Electric cars, drug costs and more: 5 battles Democrats could lose on their marquee bill

Democrats are bracing for potentially huge changes to their party-line climate, tax and health care bill as it’s run through strict Senate rules that will determine which parts they can keep, which need makeovers and which they’ll have to chuck in the garbage.

Both Republican and Democratic aides are still consumed by an aggressive slate of meetings with the Senate’s nonpartisan parliamentarian, who will decide whether each piece of the legislation gels with rules that allow Democrats to evade a GOP filibuster of their marquee domestic bill. And so far, the rules referee has been noticeably silent as to what stays and what goes.

That leaves a hefty amount of the package up in the air as Democrats plow forward with a schedule that’s the congressional equivalent of an Olympic triple axel. The bill’s provisions designed to cut prescription drug costs, encourage the buying of electric cars and narrow tax loopholes are all still marred by major question marks — and when those answers come, they could endanger or even sink Democrats’ entire effort on the floor.

But Senate Finance Chair Ron Wyden (D-Ore.), whose panel has overseen the drafting of huge swaths of the bill, professed no concern with the unresolved policy questions or rushed timeline.

“We have been preparing for this … for, like, a year and a half. We went out and recruited people like they were basketball stars because they’re so knowledgeable at how you successfully run this extraordinary procedural gantlet,” said Wyden, a former college hoops player himself.

The nonpartisan Congressional Budget Office released an official estimate Wednesday that Democrats’ overall bill, as currently written, would reduce deficits by about $101.5 billion over a decade, not including the provisions that beef up IRS enforcement. With those measures included, the deficit reduction would amount to $305 billion, the CBO said.

Of course, the bill may not stay intact as Democrats race to wrap it up this week. Here are five provisions that may have to be stripped or modified under the Senate’s budget rules:

Capping insulin costs

Democrats plan to try for a major add to their bigger legislation: a $35 per month cap on what people can pay out-of-pocket for insulin. They know full well that Republicans could easily nix it; the measure raises an obvious red flag under the budget rules because it may target the finances of drug companies more than it affects government coffers.

Under Senate rules, each piece of Democrats’ bill must produce a significant effect on federal spending, revenues and debt. Democrats have to show that any proposed policy changes still primarily affect the federal budget and are not simply a “side effect.”

Sen. Richard Burr (R-N.C.), the top Republican on the Senate HELP Committee, said Wednesday that the insulin provision would draw a GOP challenge.

Saving on prescription drugs

The Senate’s nonpartisan rules arbiter has spent more than a week reviewing Democrats’ drug-pricing plans. While provisions that would allow Medicare to negotiate the costs of higher drugs seem more likely to pass muster, Democrats’ push to penalize drug companies when they raise prices on those with private health insurance presents a bigger hurdle.

The savings yielded by that mandate involving the private insurance market could be considered a budget side effect of the policy rather than its main purpose, which would break Senate budget rules. Some budget experts surmise that the measure has a shot at surviving, but caution that no one has a crystal ball when it comes to the parliamentarian.

Restrictions on electric car credits

Some of the bill’s new conditions to qualify for a $7,500 tax credit for electric vehicle purchases could also come under scrutiny. Under the current proposal, a car is only eligible for full credit if the batteries were made with materials from the U.S. or countries that have trade agreements with the U.S.

The requirements are meant to satisfy Sen. Joe Manchin’s (D-W.Va.) concerns about the electric vehicle industry relying too heavily on China. But those conditions could once again raise the question of whether or not the policy being created outweighs its effect on the federal budget.

Leasing of public lands for energy production

Another provision Democrats may need to revise is a requirement that the Interior Department must auction at least 2 million acres of land within a year for onshore oil and gas leases before allowing for solar and wind projects on public lands.

Opponents of the proposal argue its policy impact outweighs its budgetary effects, because it makes solar and wind development on federal lands contingent on oil producer leases.

Tightening a tax loophole

Democrats want to narrow a loophole that allows wealthy private equity and hedge fund managers to pay less in taxes, known as the carried interest provision. But Arizona Sen. Kyrsten Sinema, the only Democrat who hasn’t yet signed off on the bill, is seeking the elimination of that carried-interest shrinking as she weighs whether to support the entire package.

Before Democrats can pass their bill with a simple majority, senators must endure an all-night amendment marathon that’s known as a “vote-a-rama.” During that period, Republicans could propose an amendment that would strike the carried interest language — and would likely succeed in its removal given the 50-50 Senate, so long as Sinema sides with them.

“We have looked at this every which way,” Wyden said, when asked about potential changes to win Sinema’s vote. “And any way you look at it, we’re saying there’s something that needs to be changed when you have multi-billion-dollar corporations paying lower tax rates than nurses and firefighters.”

Josh Siegel contributed to this report.

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