In ongoing negotiations, it's reported that some are proposing to employ destructive drug price controls…
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Budget Negotiations: CFIF Opposes Use of Drug Price Controls via "Mandatory Inflation Rebates"

In ongoing negotiations, it's reported that some are proposing to employ destructive drug price controls as a mechanism to reach a budget agreement.  For multiple reasons that CFIF has highlighted, that poses a potentially catastrophic idea.

Specifically, it appears that debt ceiling negotiations may include a destructive proposal to reduce federal spending levels by targeting $115 billion from Medicare, which would derive largely from alleged “Medicare savings” through instituting a government-imposed mandatory “inflation rebates.”  As we've explained, inflation rebate proposals work by penalizing drug innovators with higher taxes whenever their products exceed an arbitrary inflation mark.  Currently, Medicare Part D’s structure works by employing market-based competition…[more]

July 22, 2019 • 01:09 pm

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U.S. Holds All the Cards in Showdown With Iran Print
By Victor Davis Hanson
Thursday, June 20 2019
[T]he truth is that America has all the cards and Iran none in its game of chicken.

In May 2018, the Donald Trump administration withdrew the United States from the Joint Comprehensive Plan of Action with Iran, popularly known as the Iran nuclear deal.

The U.S. then ramped up sanctions on the Iranian theocracy to try to ensure that it stopped nuclear enrichment. The Trump administration also hoped a strapped Iran would become less capable of funding terrorist operations in the Middle East and beyond, proxy wars in the Persian Gulf, and the opportune harassment of ships transiting the Strait of Hormuz.

The sanctions are clearly destroying an already weak Iranian economy. Iran is now suffering from negative economic growth, massive unemployment and record inflation.

A desperate Iranian government is using surrogates to send missiles into Saudi Arabia while its forces attack ships in the Gulf of Oman.

The Iranian theocrats despise the Trump administration. They yearn for the good old days of the Obama administration, when the U.S. agreed to a nuclear deal that all but guaranteed future Iranian nuclear proliferation, ignored Iranian terrorism and sent hundreds of millions of dollars in shakedown payments to the Iranian regime.

Iran believed that the Obama administration saw it as a valuable Shiite counterweight to Israel and the traditionally American-allied Sunni monarchies in the Gulf region. Teheran assumes that an even more left-wing American administration would also endorse Iran-friendly policies, and so it is fishing for ways to see that happen in 2020 with a Bernie Sanders, Elizabeth Warren or Joe Biden presidency.

Desperate Iranian officials have already met secretly with former Secretary of State John Kerry and openly with Sen. Diane Feinstein, likely to commiserate over Trump's cancellation of the nuclear deal and to find ways to revive the Obama-era agreement after Trump leaves office.

To that end, the Iranians wish to disrupt world oil traffic while persuading China, Russia and the European Union to pressure the U.S. to back off sanctions.

Iran hopes to provoke and embarrass its nemesis into overreacting  or not reacting at all. If Trump does nothing, he looks weak to his Jacksonian base of supporters. But do too much, and he appears a neoconservative, globalist nation-builder. Either way, the Iranians think Trump loses.

After all, Iran knows that Trump got elected by flipping the blue-wall states of the Midwest  in part by promising an end to optional interventions in the Middle East. Accordingly, Iran hopes to embarrass or bog down the U.S. before the 2020 elections. In Teheran's view, the challenge is to provoke Trump into a shooting war that it can survive and that will prove unpopular in the United States, thus losing him the election.

Iran, of course, is not always a rationale actor. A haughty Tehran always magnifies its own importance and discounts the real dangers that it is courting. It harkens back to its role in the 2003-2011 Iraq War, a conflict that proved that U.S. efforts could be subverted, hundreds of American soldiers could be killed, public support for war could be eroded, and a more malleable American government could be transitioned in.

But what worked then may not work now. The U.S. is not only the world's largest producer of oil and natural gas, but soon to become the largest exporter of energy  and without getting near the Iranian coast. Likewise, American allies in the Middle East such as Israel are energy independent. America's Arab friends enjoy seeing competing Iranian oil all but off the market.

Time, then, is on the Americans' side. But it is certainly not on the side of a bankrupt and impoverished Iran that either must escalate or face ruin.

If Iran starts sinking ships or attacking U.S. assets, Trump can simply replay the ISIS strategy of selective off-and-on bombing. The U.S. did not lose a single pilot to enemy action.

Translated, that would mean disproportionately replying to each Iranian attack on a U.S. asset with a far more punishing air response against an Iranian base or port. The key would be to avoid the use of ground troops and yet not unleash a full-fledged air war. Rather, the U.S. would demonstrate to the world that Iranian aggression determines the degree to which Iran suffers blows from the U.S.

Of course, Tehran may try to stir up trouble with Israel through its Syrian and Palestinian surrogates. Iran may in extremis also stage terrorist attacks in Europe and the U.S. And it may lie that it has already developed enough fissionable material to launch a nuclear missile.

But the truth is that America has all the cards and Iran none in its game of chicken.

Because Iran is losing friends and money, it will have to escalate. But the U.S. can respond without looking weak and without going to war  and without ensuring the return to power of the political party responsible for giving us the disastrous nuclear deal that had so empowered Iran in the first place.


Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author of the soon-to-be released "The Second World Wars: How the First Global Conflict Was Fought and Won," to appear in October from Basic Books. You can reach him by e-mailing authorvdh[at]gmail.com.
 
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