Chairmen Arrington, Guthrie, and Smith, React After CBO Confirms Democrats’ Drug Pricing Scheme Increased Deficit

Chairmen Arrington, Guthrie, and Smith, React After CBO Confirms Democrats' Drug Pricing Scheme Increased Deficit

WASHINGTON, D.C.-Today, House Budget Committee Chairman Jodey Arrington (R-Texas), House Energy and Commerce Committee Chairman Brett Guthrie (R-Ky.), and House Ways and Means Committee Chairman Jason Smith (R-Mo.) reacted to the Congressional Budget Office's (CBO) letter responding to the chairmen's May 2026 letter regarding CBO's dramatic upward revision of Medicare Part D cost in the Budget and Economic Outlook: 2026 to 2036.

House Budget Chairman Jodey Arrington:

"The Congressional Budget Office's (CBO) new analysis confirms what Republicans sounded the alarm on for years: The drug pricing scheme in the Inflation Reduction Act (IRA) fails to deliver the savings Democrats promised. CBO originally estimated these policies would save taxpayers $129 billion. Instead, CBO now confirms the IRA's misguided policies were the major driver behind higher projected Part D expenditures, contributing to a $700 billion deficit increase.

"We have once again confirmed that Democrats, with CBO's analysis in hand, sold the American people a false bill of goods in the Inflation Reduction Act. Combined with the Joint Committee on Taxation's $600 billion miscalculation of the cost of the Green New Deal tax credits, we now know the IRA cost Americans $1.3 trillion more in new deficit spending. Today, taxpayers are left holding the bag due to Democrats' failed experiment in price fixing and their Green New Deal climate agenda."

House Energy and Commerce Chairman Brett Guthrie:

"Earlier this year, CBO's baseline update projected significantly higher costs for Medicare Part D, including an estimated $700 billion in additional Medicare prescription drug spending over the next decade. In response to the May letter I sent, alongside Chairmen Arrington and Smith, CBO highlighted how the problematic design of the Inflation Reduction Act (IRA) has not led to the savings CBO originally projected but has instead led to increased costs for taxpayers and instability in the Part D marketplace. The Part D program is critical to meeting seniors' needs and requires durable regulatory policies to ensure the long-term affordability and availability of prescription drug plans for these beneficiaries.

House Ways and Means Chairman Jason Smith:

"Washington Democrats' Inflation Expansion Act was yet another costly promise that failed to deliver lower prices for seniors. Democrats promised lower prescription drug prices, but the Congressional Budget Office is once again confirming that their policies instead increased costs for America's seniors and taxpayers by an additional $700 billion while offering 50% fewer drug plans for them to choose from. Plain and simple, Democrats have made it harder for seniors to afford prescription drugs.

"Because of these misguided policies, Americans are paying more for health care than ever before while facing fewer choices and less access to care in return. Meanwhile, powerful health care empires continue to benefit from government-created distortions, loopholes, and misaligned incentives that reward higher spending instead of better outcomes. The Ways and Means Committee will continue fighting to hold these empires accountable, expand access to care, and lower costs - not help powerful interests that have benefited from the status quo."

BACKGROUND

Medicare is one of the largest drivers of our federal debt. CBO increased its projections for Medicare spending by $1 trillion in this year's baseline compared to 2025. Factors include increases in fee-for-service spending and increased Part D costs.

CBO originally estimated that the Medicare drug price negotiation and Part D redesign provisions in Democrat's so-called Inflation Reduction Act's (IRA) would reduce the deficit by $129 billion. This letter confirms that CBO grossly underestimated the costs of Democrat policies.

Instead, Part D spending has ballooned. CBO's response confirms that Democrat's drug pricing scheme raised Part D premiums and drove a $700 billion increase in deficit spending.

Despite the IRA's attempt to cap Part D costs, CBO confirmed that Part D per enrollee costs have increased 30 percentage points above CBO's projections, leaving the federal government to pick up the tab. This letter states that Part D spending per enrollee is projected to reach $3,500, the same as pre-IRA CBO projections. The IRA failed to lower Part D spending.