What Washington did this week
What Washington did this week
Drug price negotiations, overtime pay regulations, marijuana rescheduling, and more from this week in Washington.
Good morning! It’s Friday, September 1, 2023. The 2024 elections are 431 days away.
September is here, which means summer is coming to a close. And here at Wake Up To Politics, my summer is already over: this was my first full week of classes for senior (!) year.
I want to take a moment to thank you all for your support as I worked on WUTP full-time over the summer. I’m really proud of the work I was able to do, analyzing and reporting on a wide range of political topics: the Gen Z vote, “the incredible shrinking Congress,” long-shot presidential candidates, AI in politics, evangelical support for Trump, the failed DeSantis reset, U.S. policy towards India, NATO expansion, Kamala Harris’ struggles, several Trump indictments, and much, much more.
If you told me when I started this newsletter 12 years ago that I would be reporting from inside the Supreme Court and on the grounds of Camp David — both of which I did this summer — I would have hardly been able to believe it. And that is all thanks to you: the readers and supporters of Wake Up To Politics, without whom the newsletter would not exist.
I hope I’ve made it worth it to you this summer, and that you’ve found WUTP to be an informative and insightful guide to the American political scene. The school year may be starting, but I’m not going anywhere: expect that same level of coverage to continue as we march towards 2024.
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And with that, let’s get to why you came here: my weekly look at what actually got done in Washington this week. Congress was on recess this week, so today’s roundup is focused on actions from the executive branch.
One big thing: Medicare drug pricing
The Department of Health and Human Services (HHS) announced the 10 prescription drugs that will soon be subject to the first-ever price negotiations between pharmaceutical companies and Medicare.
Empowering Medicare to directly negotiate with companies over how much the agency pays for prescription drugs has long been a Democratic goal, dating back to when the proposal was a central element of the party’s “100-Hour Plan” to take back control of Congress in 2006. (Former president Donald Trump also campaigned on a similar proposal in 2016.)
But the idea didn’t become law until last year, when the Inflation Reduction Act (IRA) laid the groundwork for a scaled-down version of such negotiations to take place. Under the 2022 law, the HHS was allowed to kick off the process by naming 10 expensive and widely used drugs that the government would be able to haggle with pharmaceutical companies over.
That’s what happened this week; here are the 10 drugs picked by HHS:
Now, the companies behind those drugs have until October 1 to either agree to the negotiations or face a heavy excise tax. Under the IRA, the talks will then extend through 2024; the agreed-upon prices will take effect on January 1, 2026. The HHS will then be able to select 15 additional drugs for negotiations in both 2027 and 2028, and 20 additional drugs every year after that.
The new prices will only apply to Americans enrolled in Medicare, the health insurance program for seniors 65 years and older, and will not directly impact those on private health insurance. Specifically, the first round of negotiations will target drugs under Medicare Part D, which covers prescription drugs administered at home. Starting in 2028, the negotiations can also target drugs under Medicare Part B, which covers drugs administered by doctors.
In Medicare Part D, enrollees pay all or some of their drug costs out-of-pocket until reaching the “catastrophic phase,” after which the government picks up the check. The chart above shows how much Medicare enrollees paid out-of-pocket for the 10 selected drugs last year, as well as the amount the government paid for them.
The non-partisan Congressional Budget Office (CBO) has estimated that the negotiations will save the government about $98.5 billion by 2031; these savings are already being used to make Medicare Part D cheaper for all enrollees, including by implementing an annual $2,000 cap on out-of-pocket spending. The CBO has also estimated that by 2031, the drug price negotiations will reduce Medicare enrollees’ out-of-pocket costs by about $7 billion.
The Medicare negotiation program already faces several lawsuits from drugmakers and the U.S. Chamber of Congress. Some Republicans are also planning to use the proposal to campaign against President Biden in 2024, arguing that the negotiations will stifle innovation and amount to government-dictated price controls.
More government actions you should know about.
The Labor Department proposed a new regulation under the Fair Labor Standards Act that would guarantee overtime pay for most American workers making less than $55,000 a year. Currently, only workers making less than $35,500 annually are guaranteed overtime pay — meaning about 3.6 million workers would be newly eligible for overtime pay under the changes. (More)
The Department of Health and Human Services formally recommended that the Drug Enforcement Administration (DEA) move marijuana from a Schedule I to Schedule III drug under the Controlled Substances Act. The change — which still has to be approved by the DEA — would loosen restrictions on tax exemptions, interstate commerce, and health research for the marijuana industry.
The Justice Department proposed a new rule under the Bipartisan Safer Communities Act that would require vendors selling firearms outside of traditional venues — including online and at gun shows — to conduct background checks on their customers, closing the so-called “gun show loophole.” (More)
The Transportation Department fined American Airlines $4.1 million for keeping “dozens of flights” stuck on the tarmac for more than the legally allowed three hours. It is the agency’s largest-ever penalty imposed for tarmac delay violations. (More)
The Environmental Protection Agency unveiled weakened clean water regulations to comply with a recent Supreme Court decision that sharply limited the federal government’s power to regulate wetlands. (More)
More news to know.
The jobs report. U.S. employers added 187,000 jobs in August, a sign that the economy is slowing but remains resilient as the Federal Service continues raising interest rates. The unemployment rate rose from 3.5% to 3.8%, although the uptick is partially due to an increase in the number of people looking for work. (The unemployment rate only counts people who don’t have a job and are actively looking for one.)
In the Senate. One day after he froze during a press conference for the second time, Senate Minority Leader Mitch McConnell’s office released a statement from the congressional physician on Thursday confirming that McConnell is “medically clear to continue with his schedule as planned.”
President Biden also spoke with McConnell on Thursday and said “he was his old self.” However, fears are mounting within the Senate GOP that a leadership change might be necessary; per Politico, some Senate Republicans are mulling whether to call a special conference meeting to discuss McConnell’s future. Only five Republican senators would have to sign off to trigger such a meeting.
On the campaign trail. Ron DeSantis’ super PAC Never Back Down is ending its door-knocking operations in early state Nevada and delegate-rich Super Tuesday states California, Texas, and North Carolina, per NBC News. The group will now focus exclusively on Iowa, New Hampshire, and South Carolina, a sign recognition that if the Florida governor does not perform well in the first three primary states, his campaign is likely over.
Meanwhile, the New York Times obtained leaked audio from the super PAC’s donor gathering before the first GOP debate, in which the DeSantis allies urgently pleaded for $50 million, a further sign of the operation’s shaky status.
The day ahead.
White House: President Biden will deliver remarks at 11:15 a.m. ET on the August jobs report. VP Harris has nothing on her public schedule.
Congress: The House and Senate are on recess.
Supreme Court: The justices are out until October.
Before I go...
It’s become my tradition at the start of each semester to share with you the list of classes I’m taking, to give you a little peek at where my mind will be when I’m not writing Wake Up To Politics.
Here’s what I’ll be studying this semester:
Comparative Political Systems, a government class that compares political systems from across the globe.
Constitutions, Courts, and Rights, a government class that will be looking particularly at the legal systems of third-wave democracies.
Congressional Reporting, a journalism course taught by a New York Times reporter.
War and Public Opinion, an international politics class that will examine polling trends on how public opinion responds to and shapes American military action.
Creative Non-Fiction Writing, an English course which I’m hoping will improve my writing and expose me to some interesting non-fiction essays.
Wish me luck!
Thanks for reading.
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Thanks so much for waking up to politics! Have a great day.
— Gabe