[Just The News] The bulk of $280 billion in savings from the IRA's prescription drug provisions has been redirected to fund $7,500 tax credits on new electric vehicles and $4,000 tax credits on used electric vehicles, as well as other energy efficiency programs.The Biden administration took an unprecedented step of rolling its climate agenda into a health care concern with the passage of the Inflation Reduction Act (IRA). According to critics, it makes climate change a priority. In both cases, they say, it’s not accomplishing anything with either goal.
DIVERTED FUNDS
Medicare provisions within the IRA are siphoning funds into green energy policies, Isabelle Morales, federal affairs manager for Americans For Tax Reform, told Just The News. The IRA, Morales explained, grants the Secretary of Health and Human Services the ability to negotiate the price of prescription drugs on behalf of Medicare.
"The negotiation is basically, if a company doesn’t comply, they’re subject to 90% tax on all of their earnings. So, it’s really not a negotiation," Morales said.
Writing in the Wall Street Journal, Mark Merritt, president of Proactive Strategies Group, said that only about 15% of the $280 billion in savings from the program goes into Medicare. The bulk of the savings, Merritt explained, are going to support the $7,500 electric-vehicle tax credit.
Morales said the siphoned funds are also supporting the $4,000 used electric-vehicle tax credit, and tax credits for energy efficiency items, such as doors. The tax credits on these vehicles, Merritt said, are items that wealthier Americans purchase. In 2019, half of those enrolled in Medicare earn less than $30,000 per year, whereas the typical Tesla buyer earns around $150,000 per year.
According to Merritt, the savings that go into Medicare pay for some "relatively inexpensive new benefits," such as a $2,000 annual cap on pharmacy spending. The overall Medicare program's budget is projected to rise from $1 trillion in 2023 to $1.8 trillion in 2031.