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Happy Thursday morning.
Johnson, a former mayor of London, has been prime minister since July 2019. A hugely controversial figure, Johnson endorsed the Brexit movement that took Britain out of the European Union.
The pound and London financial markets both rose as investors looked toward the end of a crisis that had brought British politics to a standstill. Dozens of ministers had resigned from the government and a rebellion against the 58-year-old Johnson broke among Conservative Party lawmakers.
Back to USICA … Here’s the question that we have been getting over the last 24 hours from Capitol Hill offices, lobbyists and corporations – Is USICA dead?
Senate Majority Leader Chuck Schumer’s decision to forge ahead with crafting a reconciliation package has thrown the bill aimed at boosting U.S. high tech research and manufacturing into flux. Remember – this is a top priority of Schumer’s, the White House’s and big business.
Senate Minority Leader Mitch McConnell has vowed to stop USICA in its tracks if Schumer pushes a reconciliation package, which is exactly what’s happening. As we reported, Schumer filed a Medicare prescription drug pricing proposal with the parliamentarian on Wednesday.
So we asked McConnell’s office if he was serious about killing USICA. David Popp, the Kentucky Republican’s communications director, had this response: “The tweet stands.” McConnell issued the threat by tweet last Friday.
With all this happening, we wanted to break this down a bit further and discuss some of the potential outcomes here, especially if there’s a chance to pass some scaled-down version of this legislation during the next few months. Why do we care so much? Because hundreds of members have political equity in the bill, as does the White House, Commerce Department and corporate America.
→Is McConnell bluffing? There was a time when we would say, “Absolutely not.” But McConnell reversed his position on a number of fronts this year. For example, McConnell helped Democrats pass a debt limit increase after saying he wouldn’t. Yet our take is that McConnell isn’t bluffing here. The most important dynamic will be getting his rank-and-file members – many of whom have put months of work into this package – to agree to sink it. But opposing a $1 trillion Democratic reconciliation bill that could undo the 2017 GOP tax cuts will definitely outweigh USICA politically for Republicans.
Officials from the White House and other federal agencies we spoke to insist they’re going to push ahead on both Build Back Manchin – the reconciliation package – and USICA concurrently. Here’s what one senior administration official told us Wednesday afternoon about McConnell’s threat:
“We are not going to let Senator McConnell, who blasted the White House for allegedly linking the infrastructure bill to Build Back Better, do the very thing which he previously attacked. Making America more competitive against China, and lowering the cost of prescription drugs, are both good ideas that should move separately. If Senator McConnell chooses to undermine legislation vital to US jobs, and confronting China, in an effort to protect Big Pharma, that will be his choice. As we said last week, we will not be intimidated.”
→What’s Schumer’s calculus? Let’s assume you believe that McConnell will block USICA if Democrats move forward with their reconciliation package. Wouldn’t that be a deal that Schumer would take? Reconciliation, at a minimum, is centered around a very popular policy that allows Medicare to negotiate for cheaper prescription drugs, saving seniors and the federal government tens of billions of dollars. If Schumer has to give up USICA to pass a popular reconciliation bill, that seems like a pretty good trade for Democrats. Plus, Democrats will blast McConnell for holding up a bill to take on China economically.
→The ‘break-the-glass’ option. If you talk to lawmakers close to the process, they privately acknowledge that the odds are pretty steep that a compromise can be found on a broader USICA bill. Party leaders have made only modest progress during the last two months. And we emphasize modest.
So what can they get done? Inside the Biden administration and on Capitol Hill, some Democrats and Republicans tell us that they’d settle for $52 billion in financial support for U.S. semiconductor manufacturers as a base package, stripping away other provisions such as boosting the National Science Foundation or responding to trade and climate change concerns. But can Congress pass an expensive package to benefit profitable semiconductor companies just before an election? There’s opposition from the right and left to any new government subsidies.
Schumer has been pushing upstate New York as the location for a massive tech research center. And he’s put a lot of time and effort personally into the underlying USICA legislation over the last year. Schumer has long been a China hawk, especially on economic and trade issues, and USICA was supposed to reset the U.S. approach to competing with Chinese companies – many of them state owned or directed – in the critical high-tech arena.
More importantly, there are also huge new investments in chip manufacturing facilities in Arizona, Texas, Ohio and New Mexico, projects that could revitalize the entire domestic semiconductor manufacturing base. Although the companies involved say they’re waiting to see what Congress does. Intel has already warned that it could delay or scale back the size of its Ohio project. There just happens to be a big Senate race there this November as well.
So buckle up. It will be an interesting July.
– Jake Sherman and John Bresnahan
PRESENTED BY IBM
In just 6 months, ASIC can establish an operational National Semiconductor Technology Center innovation hub to deliver breakthroughs in semiconductor R&D.
News: GOP senators push back on insulin bill
Five key Republican senators have penned a letter urging the Senate Democratic leadership to allow the Finance Committee to take up a bipartisan proposal to lower insulin prices instead of bringing it straight to the floor for a vote.
The GOP senators: Sens. Pat Toomey (Pa.), John Barrasso (Wyo.), Steve Daines (Mont.), Rob Portman (Ohio) and Ben Sasse (Neb.). All five of these Republicans serve on the Finance Committee.
Senate Majority Leader Chuck Schumer announced plans last month to bring to the floor a bill that would lower insulin prices. The legislation was drafted by Sens. Susan Collins (R-Maine) and Jeanne Shaheen (D-N.H.).
But this quintet of lawmakers has drafted a letter looking to slow the process down, and send the bill to Finance for a hearing and debate. Here are the important bites from the letter:
As with most proposals regarding drug pricing, their proposed changes involve trade-offs and far-ranging implications, which both deserve frank discussion. The Senate Finance Committee has a history of entertaining such conversations through hearings and legislative mark-ups. This process allows members of our Committee to engage with stakeholders, hear from experts, evaluate the potential effects, and provide their own perspectives. It also offers the members of this Committee the opportunity to propose potential changes or alternatives for consideration that could achieve our mutual goal of ensuring affordable access to life-saving and innovative medications, both now and in the future, while respecting the federal taxpayer.
On June 22, Leader Schumer stated plans to bring the Shaheen-Collins proposal to the Senate floor for a vote, possibly in this coming work period. We are concerned that it is his intention to do so without first allowing committees of jurisdiction to weigh in. Given the importance of this issue, we request that the Senate Finance Committee hold a mark-up on this or any drug pricing legislation within the Committee’s jurisdiction before it is brought to the full Senate for consideration.
Of course, in a 50-50 Senate, every vote is key, and this proposal would need 60 votes to break a GOP filibuster at some point. Barrasso is the No. 3 Senate Republican, while Portman serves in the leadership as well. Toomey is a leadership ally. So this is a sign of trouble for the Collins-Shaheen bill.
We’d also note that the Democratic reconciliation proposal filed on Wednesday with the parliamentarian doesn’t include an insulin cap, while the old version of the Build Back Better Act did. It’s unclear if the insulin provision could withstand a Byrd Rule review.
– Jake Sherman
K Street’s take on the Jan. 6 probe
The House select committee investigating the Jan. 6 attack on the Capitol has painted an ugly portrait of former President Donald Trump, with many former aides testifying about his unprecedented – and possibly illegal – efforts to overturn the results of the 2020 election.
We talked to senior K Street leaders and it’s clear that a number of downtowners remain wary of the “stolen election” narrative coming from some Republicans. More than one-third – 38% – of the leaders we polled said their lobby shops and corporations don’t support Republicans who voted to decertify the election.
However, a number of companies that publicly declared they were “pausing” their campaign donations after Jan. 6 have begun to give to Republicans again, including those GOP lawmakers who refused to certify Joe Biden’s Electoral College victory. So we’ll watch this closely as the election gets nearer and Republicans look like they could win control of one or both chambers.
Almost half (45%) of K Street Republicans told us they are concerned about retribution for not contributing to Republicans who voted against certifying Biden’s victory. 38% of Republicans said they weren’t concerned about possible retribution from a Kevin McCarthy-led House.
A majority (54%) of K Street leaders said that the Republican party has more extreme candidates and causes. 93% of Democrats said that Republicans are more extreme. 49% of Republicans said neither party is more extreme than the other.
– Christian Hall
PRESENTED BY IBM
As well-established leaders of chip R&D, ASIC members can help drive the National Semiconductor Technology Center to serve as the primary hub for semiconductor innovation and production in the U.S. after just 6 months.
→ Former Rep. Henry Bonilla (R-Texas) has signed up Eagle Pass, Texas, as a client. Bonilla, who works at The Normandy Group, represented Texas in the House for 13 years.
→ Here’s an NRSC ad featuring Republican Senate candidate Herschel Walker in Georgia. This is a positive spot, where Walker talks about “backing the blue,” faith, bringing people together and peace through strength. This spot is running in Atlanta and Columbus, Ga.
→ Alex Lasry, who is running for the Democratic nomination for Senate in Wisconsin, has a new spot touting his leadership in building a pro basketball arena in Milwaukee. Lasry’s family owns the Milwaukee Bucks. The spot says Lasry built the arena with 80% of the materials coming from Wisconsin. It also says Lasry pays his employees $15 minimum wage, which is more than double the state minimum wage in Wisconsin. Lasry says he’s a “Make it in America Democrat” who can beat Sen. Ron Johnson (R-Wis.). This ad is running in Milwaukee and Green Bay. The primary is Aug. 9.
→ Rep. Jim Jordan (R-Ohio) makes an appearance in this ad for Susan Manchester, who is running for the statehouse in Ohio. Manchester, who worked as a legislative assistant to Jordan in D.C., calls the veteran lawmaker her mentor. Jordan notes in the spot that Manchester is “pro life, pro gun and pro Trump and that’s exactly what we need at the statehouse now more than ever.”
– Jake Sherman
PRESENTED BY IBM
ASIC will help establish the NTSC to drive American innovation.
10:15 a.m.: President Joe Biden and Vice President Kamala Harris will get their daily intelligence briefing.
2 p.m.: Biden will award the Presidential Medal of Freedom to 17 recipients.
3:10 p.m.: Karine Jean-Pierre will brief.
→ “The Strident Writings of a Young Blake Masters Dog His Senate Run,” by Jonathan Weisman
→ “Biden offers midterm preview in Ohio campaign-style visit,” by Matt Viser and Joanna Connors in Cleveland
→ “Inflation Fears Drove Larger Fed Rate Increase in June,” by Nick Timiraos
→ “Heads of FBI, MI5 Issue Joint Warning on Chinese Spying,” by Max Colchester
→ “US, Allies Discuss Capping Russian Oil at $40-$60 a Barrel to Cut War Financing,” by Alberto Nardelli, Jennifer Jacobs, and Annmarie Hordern
→ “Where Jan. 6 prosecutions stand, 18 months after the attack,” by Kyle Cheney and Josh Gerstein
PRESENTED BY IBM
ASIC can help bring the NSTC to life and educate the technology workforce on the latest advances in chip design, materials, and packaging—which is critical to maintaining a competitive edge in the rapidly changing global economy.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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