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Happy Wednesday morning.
Big news: Senate Majority Leader Chuck Schumer is getting the ball rolling on a potential Democratic reconciliation package.
Schumer will submit text today to the Senate parliamentarian reflecting an agreement among all Democrats – including Sen. Joe Manchin (D-W.Va.) – to allow Medicare to negotiate prescription drug costs. The parliamentarian will then begin the “Byrd Bath” review process to make sure the proposal conforms with the Senate’s arcane reconciliation rules.
At this point, the rest of the package – informally dubbed Build Back Manchin – is up in the air. This is the low hanging fruit. Manchin has always supported this policy, as do 49 other Senate Democrats. So Schumer is starting with the lowest common denominator.
But this is a big deal. It represents the first formal step in reviving a new reconciliation bill for possible floor action. And Schumer is taking a risk by making this official. The top issue for Senate Democrats and the White House this month now becomes whether they can get a deal. So there’s a lot riding on this for Schumer, Manchin and President Joe Biden.
The other two major items in any Democratic reconciliation package – climate and energy provisions, plus tax reform – are still being negotiated by Schumer and Manchin. The move today by Schumer to start the Byrd Bath doesn’t mean there will be final agreement. But reconciliation is clearly back in play. And this will drive everything on Capitol Hill over the next few weeks. And it could spell the end of USICA, which we’ll get to in a minute.
The Democratic proposal would allow Medicare to begin negotiating on the price of prescription drugs in 2023, according to a summary of the provisions obtained by Punchbowl News.
The plan caps a patient’s out-of-pocket costs as $2,000 per year, with the ability to make monthly payments. There will be an “inflation rebate” to cover “arbitrary and unjustified price increases on products” that don’t change year-to-year, with drug companies forced to make up the difference if they raise prices beyond inflation.
Also included: a “premium stabilization policy” to hold down annual premium increases. “The bill changes that dynamic by incentivizing manufacturers and insurers to keep drug prices down, and puts them on the hook for higher drug prices and spending,” the summary of the legislation says.
Seniors will get free vaccines, and premium and co-pay assistance for low-income individuals will be expanded.
And one major new provision would end the “rogue secretary loophole.” Meaning a future GOP administration must continue to negotiate on Medicare drug prices.
Our friend Tony Romm at the Washington Post reported many of these details last week.
As we said, the rest of the Democratic reconciliation package – including whether to extend enhanced Obamacare premium subsidies that expire at the end of the year for several million enrollees – is up in the air. Manchin remains concerned about inflation and new federal spending programs, and there’s extensive behind-the-scenes jockeying over tax reform.
But the Medicare drug pricing provision could save the federal government as much as several hundred billion dollars over the next decade, depending on the number of drugs covered. And it polls very well. This is especially important with a tough election just four months away.
– John Bresnahan
PRESENTED BY IBM
The American Semiconductor Innovation Coalition (ASIC) is proud to unite more than 80+ members across technology, universities, startups and small businesses, and national labs to advance U.S. semiconductor R&D and manufacturing.
New: Another July event! Join us for a virtual conversation with Rep. Eric Swalwell (D-Calif.) on July 27 at 9 a.m. ET. We’ll be talking to him about the importance of privacy and security in existing and new technologies. This is the first event in our new series “Building Trust in Technology,” presented by Trusted Future. Following the conversation we’ll be joined by Maureen Ohlhausen, former FTC acting chairman and commissioner, and Ken Gude, Trusted Future executive director, for a fireside chat. RSVP here!
And don’t forget about our event next week with Rep. Brad Sherman (D-Calif.) on Tuesday, July 12 at 9 a.m. ET about how Washington is looking to regulate capital markets and financial reporting in an effort to maintain trust in a changing economy. RSVP here!
An update on the status of USICA
Let’s state the obvious: Senate Majority Leader Chuck Schumer’s decision to plow ahead with a reconciliation package is likely to hurt the prospects for USICA, aka the Bipartisan Innovation Act or CHIPs.
Senate Minority Leader Mitch McConnell has said he’s not going to help get USICA across the finish line if Schumer was moving on a reconciliation package. Now Schumer is doing just that.
Even if McConnell were to back away from this threat, we find it very difficult to believe that Congress will be able to find agreement and pass USICA and a reconciliation bill in the few weeks that lawmakers will be in town before the August recess.
But we also have some new reporting on the climb it will take to get USICA done – even without the politics of reconciliation casting a shadow over this effort.
This legislation needs to be passed by the end of July or else it’s not likely to pass at all. As we’ve reported, this would be seen as a major political failure with heaps of blame to go around.
USICA is designed to boost U.S. high tech research and manufacturing – especially the domestic semiconductor industry. It passed the Senate more than a year ago. The House has passed two versions of the bill. And the two chambers have been locked in a slow-motion negotiation for the last two months.
Here’s the news: There are 1,015 outstanding items in the USICA package and GOP sources tell us that party leaders have only come to agreement or agreed to drop 127 of them. That means nearly nine-tenths of the bill is open and unresolved.
Democrats take issue with this characterization. They say the two sides have actually closed out many more issues, but Republicans have withheld final confirmation on several hundred items until bigger-picture topics have been resolved.
In negotiations like this, it’s often difficult to totally discern where talks stand because both sides have incentive to show that the other is slow walking the talks or otherwise acting in a capricious manner.
But let’s put it this way: Any way you slice it, the two sides can’t even agree on which phase of the negotiation they’re in.
Remember: We’ve reported that the leadership is now driving the negotiations and they have agreed to drop contentious issues such as climate and labor provisions. This could be a sticking point in the House.
– Jake Sherman
K Streeters dish on the midterm elections
First of all, Premium subscribers will get a quick special edition today with all of the data from our Canvass: K Street edition. Subscribe here.
But for now, let’s dig into what K Street thinks about the midterms.
We asked senior K Street leaders about the impact of a reconciliation deal on the midterm elections. 45% of all respondents — Republicans and Democrats – said it would help Democrats. 68% of Democrats believe it would benefit the party in the midterms.
In the week following the Roe v. Wade decision, Democrats and left-leaning organizations raised more than $80 million. Some Democrats see the ruling as an opportunity to energize voters in a challenging midterm season.
79% of Democratic K Street leaders believe the overturning of Roe v. Wade will help their party in the midterm elections. The majority of Republicans — 53% — said it would have no impact or hurt the GOP.
A majority of Democrats (54%) believe the gun rights debate will help their party, while most Republicans (65%) believe it will have no impact.
– Christian Hall
PRESENTED BY IBM
The American Semiconductor Innovation Coalition (ASIC) and its 80+ members are dedicated to addressing the chip crisis and restoring U.S. economic leadership.
→ Josh Shapiro, the Democratic nominee for governor of Pennsylvania, is hitting GOP nominee Doug Mastriano hard on abortion. Shapiro has a new spot running in Philadelphia and Pittsburgh with a number of women saying that Mastriano is “scary” or “too extreme.” They also say Mastriano would outlaw abortion. The ad has Mastriano himself saying both that “my body, my choice is ridiculous nonsense,” and that he doesn’t believe in exceptions in abortion restrictions for rape and incest.
→ Sen. Chris Van Hollen (D-Md.) has his first ad up in his bid for a second term in the Senate. This is a positive spot running in Baltimore and D.C., touting Van Hollen’s work on gun safety, efforts to stop off-shore oil drilling and taking on drug companies. The primary is July 19 and Van Hollen is expected to win in a walk.
→ Rep. Matt Gaetz (R-Fla.) has a new ad up in his race for re-election. The ad sounds like it was taped in a basement. In the spot, Gaetz says he’s former President Donald Trump’s strongest ally in Congress. Gaetz also calls on the federal government to “round … up” undocumented immigrants and deport them. Gaetz faces three other Republicans in the GOP primary on Aug. 23.
Mark Lombardo, one of Gaetz’s primary opponents, has a new spot reminding voters that Gaetz “got himself entangled into a child sex trafficking investigation” and was the lone no vote on an anti-sex slavery bill that Trump signed.
→ Eric Schmitt, who is seeking the GOP nomination for Senate in Missouri, has a new ad running in St. Louis saying he will take a blowtorch to the Biden agenda.
– Jake Sherman
Darrell Issa is still really rich
Rep. Darrell Issa (R-Calif.) reported assets worth at least $115,850,000 on his most recent financial disclosure report. Issa has been one of the wealthiest members of Congress for decades.
If you have some time, and want to see what it looks like to be very rich, here’s his financial disclosure report.
– Jake Sherman
→ Worth watching: Former House Judiciary Committee Chair Bob Goodlatte (R-Va.) recently signed up to lobby for the Walt Disney Co., on “Entertainment Industry Issues. General copyright issues. Theme park security.” Goodlatte has put together a nice little lobbying business. He has reported $140,000 in lobbying income in the first quarter from the Association of American Publishers, Protect the 1st and the Project for Privacy and Surveillance Accountability.
– Jake Sherman
PRESENTED BY IBM
ASIC, working to propel the U.S. as a semiconductor innovation leader
9:30 a.m.: President Joe Biden will get his daily intelligence briefing.
12:25 p.m.: Biden will leave for Cleveland. He’ll arrive at 1:55 p.m. Karine Jean-Pierre will gaggle on board Air Force One.
3:15 p.m.: Biden will speak at Max S. Hayes High School about “the final rule implementing the American Rescue Plan’s Special Financial Assistance program.”
4:55 p.m.: Biden will leave Cleveland for Andrews. He’ll arrive at the White House at 6:20 p.m.
Vice President Kamala Harris is back in Washington and has no public events scheduled.
→ “Fulton grand jury subpoenas Giuliani, Graham, Trump campaign lawyers,” by Tamar Hallerman
→ “Next Front Line in the Abortion Wars: State Supreme Courts,” by Michael Wines
→ “Jan. 6 Hearings to Resume Next Week With Focus on Domestic Extremists,” by Luke Broadwater
→ “Justice Dept. Sues Arizona Over Voting Restrictions,” by Nick Corasaniti and Glenn Thrush
→ “As some Democrats grow impatient with Biden, alternative voices emerge,” by Ashley Parker and Matt Viser
→ “China Accuses US of ‘Technological Terrorism’ as Chip Curbs Grow,” by James Mayger
→ “Walmart Tells Suppliers New Fuel and Pickup Fees Are Coming,” by Sarah Nassauer
→ “Oil Prices Pulled Lower by Dimming Demand,” by Matt Grossman
→ “G-20 meeting may lead to wider divisions over war in Ukraine,” by Matthew Lee
→ “Warnock used campaign funds to fight personal lawsuit,” by Natalie Allison
→ “Gov. Beshear turns over White House ‘privileged’ emails on Chad Meredith judge nomination,” by Joe Sonka, Michael Collins and Joey Garrison
→ “Texas border county leaders declare ‘invasion,’ urge Abbott to expel migrants,” by Jasper Scherer
PRESENTED BY IBM
Transformation and Cooperation: The American Semiconductor Innovation Coalition (ASIC) is proud to unite more than 80 members across technology, universities, small businesses and startups, and national labs to bolster the U.S. semiconductor and chips industry—fostering innovation and creating a more resilient economy.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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