GOP corporate allies in Congress's cross hairs
Pharmaceutical companies and Big Oil look to be Democrats' first targets after the party takes control of Capitol Hill in January.
When Republicans expanded their majority in 2004, their first target was the trial lawyers, virtual ATM dispensers for Democratic candidates. A new law curbing class-action lawsuits was on the president's desk by mid-February.Skip to next paragraph
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Now, Democrats are targeting some of the GOP's strongest corporate allies – Big Oil, big pharmaceutical companies, and, in all likelihood, defense contractors.
In their first 100 legislative hours, Democrats aim to negotiate lower drug prices for seniors, roll back subsidies for oil and gas companies, and reduce the cost of student loans. They're also quickly gearing up to investigate allegations of corruption in war contracting.
"Parties reward their constituency groups, and they go after the other party's constituency groups. Parties are never stronger than in the first few days, so they do it early," says Larry Sabato, a political scientist at the University of Virginia in Charlottesville.
Moreover, it's popular. "You can't find people supporting big drug and oil companies, except the people who work in them," Professor Sabato says. For example, some 85 percent of Americans say the government should negotiate prescription-drug prices for the Medicare program, according to a recent poll by the Kaiser Family Foundation.
When the GOP-controlled Congress passed the Medicare prescription-drug bill in 2003, it included a one-line provision that banned the government from negotiating directly with drug companies to lower prices for seniors, as it now does for veterans. Rep. Billy Tauzin (R) of Louisiana, who drafted that provision, left Congress to become the top lobbyist for the drug industry as president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA) – a controversial move that Democrats say they will make less likely with new lobby-reform legislation.
If that ban on price negotiating is lifted, House Democrats say that seniors overall could cut their drug costs by as much as $180 billion over the next 10 years. A study last year by the consumer group Families USA found that 19 of 20 drugs were priced lower through the Veterans Administration than they were for Medicare recipients.
But critics, including the White House and the Department of Health and Human Services, say that drug prices are already falling faster than expected under the 2003 law, and that mandating government to negotiate drug prices could limit the access to drugs for seniors.
Under the current prescription-drug bill, seniors are already saving an average of $1,200 a year on prescription drugs, according to the Centers for Medicare and Medicaid Services. And the cost to the Treasury is about $30 billion, instead of $43 billion as anticipated.
The conflict sets up one of the first big battles of the 110th Congress. Since 1990, drug companies have contributed more than $134 million to national candidates, more than two-thirds of that to Republicans, according to the Center for Responsive Politics. The industry doubled its political contributions in the run-up to the 2003 legislation.