CHARLESTON -- Sen. Joe Manchin (D-W.Va.) is doing an admirable job of holding the line against the Build Back Better Act that recently was kicked to the Senate following passage in the House. At the very least, the West Virginia lawmaker is forcing the upper chamber to slow-roll the bill, which is providing Americans with a real opportunity to understand what’s in it. It’s a rare offering from Washington these days.
Manchin’s concerns about out-of-control spending fueling even higher consumer prices are warranted. Previous spending, to the tune of trillions of dollars, already has contributed to the 30-year-high inflation we’re currently experiencing. As Rep. Carol Miller (R-W.Va.) recently noted, “Families are paying more at the gas pump and in the grocery store as inflation skyrockets.”
It doesn’t take a rocket scientist to connect the dots.
Stansbury
In addition to consumers facing eye-popping price tags this holiday season, small businesses are feeling the pinch, as well. Entrepreneurs are encountering similarly high costs to cover overhead and input materials, as well as a tight labor market where workers are demanding higher wages. And I don’t blame them, considering the ballooning costs of household expenses they’re swallowing.
But inflation shouldn’t be the only reason for pause. The Build Back Better package empowers the heavy hand of government to further compromise the free market. The legislation’s financial incentives around clean energy — which will whack one of West Virginia’s biggest industries — is one example.
Being good stewards of the environment is a laudable goal, but the heavy lifting should be left to private investment, without the government picking winners and losers. Question: If reducing our carbon footprint is really the goal, why is nuclear power absent from the debate? It’s by far the most effective, clean-power generation technique at our disposal. It’s why some hardcore but fact-based environmentalists advocate for it as a key to combating climate change.
Another free-market intrusion perpetrated in the budget reconciliation package is a series of price controls for prescription drugs. More specifically, the bill empowers the federal government to buy some medicine for Medicare at a fraction of the market price, by threatening drug companies with an excise tax if they don’t comply. It also pegs the “allowable” price increase of other pharmaceuticals — including those accessed through private insurers — to inflation.
That might sound like a benefit to ordinary Americans, but only in the short run. If enacted, the law of unintended consequences will be on full display.
Here’s why. On average, it takes more than $1 billion in up-front investment to bring a new drug to market. Not every drug makes it past the finish line, but the money is still needed to try. If government regulations get in the way of recouping those expenses, the incentive to develop more lifesaving treatments, therapies and vaccines will weaken. As a result of the drug pricing scheme, innovation will slow and the number of new drugs available to West Virginians will drop.
Other countries that have already enacted price controls predictably suffer these consequences. Their residents don’t have access to the latest cutting-edge medicine and must wait for the products to slowly trickle down from abroad. Who pays the ultimate price? Patients.
The budget reconciliation bill being considered in the Senate is overflowing with harmful government policies. Reckless spending that quickens inflation is only the tip of the spear. Other components that tinker with the free market will have lasting consequences that are more challenging to undo.
Stansbury is a partner at West Virginia Eye Consultants and a member of the Job Creators Network. He is a former Republican member of the West Virginia House of Delegates.