Kevin Brady

Mr. BRADY

Mr. BRADY. Madam Speaker, I include in the Record Page 16 of the Department of the Treasury's tax compliance plan, which shows the agency intends to hire 87,000 new IRS employees. Restoring IRS Resources The first step in the President's efforts to restore IRS enforcement capability is a sustained, multi-year commitment to rebuilding the IRS. This involves spending nearly $80 billion on IRS priorities over the course of the decade including hiring new specialized enforcement staff, modernizing antiquated information technology, and investing in meaningful taxpayer service--including the implementation of the newly expanded credits aimed at providing support to American families. Importantly, the additional resources will go toward enforcement against those with the highest incomes, and audit rates will not rise relative to recent years for those earning less than $400,000 in actual income. The President's proposal includes two components: a dedicated stream of mandatory funds ($72.5 billion over a decade) and a program integrity allocation ($6.7 billion over a decade). These mechanisms provide for a sustained, multi- year commitment to revitalizing the IRS that will give the agency the certainty it needs to rebuild. The IRS proposal includes year-by-year estimates of the additional resources that will be directed toward the agency as well as the specific activities that these resources would support. The design ensures that the IRS is able to absorb and usefully deploy additional resources over the entire 10- year horizon and keeps budget growth manageable at around 10 percent per year.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Oklahoma (Mr. Hern).

Mr. BRADY. Madam Speaker, I include in the Record a CBO letter, which confirms the Affordable Care Act subsidies will boost inflation and reduce the incentive for people to work. U.S. Congress, Congressional Budget Office, Washington, DC, August 4, 2022. Re Economic Analysis of Budget Reconciliation Legislation Hon. Lindsey Graham, Ranking Member, Committee on the Budget, U.S. Senate, Washington, DC. Dear Senator: Yesterday, the Congressional Budget Office published a cost estimate for H.R. 5376, the Inflation Reduction Act of 2022, which is the latest version of the reconciliation legislation in the Senate.\1\ This letter provides answers to four questions you asked related to that bill and broader economic conditions. Is the United States Currently in a Recession? The U.S. economy shows signs of slowing, but whether the economy is currently in a recession is difficult to say. It is possible that, in retrospect, it will become apparent that the economy moved into recession sometime this year. However, that is not clear from data that were available at the beginning of August. Some key metrics indicate a decline in economic activity as the first half of this year progressed, whereas others indicate continued growth, though generally at a slower rate than previously. Real gross domestic product (that is, GDP adjusted to remove the effects of inflation) and industrial production have both declined. In particular, real GDP declined by an average of 1.25 percent (at an annual rate) in the first two quarters of 2022. Industrial production grew from January to April, was essentially unchanged in May, and then declined in June. Other key indicators of economic activity have continued to increase in the first half of 2022, though generally at a slower rate than they had previously. For instance, real gross domestic income (GDI) increased at an annual rate of 1.8 percent in the first quarter of 2022 after growing by an average rate of 6.3 percent in the second half of 2021.\2\ (Second-quarter data for GDI are not yet available.) Real personal income minus transfer payments to people by federal, state, and local governments grew at an average annual rate of 0.5 percent in the first half of 2022 versus 3.1 percent in the second half of 2021. And real personal consumption expenditures grew at an average annual rate of 1.4 percent in the first half of 2022 (with somewhat slower growth in the second quarter than in the first), compared with 2.2 percent in the second half of 2021. One reason for the deceleration in personal consumption expenditures is higher inflation, which has eroded consumers' purchasing power. Another reason is that real disposable personal income has declined in the first half of 2022. Savings accumulated during the coronavirus pandemic, including from transfer payments, have continued to support consumption. The labor market remains tight, with low unemployment and elevated job vacancies, but both measures have softened in recent months. Net gains in nonfarm payroll employment averaged 375,000 jobs per month in the second quarter of 2022 compared with 539,000 jobs, on net, added per month in the first quarter and 590,000 jobs, on net, added per month in the second half of 2021. In June 2022, the unemployment rate was 3.6 percent (unchanged since March and near its prepandemic low) and there were about 1.8 job vacancies for every unemployed worker (one of the highest readings in the near 22-year history of this series though down from its highest level of 2.0 in March). How Would Enacting the Bill Affect Inflation in 2022 and 2023? In calendar year 2022, enacting the bill would have a negligible effect on inflation, in CBO's assessment. In calendar year 2023, inflation would probably be between 0.1 percentage point lower and 0.1 percentage point higher under the bill than it would be under current law, CBO estimates. That range of likely outcomes reflects uncertainty about how various provisions of the bill would affect overall demand and output, the supply of labor, the persistence of disruptions in the supply of goods and services, and how the Federal Reserve would respond to offset any increase in inflationary pressure. Responsiveness to the enhancement of health insurance subsidies established by the Affordable Care Act is the most important factor boosting inflationary pressure, and responsiveness to the new alternative minimum tax on corporations is the most important factor reducing inflationary pressure. The range applies to multiple measures of inflation: the GDP price index, the personal consumption expenditures price index, and the consumer price index for all urban consumers. In its analysis of the inflationary effects of the bill, CBO used an approach similar to that underlying the agency's estimates of the short-term effects of legislation enacted in 2021.\3\ The agency augmented its analysis to account for the effects of supply disruptions and for the amount of tightness or slack in the economy on the inflationary effects of fiscal policy. Key inputs into the analysis of inflation were the effects of the bill on overall demand for goods and services. In the short term, changes in fiscal policies affect the economy primarily by influencing the demand for goods and services by consumers, businesses, and governments, which leads to changes in output. Factors increasing overall demand push inflation up and those decreasing overall demand push inflation down. To estimate the effects of changes in federal spending and revenues on overall demand and output, CBO considered evidence about the effects of similar policies in the past and used results produced by macroeconomic models.\4\ CBO expects different provisions of the legislation to affect overall demand and output differently.\5\ For example, provisions that directly increase government purchases of goods and services would add to overall demand on a dollar- for-dollar basis. Increases in financial support to people, such as through enhanced health insurance subsidies, would boost spending more among lower-income people than among higher-income people, partly because lower-income households typically consume a higher fraction of their additional disposable income than higher-income households do. Thus, financial assistance to lower-income households would boost the overall demand for goods and services more than financial assistance to higher-income households would. Changes to business taxes that affect after-tax profits on past investments--as opposed to the return on new investments-- would have relatively small effects on overall demand, in CBO's assessment. CBO used its estimates of the bill's net effects on the deficit as the starting point for its analysis of overall effects on demand (see Table 1). The enhanced health insurance subsidies and energy-related subsidies were the largest contributors to increases in the deficit. The new alternative minimum tax on corporations was the largest contributor to reductions in the deficit. For each dollar change in the deficit, the increases in subsidies would probably have larger effects on overall demand (boosting it) than the increases in revenues (which would reduce overall demand). Those factors could contribute to the effects on output and inflation being positive even when the overall deficit was reduced.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Texas (Mr. Arrington).

Mr. BRADY. Madam Speaker, I include in the Record the Joint Committee on Taxation analysis that shows that families earning $75,000 or $100,000 are four times more likely to have a tax hike under this bill than a tax cut. Nonpartisan Tax Scorekeeper: Average Working Family Is More Likely To Be Worse Off Than Better Off Under Democrats' Tax Plan Working families will be worse off under Democrats' higher taxes, according to a new analysis from the nonpartisan Joint Committee on Taxation. This is another devastating blow for families after the Congressional Budget Office revealed that Democrats' supercharged IRS expects to grab $20 billion from lower- and middle-income earners. Working Families at High Risk of Tax Hikes Democrats have once again tried to hide the real effects of this bill. New analysis from the nonpartisan Joint Committee on Taxation (JCT) shows that the average working family is more likely to be worse-off than better-off under Democrats' tax plan. For median-income families earning $50,000-$75,000, households are 33 percent more likely to have a tax hike than a tax cut. It gets worse for every dollar earned--families earning $75,000-$100,000 are four times more likely to have a tax hike than a tax cut, and families earning $100,000-$200,000 are more than ten times more likely to have a tax hike than a tax cut. The bill does nothing--or makes things worse--for regular working families. More than 92 percent of households with incomes under $200,000 get no benefit--or a tax hike--under Democrats' bill. What's more, these tax hikes on working families do not include the bill's superfund or methane taxes on American energy, which disproportionately harm middle- and lower- income households through higher prices at the pump and bigger utility bills. High-Income Households Enjoy Big Benefits The JCT analysis shows the landscaping company owner and his workers pay more, while the wealthy homeowner gets checks from Washington for the solar panels on their roof. That's because the ``winners'' under Democrat's tax plan are the earners at the very top. Democrat's reckless spending plan includes more than $250 billion in Green New Deal subsidies that benefit the wealthy the most. The percentage of $1 million-plus households getting a tax cut (19.4 percent) is twice as high as any other income group. The group with the next highest proportion of tax cuts is those earning $500,000-$1 million. Over the long term, 72.5 percent of households with income over $1 million will receive a tax cut. More Bad News: $10.6 Billion in Tax Hikes on Working Families Next Year Separate analysis by JCT isolates the effects of Democrats' tax plan without the Obamacare subsidies that flow to a limited number of households in an attempt to bribe them into one-size-fits-all Obamacare plans. In 2023, Democrats would increase the total tax burden on Americans under $200,000 in income by $10.6 billion.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Tennessee (Mr. Kustoff).

Mr. BRADY. Madam Speaker, I include in the Record a letter from the Congressional Budget Office, which confirms this bill will actually increase the cost of new drugs. U.S. Congress, Congressional Budget Office, Washington, DC, August 4, 2022. Re Additional Information About Prescription Drug Legislation Hon. Jason Smith, Ranking Member, Committee on the Budget, U.S. House of Representatives, Washington, DC. Dear Congressman: This letter provides additional information that you and your colleagues requested about subtitle I of the reconciliation recommendations of the Senate Committee on Finance regarding prescription drug legislation. You asked about how provisions involving inflation rebates and the negotiation of drug prices would affect launch prices for new drugs and the introduction of new generic drugs. You also asked how a provision to stabilize premiums as a part of the redesign of Medicare's benefits would affect the federal budget and premiums. Effect of the Inflation-Rebate and Negotiation Provisions on Launch Prices The Congressional Budget Office projects that the inflation-rebate and negotiation provisions would increase the launch prices for drugs that are not yet on the market relative to what such prices would be otherwise. That effect would primarily be driven by the inflation-rebate provisions (sections 129101 and 129102), which would begin to apply to prices within 12 months of a given drug's entering the market. Under those provisions, manufacturers would have an incentive to launch new drugs at a higher price to offset slower growth in prices over time. The negotiation provision (section 129001) would have less of an impact on launch prices, CBO expects: Although the ceiling for a drug's negotiated price is based on its price from a prior year, negotiation could not occur until drugs were on the market for a number of years--at least 7 for small-molecule drugs and 11 for biologics. Higher launch prices would primarily affect spending for drugs in the Medicaid program, CBO projects, because an increase in that program's basic rebate brought about by the higher launch prices would only partly offset those prices. Higher launch prices would also tend to affect spending for drugs covered by Part B of the Medicare program because that program's payments for those drugs are based on the average sales prices. Over time, slower price growth would attenuate the effect of higher launch prices. In the commercial and Medicare Part D segments of the market, spending would be less affected by higher launch prices, CBO estimates, because manufacturers would have more flexibility to manage rebates to maximize their revenues in those sectors. Effect of the Negotiation Provision on the Introduction of New Generic Drugs CBO has not analyzed the effects of the negotiation provision on the introduction of new generic drugs. In projecting the effects of the negotiation provision, CBO estimated the share of spending that would be subject to negotiation each year and the average reduction in prices that would stem from the negotiations. But the agency did not analyze how the provision would affect prices or spending on specific drugs, nor did it quantify any impact on the introduction of new generic drugs. Effects of the Premium-Stabilization Provision Under the premium-stabilization provision (section 129201), the federal government would subsidize any growth in beneficiaries' base premiums for Medicare Part D exceeding 6 percent from one year to the next over the 2024-2029 period. The provision subsequently would lower the base premium percentage (the percentage of the average cost of standard Part D coverage that is used to calculate beneficiaries' premiums) to ensure that premiums did not grow by more than 6 percent between 2029 and 2030. That subsidy and subsequent reduction in premiums would increase federal spending by roughly $40 billion over the 2024-2031 period, CBO estimates. Beneficiaries' spending on premiums would be lower under the premium-stabilization provision than it would be without it. That estimate is an average effect among the possible paths of premiums that CBO considered when modeling the uncertainty of future outcomes. Under some of those paths, premiums would grow by less than 6 percent a year, and the provision would have no cost; under others, premiums would grow faster, and the provision would generate costs. I hope this information is useful to you and your colleagues. Please contact me if you have further questions. Sincerely, Phillip L. Swagel, Director.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Arizona (Mr. Schweikert), my colleague on the Committee on Ways and Means.

Mr. BRADY. Madam Speaker, I include in the Record a Congressional Budget Office report from this morning, while we were on the House floor, which confirms IRS audits will generate tens of billions of dollars for middle-class families making less than $400,000. CBO has received a number of questions regarding our estimate of an amendment offered by Senator Crapo during the floor debate on H.R. 5376 last weekend. That amendment, #5404, would limit the use of additional funds for the Internal Revenue Service. If the amendment had been adopted none of the additional funds could have been used to audit taxpayers with taxable incomes below $400,000. CBO did not complete a formal cost estimate in advance of consideration of the amendment but the agency did provide the following information to the Senate Budget Committee: CBO estimates that the amendment 5404 would have the following effects: No effect on outlays in the one or ten year budget windows; would reduce outlays in the five year budget window. No effect on revenues in the one year budget window; would reduce the ``non-scorable'' revenues resulting from the provisions of section 10301 in the five and ten year budget windows. No effect on outlays after 2031 but would decrease the ``non-scorable'' revenue resulting from the provisions of section 10301 after 2031. CBO has not completed a point estimate of this amendment but the preliminary assessment indicates that amendment 5404 would reduce the ``non-scorable'' revenues resulting from the provisions of section 10301 by at least $20 billion over the FY2022-FY2031 period. Thanks, Leigh Angres, Director of Legislative Affairs, Congressional Budget Office.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Kelly), my colleague from the Committee on Ways and Means.

Mr. BRADY. Madam Speaker, I would note that every Democrat in Congress, in the House and Senate, strongly opposed providing prescription drugs for seniors in Medicare part D, and then-Leader Pelosi at the time said, it would end Medicare as we know it to help seniors with these lifesaving medicines. Madam Speaker, I include in the Record the following study from the University of Chicago which shows the Democrats' drug pricing scheme and controls could kill up to 342 cures, many of them lifesaving cures, in the next two decades alone. [From University of Chicago, Sept. 2021] The Evidence Base on the Impact of Price Controls on Medical Innovation (By Tomas J. Philipson and Troy Durie) Executive Summary This issue brief reviews the evidence on the impact of price controls on biopharmaceutical innovation and calibrates what this evidence implies for recent price control proposals in the US. A large academic literature estimates the effect of future drug revenues on R&D spending with a mid-range effect of a 1 percent reduction in revenue leading to a 1.5 percent reduction in R&D activity. Using the range of such effects found in the literature we find the proposed price controls of US bill HR3, the Lower Drug Costs Now Act, would lead to a 29 to 60 percent reduction in R&D from 2021 to 2039 which translates into 167 to 342 fewer new drug approvals during that period. The mid-range effect of the evidence implies a 44.6 percent decline in R&D and 254 fewer new drug approvals. As a benchmark on the large size of the adverse health effects this implies, we conservatively find the loss in life from the price controls the next 10 years is 20 times larger than the loss from COVID-19 to date in the US. We argue this is a conservatively low estimate of the impact of such proposals even though it is as much as a ten times larger reduction in new drugs compared to a recent CBO analysis. Section 1: Introduction A national debate has emerged again about the effect of price controls on pharmaceutical innovation. Many proponents of price controls for pharmaceutical drugs argue that they do not impact innovation while opponents argue they will lead to fewer new drugs. This issue brief attempts to provide insight into the likely effects of recent price control proposals by analyzing how the debate can be informed by basic economics and the prevailing empirical evidence. While the United States has less stringent price regulations when compared to other nations, the Biden Administration has recently announced plans to lower drug prices through policies similar to those outlined in a recent bill referred to as the Lower Drug Costs Now Act (H.R. 3) that passed the House of Representatives in December 2019 and was reintroduced in April 2021. This proposal would create price controls for the government's highest expenditure drugs and then apply price controls to firms conducting private sector transactions. This issue brief reviews the evidence on how sensitive innovation is to changes in revenues and applies the evidence to estimate the effect of proposed price controls. Section 2: Evidence Base on Revenue Effects on Innovation Biopharmaceutical companies routinely project future market size and profits for their products to determine the rate of return on investment (ROI) from R&D. A large body of evidence suggests that these market practices translate into a predictable positive relationship between realized revenues and R&D spending in the economy in general and for biomedical innovation in particular. A rich academic literature quantifies this relationship between future revenues and pharmaceutical innovation. For assessing evidence related to revenue effects on R&D, it is important to recognize that global profits drive innovation and that revenues from different countries have different effects on those global profits because of different profit margins across countries. Expected earnings, not revenues, drive R&D investments. Therefore, decreases in US revenue will have larger effects on global profits than revenue losses in price controlled markets in Europe due to higher profit margins in the US. Goldman and Lakdawalla (2018) find that pharmaceutical profits in the United States accounts for 64 to 78 percent of global profits, similar to an estimate from the Council of Economic Advisers (CEA) (2018). Consequently, the evidence finds that studies focusing on US revenue losses show larger R&D effects than those studying revenue losses in Europe. In particular, a set of papers looks at the expansion of the Medicare prescription drug benefit, Medicare Part D, which provides the most relevant evidence for assessing the revenue effects of Medicare policy changes. They find that companies recognized this expansion and increased innovation in drugs treating diseases prevalent in the elderly population more so than innovation in non-elderly diseases (Blume-Kohout and Sood 2013). Quantifying that relationship, a 1 percent increase in market size due to Medicare Part D leads to a 2.8 percent increase in new drug approvals. Another often cited paper finds a 1 percent increase in potential market size leads to a 4-6 percent increase in the entry of new drugs (Acemoglu and Linn 2004) in the US. Though other studies have found lower effects in Europe of the relationship between potential market size and the number of new treatments, a clear strong positive relationship exists (Dubois et al. 2015). Other studies show that a 1 percent increase in price leads to a 0.22-1.33 percent increase in innovation. Another extensive literature illustrates how companies change their investments in lower quality drugs due to price controls and other regulations that decrease how much can be charged for high-quality drugs. We synthesized the evidence base by computing the average R&D elasticity with respect to revenue estimated from 10 different studies looking at the effect of a price change, expected market, and overall revenue on R&D. Table 1 illustrates the elasticities used from each paper, and the average elasticity across these 10 studies is 1.54. Note: Acemoglu and Linn (2004) find an elasticity range of 4-6 based on if all approved including generics are included or not. We take the midpoint of this range. Abbott and Vernon (2005) find a price cut of 40 to 50 percent lowers R&D by 30 to 60 percent. Taking the midpoint of these numbers gives a 45 percent price cut leads to a 45 percent decrease in R&D, or an elasticity of 1. To assess the impact on the number of new drugs from reductions in R&D spending, a common approach is to divide the reduction in R&D spending by an estimate of the costs of bringing a drug to market. This is a useful approach and implies a proportional reduction in new drugs to the reduction in R&D spending regardless of the particular cost per drug. In other words, using this methodology, a 10 percent reduction in R&D spending leads to 10 percent fewer drugs regardless of the cost per drug estimate used. The elasticity of R&D spending with respect to revenue in this case therefore also represents the elasticity of new drugs to revenue. Despite the evidence, there is some debate among law makers concerning whether revenue or price controls affect innovation at all. However, the evidence is consistent with common market practices of biopharmaceutical innovation--a positive relationship between investment and earnings. Such market practices include the use of net present value (NPV) calculations to determine a new drug's ROI. Biopharmaceutical companies determine the demand for new drug therapies by analyzing the prevalence of disease, insurance coverage of the population affected by the disease, and reimbursement by payers managing patients' care. The pharmaceutical industry spent more than $91 billion on R&D in 2020. In obtaining such R&D funding, companies have relied on venture capital funding, licensing agreements, or mergers and acquisitions as well as their own revenue. All rely on ROI assessments to evaluate R&D investments. Indeed, markets routinely assess the enterprise value of firms by estimating the present value of expected cash flows across all business lines and projects. section 3: Calibration of the Impact on Innovation of Proposed US Price Controls This section evaluates what the evidence implies for the innovation effects of proposed US price controls. We calibrate that the price controls implemented in the United States would lead to a 29.2 to 60.0 percent reduction in R&D from 2021 to 2039. This equates to $952.2 billion to $2.0 trillion in lost R&D spending and 167 to 342 fewer new drug approvals during this period. This means annual new drug approvals will be 11.7 to 24.0 percent lower per year from 2021 to 2029 and 45.0 to 92.4 percent lower from 2030 to 2039. We discuss how these findings, as well as findings from other studies, differ from CBO (2019), which finds only 37 fewer new drug approvals over this time period, which is 550.2 to 1,024 percent lower than our estimates. Our estimates are conservative as the entire evidence base is considered and not only the evidence base for the more R&D sensitive US market. It should be noted, however, that making comparisons to CBO estimates is made more difficult due to the highly non- transparent discussion of their underlying analysis, which makes third-party replication of their results impossible. This ``black-box'' nature of analysis is often the case with government reports and raises larger issues with the difficulty for private parties and taxpayers--who funded the analysis--being able to assess their accuracy. In contrast, we believe the presentation of the evidence discussed above, and the innovation effects they directly imply, is highly transparent as it simply documents the findings of the studies and their implied effects. 3.1 The Proposed US Price Controls The United States has fewer restrictions on price than other countries, but the Biden Administration has announced their goal to lower drug prices through greater price regulation, as set forth in a recent bill referred to as H.R. 3. This proposal would change the way certain single-source brand drugs are priced for Medicare beneficiaries by requiring drug manufacturers to ``negotiate'' drug prices with the Secretary of Health and Human Services. A prohibitive excise tax of 65 to 95 percent will be applied to a company's annual gross sales if they refuse to negotiate, making the requirement largely equivalent to mandatory price controls. Drug prices set by the Secretary may not exceed the prices in specified countries by more than 20 percent and price increases would be capped at the rate of inflation (CBO 2021). In addition, these price controls would also be extended to private transactions by employer-based plans as stated on August 12, 2021 by President Biden and as implied by the proposed legislation. Private payers can choose the lower prices negotiated by the government, which they presumably will. 3.2 CBO's Estimated Effects and Alternative Estimated Effects of the Proposed Price Controls CBO (2019) previously estimated that a drop in future revenues due to H.R. 3 would lead to 8 fewer drugs from 2020 to 2029, which would then expand to 30 fewer drugs from 2030 to 2039). In August 2021, CBO (2021b) updated its estimated impact of price negotiations to be 2 fewer drugs in the first decade (0.5 percent), 23 fewer in the second decade (5 percent), and 34 fewer drugs in the third decade (8 percent). Since the development process takes about a decade, the long run effects of the bill will be larger than its short-run effects. To align these estimates with our time period of 2021-2039, we lower their estimate to 7 fewer drugs from 2021 to 2029 and keep the estimate of 30 fewer drugs from 2030 to 2039. Consistent with our analysis, other analysts' assessments of CBO's 2019 analysis of H.R. 3 conclude that CBO (2019) likely underestimates the impact of H.R. 3. Charles River Associates (2021) finds the CBO study underestimates the company revenue impact by assuming companies will be able to set their price at the high end of the allowed price range, and that companies will be able to increase their non- U.S. price. Both assumptions may not be true due to uncertainty around behavioral responses in negotiations. Further, for the loss-of-revenue impact on R&D, CBO extrapolates price control effects from smaller markets, and they do not account for the larger impact on targeted disease groups most impacted by the policy like rare diseases and oncology. CBO's analysis relies on Dubois et al. (2015) to estimate the effect of H.R. 3 on R&D, but CRA notes that this estimated effect is smaller than most of the other literature, too dependent on specific assumptions, and may not be as relevant to a policy of H.R. 3's magnitude. Other analysts' estimates of the impact of the price controls introduced in H.R. 3 show a considerably larger impact on global revenues and R&D than assumed by CBO. Stengel et al. (2020) estimate drug manufacturer revenues would fall 34 to 44 percent, which would equate to about $1.3 to $1.7 trillion in total lost global revenues from 2020- 2029. Vital Transformation (2021) estimates annual earnings would fall 56 percent, or on average $102 billion a year, starting in the year 2024. This fall in earnings when fitted to past data would have lowered new approved drug therapies in their sample from 68 new drugs to 7 new drugs, an 89.7 percent decline from 2010 to 2019. 3.3 Effects of the Proposed Price Controls Implied by the Evidence Base In light of the reported shortcomings in the CBO (2019) report, we used the broader evidence base discussed in this issue brief to assess the effect H.R. 3's proposed price controls would have on innovation. We create a range of the estimated drop in global drug manufacturer revenues by taking the CBO's lower estimate of 19 percent and the midpoint revenue effect of alternative studies, 39 percent, from Stengel et al. (2020). As discussed earlier, a conservatively low estimate of the elasticity of revenue on either R&D or the introduction of new drugs is 1.5 based on current evidence. We apply this elasticity to the 19 to 39 percent decline in revenues to derive a percentage reduction in R&D. This percentage reduction is thereafter used to calibrate the reduction in absolute R&D spending or number of approved drugs which is applied to the CBO baseline trend in absolute values. In other words, the reduction in R&D spending and the number of new drug approvals during 2021 to 2039 is obtained by determining how much would be lost in each of those measures with the number of approved drugs being compared to CBOs baseline trends given the percent reduction in R&D. We create our own trend for R&D spending by taking a time series from PhRMA's 2021 Membership Survey showing pharmaceutical R&D spending from 2000-2019 and calculated the compound annual growth rate to get a trend for expected R&D spending through 2039. We then applied the impact on R&D to each year and summed these values to get a total. For new drug approvals, we use the 30 new drug approvals baseline from CBO (2019) and applied the impact on R&D for each year and summed. Table 2 illustrates our main findings. Using the average elasticity on the 19 to 39 percent drop in global revenues, innovation through R&D is expected to drop 29 to 60 percent. Using the middle of our range, this would equate to lost R&D spending of up to $1.5 trillion. We find that this drop in spending will lead to 167 to 342 fewer new drug approvals. Our estimates are therefore 550.2 percent to 1024.0 percent larger than CBO (2019)'s estimated 37 fewer new drug approvals, adjusted to our time period. CBO (2019) points out that lower R&D spending will take time to be reflected in new drug approvals due to the long development process, so the reduction in revenue results in 7 fewer new drug approval, 18.9 percent of their total estimate, in the first 9 years and 30 more in the following decade, 81.l percent of their total estimate. We assume this breakdown as well, so new drug approvals will fall by 32 to 65 approvals from 2021 to 2029 and 135 to 277 approvals from 2030 to 2039. These significant drops in new drug approvals will lead to delays in needed drug therapies, resulting in worse health outcomes for patients. The failure to discover and get new drug approvals leads to worse health outcomes. CEA (2019) did an early analysis of H.R. 3 finding 375 million to 100 million life years lost due to this policy's impact on R&D spending through 2029. For comparison, using death data through September 22, 2021, SARS-CoV-2 has directly reduced health outcomes by 7.5 million life years. The 7.5 million life years lost is only just over 10 percent as large as the midpoint of CEA (2019)'s estimate due to H.R. 3. We calculate this loss in life years by applying life expectancy estimates conditional on age from CDC to the age distribution of deaths from SARS-CoV-2 from CDC updated through September 22, 2021. Then we multiply the life expectancy at each age grouping by the number of deaths and sum to get 7.5 million life years lost. A prior study shows how every $2,000 spent on pharmaceutical research and development increases population health by one statistical life-year (Lichtenberg 2002). When applied to our R&D spending estimates, this would lead to 159.3 million to 326.9 million life years lost by 2029 which increases to 476.1 million to 977.2 million by 2039. This amounts to the direct negative health effects of SARS-CoV-2 to be only 3.1 percent as large as our midpoint estimate by 2029 and 1.0 percent as large by 2039. Price controls have significant health costs to the U.S. population. Our analysis likely underestimates true innovation effects, which, if considered fully could make our findings even further away from the CBO estimates. This is because the average R&D elasticity of 1.5 used included studies of non- U.S. markets with lower earnings effects than U.S. markets. Given that the U.S. has higher margins, price controls are expected to have a larger impact on earnings. Thus, only using the larger estimated elasticities from U.S. markets, which would double the elasticity of 1.5, would yield proportionally larger differences between the evidence base and the CBO estimates.

Mr. BRADY. Madam Speaker, I include in the Record the following report from 2020 from a group that tracks government spending, which details how the IRS is currently armed with 4,600 guns and 5 million rounds of ammunition. That is not fear-mongering; these are the facts. IRS Has 4,600 Guns and Five Milion Rounds of Ammo: Will Dem Bill Grow Arsenal? The IRS has 4,600 guns and five million rounds of ammunition according to a report from OpenTheBooks published in 2020. With Democrats on the verge of passing $80 billion in additional funding to facilitate the hiring of 87,000 new agents, how much will this arsenal grow? The Democrats' push to increase the size and power of the IRS has significant criminal justice and basic due process ramifications. An OpenTheBooks report titled The Militarization of U.S. Executive Agencies shows that, even without the proposed $80 billion increase in funding, the IRS Criminal Investigation Division (IRS-CI) is already heavily armed at the expense of the American taxpayer. The current 4,600-gun stockpile includes: 3,282 pistols 621 shotguns 539 rifles 15 fully automatic firearms 4 revolvers According to the Government Accountability Office the ammunition breakdown is as follows: Pistol and revolver rounds: 3,151,500 Rifle rounds: 1,472,050 Shotgun rounds: 367,750 Fully automatic firearm rounds: 56,000 When OpenTheBooks directly asked the IRS for an accounting of its gun locker, the agency responded, ``We don't have one [an inventory], but could create one for you, if important.'' There are seven reasons to be concerned about the IRS having more power, more money, and more guns: 1. irs fails to ensure armed agents receive required firearms training In order to carry or use an IRS-owned weapon, agents must: engage in handgun firing training at least once each quarter, shoot at least the minimum of 75 percentage points on the firearms qualifying test using the issued handgun during two nonconsecutive quarters, participate in biannual firearms building entry exercises, participate in an annual briefing on firearms safety and security policies and IRS-CI's directives and procedures regarding the safe handling and storage of firearms, and participate in a briefing each quarter regarding the policy of discharging a firearm at a moving vehicle. IRS-CI's National Criminal Investigation Training Academy (NCITA) is responsible for implementing the formalized firearms training and qualification program nationwide. This includes developing the firearm qualification requirements they are expected to meet and the training special agents will undergo. Despite these requirements, CI agents have regularly failed to stay up to date on training or report incidents, endangering the taxpayers they are supposed to protect. According to reports from the Treasury Inspector General for Tax Administration (TIGTA), the IRS has repeatedly failed to ensure that procedures relating to firearms are properly followed: ``there is no national-level review of firearms training records to ensure that all special agents meet the qualification requirements.'' Special agents are required to surrender their weapons when they fail to participate in this training, however this often does not happen. As noted by the Inspector General: ``However, there is currently little consequence for special agents who fail to meet the training requirements listed on the checklist.'' The Inspector General noted the IRS failed to secure the firearms of those who did not meet their requirements: ``controls did not ensure that CI personnel properly secured firearms when special agents failed to meet the biannual standard qualification requirement. CI was only able to provide evidence that firearms were surrendered in nine of the 27 instances when special agents did not qualify. The Criminal Investigation Management Information System was only updated to reflect the custody change in four of those nine instances. The Inspector General noted that the IRS lapses torpedo its ability to effectively try cases: ``Court decisions in the past have held law enforcement entities liable because their law enforcement agents did not have training that reflected the environment that they would likely encounter, such as training involving moving targets and low-light conditions. Other court decisions underscored the importance of properly documenting firearms training. One decision dismissed the claims against a law enforcement entity that maintained thorough records that showed the law enforcement personnel had been trained. Another decision upheld a jury's conclusion that undocumented police training did not constitute adequate training.'' The IRS failure to conduct proper internal oversight of its weapons could have grave consequences for the public. As noted by the Inspector General: ``If there is insufficient oversight, special agents in possession of firearms who are not properly trained and qualified could endanger other special agents and the public.'' 2. irs agents accidentally fire their weapons more often than they intentionally fire them A TIGTA report found that special agents at the IRS Criminal Investigation Division (IRS-CI) accidentally fired their weapons more often than they intentionally fired them: ``According to documentation provided by all 26 CI field offices, the NCITA, and the TIGTA OI, there were a total of eight firearm discharges classified as intentional use of force incidents and 11 discharges classified as accidental during FYs 2009 through 2011.'' 3. irs conceals details of accidental gun discharges The agency's lackadaisical approach to firearm safety has led to easily preventable accidents. The Inspector General cryptically references IRS accidental discharges that caused ``property damage or personal injury'': ``In three of the four accidental discharges that were not reported, the accidental discharges may have resulted in property damage or personal injury.'' The details of these incidents are--for some reason-- redacted in the report: IRS-CI management is required to be notified when a special agent discharges their weapon. CI must report all accidental discharge incidents externally to the TIGTA OI and internally to the NCITA and the Director of Field Operations. Despite these directives, CI did not always properly disclose accidental discharges: ``we found that four accidental discharges were not properly reported. This included two that were not reported to both to the TIGTA OI and the NCITA. one that was not reported to the TIGTA OI, and one that was not reported internally to the NCITA.'' 4. IRS AGENTS DO NOT ALWAYS UNDERGO REMEDIAL TRAINING AFTER DISCHARGES

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Smucker).

Mr. BRADY. Madam Speaker, I include in the Record the following Joint Committee on Taxation analysis that shows that American manufacturers are hardest hit by the Democrats' made in America tax--$200 billion-- and they will pay over half of that tax. Congress of the United States, Joint Committee on Taxation, Washington, DC, August 11, 2022. Memorandum To: Redacted From: Thomas A. Barthold Subject: Revenue Estimate This memorandum is in response to your request for an estimate of how the burden of the corporate minimum financial statement income tax as contained in section 10101 of an amendment in the nature of a substitute to H.R. 5376. ``An Act to Provide for Reconciliation Pursuant to Title II of S. Con. Res. 14'' as passed by the Senate on August 7, 2022, would fall across different industrial sectors. Business income tax returns ask taxpayers to report the industry in which they are primarily engaged, identifying the industry by the code numbers established under the North American Industrial Classification System (``NAICS code''). This is self-reported and the Internal Revenue Service does not verify the accuracy of the classification stated by the taxpayer. The NAICS code system allows data to be aggregated at different levels of general categorization. Two-digit codes are the broadest categorization. For example, code 31 encompasses all manufacturing. As we project that only approximately 150 taxpayers annually will be subject to the proposed book minimum tax, in the accompanying table we generally report results by two-digit reporting to protect the privacy of the tax return data on which we base our analysis. We estimate the corporate minimum financial statement income tax as contained in the amendment in the nature of a substitute to H.R. 5376 as passed by the Senate would have the following effect on Federal fiscal year budget receipts.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Florida (Mr. Rutherford).

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from North Carolina (Mr. Murphy).

Mr. BRADY. Madam Speaker, I include in the Record the following letter of opposition, which represents America's independent natural gas and oil production industry, which says this bill will only exacerbate--make worse--our Nation's energy crisis. August 11, 2022. Hon. Nancy Pelosi, Speaker, House of Representatives, Washington, DC. Hon. Kevin McCarthy, Republican Leader, House of Representatives, Washington, DC. Dear Speaker Pelosi and Leader McCarthy: The undersigned trade associations, representing thousands of businesses across the United States that collectively employ millions of Americans, write to express our opposition to the Inflation Reduction Act (IRA) as passed by the U.S. Senate. Further, we write to urge you to reconsider policies within the legislation before proceeding. The United States has experienced its second consecutive quarter of negative GDP growth, and American consumers are facing record high inflation. We share the goal of addressing climate change, as evidenced in the policies we support and in the actions that we take every day. However, the considerable tax increases and new government spending in the IRA amount to the wrong policies at the wrong time. We are also facing the most significant global energy crisis since the 1970's, and U.S. energy security--and that of our strategic allies abroad--is being put to the test. Further, U.S. energy costs have increased 40 percent over the past twelve months, creating a serious strain on American household incomes. With these current conditions as the backdrop for this legislation, there are several specific policies included in the IRA which are particularly troubling and deserve re- consideration. We would like to draw your attention to three such provisions: 1. The IRA imposes a new corporate minimum tax, increasing taxes on Americans by more than $300 billion over the next 10 years. As President Obama noted in 2009, ``the last thing you want to do is raise taxes in the middle of a recession.'' 2. The IRA imposes an $11.7 billion tax on crude oil and petroleum products. At a time of record-high energy prices, Congress should not add additional costs on American energy companies competing globally. 3. The IRA imposes additional constraints on the ability of companies to develop and produce the energy that Americans need to fuel our economy and strengthen our energy security. This includes increased fees on domestic production and the establishment of a new $6.3 billion natural gas tax. Finally, the IRA fails to address permitting reform, which is desperately needed and is essential to effectively deliver affordable, reliable energy to consumers in a growing economy. To date, neither the House nor the Senate have introduced comprehensive permitting reform legislation. We urge Congress to quickly consider and pass permitting reform without delay. For the above-stated reasons, we express our opposition to the IRA and request that you reconsider passage of this legislation. Sincerely, American Petroleum Institute; American Exploration and Production Council; American Fuel & Petrochemical Manufacturers; Independent Petroleum Association of America; Energy Workforce & Technology Council; Plumbing-Heating- Cooling Contractors--National Association; Manufacture Alabama; The Coalbed Methane Association of Alabama; Arkansas Independent Producers and Royalty Owners; Arkansas Oil Marketers Association; California Independent Petroleum Association; Colorado Oil and Gas Association; West Slope Colorado Oil & Gas Association; Colorado Wyoming Petroleum Marketers Association; Associated Industries of Florida; Florida Independent Petroleum Producers Association; Florida Natural Gas Association; Florida Petroleum Marketers Association; Florida Propane Gas Association; Florida State Hispanic Chamber of Commerce. Florida Transportation Builders Association; Floridians for Better Transportation; The James Madison Institute; Georgia Association of Convenience Stores; Georgia Mining Association; Illinois Fuel Retails Association; Illinois Manufacturers Association; Illinois Retail Merchants Association; Chemistry Industry Council of Illinois; Fuel Iowa; Kansas Independent Oil & Gas Association; Louisiana Association of Business and Industry; Louisiana Oil and Gas Association; Michigan Association of Convenience Stores; Michigan Oil and Gas Association; Michigan Petroleum Association; Minnesota Service Station & Convenience Store Association; Associated Industries of Missouri; New Mexico Business Coalition; New Mexico Oil and Gas Association. North Carolina Chamber; North Carolina Petroleum & Convenience Marketers Association; North Dakota Petroleum Council; Ohio Energy and Convenience Association; Ohio Manufacturers Association; Ohio Oil and Gas Association; The Petroleum Alliance of Oklahoma; Pennsylvania Chamber of Business & Industry; Pennsylvania Grade Crude Oil Coalition; Pennsylvania Independent Oil & Gas Association; Pennsylvania Independent Petroleum Producers; Pennsylvania Manufacturers Association; South Dakota Petroleum and Propane Marketers Association; Texas Alliance of Energy Producers; Texas Independent Producers & Royalty Owners Association; Permian Basin Petroleum Association; Associated Builders & Contractors West Virginia; Petroleum Association of Wyoming.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Georgia (Mr. Clyde).

Mr. BRADY. Madam Speaker, may I inquire how much time Chairman Neal and I have remaining.

Mr. BRADY. Madam Speaker, I include in the Record this Penn Wharton School of Business analysis that debunks the Inflation Reduction Act, showing how this bill will reduce inflation by less than a tenth of 1 percent in the first 5 years, with zero impact on inflation after that. [From Penn Wharton] Senate-Passed Inflation Reduction Act: Estimates of Budgetary and Macroeconomic Effects key points PWBM estimates that the Senate-Passed Inflation Reduction Act, as written, would reduce cumulative deficits by $264 billion over the 10-year budget window. The Act would have no meaningful effect on inflation in the near term but would reduce inflation by around 0.1 percentage points by the middle of the first decade. These point estimates, however, are not statistically different from zero, indicating a low level of confidence that the legislation would have any measurable impact on inflation. Relative to current law, the Act would slightly reduce GDP in the first decade while slightly increasing GDP by 2050. These estimates include the impact of debt reduction, carbon reduction, and tax incentives on investments and working hours. Most, but not all, of the tax increases fall on higher income households. However, future generations, including higher-income households, gain from the improved economy, including a reduction in carbon emissions. introduction On Sunday August 7th, the U.S. Senate passed the Inflation Reduction Act of 2022 under FY2022 budget reconciliation instructions. PWBM recently analyzed a previous version of the bill. We also compared our analysis against that of the Joint Tax Committee and Congressional Budget Office who use an older economics baseline from July 2021. In this brief, PWBM analyzes the budgetary, macroeconomic, and distributional effects of the final Senate passed version. In line with the previously released version of the bill, the Act provides for new spending and tax incentives related to the adoption of clean energy technology, both at the industrial and consumer level. It extends a temporary expansion of Affordable Care Act (ACA) health insurance subsidies for an additional two years. To offset these deficit-increasing initiatives, the bill imposes new taxes on certain businesses, reduces government outlays on prescription drugs through pricing reforms. It also provides for new IRS funding which PWBM estimates would increase revenue collections above new outlays. provision descriptions and estimated budgetary effects The final version of the Act makes several key amendments to the version we previously analyzed. First, the new corporate minimum tax no longer restricts the tax benefit of accelerated depreciation, and private equity firms are exempted from the tax. Second, the carried interest provision was removed. Third, new revenue raising provisions (a tax on stock buybacks and a restriction on pass-through loss deductions) were added. Fourth, due to Senate rules, drug price inflation caps for private insurance plans were removed. More specifically, the Act proposes the following policy changes: Extension of expanded ACA subsidies. Extends the temporary expansion of Premium Tax Credits through 2025. The expansion, which offers eligibility to households above 400 percent of the poverty line, is scheduled to expire at the end of 2022 under current law. Climate and energy provisions. Includes tax rebates and credits to lower energy costs for households; tax credits, research, loans, and grants to increase domestic manufacturing capacity for wind turbines, solar panels, batteries, and other essential components of clean energy production and storage; tax credits to reduce carbon emissions; programs to reduce the environmental impact of agriculture; a new fee on methane emissions; and more. Minimum tax on corporations' book income. Creates a new 15 percent corporate alternative minimum tax based on the financial statement income of corporations with at least $1 billion in such income. Allows for bonus and accelerated depreciation deductions when calculating taxable book income. Tax on share repurchases. Imposes a new 1 percent tax on corporations' net repurchase of stock. Extension of excess noncorporate losses limitation. Extends the limitation on the deduction of pass-through losses through tax year 2028, which under current law is scheduled to expire at the end of 2026. The maximum deductible loss, which is indexed to inflation, is $540,000 for married taxpayers in 2022. Prescription drug price reforms. Allows Medicare to negotiate the price of certain prescription drugs; limits the price growth of certain drugs paid covered under Medicare to inflation; repeals the implementation of a ``rebate rule'' scheduled to increase drug-related Medicare outlays beginning in 2027; redesigns Medicare Part D benefit formula and caps out-of-pocket costs for beneficiaries. IRS funding. Appropriates approximately $80 billion over the next decade for IRS enforcement activities including the hiring and training of new auditors, IT systems modernization, and taxpayer services. Table 1 presents PWBM's estimate of conventional budgetary effects over the 10-year budget window defined in the FY2022 reconciliation instructions. We estimate the Act would reduce cumulative noninterest deficits by $264 billion from FY2022 through FY2031. estimated effects on inflation We estimate that the Inflation Reduction Act as passed by the Senate would have a very modest impact on inflation over the next decade. The Act produces some upward pressure on prices in 2023 and 2024, but its effects are too small to meaningfully affect measured the Personal Consumption Expenditures (PCE) inflation rate as reported by the Bureau of Economic Analysis. The Act would reduce annual inflation by around 0.1 percentage points in about five years, once major deficit-reducing provisions of the legislation are fully implemented, but the Act would have no measurable impact on inflation after 2028. All these point estimates are not statistically different from zero, indicating a low level of confidence that the legislation would have a measurable impact on inflation. other macroeconomic effects Government spending rises because of the climate-related spending and the extension of the ACA subsidies are greater than the savings from prescription drug pricing reforms. However, additional tax revenues are greater than the spending increases, which leads to a decrease in government debt. Government debt goes down by 4.1 percent in 2040 and 8 percent in 2050, which crowds-in investment in productive private capital. The provisions which increase taxes on business activity lower the after-tax return to investment, which offsets the positive effects on investment from lower government debt. Net of these two effects, private productive capital declines by 0.2 percent in 2031, is unchanged in 2040 and increases by 0.3 percent in 2050. The drop in productive capital in 2031 leads to a 0.1 percent decline in GDP. Nonetheless, as government debt declines, private capital increases by 0.3 percent by 2050, and workers become more productive. Higher worker productivity is reflected in wages that increase by 0.1 percent in the same year. Moreover, the increase in private capital combined with the accumulated productivity increases from the climate and energy effects, described in a previous brief, leads to an increase in GDP, which grows 0.1 percent in 2050. distributional tax effects: conventional estimates The Inflation Reduction Act contains a wide array of subsidies, taxes, and pricing reforms, each with varying impacts on households and businesses. For example, some large businesses would face higher tax bills; individuals buying certain health insurance plans would face lower out-of-pocket costs; some households who evade taxes would be made to pay; and pharmaceutical companies would earn lower revenues. Though not responsible for remitting taxes assessed on business activity, households bear some of the economic burden of such taxes. Shareholders receive lower after-tax returns, and workers earn lower wages with fewer productivity-enhancing investments. Distributional analysis traditionally focuses on the effects of revenue-raising tax provisions since attempting to allocate all spending--including for roads, education, national defense, some transfer programs, and the bill inherited by future payers for current deficits--is challenging and subjective. Put differently, distributional analysis typically is not intended to be a holistic incidence. Instead, distributional analysis attempts to estimate answers the narrower question: for a given set of spending benefits and change in debt, who finances the costs under the explicitly stated revenue provisions in the bill? In the case of this Act, the revenue is raised from the corporate minimum tax as well as the tax on share repurchases. Conventional distributional analysis measures the long-run incidence of tax increases imposed at a single point in time. PWBM assumes that 75 percent of corporate income taxes are borne by owners of capital with the remainder borne by labor--magnitudes consistent with empirical research and scorekeeping convention. We apply this incidence assumption when analyzing the corporate minimum tax provision. However, for the stock buyback tax, we assume that shareholders bear 100 percent of the burden because it is assessed on a discretionary balance sheet transaction rather than on income from economic production. We find that all income groups would bear some of the additional burden of the 2023 revenue-raising business tax changes. Average burden ranges from $5 for the lowest quintile, to $55 for the middle quintile, to $61,520 for the top 0.1 percent of tax units. At lower incomes, the tax incidence largely reflects lower wages over time relative to baseline, whereas at high income the tax incidence mostly reflects more immediate changes in the value of financial assets. distributional effects: dynamic estimates PWBM's dynamic distribution metric shows how benefits and costs accrue across generations when accounting for macroeconomic effects, including the increase in productivity from lowering carbon emissions relative to baseline. While this analysis is less granular than conventional distributional analysis, the dynamic ``equivalent variation'' measure captures important dynamics like lifetime income trajectories, the ``insurance value'' of means-tested benefits and changes in wages and returns to capital investments. Table 4 reports the equivalent variation for households at different ages (relative to the year 2022) and incomes. Each value shown in Table 1 corresponds to the one-time benefit that the corresponding household receives from the legislation. For example, the value of -$700 for a household age 40 in the bottom income quintile indicates that this household is worse off by $700 under this legislation, including at age 40 and the remainder of his or her lifetime. Put differently, this household is indifferent between the adoption of the Inflation Reduction Act and making a one-time payment of $700 that avoids the adoption of the Act. However, a household in the bottom quintile who is born in 20 years (-20 age in 2022) would be $1,900 better off. Notice two main effects that vary by both income and generation: First, current workers and retirees prefer current law over the provisions in the Inflation Reduction Act. People alive today bear the burden of business tax increases in the form of lower investment returns and lower wages in the near term. However, future generations gain from the adoption of the Act, including positive gains to capital formation from reducing the debt as well as the increase in total factor productivity from reducing carbon emissions relative to baseline. Second, current higher-income households bear a substantially larger share of the tax burden while future higher-income households also gain the most from the improved economy. In the long run, the Inflation Reduction Act leads to lower government debt, higher wages, higher total factor productivity and higher GDP. Although older workers and retirees prefer current law, this growth leads to significant gains for younger households in all income brackets. As lower government debt crowds in additional productive private capital, wages increase. In addition, these younger workers begin to benefit from the accumulating productivity benefits from climate investments. Therefore, workers in the future will receive higher wages and income, which is reflected in larger equivalent variations for younger cohorts of workers.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Tennessee (Mr. Rose).

Mr. BRADY. Madam Speaker, I insert in the Record the following analysis which shows the top 10 manufacturing industries hit hardest by the Democrats' made-in-America manufacturing tax. These are predominantly minority communities and working-class Americans. TOP 10 INDUSTRIES WHERE AVERAGE ANNUAL WAGES ARE LESS THAN 75K PER YEAR: ------------------------------------------------------------------------ Amount of Industry Workers Job Example ------------------------------------------------------------------------ 1) Office and Administrative 18,299,380 Secretaries, Support. Administrative Assistants 2) Sales and Related.............. 13,256,290 Retail Sales Workers, Travel Agents 3) Transportation and Material 12,639,920 Truck Drivers Moving. 4) Food Preparation and Serving... 11,201,480 Waitress, Hosts and Hostesses, Cooks 5) Production..................... 8,408,030 Machine Operators, Laundry and Dry- Cleaning Workers, Tire Builders 6) Educational Instruction and 8,191,930 Teachers, Librarians Libraries. 7) Healthcare Support............. 6,603,680 Nursing Assistants, Occupational Therapy Aides 8) Construction and Extraction.... 5,848,950 Carpet Installers, Insulation Workers 9) Installation, Maintenance, and 5,574,410 Radio, Cellular, and Repair. Tower Equipment Installers and Repairers 10) Building and Grounds Cleaning 4,108,810 Janitors and and Maintenance. Cleaners, Lawn Service, Groundskeeping Workers ------------------------------------------------------------------------

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from Ohio (Mr. Davidson).

Mr. BRADY. Madam Speaker, I include in the Record the following editorial from The Wall Street Journal, which shows this bill will only reduce global temperatures by, at best, 0.028 degrees Fahrenheit throughout this century and as little as 0.0009 degrees over the entire century. [From The Wall Street Journal] Tilting at Climate Windmills Nearly all of Washington--Democrats, the press, lobbyists-- is taking a victory lap with Senate passage of the Schumer- Manchin tax, climate and drug price control bill. The climate lobby is especially thrilled, claiming a historic victory that will reduce temperatures, hold back the rising sea, and save the planet. Or, maybe not. Our contributor Bjorn Lomborg looked at the Rhodium Group estimate for CO2 emissions reductions from Schumer-Manchin policies. He then plugged them into the United Nations climate model to measure the impact on global temperature by 2100. He finds the bill will reduce the estimated global temperature rise at the end of this century by all of 0.028 degrees Fahrenheit in the optimistic case. In the pessimistic case, the temperature difference will be 0.0009 degrees Fahrenheit. In other words, the climate provisions in this ballyhooed legislation will have no notable impact on the climate. This isn't surprising. No matter what the U.S. does to reduce greenhouse-gas emissions, it will be dwarfed by what the rest of the world does. China, India and Africa aren't about to stop burning fossil fuels as they develop, and China is sprinting ahead to build huge new coal capacity despite its pledge to start reducing emissions after 2030. Barring a breakthrough in battery or other technology, carbon emissions will continue to increase. No one knows how much the Earth's temperature will warm, though even the U.N. model has modified its estimates from the apocalyptic predictions of some years ago. Schumer-Manchin won't reduce inflation, won't reduce the budget deficit, and it won't reduce the world's temperature. What it will do is transfer some $369 billion from taxpayers and drug companies to the pockets of green energy businesses and investors. It will tighten the hold that politicians have on the allocation of capital, as they pick winners and losers with their grants and tax credits. Everyone will get a nice warm feeling as they pretend they are cooling the climate.

Mr. BRADY. Madam Speaker, I yield 1 minute to the gentlewoman from New York (Ms. Malliotakis).