[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
THE INFLATION REDUCTION ACT:
A YEAR IN REVIEW
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH CARE
AND FINANCIAL SERVICES
of the
COMMITTEE ON OVERSIGHT
AND ACCOUNTABILITY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 14, 2023
__________
Serial No. 118-65
__________
Printed for the use of the Committee on Oversight and Accountability
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov
oversight.house.gov or
docs.house.gov
_______
U.S. GOVERNMENT PUBLISHING OFFICE
53-383 PDF WASHINGTON : 2024
COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Jamie Raskin, Maryland, Ranking
Mike Turner, Ohio Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama Gerald E. Connolly, Virginia
Clay Higgins, Louisiana Raja Krishnamoorthi, Illinois
Pete Sessions, Texas Ro Khanna, California
Andy Biggs, Arizona Kweisi Mfume, Maryland
Nancy Mace, South Carolina Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas Katie Porter, California
Pat Fallon, Texas Cori Bush, Missouri
Byron Donalds, Florida Shontel Brown, Ohio
Kelly Armstrong, North Dakota Jimmy Gomez, California
Scott Perry, Pennsylvania Melanie Stansbury, New Mexico
William Timmons, South Carolina Robert Garcia, California
Tim Burchett, Tennessee Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia Summer Lee, Pennsylvania
Lisa McClain, Michigan Greg Casar, Texas
Lauren Boebert, Colorado Jasmine Crockett, Texas
Russell Fry, South Carolina Dan Goldman, New York
Anna Paulina Luna, Florida Jared Moskowitz, Florida
Chuck Edwards, North Carolina Vacancy
Nick Langworthy, New York
Eric Burlison, Missouri
------
Mark Marin, Staff Director
Jessica Donlon, Deputy Staff Director and General Counsel
Tyler Sanderson, Senior Counsel
Reagan Dye, Professional Staff Member
Mallory Cogar, Deputy Director of Operations and Chief Clerk
Contact Number: 202-225-5074
Julie Tagen, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee on Health Care and Financial Services
Lisa McClain, Michigan, Chairwoman
Paul Gosar, Arizona Katie Porter, California Ranking
Virginia Foxx, North Carolina Minority Member
Glenn Grothman, Wisconsin Alexandria Ocasio-Cortez, New York
Russell Fry, South Carolina Jimmy Gomez, California
Anna Paulina Luna, Florida Greg Casar, Texas
Nick Langworthy, New York Summer Lee, Pennsylvania
Eric Burlison, Missouri Jasmine Crockett, Texas
Vacancy Vacancy
C O N T E N T S
----------
Page
Hearing held on September 14, 2023............................... 1
Witnesses
----------
Mr. Preston Brashers, Senior Policy Analyst, Tax Policy, Grover
M. Hermann Center for the Federal Budget, The Heritage
Foundation
Oral Statement................................................... 10
Mr. Joel White, President, Council for Affordable Health Coverage
Oral Statement................................................... 11
Mr. Trevor Higgins (Minority Witness), Senior Vice President,
Energy and Environment, Center for American Progress
Oral Statement................................................... 14
Written opening statements and statements for the witnesses are
available on the U.S. House of Representatives Document
Repository at: docs.house.gov.
Index of Documents
----------
* Statement for the Record; submitted by Rep. Raskin.
* Article, Time Magazine, ``Trump Allies Are Attacking Biden
For a Plan to Hire 87,000 New IRS Agents That Doesn't Exist'';
submitted by Rep. Casar.
* Letter, September 13, 2023, from Schizophrenia & Psychosis
Action Alliance to the Committee; submitted by Rep. McClain.
* Letter, from the PFCD Coalition to the Committee; submitted
by Rep. McClain.
* Statement for the Record, Associated Builders and Contractors
(ABC); submitted by Rep. McClain.
Documents are available at: docs.house.gov.
THE INFLATION REDUCTION ACT:
A YEAR IN REVIEW
----------
Thursday, September 14, 2023
U.S. House of Representatives
Committee on Oversight and Accountability
Subcommittee on Health Care And Financial Services
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2:22 p.m., in
room 2154, Rayburn House Office Building, Hon. Lisa C. McClain
[Chairwoman of the Subcommittee] presiding.
Present: Representatives McClain, Grothman, Langworthy,
Porter, Casar, and Lee.
Mrs. McClain. The hearing of the Subcommittee on Health
Care and Financial Services will come to order.
Welcome, everyone.
Without objection, the Chair may declare a recess at any
time.
I recognize myself for the purpose of making an opening
statement.
Again, thank you all for being here. I appreciate your
patience.
We are here today to examine the Inflation Reduction Act, a
year since its passage. Not surprisingly, the Inflation
Reduction Act has not delivered on its promises that the
Democrats claimed it would. Americans still are struggling
under the weight of inflation. Americans are paying more for
just about everything: groceries, rent, gas.
The most recent Consumer Price Index for August 2023
increased to 3.7 percent. When President Biden was sworn into
office in January, he inherited a 1.4 percent inflation rate.
Inflation today is more than 2.5 times the rate he inherited.
And remember, inflation is cumulative. Over the past 2 years,
total inflation has increased by over 17 percent, and prices
are likely only going to tick up.
Meanwhile, the Federal Reserve continues to raise interest
rates in an attempt to curb inflation and the inflation brought
about by the excessive spending. Frankly, this frustrates me.
When Americans were first experiencing the highest inflation in
40 years last summer, Democrats claimed their Inflation
Reduction Act would do what the bill's name indicated, help
curb inflation. Republicans saw it for what it really was, a
radical spending spree to implement a leftist wish list for the
Green New Deal.
A year later, President Biden says that he regrets the
title of the bill. Instead, he has labeled the $369 billion
spending package as the single greatest investment in climate
change ever. Not a word about inflation, because it was never
intended to reduce it.
When Americans needed inflation relief the most, the IRA
was a lie that the Democrats told to push their Green New Deal.
Not only does the IRA do little to reduce inflation, but it
will continue to add to the deficit with rampant spending. It
is estimated that the Federal deficit will hit $2 trillion as
the Fiscal Year ends later this month. The IRA's green energy
slush fund is expected to cost us more than $633 billion over
the next 10 years. Goldman Sachs estimates that the IRA's green
energy credits will cost taxpayers as much as $1.2 trillion by
2032.
Further, the IRA's Medicare price control provisions are
harming the market. The IRA allows Federal Government to
dictate arbitrary prices on drugs, disrupting normal market
mechanisms of supply and demand, and putting drugs already in
short supply at further risk. Drug price control risk for the
future of investment in research and development of the
innovative treatments Americans need the most.
I, as well as others on this Committee, understand that
healthcare is getting more expensive, but this is not the way
to fix it. And, in fact, it is making the problem worse. Just
like hiring 87,000 more IRS agents and wishy-washy
unenforceable promises to not target regular Americans is not
going to help reduce the deficit, right? We need the money
that--one, we have a spending problem, but, two, we also need
to pay attention to where this money is going. Government's
micromanagement of the economy is not the solution. Maybe we
should micromanage where the money is actually going.
We have seen it fail before. In the late seventies,
President Jimmy Carter tried to ease inflation by imposing
energy price controls. It failed then, and Americans suffered.
It will fail this time as well.
The solutions are free-market, pro-competition policies,
like shrinking the deficit; promoting economic growth; cutting
regulatory red tape; simplifying the Tax Code; eliminating
government waste, fraud, and abuse, really following the money
and holding these agencies accountable as well; and investing
in American energy and independence.
The IRA did not do any of these things, and that is why the
American people are worse off today than the day it passed.
I am looking forward to hearing from the experts on the
impacts and what should be done to help Americans.
I now recognize Ranking Member Porter for the purpose of
making her opening statement.
Ms. Porter. Thank you very much, Madam Chairwoman.
We have 16 days until the government shuts down. Speaker
McCarthy, who is slow walking government funding bills one by
one, has only passed 1 of 12. I am a former professor, so I
know what 1 of 12 means. The Speaker is getting an F. And these
bills do not even have enough support to pass in the Senate.
The Speaker is not on pace to significantly improve his
grade before the deadline. So, what does that mean for the
American people? It means that House Republicans are driving us
off a cliff to a shutdown and to the corresponding economic
harm. That is not the type of action that is going to bolster
our economic growth and fight inflation.
Our constituents, Democrats and Republicans alike, are
wondering what the plan really is around here. Make no mistake,
today's hearing tells us a great deal about the plan. Someone
who is driving you off a cliff wants to distract you, and that
is what Republicans are trying to do with this hearing. While
House Republicans struggle to figure out any kind of real plan
to keep the government open and to lower costs for the American
people, they come up with hearings like this to attack the
progress that was made and is being made.
The Inflation Reduction Act is paying down our national
debt, lowering our energy costs, and making prescription drugs
and healthcare more affordable. It is a testament to what
happens when Washington stops delays, gets to work, and makes a
genuine effort to adjust problems that Americans are facing. In
other words, it is what Washington looks like when it is doing
the opposite of what it is doing right now.
Look, you do not have to believe me when I say the
Inflation Reduction Act is lowering costs for Americans and
saving us money. Let me give you a couple of examples. The
Inflation Reduction Act includes legislation that I wrote that
recovers tax dollars from drug companies that hike drug prices
faster than the rate of inflation. For years, Big Pharma has
lined its pockets by jacking prices up way faster than
inflation, and now patients are already paying less.
My bill would recoup $63 billion over 10 years. Let us be
clear, with my legislation alone, which is just one part of
this landmark law, we are stopping drug companies from ripping
off Americans and we are saving our government billions of
dollars. That is one small part of the law alone that is
meaningfully lowering people's costs.
The Inflation Reduction Act is also saving our constituents
money when it comes to energy. The Inflation Reduction Act
includes another piece of legislation that I wrote to charge
polluters a fair rate when they lease Federal land. It was the
first increase in that rental rate in over 100 years. Big Oil
has been cheating all Americans by drilling on public lands for
pennies on the acre. No more. My legislation is already saving
taxpayers millions by making Big Oil finally pay a fair price.
Whether you are a Republican or a Democrat and whether you
agree with every single aspect of the Inflation Reduction Act
or not, one thing is clear: We all win when we have people in
charge who make a genuine effort to lower costs for families,
not shut the government down.
I yield back.
Mr. Langworthy. [Presiding.] Thank you, Ranking Member.
I am pleased to welcome our witnesses for today: Mr.
Preston Brashers, Mr. Joel White, and Mr. Trevor Higgins.
Mr. Brashers is a senior tax policy analyst at the Grover
M. Hermann Center for the Federal Budget at The Heritage
Foundation. Mr. White is the president of the Council of
Affordable Health Coverage. And Mr. Higgins is the senior vice
president for Energy and Environment at the Center for American
Progress.
We look forward to hearing what you all have to say on
today's important subject.
Pursuant to the Committee Rule 9(g), the witnesses will
please stand and raise their right hands for the oath of
office.
Do you solemnly swear or affirm that the testimony that you
are about to give is the truth, the whole truth, and nothing
but the truth, so help you God?
Let the record show that the witnesses answered in the
affirmative.
Thank you. And you all may take a seat.
We appreciate you being here today and look forward to your
testimony. So, let me remind the witnesses that we have read
your written statements, and they will appear in full in the
hearing record. Please limit your oral statements to 5 minutes.
As a reminder, please press the button on the microphone in
front of you so that it is on, and the Members can hear you.
When you begin to speak, the light in front of you will turn
green. After 4 minutes, the light will turn yellow. And when
the red light comes on, your 5 minutes have expired, and we
would ask that you please wrap up.
I now recognize Mr. Brashers for his opening statement.
STATEMENT OF MR. PRESTON BRASHERS, PHD
SENIOR POLICY ANALYST, TAX POLICY
GROVER M. HERMANN CENTER FOR THE FEDERAL BUDGET
THE HERITAGE FOUNDATION
Mr. Brashers. Chairwoman McClain, Ranking Member Porter,
and Members of the Subcommittee, thank you for giving me the
opportunity to testify today.
My name is Preston Brashers. I am the senior policy analyst
for Tax Policy at The Heritage Foundation. The views I express
today are my own and should not be construed as representing
any official position of The Heritage Foundation.
August 16th marked the 1-year anniversary of the signing of
the Inflation Reduction Act. The IRA, as the name--as the
bill's title suggests, was intended to reduce inflation
primarily through deficit reduction. But 1 year in, the
Inflation Reduction Act has contributed to significantly higher
deficits compared to last year. These deficits and
malinvestments spurred by the IRA have added to inflationary
pressure, which has forced the Fed to dramatically raise
interest rates. Rates on a 30-year mortgage are at 20-year
highs, putting the American Dream out of reach for many
American families.
The IRA is making Americans poorer and turning them into
debtors to the special interest green agenda. Although CBO and
some other groups originally scored the IRA as achieving a
small surplus over the 10-year budget window, the surpluses
were backloaded at the end of the decade while deficits were
frontloaded into the first 4 to 5 years. And the IRA is much
more fiscally irresponsible than it appeared on paper. It uses
gimmicky and questionable pay-fors and expirations, and some of
the provisions are proving much more costly than forecasters
expected, especially the bevy of tax credits for green energy,
electric vehicles, carbon sequestration, and other things
ostensibly connected to the climate agenda.
CBO initially scored these provisions as having a $270
billion budget impact through 2031, but in May, government
forecasters estimated the cost of these credits was double the
initial estimate. Some outside estimates have put that figure
closer to a trillion dollars or roughly four times what the
American public was originally told.
The IRS' implementation of the green tax credits has not
helped matters. When the IRA passed, analysts expected that
relatively few vehicles would qualify for the EV credits
because of strict limitations on foreign manufacturing,
critical mineral content, and income limitations for the
purchaser. However, the IRS has dramatically weakened those
restrictions.
First, Treasury delayed issuance of guidance for the
battery component rules, so EVs sold between January 1st and
April 16th qualified for the EV credits even if they did not
meet the domestic battery content requirements.
Second, the IRS created a regulatory loophole by treating
EVs that businesses leased to consumers as commercial clean
vehicles. As a result, wealthy EV buyers and foreign
manufacturers can circumvent income thresholds and domestic
requirements by simply leasing the EVs instead of buying and
selling them.
Third, the IRS further extended the credits to foreign
manufacturers by taking an incredibly expansive interpretation
of the term ``free trade agreement'' to include extremely
narrow trade deals covering EV critical minerals. Therefore,
car sales with Japanese-produced batteries can qualify for the
credits.
The costly expansion of the green tax credits will not have
a material effect on global temperatures because the U.S.'
share of global emissions is a mere 11 percent. And that number
has been falling as China and India account for an increasingly
large share year after year.
Even if you accept dire predictions about global warming
and even if the U.S. completely eliminated greenhouse gas
emissions, by the end of the century, it would only reduce
global temperatures by no more than about one-fifth of a degree
Celsius, but the IRA will not completely eliminate U.S.
emissions, far from it.
Based on the level of emissions reductions from the IRA--
that the IRA is expected to achieve, you are looking at less
than a 0.03 degree difference in temperatures by the end of the
century. And I think that is being generous, as that is only if
you extend the emissions reductions out for the rest of the
century at the cost of many more trillions of dollars.
Lawmakers must weigh the benefits against the costs of the
Inflation Reduction Act, and in my estimation, the IRA's
benefits to special interest green companies are not worth the
cost to American taxpayers and consumers.
Thank you.
Mr. Langworthy. Thank you.
I now recognize Mr. Higgins for his opening statement.
(MINORITY WITNESS)
STATEMENT OF MR. TREVOR HIGGINS
SENIOR VICE PRESIDENT, ENERGY AND ENVIRONMENT
CENTER FOR AMERICAN PROGRESS
Mr. Higgins. Thank you to Chair McClain and to
Representative Langworthy and Ranking Member Porter, and other
Members of the Subcommittee. I appreciate the opportunity to
appear today to provide testimony on the anniversary of the
Inflation Reduction Act.
Little over 1 year ago, Congress enacted the Inflation
Reduction Act, building on the achievements of the
Infrastructure Investment and Jobs Act and the CHIPS and
Science Act. This groundbreaking legislation is already at work
today, growing the economy by investing in the middle class.
The new law connects good-paying jobs and apprenticeship
programs to clean energy incentives for the first time. It
builds supply chains and domestic manufacturing that will equip
America to compete in the global clean energy economy for
decades to come. It cleans up air pollution that is
concentrated in low-income communities. It modernizes the IRS
to deliver better service to taxpayers and fair enforcement,
and it cuts healthcare costs and household energy costs in
every region of the country. Together, these investments are
laying a foundation for continued climate action in ways that
will bring benefits to people in their everyday lives and put
the U.S. climate goals within reach to achieve an emissions
reduction of 50 to 52 percent below peak levels by the end of
this decade.
I would like to briefly take each of these points in turn.
First, IRA is not only expected to create more than a million
new jobs in 2030. It has already created, in just this last
year, more than 170,000 clean energy jobs across the United
States. These are not just jobs of the future. These are jobs
right now. And importantly, the full value of the new clean
energy tax credits is only available for project developers who
pay prevailing wages and employ people in apprenticeship
programs, ensuring that the clean energy economy will be built
with good jobs.
Second, IRA is investing in domestic manufacturing and
resilient supply chains by requiring increased proportions of
domestic content, incentivizing domestic production of
batteries and critical mineral processing, and supporting
reinvestment in energy communities.
According to a recent report from the Rhodium Group, more
than $200 billion has already been invested, public and
private, to deploy clean energy since the passage of the
Inflation Reduction Act, and Climate Power has documented
examples of new clean energy projects across 44 states and
counting.
Third, IRA investments help cleanup air pollution that is
concentrated in low-income communities, which is projected to
save more than 4,000 lives every year by the end of this
decade. The Justice40 Initiative has already organized more
than $90 billion across 24 Federal agencies to ensure these
programs are actually bringing benefits to disadvantaged
communities as intended.
Fourth, IRA is cutting costs for American households,
including both energy costs and healthcare costs. By offering
tax incentives, grants, and rebates, IRA is helping households
to choose to install heat pumps or purchase an electric
vehicle. Investments in affordable clean electricity and
reduced fuel demand across the economy are actually projected
to lower the price of natural gas. So, even households that do
not take up these tax incentives will still benefit.
And when it comes to healthcare costs, IRA is reining in
high drug prices. Last month, the Centers for Medicare and
Medicaid Services announced the first 10 drugs for which it
will negotiate prices, and it is estimated by CBO that this
will cut prices for these drugs in half. This will be a
lifeline for millions of seniors and disabled people.
IRA also cracks down on pharmaceutical companies that hike
drug prices above the rate of inflation, caps out-of-pocket
spending for Medicare enrollees at $2,000 a year, provides
lifesaving vaccines at no cost, saves $800 per year for
premiums through the Affordable Care Act, and limits out-of-
pocket spending on insulin to $35 a month.
When you look at inflation, this is what it is. It is about
household energy costs. And when IRA passed, inflation rate was
8.3 percent annually. This month it is 3.7 percent. That is
progress. And, in fact, the United States is experiencing lower
inflation than comparable countries. The rate last month in
Germany was 6.2 percent and the United Kingdom was 6.4 percent.
Finally, the Inflation Reduction Act made long overdue
investments in the IRS to modernize its technology, improve
customer service, and audit wealthy taxpayers. Thanks to the
new funding, the IRS reduced call wait times this tax filing
season from almost half an hour to just 3 minutes. And tax
enforcement is about not just collecting needed revenue but
also unrigging the economy for workers and honest taxpayers,
while making sure that the wealthy pay the taxes they legally
owe.
So, in conclusion, these benefits are just beginning to
take effect. We are only 1 year in. But already, the Inflation
Reduction Act has created hundreds of thousands of jobs,
delivering clean energy across the country, and has begun to
onshore supply chains that China has long sought to dominate.
The new job quality domestic content and place-based investment
incentives for clean energy are building a sector that will
serve as an example for the rest of the economy.
I thank you for the opportunity to testify here today.
Mr. Langworthy. Thank you.
I now recognize Mr. White for his opening statement.
STATEMENT OF MR. JOEL WHITE
PRESIDENT
COUNCIL FOR AFFORDABLE HEALTH COVERAGE
Mr. White. Congressman Langworthy, Ranking Member Porter,
thank you for the opportunity to present my views here today on
the Inflation Reduction Act. My comments will focus on the new
Medicare drug price setting program, but I am happy to answer
any questions you may have.
I want to start off by discussing the human impact of the
law. I have two dear friends with teenage daughters who have
serious and rare medical conditions. Their names are Ella and
Harper. Ella has EB, and she should have died years ago. EB
causes the skin to become so fragile that it tears and blisters
at the slightest touch. There is no cure, and the current
treatment includes daily wound care management and protective
bandaging. Ella's dad told me once he spends $10,000 a month on
bandages alone.
In May, the FDA approved the first and only medicine to
treat EB. This gene therapy heals the wounds and prevents new
blisters caused by the disease. So, Ella has hope. But this is
a treatment, not a cure.
Under the IRA, if the company investigates another use of
their product, say, for skin cancer and it is approved, the
original product could be subject to the IRA's price controls.
As a result, the company likely will not investigate new
indications, and people with skin cancer and EB will lose out.
My other friend's daughter is Harper. She has ITP and was
diagnosed when she was 6 years old. Her immune system attacks
and destroys her platelets by mistake, leading to bleeding and
bruising that can be life-threatening. It is unknown why this
happens. People with chronic ITP do not have a host of
treatment options and there is no cure.
So, I get angry when I hear some politicians talk about the
IRA's benefits and none of the downsides, such as how the law
may lead to fewer cures for people like Ella and Harper.
We have decades of experience in other countries about how
similar price setting systems impact patients, including less
access and fewer innovations. In the U.S., since the enactment
of the IRA, we have already seen investments shift away from
pills and entire research programs for blindness and cancer
pulled since the enactment of the law. All of the experts, all
of them--CBO, the CMS actuary, and private academics--agree
that the IRA will result in fewer therapies. They simply
disagree on the extent of the damage.
The most optimistic estimate is from the Congressional
Budget Office. They say there will be two fewer treatments or
cures over the next few years. Some are willing to accept that.
Ella and Harper are not, and neither am I. They need two more
cures.
With respect to the law's implementation, CMS recently
announced the 10 drugs selected for Medicare's drug price
setting program. Congress exempted the price setting program
from the normal rulemaking process enshrined in the 77-year-old
Administrative Procedure Act. The Democrat author of the APA
said it is a Bill of Rights for the hundreds of thousands of
Americans whose affairs are controlled or regulated by Federal
Government agencies.
The U.S. General Services Administration has noted, quote,
``The APA ensures public transparency in the rulemaking
process, while holding the government accountable to address
public input. Transparency and accountability ensure integrity
throughout the process,'' end quote.
By exempting the program from the normal process,
politicians and bureaucrats can set prices that impact our
healthcare in secret. Practically, this means CMS can change
the rules on a whim. The agency does not have to accept
feedback from stakeholders, and it does not have to explain its
decisions or provide an analysis of the impact on their
patients.
In addition, CMS will spend $3 billion to set up six new
divisions to replace private sector expert negotiators. This
raises obvious questions. How many private sector jobs are
being replaced by new bureaucrats? If new employees come from
the industry, will CMS preclude employees from being lobbied by
their former employers? The Biden Administration should answer
these questions, and this Committee should ask them.
Finally, I am concerned the law will increase costs and
worsen health disparities. For example, Medicare's price
controls apply to pills 9 years after FDA approval versus 13
years for biologics. This small-molecule penalty creates
powerful incentives to create more biologics and less pills.
The problem is that biologics are harder to genericize and are
typically administered by a doctor in a more expensive setting.
For patients who lack access to doctors, such as people in
rural areas or low-income urban communities, they will find
getting their drugs much more difficult. To address this,
Congress should eliminate the small-molecule penalty.
In conclusion, I think we all want lower healthcare costs,
but we also want good access to care and new innovative
products. I have outlined seven solutions in my testimony that
will not harm innovation and access. But Congress should start
by repealing the drug price setting program. Ella and Harper
would thank you.
Mr. Langworthy. Thank you all for your opening statements.
I now recognize myself for 5 minutes of questions.
I want to start by asking you, Mr. Bashers, whether or not
you believe so-called green energy subsidies are effective at
reducing inflation.
Mr. Brashers. So, the green energy subsidies will benefit
people that want to buy electric vehicles, which is
predominantly going to be very wealthy people. The typical
lower-to middle-income person is probably not going to benefit
from the EVs in the same way.
The general--the overall effect of the Inflation Reduction
Act's green tax credits is going to dramatically increase
deficits, and that is the primary cause of the inflation that
we have been experiencing. The inflation--when the Federal
Government is spending substantially more money than it is
taking in, there are two ways that that can manifest itself. It
can either manifest itself in higher inflation or in higher
interest rates. For a while the Federal Reserve was absorbing a
lot of that Treasury debt that was being issued and, therefore,
it was--what we were seeing was inflation. Since then, it has
changed its tact and it started raising interest rates, but
that has got its own set of problems.
Mr. Langworthy. Well, thank you.
It is funny that the Biden Administration claims that this
act is there to reduce inflation when one of the primary
strategies they are using is inflationary by nature. The
subsidies themselves, while supposedly funded to relieve
financial pressure on consumers, instead, impose radical,
shortsighted and incredibly expensive so-called green energy
policies on working families.
And that is exactly what we are seeing in my home state of
New York. The IRA allocates almost $9 billion on two separate
rebate programs, all for electric appliance installation and
one known as the Homes Rebate Program. These rebates are
offered to consumers who make improvements to their homes that
achieve energy savings benchmarks. However, last month, the DOE
issued guidance telling states to ban homes from accessing
these rebates if they intend to upgrade their liquid or gas-
fired appliances to more efficient models. The document says
they should only be allowed to do envelope improvements, such
as install efficient doors, windows, or insulation, even if
their HVAC technician suggests a heating system upgrade will
realize the greatest energy savings for their home.
Dr. Brashers, I am sure you will agree that these rebates
do not seem to benefit consumers?
Mr. Brashers. In my estimation, it would be no.
Mr. Langworthy. So, Dr. Brashers, who do green energy
subsidies largely benefit?
Mr. Brashers. The companies that are engaged in the green
industry, they will obviously benefit. The overall effect I
think on the economy, though, is not going to be creating jobs,
it is not going to be creating new wealth. It is simply
reallocating it. And, in fact, the size--the total size of the
pie is going to be diminished because we are moving to less and
less efficient companies, less and less efficient products.
Mr. Langworthy. And, Dr. Brashers, have you heard of the
Drive Clean Rebate for electric cars? It is an offer in New
York State through the state's Charge New York Initiative. I
know there is similar rebates in other states as well.
Mr. Brashers. I am not familiar with that one.
Mr. Langworthy. OK. You know, most green energy rebates,
including the electric vehicle subsidies, do not benefit the
majority of consumers. You have many states, they offer them
through the IRA, and this is concerning due to China's control
over critical mineral supply chains.
The Oversight Committee, we recently discussed the
possibility of Chinese firms funding litigation to hinder
American energy development. If we do not produce our own
energy and mine critical minerals, we risk dependence on China
for the Biden Administration's priorities. And if China cuts
off our access to critical minerals, it could lead to a
significant price increase affecting all of these priorities.
Do you think America could face a green energy bailout if
there was a significant supply chain interruption?
Mr. Brashers. I think the possibility of a green energy
bailout is actually pretty high given what you are seeing in
terms of all the grants and loans in the program. I think we
already saw it today. Ford was noting that they were having
large losses from their EV business. So, I think the
probability of that is not--it is certainly not low.
Mr. Langworthy. Yes. I spent a lot of my time in recess
talking to different, you know, retailers, especially auto
dealers, and they cannot move this product. I mean, this is the
government picking winners and losers, and right now it is
looking like a loser, from my perspective.
Thank you.
This mistitled Inflation Reduction Act is nothing more than
an attempt to push the green agenda by the Biden Administration
on American citizens. Subsidies that were sold as economic
relief have actually led to increased inflation that has
disincentivized investment in industries not eligible for tax
credits. The Administration's green agenda hurts the everyday
American, and I am glad we are able to have this conversation
with you today to bring this to light.
I now recognize Ranking Member Porter from California for 5
minutes.
Ms. Porter. Thank you very much.
We have a major heat wave harming portions of the United
States during most of July and August, and in southern
California where I live, we saw temperatures get as high as 110
degrees.
Mr. Higgins, if you were experiencing this kind of extreme
heat, what would you turn on in your home to keep yourself safe
and comfortable?
Mr. Higgins. The air conditioner.
Ms. Porter. The air conditioner. We would all prefer to
turn on the air conditioner. But not every American can afford
an air conditioner, let alone pay for the energy needs of that
system.
I know a resident of California's 47th congressional
District who got frustrated during the heat wave. They got
literally hot and bothered. Throughout the summer they did not
have air-conditioning in their home, and this constituent is
concerned about the increase in temperatures, the air quality
issues with wildfires, and they want to buy an energy efficient
heat pump to cool their home, bring down their heating costs,
and reduce their dependence on volatile fossil fuels. But she
cannot just go spend the money because she also needs to
replace her broken gas stovetop, which has one working burner,
and her 20-year-old dishwasher.
Mr. Higgins, how can the Inflation Reduction Act help this
Californian afford a heat pump and lower their bills without
breaking the bank?
Mr. Higgins. Thank you for the question. For the first time
there are new incentives for heat bumps because of IRA. It
includes a tax incentive of $2,000, but that only helps
households that have the tax liability. So, there is also a
program to create rebates for low-income households, which will
be administered through the states, which for participating
households it can cover up to the entire expense, including
installation, and electric upgrades.
Ms. Porter. OK. So, this household has tax liability, so I
think they are going to be able to get the $2,000 per year for
a heat pump. This sounds like this really would help this
Californian be able to afford this heat pump, really bring down
the costs, reduce the carbon footprint, help her save money on
energy bills in the long term.
Mr. Higgins, can this hot and frustrated Californian go get
this heat pump using this credit?
Mr. Higgins. Yes. And Treasury is working on guidance
right----
Ms. Porter. Oh, stop, stop there, Mr. Higgins. This
Californian is hot today. Can they go get a heat pump using
this credit today?
Mr. Higgins. They would have to wait until they file their
taxes to get their rebate, but Treasury is working on the
guidance to make that much clearer so that by next summer, this
will be a much smoother option for households than it was this
summer.
Ms. Porter. Ah. So, right now, the Department of Energy,
Department of Transportation, they are still preparing to roll
this out?
Mr. Higgins. That is right.
Ms. Porter. So, it has been a year since the Inflation
Reduction Act passed. And as a practical matter, I think it is
cold comfort to a lot of people to hope that they can figure
out somehow with Turbo Tax how to get this credit. They want to
be able to go in the store and get it for less now up front.
When can this Californian go do that?
Mr. Higgins. So, as soon as the Treasury puts together
their new guidance for 25C, which is that part of the tax
credit, which they are expecting--I think the Treasury just
announced that was one of the next priorities they are working
on for the end of this year, so that it will be in place for
the next tax credits and I think a way that is much more
intuitive than it was this summer.
Ms. Porter. OK. Because the Department of Energy's website
says that DOE expects households to be able to access these
rebates in much of the country in 2024. You are talking about
Treasury and the credits. So, this Californian without air-
conditioning all summer has to wait basically another year to
get an energy efficient heat pump. You testified that these
households can save hundreds of dollars. You give aggregate
figures. Did you adjust those aggregate figures downward for
the fact that nobody has been able to use these programs yet?
Mr. Higgins. No. Those numbers are based on the projections
of once this is implemented. So, I agree with you that these
programs are still being rolled out, particularly for the
consumer-facing credits.
Ms. Porter. Yes. You might be interested to know that this
Californian is me. Like many Americans, I want to reduce my
greenhouse gas emissions. I want to save money on my energy
bill, and I would like air-conditioning. And many of us cannot
make our homes greener, and we have heard about this Inflation
Reduction Act. We have heard about these tax credits, but we
are not able to take advantage of them.
I understand that the Treasury's working on it, that DOE is
working on it, that the states are working on it. But the
takeaway is the Inflation Reduction Act is the law of the land.
How each of us feels about this law is not going to change, but
we can make the law work. We can ask tough questions, on a
bipartisan basis, about what the holdup is. And I personally
think it would be a much better use of this Committee's time to
conduct meaningful oversight of how the programs are being
rolled out and whether they are working as intended, to
relitigate whether we should have passed this or not. So, we
can continue to go back and forth on whether this bill is good
or bad or we can get serious about trying to conduct oversight
on whether it is actually helping people and what we need to do
to push the Administration to deliver.
I yield back.
Mr. Chair, if you will accommodate me. I also wanted to ask
unanimous consent to insert into the record a statement from
the full Committee Ranking Member, Congressman Raskin.
Mr. Langworthy. Without objection, so ordered.
Mr. Langworthy. I now recognize the gentleman from Texas,
Mr. Casar, for 5 minutes.
Mr. Casar. Thank you, Chair.
The Republican Majority is hurdling toward shutting down
basic services for people across the country in just 2 weeks,
shutting the government down, shutting the country down. And
while Democrats and, frankly, even Republicans in the Senate
have said, no, we want to keep this government open, let us
just keep it open the way it is or let us stick to the deal
that we already agreed to keep it open, it seems like the
Republican Majority wants to close it, while demanding
unreasonable things that will never pass, like kicking 100,000
kids out of their Head Start and preschool programs, kicking
20,000 working class people and seniors out of their housing,
slashing funds for things like public education and climate
action.
And I get asked by my constituents back home in Texas, why
would they do that? And to me, I think back to the very first
votes I took on legislation under this Republican Majority,
which were votes to cut IRS funding so that billionaires could
get away with cheating on their taxes, cut IRS funding so that
big corporations could get away with not paying their fair
share.
And that is what we are dealing with again in this hearing.
As we have--keep on walking down this path where we could wind
up in another government shutdown caused by the Republicans, we
are having a hearing blasting the Inflation Reduction Act. And
the Inflation Reduction Act, signed by President Biden, is the
first time in my lifetime that I have seen a bill pass that
finally holds corporations accountable to paying their taxes.
Remember, in 2021, before the Inflation Reduction Act was
passed, the Institute on Taxation and Economic Policy reported
that at least 55 of the largest corporations in America paid no
Federal income taxes. And a 2021 paper from the Treasury
Department estimated that the wealthiest one percent owe $160
billion in unpaid taxes each year. But finally, under this law,
we take climate action, we address rising energy costs, we
address rising healthcare costs and hold corporations
accountable by setting a 15 percent minimum corporate tax rate.
This is overwhelmingly popular with the American people, so
House Republicans have taken up to making false claims about
the Inflation Reduction Act to scare people. I have been asked
in union halls, walking down the street, in grocery stores by
people saying, well, doesn't the Inflation Reduction Act hire
like 87,000 new IRS agents? And they have heard this propaganda
on the radio. They have heard it pushed out by rightwing
officials. In fact, it was stated by the Chair as she opened up
this meeting. But to put this politely, that is false.
The IRS funding in the Inflation Reduction Act, one,
improves technology and customer service so constituents do not
have to keep waiting for days or weeks to get answers from the
IRS. And, second, it sets up the resources necessary to make
sure large corporations and the wealthy have to pay their fair
share.
Mr. Higgins, is it correct or incorrect that the Inflation
Reduction Act is hiring 87,000 new IRS agents?
Mr. Higgins. That is incorrect.
Mr. Casar. Thank you.
In fact, according to one article and to much of our
research, the IRS funding is just to get the number of
employees back at the IRS where we were a decade ago. This
article appeared in Time Magazine, titled, ``Trump Allies Are
Attacking Biden For a Plan to Hire 87,000 New IRS Agents, but
That Plan Doesn't Exist.''
I ask unanimous consent to insert this article into the
hearing record.
Mrs. McClain. [Presiding.] So, ordered.
Mr. Casar. Thank you, Chair.
We are facing a government shutdown which could impact tens
of thousands of Americans, hundreds of thousands of Federal
employees. We know that the government does not need to shut
down. Those services can be paid for if billionaires and big
corporations finally pay their fair share.
The budget deal that Republicans forced holding the economy
hostage earlier this year eliminates much of the IRS funding
that we need for enforcement, but now we are hearing in this
hearing more and more attacks from the Republican Majority
trying to cut IRS funding from the Inflation Reduction Act, and
that funding we need, not only to go after billionaires and big
corporations, but we need it in order to reduce our deficit.
Mr. Higgins, do you know that if we fund the IRS agents
that we need--do we know, if we fund them, does that increase
the deficit or does it actually decrease the deficit?
Mr. Higgins. That will help recoup lost revenues right now
to close the tax gap and will reduce the deficit.
Mr. Casar. So, we can reduce the deficit and have better
funding for our programs if we stick with things in the
Inflation Reduction Act and have those minimum corporate taxes.
I discussed this in a July Committee hearing, and I asked
the Chairman if we can finally have a hearing in this Committee
to start looking at corporate tax cheats and how the wealthiest
people in this country get away with not paying their taxes.
And I heard from Mr. Sessions that he was open to that. And I
hope, Chair, that we consider finally having a hearing on this
important topic.
And I yield back.
Mrs. McClain. Thank you.
The Chair now recognizes Mr. Grothman for 5 minutes.
Mr. Grothman. Thanks.
I will start off with Mr. Brashers. And it concerns me that
some of these trillion-dollar bills that come through here
basically benefit the very wealthy in our society. OK. I do
realize we have some problems with our Tax Code, but the
problem is Congress who passes the bills.
But the IRA has been described as a massive transfer of tax
dollars from the working class to the wealthy, big banks, and
large corporations.
Do you agree with this characterization, and why do you
feel that is true?
Mr. Brashers. I think many of the beneficiaries of the
green tax credits are going to be the very wealthy, so I think
there is a lot of truth to your statement.
Mr. Grothman. OK. Can you give me some examples?
Mr. Brashers. So, for example, the green--the EV tax
credits have proven to be much more expensive than they were
going to be. The way that the IRS is implementing it has
expanded that, so that wealthy people that are leasing can
claim these credits even though that was not really in the
intent of the original bill. So, that is one example. There are
others within these green tax credits.
Mr. Grothman. OK. Are there any tax credits which influence
the purchase of electric cars?
Mr. Brashers. Yes. So, there is the Clean Vehicles Credit,
there is the Clean Commercial Vehicles Credit, there is Used
Clean Vehicles Credits.
Mr. Grothman. As I understand, I was talking to some car
dealers the other day, some of these green cars, electric cars
can cost 100 grand a year. So, almost by definition, the really
wealthy show-offs of our society are the people building them.
You mean they give special credits to the rich guy who likes to
show off with his 100 grand a year Chevy, but you do not get a
credit if you are an average guy trying to buy a car for 35
grand?
Mr. Brashers. Yes. I think for the average person, the
average taxpayer, middle class probably do not even have a lot
of awareness about all of these tax credits. If you do not have
your own home, it is hard to have these energy efficiency
improvements. There are many other things that are--you know,
installing solar panels, all these things are very difficult
for a middle-class person to afford.
Mr. Grothman. OK. We right now--particularly with regard to
housing, housing and cars are the two big ones that stick out
to me. Inflation has just completely run amok. I mean, at least
in my district, the ability to buy a house today compared to 3
or 4 years ago, I think a lot of times the cost of housing has
gone up 40, 50 percent. Could you--and I think it is because we
are still printing so much money. I mean, we are borrowing 22
percent of our budget.
Could you indicate again, are we hitting the average guy
more or the ultra-wealthy as we drive up the cost of housing by
having the Fed print money?
Mr. Brashers. Yes, that is a great question. Thank you for
that.
Mr. Grothman. It was a great question. I agree.
Go ahead.
Mr. Brashers. Yes. So, inflation is a silent tax that hurts
everybody, but I think it particularly hurts middle class and
lower income people. And what you are referring to in terms of
housing costs, the fact that interest rates are through the
roof, that is going to be very hard on a----
Mr. Grothman. And the cost of a house. I do not know how a
young person is going to get going in life after we get done of
4 years of this guy. I mean, how can you afford a house when in
my district you cannot build a new house for under 700-,
$800,000, unless it is tiny.
Mr. Brashers. Yes. The interest rates have gone up
dramatically since the Inflation Reduction Act was signed. I
think the continued deficit spending is a big contributor to
why that is and why the Federal Reserve is having such a hard
time getting inflation under control. We saw it just yesterday
that the inflation----
Mr. Grothman. And not just interest rates; the cost of the
house to boot. You have the initial cost going up and then the
cost of interest rates going up.
Mr. Brashers. Yes.
Mr. Grothman. Isn't that the function of these trillion-
dollar bills that come shooting out of here?
Mr. Brashers. Yes. And another thing to keep in mind; is
all of the money and the investments and capital that are going
into the green energy, that has got to come from somewhere. The
government is not coming in and creating wealth. They are not
creating these programs--these goods and services for people.
They are simply reallocating them. And so that is helping to
drive the interest rates up. That is helping to drive the costs
up across the economy.
Mr. Grothman. There is no more green state than California.
What has been the effect of their policies on the average guy,
say, compare the average guy to the average Hollywood type,
movie star type?
Mr. Brashers. Yes. Well, I mean one of the big things you
see there is the gas prices are through the roof. You see
housing prices----
Mr. Grothman. How much is gas now in California?
Mr. Brashers. It is over $5.
Mr. Grothman. Oh, my goodness. Oh, oh. I hope we never have
those people run the country.
But go ahead. I am sorry I interrupted you.
Mr. Brashers. Yes. So, it is absolutely unaffordable for
middle-class people to live in a lot of these areas that have
been pushing these policies.
Mr. Grothman. Oh. Well, thanks. I hope we work our way out
of this in the next few years.
Mr. Brashers. Thank you.
Mrs. McClain. Thank you, Mr. Grothman.
The Chair now recognizes Ms. Lee for 5 minutes.
Ms. Lee. Thank you, Madam Chair.
I would like to start by expressing my shock and surprise
at the concern for young people in our country that I would
like to say that the thing that keeps young people from being
able to buy a house are stagnant wages that have not increased
in decades, is the busting of unions that we are seeing
consistently across the country, but also is the cost of a
college education and the loan burden that these young people
are carrying that keeps us from starting families or from
buying homes, and yet we see that the loan debt period is going
to end in a few days.
But today, I wanted to actually talk about some of our
environmental issues. According to a report issued in April of
this year by the American Lung Association, quote, ``Out of the
nearly 120 million people who live in areas with unhealthy air
quality, a disproportionate number, more than 64 million, 54
percent, are people of color.''
I came to environmental justice through necessity, not
expertise. Where I grew up in Braddock in the Mon Valley of
western Pennsylvania, our air is so dirty that we have some of
the highest rates of pollution-causing childhood asthma, COPD,
and emphysema, and other respiratory illnesses in this country.
The American Lung Association's 2023 State of the Air
report found that ozone smog pollution levels in the
Pittsburgh, New Castle, Weirton metro area have declined, which
is phenomenal. However, the metro area I represent, quote,
``continues to rank among the worst 25 metro areas in the
country for both short-term and year-round particle
pollution.''
Dirty air is killing people, and it is disproportionately
harming minoritized communities. Black people are exposed to
1.54 times more fine particulate matter than White people and
are three times more likely to die due to air pollutants. And
Black women have the highest death rates because of asthma.
Mr. Higgins, I note that a paper published in April of this
year by the Center for American Progress stated, quote, ``A key
insight driving many of the Inflation Reduction Act's
investments is that Federal dollars go a lot further in places
that have experienced underinvestment in a private market often
due to historical and ongoing racial discrimination, including
low-income and disadvantaged communities that face the greatest
effects of climate change.''
Mr. Higgins, how can we maximize our Federal impact through
investments in communities that have historically experienced
underinvestment?
Mr. Higgins. It is such an important question because you
are right that the effects of fossil fuel pollution and climate
change are disproportionately affecting Black and Brown
communities and low-income communities. That is why the
Inflation Reduction Act takes pains to create new programs that
will help to serve these areas, including set-asides for low-
income investment through the tax credits, a Greenhouse Gas
Reduction Fund which requires 40 percent of its spending to be
for the benefit of disadvantaged communities echoing the
Justice40 Initiative. There are climate pollution reduction
grants, climate justice block grants.
I will give a couple of examples of projects that have
already been funded, if I may----
Ms. Lee. Yes, please.
Mr. Higgins [continuing]. That I think help to demonstrate
the promise of Justice40 already.
So, for example, we recently saw a $19 billion investment
in the electricity distribution grid in Jefferson Parish,
Louisiana, to help protect against future hurricanes. There is
a new grant supporting the Chicago Transit Authority's plans to
run an all-electric bus fleet which will disproportionality
benefit the air quality in communities that are facing the
worst pollution now. And this extends to all sorts of
disadvantaged communities, including in Tulare County in a
rural area. There is new money to retrofit an old hydroelectric
system.
So, these sets of investments, I think, benefits
communities all across the United States, but you have to be
intentional about it, and the Inflation Reduction Act provides
new tools to make it possible.
Ms. Lee. Thank you.
Southwestern Pennsylvania groups have already received more
than 2 million to monitor levels of harmful air pollution. The
EPA is issuing an additional $236 million in IRA funds
nationwide for air monitoring, including grants for monitoring
near industrial facilities, multipollutant monitoring, and air
quality sensors in disadvantaged communities. The IRA includes
a program called the Greenhouse Gas Reduction Fund which will
help reduce polluting emissions particularly in low-income and
disadvantaged communities.
Mr. Higgins, I thank you for your answer about how the IRA
will benefit those disadvantaged communities and also your
answer earlier to our Ranking Member about how the IRA will
help low-income households reduce their energy bills.
But to put it in more perspective, the provisions in the
IRA could lower energy bills for Pennsylvanian families by more
than $341 per year. The IRA provides precisely the investments
we need to combat climate change and helps the communities that
have suffered disproportionately from air pollutants.
And while we are also seeing investments in our workforce,
Pennsylvania's Governor Shapiro recently announced a commitment
to reserve at least three percent of all funding they receive
from the IRA to fund workforce development and on-the-job
training, investing as much as 400 million over the next 5
years in workforce training.
So, to sum it up very quickly, the IRA's investments to
fight pollution across the country will not only help improve
air quality and preserve a level of future for our children, it
will lower energy costs for working families, protect us from
the impacts of climate disaster, and create thousands of good-
paying union jobs.
I would like to thank my Republican colleagues for holding
this hearing and giving us the opportunities to highlight such
strong investments in America's future.
Thank you. And I yield back.
Mrs. McClain. Thank you, Ms. Lee.
I now recognize myself for 5 minutes.
Mr. Brashers, simply put, does the Inflation Reduction Act,
in fact, reduce inflation?
Mr. Brashers. No.
Mrs. McClain. Do you have any data to support that? Is that
your opinion?
Mr. Brashers. The Inflation Reduction Act was intended to
reduce inflation by reducing the deficit, but the deficit has
doubled from last year, from about 1 trillion to 2 trillion.
So, the evidence is--and even if you looked at the original
estimates, it was not going to be reducing the deficits in the
initial years. So, the fact that everything has blown up in
costs, that tells me that, no, it has not reduced inflation.
Mrs. McClain. So, facts and evidence. Crazy.
OK. What impact does the IRA have on prices Americans are
paying at the gas pump and in the supermarkets?
Mr. Brashers. So, what we have seen so far since the
Inflation Reduction Act went into place--and most of the
provisions went into place in January 1 of this year, and the
average gas price of gasoline was $3.09 at the time. Now it is
up to $3.84. So, the evidence is that the prices of gasoline
are going up, prices----
Mrs. McClain. I am sorry. Could you repeat those numbers
again?
Mr. Brashers. It has gone up from $3.09 to $3.84 since
January.
Mrs. McClain. OK. And under normal, $3.09 is less than
$3.84.
Mr. Brashers. That is correct.
Mrs. McClain. I mean, I realize Bidenomics, it might be a
little different, but I just wanted to make sure.
OK. Switching gears, Mr. White, will the IRA increase the
costs of prescription medicines?
Mr. White. Absolutely. I mean, the first thing is for the
inflation rebates CBO said repeatedly that those will lead to
higher launch prices. So, yes, it will increase drug prices.
Mrs. McClain. And can you expand on that just a little bit
more?
Mr. White. Sure. So, if a drug company is subject to an
inflation rebate, what it says is that if my drug price
increases faster than inflation, I have to pay a rebate back to
the government. So, as a company launches a product, what the
Congressional Budget Office has said is that they will take
that into account when pricing their product and try and price
it as high as they possibly can so that as they increase prices
over time, they are not subject to----
Mrs. McClain. And is there any evidence of this or is this
just your opinion?
Mr. White. This is the--experts of the nonpartisan
Congressional Budget Office have said this.
Mrs. McClain. I am just making sure we are following the
facts as opposed to opinions.
So, to follow up on that, the IRA uses the term
``negotiations,'' right, as code language for government price
controls on drugs. In your assessment, what impact will price
controls have on the ability for Americans to access
medications?
Mr. White. It will make it much more difficult to access
new and innovative medicines. It will also lead to drug
shortages. I think we have decades of evidence from other
countries that have tried this approach, and in every instance,
access----
Mrs. McClain. Can you give us an example?
Mr. White. Sure. So, in the U.K., for example, they have
had this system in place--a similar system in place for several
decades. They have access to about half as many medicines as
people in the United States have.
Mrs. McClain. Interesting. Thank you.
Mr. Brashers, are green energy subsidies effective at
reducing inflation?
Mr. Brashers. No, I would say they are not.
Mrs. McClain. Can you expand on that for me?
Mr. Brashers. These are subsidies that are merely shifting
the incentives around to push people into purchasing certain
items and not other items, but they are not expanding the
supply. They are merely rearranging, I guess, the distribution
and the allocation of people's money. But there is no increase
of supply.
Mrs. McClain. Would it be safe to say that if a policy was
so effective and it worked so well and it helped so many
people, that a policy like that would not need a subsidy
because people would go and buy that product, whatever it may
be?
Mr. Brashers. I think that is a very good way of stating
it. If you did not----
Mrs. McClain. Seems like common sense.
Mr. Brashers. It does seem common sense, yes.
Mrs. McClain. Right. And, Mr. Brashers and Mr. White, were
Americans better off in 2019, or are they better off now under
Bidenomics?
Mr. Brashers. I would say they are better off--they were
better off in 2019.
Mrs. McClain. Based on what?
Mr. Brashers. Based off of real incomes, based off of
inflation, I think that the economic statistics have
deteriorated significantly.
Mrs. McClain. Thank you.
Mr. White?
Mr. White. I would agree with that.
Mrs. McClain. Based on?
Mr. White. Real wages are down. As health costs increase,
our take-home pay declines, our standard of living declines, so
families are worse off by paying more. The average family
policy this year will cost about $22,000. It is the equivalent
of buying a new Kia and shoving it into the Potomac River every
year and then buying a new one.
Mrs. McClain. I mean, at the end of the day, I think both
sides want a better America. I really want to believe that in
my heart of hearts. And how we--where we differ is how we get
there. And I think we have to be stewards of the taxpayers'
money, because I believe you said earlier, sir, that the
government really does not produce anything, right? They really
do not produce everything. And with this layer upon layer of
regulation and this layer upon layer of bureaucracy, it is
people like my colleague over here that actually supported the
bill but cannot even take advantage of it.
Where is this money going? I will share with you where it
is not going. It is not going to the American people. It is
going somewhere, but I can assure you the Americans in my
district, they are not benefiting from these policies.
So, with that and without objection, all Members have 5
legislative days within which to submit materials and
additional written questions for the witnesses which will be
forwarded to the witnesses.
And if there is no further business, without objection, the
Subcommittee stands adjourned. And I thank you all for your
patience. It was kind of squirrelly today, but I truly
appreciate it. Thank you.
[Whereupon, at 3:22 p.m., the Subcommittee was adjourned.]
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