating, the give and take in the business world is what constitutes free-market. the first part sounds like monopoly, or even worse, autocracy in the business sense. i was wondering as we were listening to our friends on the other side attacking this, wonder if having drug companies dictatorial he set the price and you cannot verify, why not do that and prohibit the private sector and the v.a.? wouldn't we get more prices out of that? it is crazy. rep. raskin: it is the heart of capitalism to deny negotiation. finally i want to ask a couple

factual questions. i know the democrats and senate were fighting for a $35 a month limit in prescription drug costs for seniors who have to buy insulin for their diabetes. is that part of the plan? also, did the annual out-of-pocket cap of $2000 a year for all americans under medicare part d, did that survive in the senate and is that part of the plan now if someone can verify that? >> it is, if i could clarify. basically you have the $2000 cap in medicare out-of-pocket in the bill. >> that's for everyone? everyone in the medicare part c? >> everyone in the medicare program, that's right it also the inflation rebate meaning they can't rate prices more than inflation.

rep. raskin: the $35 a month? >> yes, $35 per month cap on insulin. mr. raskin, i think the danger came because we as democrats wanted to apply these things to the private sector, the commercial market. what happened is the parliamentarian, because it is a reconciliation process, says they could not be applied to the commercial market, so the $35 cap, those are only within medicare, not the commercial market. i will say this. i believe very strongly by doing this in medicare, because most of the insurance industry looks at the medicare price, whether it is insulin, the drugs being negotiated, i think you will end

up applying in the marketplace because the insurance industry will say if the government is only paying that much for a drug, you only have 35 for insulin, we are not going to do it easier -- either. this will leach into the commercial market, but we couldn't do that with the reconciliation bill. when the democrats in the senate kept the $35 per month for the commercial market in the bill, and during vote aroma, the republicans voted -- took it out rep. raskin:. mr. chairman, i will yield back what i want to close by saying i'm extremely proud to be supporting this legislation. the more i learn about it, the more excited i am. this really does exemplify the difference between our parties.

our party believes the government has to be an instrument for the public good for everybody, not just the big corporations. i'm thrilled about the handiwork of these committees and i thank them and yield back to them. >> thank you. i think we will go to dr. burgess. >> it is raining so hard that i can hardly hear. [inaudible] -- will let someone else go. >> ok. ms. scanlan. >> thank you, mr. chairman.

to see a bill that will deal with the issues that my constituents are concerned with, medical costs, the inflationary impacts of the deficit, which went way up after the reconciliation bill passed by republicans in 2017, the ability for congress to finally expose some of these tax loopholes that are allowing the wealthiest among us and corporations to not pay their fair share, and to finally take substantive action on the climate issues which are both an existential threat to our nation and our children. i'm very excited about all of the provisions in this. mr. pollone, today i had occasion to meet with some constituents, the members of the

delta sorority doing voter registration at a local health clinic. one woman told me she was 89, her husband is 86, and they had to fill four prescriptions yesterday and had to pay $200 out-of-pocket. that was a lot for them. they will have to pay that again before the end of the month. how is this bill going to help folks like my constituents, older americans on medicare, who need to maintain prescriptions in order to stay healthy? >> i don't know how much detail you want, but basically it says that the secretary of health and human services is required to negotiate drug prices on the highest drugs in medicare -- highest cost drugs in medicare that have been on the market for a long time.

this is the price the secretary can negotiate based on whether or not these are the drugs that cost the most and whether prices have gone up the most. so i do believe the most important part of this is once we start negotiating prices for drugs, and we will go after the ones that have the biggest price increases, they will see the actual prices come down significantly because we pay a lot more for these drugs in the united states than they do in all these other countries, japan, france, australia, than they do with all the other developed countries. also this cap on medicare part d out-of-pocket drug spending at $2000 a year is significant. a lot of people say $2000 a year , but don't realize many seniors pay a lot more, $6,000, $7,000, out-of-pocket.

then it requires drug manufacturers to pay a rebate to medicare if they increase prices faster than the rate of inflation. they have done that during this covid period. even though the rebate is to the government, they will not want to pay that so it will be a factor. those are the three most important things other than if they are taking insulin, the $35 cap on insulin per month. those are the key. >> and even if that's $200 on a monthly basis, that is $2400. they will see at least $400 in reduction. >> and a lot of seniors take multiple drugs, not just one. depending on the need. >> am i also correct that extending the affordable care act subsidies allow an additional 15 million people to get coverage?

so we are extending those subsidies for three more years? >> yes. when we did the american rescue plan, we had enhanced subsidies at every level. you pay a certain amount depending on your income, and the rest is subsidized. all of those were significantly increased for the years 2021 to 2022. for the first time, we also provided some subsidy if your income was above 400% of poverty. in a state like mine in new jersey, if you have a family of four, you can easily get above that 400% as the middle class at that point. so that is extended for the next three years. we now have the highest, as a result of that and hands to subsidy in the last two years

for the biden administration, the level of people that are uninsured is at an all-time low and we want that to continue. >> that is amazing. do you have the irs issues in your bucket? one of the things that is really interesting as this thing that worked its way through the house and the senate, certainly all of us in the last few years have had to deal with complaints about the irs not being able to process tax returns in a timely fashion, not being able to get people their stimulus checks that is underfunded, and also anticipating tens of thousands of irs agents. so -- also the fact that the irs

is still operating on a computer system which was antique i think when i was in college. so can you tell us a little about how the investment will help so that people, particularly rich people and rich corporations so we can from the government properly? >> thank you for framing the issue so well and giving us a chance to point out that some of the ways it has been characterized by republican friends are not fair or accurate. let's begin with the fact that the greatest expectation is the irs may, with this investment, get back to the employment level they had in 2010. let's also add to the fact that

there's nothing wrong with irs staff becoming efficient over the years. perhaps they can deal with twice as many claims with fewer people. but there's no i.t. improvement over the years as they were starved. i don't know if there's anyone who has taught this for 20 or 25 years. it is not only antiquated, but a system that few people are around left to program or improve ear and my friend from missouri said only 4% is dedicated to direct customer service. that may be technically right, but those are taxpayer advocates. most taxpayer folks are processors. they will have to deal with the 10 million backlog of individual irs claims sitting in irs cafeterias around the country. a significant part of that $80 billion will be spent on improving the i.t. systems which

makes the processors and customer service agents that much more efficient. hopefully the backlog and returned telephone calls will go way down because of this investment. but we have to continue to say is 87,000 new auditors is just not happening. one of my friends said on the other, how many billion -- billionaires are there? over 700. how many millionaires are there? many many people. there are many many people in the category under reporting their income. audits barely fell for people making less than 200,000 dollars and plummeted for people making more than $1 million a year. that will perhaps be rectified with this investment. >> and i understand a lot of the impetus for the investment is to deal with that, certainly

millionaires and billionaires are not filling out income tax forms themselves, they have armies of people helping them try to evade taxes so i think this is a wise investment. particularly, some have been under audit years and years, otherwise they would have revealed tax returns. i think it is a good investment. >> charlie, who was one of the irs commissioner's, hopefully not one of the so-called corrupt irs commissioner is referred to by an earlier friend, that those of us with w-2 incomes and 1099 incomes and most of the people on this call, report 99% of our income. those that have lots of other passive income sources, stocks and bonds, real estate and the like, perhaps as little as 50% of that is reported. so that's where the unpaid but fair taxes is missed out and why

a stronger irs can help collect that. >> thank you. as i understand it, we know the national deficit ballooned following the 2017 republican tax cut bill. how is this bill supposed to help the national deficit? it brings it down, doesn't it? >> it brings it down quite a bit. there's only the first down payment we have had structurally and quite a long time. a note i read yesterday, the deficit is down $1.2 trillion from last year. we are making an enormous progress from the deficit that was built up in the last years of the trump administration because of the covid crisis. we are moving strongly in the right direction. for the first time we are

actually making a significant down payment on it. >> thank you. and of course the largest spending in the bill does have to do with making the types of investment that are so important. can you just highlight, what do you think is the most important climate peace here? >> thank you for the question. i think the most important thing is that we are changing the incentive structure of the government in order to put us in a certain direction. the aggregate effect of this in terms of promoting electric vehicles and renewable energy, all of these things, mitigation techniques, resiliency, all will push us in the direction where a variety of expert organizations have set -- said will help us

meet our goal of reducing carbon emissions by 40% in 2030. that is an enormous amount of progress to be made in eight years. we never even approached this kind of government initiative to deal with not just climate change, but set us on an energy-efficient economy that will save consumers a lot of money. the ranking member smith said again, scare tactics, this notion of 700,000 additional audits being done. there are 150 million individual tax returns in the year. you are talking about an additional one half of 1% of audits where we know that

hundreds of billions of dollars of money that is owed but not paid is out there for us to capture. the idea that we are inconveniencing anybody or on some kind of assault on america's middle class when we are increasing audits by one half of 1% is just ludicrous. >> thank you. thank all of you for your testimony. i'm really looking forward to voting for this bill because i think it does address the most pressing problems for constituents in the country, the high cost of health care, the deficits, the climate change issues that are so front of mind particularly for young people. maybe not everything we wanted is in here but i'm looking forward to voting on friday. i yield back. >> thank you very much.

>> i appreciate the opportunity. first i would like to address the agriculture funding in the bill. the funding levels have not been considered in markups. we have no idea if the usda even has the capacity to properly utilize the amount of funds provided, seeing as they work with a learned -- around $900 million each year compared to the roughly $20 billion under this bill. not to mention the major staffing shortages that impair the even current funding level we provide. altogether, i have serious concerns over the potential for abuse and misuse of taxpayer funds given these factors. this funding is for farm bill programs outside of the farm bill process, meaning again it has not received any hearings or debate within the house agriculture committee, does not receive input from our side of

the aisle, meaning it circumvents a traditionally bipartisan process of a farm bill. it does not receive any input from stakeholders. there's no doubt this will complicate the farm bill process which has already begun, but needs to be complete next year. more importantly, i was in the district doing farm tours and visiting producers. not a single one of the farmers i asked to ask for this funding. they are asking to address input costs, inflation, supply chains and bureaucratic overreach, issues unaddressed in the bill before us. i think it goes to show my colleagues' priorities and how out of touch this legislation is with the american people. i do have a couple questions. i want to ask ranking member smith. proponents of the bill argue this legislation will fight inflation by reducing the deficit. i think we talked a little bit

about it. as i understand it, the bill increases the deficit in the short term. is the bill providing the kind of frontloaded deficit reduction that would be expected to help with inflation? >> thank you representative for the question. if you even follow and go along with the budget gimmicks and fake sunsets that the democrats have put in this bill, the first five years, the first five years underneath this bill will add $54 billion to the debt. $54 billion. 80% of their projected deficit reductions doesn't begin until the year 2029. that is seven years down the road to start addressing inflation.

those are the facts. if anyone wants to argue those facts, let's do it. but the first five years under the fake budget gimmicks and sunsets. under that, $54 billion is added to the debt. >> i would think we want to reduce the debt now while inflation is at record highs. i'm assuming you would agree with that. >> absolutely. the reason why we have a problem with this inflation is the trillions of dollars of reckless government spending and they are trying to inject $745 billion more of spending and adding almost $150 million to the debt. under even their budget gimmicks and fake sunsets, it is adding $54 billion to the debt in the

first five years. i know irs audits have come up so many times. it has some real impacts on people all and i wanted to point this out to you. with this proposal, for families to make less than $200,000 a year in the state of minnesota, 17,000 more families will face an audit with the irs because of this $80 billion investment to hire more irs agents. i don't think the folks of minnesota would be happy with that. >> and i would agree. thank you for pointing that out. i did want to give the opportunity to comment. even though you are on zoom, i can see you react to some of the statements that have been made. i wanted to give you the opportunity if there was anything said that you wanted to comment on that opportunity.

>> thank you very much. i have been grateful i have been able to respond to a lot of them but in regards to the tax burden that is being affected because of the tax increases, i want to point out that the joint tax has said that one fourth of all corporate tax increases will rest on individuals. so those are tax increases that will fall right on the taxpayer. this bill right here does two horrible things. it extends hundreds more billions of dollars and taxes hundreds of billions more dollars.

the idea that the solution to our inflation crisis and the idea of our solution to the recession is to spend our way out of inflation and tax our way out of recession, the american people are not buying it. they will not support it. you can push all the numbers you want on polling saying the american people want it, this is an environmentalists wish dream, a proposal to buy off donors at the expense of hard-working americans who are surviving barely to put food on the table, clothes on their backs, and gasoline in the cars, and this will only continue to drive inflation. it will make inflation longer in the country and worse in the country. >> thank you very much for that ranking member smith. i wanted to turn for a moment and offer him the opportunity. i know you kind of have joined

the conversation late but if there was something that you had heard that you would want to comment, mr. carter. >> i think the lady for listening. i do want to comment, i've been sitting here listen to you saying how this is going to help. no one, everyone here, does not understand drug prices as well as i do. i have lived it. i practiced it for 42 years that i practiced pharmacy. you are missing the point here. it is not the drug manufacturers. it is the middle man. they are the one making the profits here. who owns them? the insurance company. why is the ftc undertaking a study right now as we speak to look at the vertical integration that exists in drug pricing now?

the insurance company owns the pbm and the pharmacy. they will make money along the way. the berkeley research group just did a study three months ago that shows only 37% of the price of a prescription drug goes to the pharmaceutical manufacturers. the rest of it, where does that go? to the pbm. they get rebates. do they pass them on to customers? no. they keep them. and who is the pbm? the insurance company. and what are we doing here? pumping up the insurance companies. that's why i have legislation, and nobody knows better than i do, i was on the other of the counter for 42 years. i had to tell people how much their prescription would cost them. i had to watch them make a decision between getting

groceries or getting drugs. i was the one that watched a mother in tears call a family member trying to get money to pay for her antibiotics for her child. that was me. i know too well how bad of a problem this is. i also know all too well how much research and development means. i started practicing pharmacy in 1980. if you were diagnosed with hepatitis c, you were going to die. you were going to die if you were diagnosed with hepatitis c. today, we can cure it with a pill. one pill. how phenomenal is that? and what is that a result of? the research and development. do pharmaceutical manufacturers need to do a better job with pricing? yes, they do. no question. but you are missing the point

here. it is not just them. it is primarily the pbm spirit i have been preaching that for eight years since i have been in congress. you have to have transparency in the drug pricing. the pbm's are keeping the profits. they are the ones holding the drug companies hostage and saying if you want our formulary, you give me a rebate. you go to the doctor and get diagnosed with high blood pressure, they will tell you this is the drug you can use for high blood pressure. i don't care about the sound effect profile you have. what matters is we are getting the biggest rebate and therefore that is what you will get. if you want to pay more, that's fine. but if you want this co-pay, this is what you will get

because i'm getting the biggest rebate. i have an amendment i would like to talk about. if i own a pharmaceutical company, they -- >> we are not at the amendment stage. you can testify after the panel about your amendment. this is question and answers, the opening panel. >> lead than keep railing then, that's fine. >> thank you, mr. carter. i think your discussion and the input points out once again that if the bill had really been any kind of discussion and import from all of the members or more of the members, it would have been improved and you would have addressed some of those. once again disappointing that we

don't follow regular order and do the kinds of things to get the input from all the sides and all the input that we should when we are putting together legislation. with that, mr. chair, i yield back. >> thank you very much. i want to reenter into the record, because it seems we keep on going down this irs conspiracy theory, that somehow this money is designed to go after walmart shoppers or people who earn under $400,000 a year. i want to reinsert the letter from the commissioner of the irs who disputes that, and just humor me, mr. buyer, who appointed the current irs commissioner? >> donald trump appointed that -- the current one. >> maybe i should be scared by that, but i think it is important to point out that is donald trump's irs commissioner.

>> thank you, mr. chairman. i want to start by associating myself with your comments at the outset about our colleague and her staff and keep them in our thoughts and prayers. i would like to thank the witnesses for coming before the committee this afternoon. chairman pollone and yarmuth and ranking member smith, great to have you all with us. as i have heard this discussion this afternoon, i'm reminded of the old quote from shakespeare, in this case, the gop instead of my lady. i disagree with ranking member smith. i think this is exactly what the american people want. i think it is what they want us to do. i think we will find in the next several weeks as people begin to digest the elements of this, i

think you are going to find there is widespread support for it. i think the discussion has been very illuminating. we've gone through each of the parts of the bill. i want to take a moment to focus on one of the things i am most focused on talking to constituents for four years, the measures to cut the cost of prescription drugs. for years we have been lamenting this. how much it takes out of families budget. we have talked about how exponentially more expensive medications are in america than most of the industrialized world and we seen the devastating toll it has taken on constituents. we are forced to ration medication or skip doses because we can't afford to keep a prescription. earlier today i was with a constituent susan. susan is 72 years old.

she's not working. not because she gets to enjoy a comfortable retirement, but because of disability from spinal stenosis, a significant that puts pressure on the spinal column and greatly restricts movement. on top of that, susan has diabetes and a host of other medical challenges, no doubt made more difficult by the spinal stenosis. she relies on 10 different medications or the cost is astronomical. she used a term today that i did not know before. drug hopping. she says she does a number of things. first she takes half of a pill instead of a full one. she will also go through the 10 different medications she is on and prioritizes what she can take at any given moment. she has a heart condition so she takes the heart drug every day because she wants to keep on living. the other drugs she parses out not according to the dosage given by her doctor, but what

she can afford. she also swaps drugs with her friends. she will find those who has extra something. maybe she has extra of something and can put it off. i did not know people went to such extraordinary lengths to make sure like she said, so i can keep living and i want to do whatever i can to stay here and be here. the legislation we are talking today will change susan's life fundamentally. allowing medicare, which by the way, this is about as republican a principal as you can get, using the big volume of purchasing, using the ability of the size of purchasing to exact the best price you can. that sort of market-based economics 101, i did not do so well in school, but i remember that from my state university macroeconomics 101 course. this is about making sure that

as we are buying and making use of the economies of scale that we are able to do that. it is unimaginable for me that for 57 years medicare has been around that we have not done it long before this. that will lower the cost. but the cost of insulin, reducing that to $35 a month for medicare recipients is really life altering. this is not only a life-saving, it is a life-sustaining drug. people cannot live without it if you have diabetes. there are millions of americans, particularly older americans, who have diabetes, get diabetes in younger your onset, and this will be like saving for them, as will the annual cap on out-of-pocket costs is transformative. susan paying for 10 prescriptions spends well in excess of $2000 a year on

out-of-pocket costs. this will change her life. she actually wept while we were talking about this, talking about how difficult her life has been, how she cannot go out with friends, she cannot go to restaurants, she can't even go to mcdonald's because the cost of doing what she has to to maintain her health is so excessive. she was weeping tears of joy talking about what we were doing. at a time when costs are already high especially for older americans living on fixed incomes, the savings from the legislation will be the difference between paying the air-conditioning bill and utilities, or not. buying groceries or not. this is delivering real relief for families. for all the talk we have in washington and all the things we often talk about that seem sort of hard to touch and are not factual, this is. i know susan and the other seniors i met with this

afternoon desperately want this. there is much more to do. i was talking on the private insurance side, use the purchasing power to drive down the cost of prescription drugs and that should be for all americans. given the limitations of the senate, we have what we have. we will continue to fight for those and i appreciate chairman pollone on this issue, the continued advocacy for. at the end of the day, no family should be forced to choose between filling the prescription and having food to eat. this is an important step forward. it is real and affects people day-to-day. i proudly support the underlying bill and i look forward to supporting the bill. thank you to the chairs and ranking member for being that -- being here. with that, i yield back. >> thank you, ms. ross. >> thank you, mr. chairman.

before i make remarks, i want to remind the committee, i know i'm just a freshman, i did my research to know why we will have three hours of debate tomorrow. but this bill has gone through regular order. i was a state legislator and what happens is you do all your work on your side, you send it to the other side, they do all the work, they don't do things you like sometimes, they do other things you like, and they send it back with concurrence. what they sent us back may not be everything we want, but it is pretty good. my constituents want it. so i'm going to concur. with that, i want to give this a little context. at the start of this congress, which has been quite a congress, i was appointed to the rules committee and had to come the next morning and deal with impeachment for a president who clearly has been derelict in his

duties, or was. we face unprecedented challenges including the pandemic. we have stepped up for the american people to deliver meaningful relief. we are putting people before politics. this is a once in a generation bill and example of our efforts. it deals with issues that congress has simply kicked the can down the road about. you have heard about them all afternoon. it is a monumental piece of legislation that will reshape and improve our country's commitment to major issues affecting every single american. it reduces health care costs for families. it slashes greenhouse gas emissions. it invests in clean energy.

it invests in millions of manufacturing jobs and ensures businesses pay their fair share. for decades, we have heard from americans of all backgrounds imploring congress to find solutions for these concerns. this legislation will take us one step forward to doing that. i am particularly excited this bill represents the most significant investment to combat climate change in u.s. history, ever. it is an investment in clean energy that will strengthen the energy independence and lower energy costs for consumers across the country. in my home state of north carolina, we dedicated years to rethinking and improving our renewable energy options, and we are a leader in the southeast and in the country. we recently announced a historic $1.2 billion investment, and in

electric car manufacturing set to bring over 7500 jobs to the state. i spent the past year working across the aisle to create offshore wind opportunities in north carolina, which are supported by our major utilities and the chamber of commerce. offshore wind energy represents one of the best options in our toolbox to reach our clean energy goals, powering millions of homes, lowering prices and creating thousands of high quality jobs. my state is perfectly positioned to lead this multibillion-dollar industry and i'm pleased that this bill will end -- we talked about the prior administration. they were shutting down options for the utilities and our future.

this act takes north carolina's investment in clean energy and multiplies them, substantially improving americans' lives and bolstering our capabilities while reducing the deficit. we will be reducing the deficit for generations to come. i'm honored to have the opportunity to speak on this historic legislation and vote in support of the rule and the bill. thank you mr. chairman and i yield back. >> thank you very much. i want to ask unanimous consent to put in the record a couple of letters. one, a business support statement for the inflation reduction act signed by some of the nations leading energy companies and also a letter from the small business majority strongly in support of the bill saying the inflation reduction act of 2022 strengthens small business by closing tax loopholes and assuring large corporations are held accountable and pay their fair

share. this is critically important because the nation's tax system has unfairly benefited the largest corporations at the expense of small business owners , employees, and independent entrepreneurs. the proposed bill also includes support for access to affordable quality health care which we know significantly impacts small businesses and employees because they have historically comprised a disproportionate share of the working uninsured populations. dr. burgess is on his way here. so if people could be patient, because he was unable to ask his questions in the car. are you almost here? do you want to ask your questions where you are?

>> [indiscernible] [inaudible] >> i don't think we can hear you from the car. >> mr. chairman, can you yield to me? >> i'm happy to yield to you. mr. carter, do you want to be yielded to? >> yes, thank you, mr. chairman. i appreciate that. i want to finish what i started about the drug pricing part of this. this is serious.

i've been doing this ever since i've been in congress. finally. the first thing i did is go to the ftc and tell them you need to look at the vertical integration that has taken place in the drug pricing chain, the fact that the insurance company owns pb ends and the pharmacy. they steer patients to their pharmacies so they can make the most. they are getting these rebates. we all agree, republicans and democrats, we need to bring down prescription drug prices. the hippocratic oath tells us do no harm. with this bill is going to do is going to be harmful because it will deter and kill research and development at a time we can still afford it. it is going to do that. we need cures. we need a cure for alzheimer's the price we will have to pay financially and emotionally, the strain on families, the strain

on the caregivers, all of that will have a tremendous burden on our society if we don't find yours for it. here we are trying to pass this bill that will be doing the opposite of what we need to do. i have to disagree with my good friend the chair of the energy and commerce committee. hr 19 is not a bartus -- partisan bill. it is a bipartisan bill. that has solutions in it that will achieve what all of us want to achieve, that is to bring down prescription drug pricing, but it will do it in such a way that it will not fuel research and development. what you are doing this one, this is not negotiation. this is extortion. >> mr. chairman -- >> what you are doing is extortion. one last thing i have to tell you, this will kill research and development at a time we can least afford to do it. we all want the same thing here. >> mr. chairman, i would like to respond to that.

>> i>> would like to yield briefly to the gentleman from the -- new jersey, the chairman of the energy and commerce committee. >> mr. carter, you know i admire you. but the bottom line is, hr 19, the republican alternative, it does have something around the edges in terms of having costs out of pocket and inflation, but it does not deal with negotiated prices. that is the only significant way you deal with bringing down prices. i'm willing to work with you to address the tbm problem -- pbm problem. the fact of the matter is the drug manufacturers set the price of the drugs and they increase year after year. the number of price increases for the first seven months of 2022 exceeded the 2020 and 2021 hikes in the same period. this year so far, there have been 1186 price highs -- hikes for prescription drugs.

it is for the american people to continue to pay these prices, as every other developed country in the world does not. the increase says that the pharmaceutical industry has had a bigger process than any other industry in the last few years. there's no way in the world they don't have enough money to do research and innovation. most of them, seven out of 10 of them, mr. carter, spend more money on advertising than this idea that it's just not fair, it's unfair to the average american. the pharmaceuticals say we need this money for research. they are paying it back to their shareholders. you aren't spending most of the money on research, it isn't the case. i yield back.

>> thank you very much and i appreciate you providing some filler. i want to ask you to enter the record a statement from the congresswoman. i want to reiterate we are here to lower costs for hard-working americans and this will would lower prescription drug costs. it protects affordable health care coverage and we are making the boldest investment in our history to combat the climate crisis. to cut greenhouse gas emissions by 40%. this will start to -- the tax code by finally making corporations and wealthy start to pay their fair share in taxes.

some of these drugs don't do any good if you can't afford them. people are having a hard time paying for their food or rent or utility costs or a number of other things. 73% of the american people think that what we are doing here on prescription drugs is the right thing to do. i will probably support this bill. >> mr. chair, will you yield? >> we have already gone to the questions, we are just waiting for dr. -- i think dr. burgess we lost him somewhere.

>> mr. chairman. could i enter into the record a joint committee on tax distribution analysis that just came in on the tax provision bill? >> without objection and anything else anyone wants to enter into the record they may do so without objection. does any member of the committee wish to ask a question? seeing none, i want to thank our witnesses for being here. please leave any information you have with the stenographer or send it to me electronically anything you would like inserted into the record. you are now excused and i thank you all for being here.

[inaudible conversations] >> mr. carter -- >> thank you for allowing me to

speak on my mms this afternoon. -- for allowing me to speak on my amendment this afternoon. >> i have to correct you said that some of these drugs many of these drugs don't do any good and if you can't afford them, none of these drugs don't do any good if you can't afford them. if you can't afford to buy them, none of them will do you any good. the other thing i want to point out before i get into my written testimony is the fact that as i stated earlier, only 37% of the price of a drug goes to the pharmaceutical manufacturer. the other 63% goes to the pbm insurance company. you cited numbers on how much money that pharmaceutical manufacturers spend on research and development. how much do pbm's, how much do

insurance company spend on research and development? nothing. that's how much they spent. at least the drug companies are spending some of it on research and development. if you want to do some good, do away with rebates or short they are done at the point-of-sale. make sure they are done at the point-of-sale so they go where they should go which is to the patient. that's why mr. chairman it's important for us to lower drug costs without the risk of -- by forcing the pharmacy benefit managers. my amendment would do just that. it would force the pbm's to pass every bit of it to the patient at the pharmacy counter instead of letting the pbm's steel those dollars to pad their pockets. the pbm's i.e. insurance company.

my democratic colleagues want to lower drug costs but they are letting pbm's off scott free. pbm's offer nothing. they certainly do not help lower drug costs. they bring no benefit whatsoever to the health care system. what's outrageous is the biden administration has finalized the dir rule but on the other hand, it is using the rebate rule which operates under the same principle of returning price concessions to patients at the point-of-sale as a piggy bank to enable its prolific spending spree. the office of the actuary estimated that it's a total of $33.1 billion in cost sharing

over the last 10 years and even when accounting for the increase in medicare premiums, beneficiaries still save $21.3 billion over that time. the rule clearly states lower point-of-sale prices would result directly and lower cost sharing costs for non-low income beneficiaries. we expect this -- decreases would exceed increases. why don't believe -- i am glad that hhs and cms are on the same page that this policy would save patients money at the pharmacy counter significantly more than any premium impact which leads me to my next question for my democratic colleague. how does the office of the actuary the same office who i understand conducted the analysis in this year's rule and policy the so-called rebate rule

that has saved patients over $25 billion in the net cost over 10 years. to clarify, that means the aggregate reduction in patient cost sharing would have been $25 billion greater than the estimated increase. why are they ok with it at the pharmacy counter but separately using the rebate rule as a piggy bank for newark spending and programs. if you truly care, you should vote for my amendment and stop letting pbm's get away with these practices and this highway robbery. i have had at least three democratic colleagues come to me and say you are right our policy is wrong. they are going to vote for your bill, there's no question. they have come to me and told me

personally next session when you were in charge we will work with you to get these pbm's to lower drug vices. with that, i yield. >> thank you. >> thank you to everyone on the rules community -- committee for considering my amendment. i want to talk to you about amendment 42 the focuses on how we need to focus on the economy. this morning, we learned that inflation is still rampant and hurting families. kansas families are still spending 8.5% more this year than one year ago and that was on top of -- through july of last year.

baby food is up, bacon is up, gas is still up. the worst statistic of the day is the real hourly rages -- wages are down 3%. they are trying to push the narrative that it's a strong economy, but americans aren't buying because they can't afford it. as a member of the rules committee and members of your respective districts, i'm sure you are hearing from your constituents the price increases and impacts they are having are just crushing them. the american economy is suffering. the response the house is going to consider this highly partisan bill that doubles down on the policies that got us here. we are spending on bad priorities. the inflation reduction act doesn't really reduce inflation at all. instead, it increases taxes,

increases spending and continues to increase inflation and hamstring the economy. how can we make that better? start with bipartisan common sense amendment like the one that i am introducing today. it's a temporary extension of the research and development tax credit to the end of 2025. research and development is key for economic growth in the country and an immediate extension of r&d costs will expand r&d in the u.s.. where r&d occurs is critical for job creation and job growth. in the case of the tax implications, full expensing was allowed through 2021. businesses will be required to spread out or amortize those expenses over five years for domestic r&d for 15 years. it was -- will significantly diminish the year term value

making us the only country requiring r&d expenditures amortized. when compared to the leading markets around the world, the u.s. ranks 26th for the value of our r&d tax incentives. spending on r&d would make us less competitive. [indiscernible] i have introduced and reintroduced the bill with john larson from connecticut the american innovation and competitiveness act that would allow to expand r&d permanently. my mimic today would provide certainty to job creators and workers for the next few years.

i think the amendment today should be a no-brainer. we need to keep r&d dollars inside where we can strengthen american businesses and help create more jobs for americans. i look forward to questions and hope you consider including my amendment in this bill. >> i now yield to dr. burgess. >> i have two amendments. the first is number 11 it would remove doctors from the middle of drug pricing negotiations putting government and drug manufacturers. we face a serious problem with the nation's physicians. they had been through with the pandemic for two years, they are facing a series of cuts. the fee schedule update for this

year's calculated to be 0%. you know what that means in washington dc. it means a cut especially when you have 9% inflation. i think this amendment is going to be important to alleviate some of the burden. it was offered with dr. murphy in north carolina. it allowed drug manufacturers to reoffend -- refund the government the amount. if a pharmaceutical company broke its prices of to quickly. there is a precedent for drug companies, it would just remove physicians from the negotiation process. our goal should be to achieve cost savings without threatening

the stability of providers further threatening the stability of providers and the practices. i have heard directly from doctors that they would face significant financial risks under this which would affect america's patients. the gop doctors caucus recently sent a letter to speaker pelosi and leader schumer on how this would affect our health care system. we have seen specialty practices close. i'm especially concerned that oncology practices, rheumatology, neurology, those that administer part b drugs that would see the pricing structure change dramatically going to be hard hit and we will see practices close. practices will still be taken care of, but at the site of

service that costs more. a costs third to see a doctor in the hospital versus in the doctor's office. yet we will be driving patients into hospitals to get their cancer care and the result will be a higher cost. we should remove the doctors from the process entirely. i encourage them to read the section written by all health care members in congress. the second amendment is number 53. this would require that 100% of the rebate on insulin be passed

down to the patient at the pharmacy counter. i recently introduced the insulin savings for patients act. it would allow phased in rebate on insulin and medicare part d from 50% to 100% over three years. the rebate would be passed onto the patient at the point-of-sale. it would build on the concept and past 100% of the rebate on insulin to the patient at the time of purchase in the pharmacy. one of three medicare fisheries have diabetes. millions of seniors rely on insulin to live. this solution certainly makes the monthly cost of a patient's insulin more affordable for the millions of medicare beneficiaries with diabetes. an analysis that i have found

that passing the rebate through to the patient's in the retail market could save certain patients as much as $800 annually while increasing premiums by 1%. another study found that if discounts were passed directly to patients at the pharmacy counter, a typical patient with diabetes taking five medicines including insulin could see their out-of-pocket spending decreased by more than $900 per year. one could argue that reducing out-of-pocket insulin costs for individuals with diabetes could potentially have a positive impact on adherence. this common sense approach to accomplishing that is worth our consideration. our pricing system is structured in a way that allows for rebates but patients do not see the benefit of these rebates. this amendment would require that not just 100% pass through of the dollars but requires to

further improve congress's knowledge on what pricing policies we could pursue. this is a common sense amendment and i urge that it be made into order. >> i think the gentleman for his amendments. >> i have some really good questions. >> i appreciate you making it here. does anyone on either side have any questions? >> mr. chair, i want to thank the witnesses and two of my favorite republicans mr. carter and mr. smith for being here today. >> thank you anybody else?

and mr. estes. >> seeing none, i would like to thank our witnesses for their testimony. please see that they are >> the house he went on to three-hour of debate. the house meets friday to consider the legislation and vote and send it to the president's desk. follow it live starting 9:00 a.m. eastern on c-span. you can also watch on the free c-span now video app or online at c-span.org. >> c-span's "washington journal," every day we take your calls live on the air, on the news of the day, and we discuss policy issues that impact you.

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