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THE MAJORITY AGENDA

What reconciliation might look like

Sen. Joe Manchin (D-W.Va.) is more skeptical than ever about a roughly $1 trillion reconciliation package following Wednesday’s horrible inflation report, which showed that prices for goods and services are more than 9% higher than last year. This is the worst inflation rate since the early 1980s and comes as another blow to President Joe Biden and Democrats.

So that got us thinking about what kind of reconciliation deal that Manchin and Senate Majority Leader Chuck Schumer might reach to avoid coming up empty handed. Again.

The answer, based on our conversations with more than 20 Democratic senators and aides, is this: A reconciliation package centered around allowing Medicare to negotiate for cheaper drug prices paired with extending Obamacare premium subsidies in order to avert rate hikes for millions of enrollees come January. Or something even more basic – use reconciliation to pass the Medicare prescription drug bill.

There are several reasons why this could work, not the least of which being that politics is the art of the possible. After a seven-month period in which Democrats have seen the Build Back Better Act collapse, Biden’s ratings sink, inflation and gas prices soar, and a major war break out in Europe, any victory headed into the fall would be a major boost.

And between House opposition and Senate skepticism, it seems unlikely that Democrats will be able to pass a huge spending-and-tax package.

According to CBO, implementing the Medicare prescription drug plan proposed by Senate Democrats would save the federal government nearly $288 billion over a decade while also having little impact on the number of new drugs introduced. Some of those savings could be used to shore up Medicare, support Obamacare premium subsidies or reduce the deficit.

PhRMA, the powerful trade group representing the drug industry, and the drug companies insist that the Democrats’ prescription drug pricing plan “could lead to less research and development (R&D) for new medicines and treatments.”

Yet most importantly, Manchin seems interested in it. And there are a number of other Senate Democrats who would take it as well – provided that’s the only deal available.

“That’s a big one,” Manchin told us on Wednesday when asked about an Obamacare-Medicare deal. “It would be a big deal.”

It could also put Republicans in a jam. Voting against cheaper prescription drugs and allowing Obamacare premiums to spike may prove a dicey spot for Republican senators. Democrats may not pick up any GOP votes, but the politics of this debate aren’t great for Republicans, GOP senators and aides will privately admit

We talked to 20 Senate Democrats about this option. Their responses ranged from not interested in such an approach because it didn’t resolve tax and energy-climate issues to totally open to the idea, and everything in between. Here’s some of what they said:

→	Sen. Elizabeth Warren (D-Mass.): “Reconciliation will be whatever we can get 50 votes on and there’s no mistaking that.”

→	Sen. Chris Murphy (D-Conn.): “I obviously want to get as much done as we can, but I also just think that you could adjust the dial on some of these things.”

→	Sen. Mark Kelly (D-Ariz.): “Well, like anything, I’ve got to look at the details. But the price of prescription drugs for seniors in my state and across the country are often unaffordable.”

→

Sen. Brian Schatz (D-Hawaii): “We still have an extremely live negotiation about prescription drug prices, taxes, ACA subsidies, shoring up Medicare, climate, and energy. You’ll notice I’m not talking about other stuff that was in previous bills. We’re already talking about a pared-down inflation-fighting bill. And we’ll see how much we can get.”

→	Sen. Kirsten Gillibrand (D-N.Y.): “If you can lower the cost of prescription drug prices for millions of Americans, that’s a win. If you can add extra investments in clean energy, that’s a win. So I will say yes to any common-sense proposal that helps people.”

→

Sen. Chris Coons (D-Del.): “I would vote for that. We shouldn’t do that. We should also reduce the deficit. We should also invest in clean energy and renewables. We should also extend some of the ACA subsidies. But look, if you put on the floor a bill that reduces prescription drug prices, we would be both reducing inflation and reducing one of the most painful monthly costs that face millions and millions of families. And we’d be doing something that both parties – and the current and former president – have been saying for years they were gonna get done.”

→	Sen. Mazie Hirono (D-Hawaii): “You say only prescription drugs. That’s a lot.”

→

Sen. John Hickenlooper (D-Colo.): “I don’t want to negotiate this stuff in the media. I think those are two very worthy goals. But I would hope we would have the ambition to go beyond that. I’m from the school of people who don’t want to have $5 per gallon gas on the backs of working people. But climate change is real. And climate rescue is overdue.”

→

Sen. Sherrod Brown (D-Ohio): “I’m not going to talk about reconciliation. News reports will say, ‘They [Democrats] didn’t get as much as they wanted, Brown wanted more, this person wanted more.’ I’m just not going to get into that debate. I’m going to support the reconciliation bill. We should move forward.”

→

Sen. Gary Peters (D-Mich.): “I think we can do more. Those are really critical elements, so there’s no question those are priorities for me and the caucus, we should get those done. But I don’t think we should engage in hypotheticals that that’s all we’re going to have right now. There will be more.”

→	Sen. Bob Casey (D-Pa.): “Those two would be substantial progress, no question about it. But we still gotta do climate, I want to do home and community based [health care] services, child care, pre-K. We’ll see what happens. We don’t know what [Schumer] and Sen. Manchin will agree to.”

→	Sen. Jack Reed (D-R.I.): “I think it would be difficult if that was all that was on the table to say no. But it would be very troublesome if that’s all we got.”

Senate Finance Committee Chair Ron Wyden (D-Ore.) still believes that a broader agreement is possible and he refused to concede that it’s necessary to scale back the Democratic package yet.

“I just don’t think that’s where we are,” Wyden said on Wednesday afternoon. The Oregon Democrat insists a reconciliation package can be crafted that includes the prescription drug provision and ACA subsidies, clean energy funding and tax reform.

“I still feel this can be done before we leave in August,” Wyden added. “I think we’re making progress.”

– Jake Sherman, John Bresnahan and Max Cohen

THE SPEAKER

News: Pelosi’s massive quarter: $42M

Speaker Nancy Pelosi raised $41.8 million for House Democrats in the second quarter of this year, another chapter in the California Democrat’s effort to keep the party flush with cash.

Pelosi raised more than $31.7 million for the DCCC. Aides say the California Democrat has raked in $233 million this cycle and $1.2 billion fro the party since 2002.

Democrats face stiff headwinds in keeping the House majority. Pelosi’s fundraising has kept apace with previous cycles, as she wheels around the country collecting big checks for the DCCC.

In some sense, Pelosi’s fundraising prowess has never been more crucial. As we describe below, Democratic outside groups are getting crushed in fundraising by their GOP counterparts this midterm cycle.

– Jake Sherman

THE OUTSIDE GAME

Scoop: McCarthy aligned super PAC doubled up Democrats’ group

The Congressional Leadership Fund, the House GOP super PAC, raised $43.5 million in the second quarter and has a record-smashing $130.4 million in the bank. The cash-on-hand total is the most the organization has ever had at this point in an election cycle, while the $43.5 million total is the most it has ever raised in a quarter.

CLF will also disclose it took in $4 million between July 1 and July 4 on a post-primary report that will come out today. This sum fell outside of the second-quarter fundraising report.

House Minority Leader Kevin McCarthy is the main draw for this organization’s fundraising. McCarthy can appear on the organization’s behalf, but can only solicit donations within the legal limits. CLF, led by Dan Conston, has the blessing of the House Republican leadership team.

Outside groups like CLF are taking an increasingly critical role in House races. Leadership finds super PACs to be the more efficient way to raise money. The NRCC can raise in six figure sums, while CLF can raise unlimited amounts of money. CLF’s sister organization, the American Action Network, can also raise unlimited sums and does not have to disclose its donors.

CLF and AAN have raised a combined $226 million, which is more than they ever raised during a complete cycle.

House Majority PAC, the House Democratic super PAC, raised just $19.7 million in the second quarter, which is less than half what the GOP group pulled in.

That Republicans so frequently crush their Democratic outside-group counterparts is a point of consternation at the DCCC.

– Jake Sherman

THE CAMPAIGN

→	News: Rep. Kim Schrier (D-Wash.) raised $1.7 million in the second quarter and has a whopping $6.1 million on hand. Schrier’s race is a toss up, according to the Cook Political Report with Amy Walter.

→	Retiring Sen. Richard Shelby (R-Ala.) reported that he still has $9.5 million in his campaign account. That’s a lot of money for an 88-year old not seeking office again.

– Jake Sherman

MORE FROM PUNCHBOWL NEWS

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MOMENTS

All times eastern

President Joe Biden is in Israel. He met this morning with Israeli Prime Minister Yair Lapid. Biden also held a meeting with the I2U2, which includes leaders from Israel, India and the United Arab Emirates

7 a.m.: Biden will hold a news conference with Lapid.

9:45 a.m.: Biden will meet with Israeli President Isaac Herzog.

10:20 a.m.: Biden will meet with Benjamin Netanyahu, the opposition leader.

11 a.m.: Congress will hold a ceremony for Hershel “Woody” Williams, who is lying in honor in the Capitol. Williams was the last surviving Medal of Honor recipient from World War II.

11:20 a.m.: Biden will receive the Israeli Presidential Medal of Honor.

12:30 p.m.: Speaker Nancy Pelosi will hold her weekly news conference in the Capitol.

12:45 p.m.: Biden will attend the opening ceremonies of the Maccabiah Games and meet with U.S. athletes.

CLIP FILE

NYT

→	“Jan. 6 Panel Will Turn Over Evidence on Fake Electors to the Justice Dept.,” by Luke Broadwater

WaPo

→	“Democratic cities in Republican states seek ways around abortion bans,” by Scott Wilson in New Orleans

→	“Janet Yellen’s global campaign to defund Russia’s war machine,” by Jeff Stein in Tokyo

→	“Youngkin hits Nebraska like a GOP star, but some want him to take it slow,” by Gregory S. Schneider in Kearny, Neb.

CNN Business

→	“Bill Gates funnels $20 billion to foundation and plans to drop off list of wealthiest people,” by Allison Morrow

WSJ

→	“Yellen Pitches Russian-Oil Price Cap to Chinese Counterpart,” by Andrew Duehren

→	“Democratic Senators Press Fed to Add Teeth to New Central Bank Ethics Rules,” by Michael S. Derby

Bloomberg

→	“Fed Could Weigh Historic 100 Basis-Point Hike After Inflation Scorcher,” by Catarina Saraiva, Steve Matthews, and Jonnelle Marte

Politico

→	“Dems agonize over election-year tax increases,” by Burgess Everett and Sarah Ferris

Detroit News

→	“Meijer seeks to survive Trump backlash in GOP primary,” by Riley Beggin and Melissa Nann Burke

Milwaukee Journal-Sentinel

→	“Tony Evers: Republicans won’t stop investigating 2020 ‘until Donald Trump is 6 feet under,’” by Molly Beck