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PRESENTED BY
THE TOP
Happy Monday morning. And welcome to August.
The Senate is in session today, the House is in recess. And President Joe Biden is in quarantine after testing positive for Covid-19 – again.
Let’s talk about reconciliation timing for a minute, and then we’ll get into the bigger political picture.
The Inflation Reduction Act – the formal name for the $740 billion legislative package agreed to by Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D-W.Va.) – may come to the floor this week. Or it may not.
Senate Democratic leadership and committee staff – along with their Republican counterparts – will be meeting with Senate Parliamentarian Elizabeth MacDonough this week to conduct a “Byrd bath” for the legislation. This is a highly technical review of the proposal to see if it comports with the Byrd Rule, which governs the Senate’s reconciliation process.
We’ve been told by Democratic aides that the Senate could take up the Schumer-Manchin bill later this week, with a vote-a-rama running into the weekend. Schumer has warned his colleagues this may happen.
But we’re still skeptical of this proposed schedule for one simple reason: Everything takes longer than you’d expect this Congress. Everything. So we could see the Senate not even starting on the vote-a-rama until next week. We’ll keep you up to date as soon as we hear anything.
→ | Today’s theme – reversal. Or changing direction. Or flip-flopping. Call it whatever you want. It’s what politicians do best. But the key is how the best politicians do it. |
Let’s start in the Senate, where the big topic of the day will be Republicans reversing their vote on the PACT Act, a suddenly very high-profile bill designed to help millions of veterans exposed to toxic substances during their military service.
First, Senate Republicans were for this bill. Then they were against it. Now they’re for it again if they can get an amendment vote on an issue that the majority of them didn’t care about when they voted for the bill originally. But they’ll vote for the bill even if the amendment fails. Got it?
The PACT Act – formally known as the Honoring Our PACT Act – was introduced in the House in June 2021. The full House passed it in March. Since then, the bill has gone back and forth between the two chambers, getting big bipartisan margins on the floor. Until last week.
At that point, 25 Senate Republicans switched their votes and opposed cloture on the measure, derailing the legislation just as it was on a glide path to Biden’s desk.
Some Republicans explained they voted against cloture because of a dispute over discretionary versus mandatory spending. See Sen. Pat Toomey (R-Pa.), who has consistently said this for months.
Yet nothing significant has changed in the bill from when these 25 other Republicans voted for it back in June.
What did change is that Schumer and Manchin cut a deal on a reconciliation package, a move that caught everyone in Washington by surprise. This upset Sen. John Cornyn (R-Texas) and other Republicans, who believed they’d been assured Democrats had given up on reconciliation before these GOP senators threw their support behind the $280 billion CHIPS Plus bill.
Cornyn and other Republicans – after an outpouring of fury from veterans’ groups – will vote for the bill now, although Schumer has offered Toomey an amendment vote. Toomey wants to make future funding of the program discretionary rather than mandatory, which means Congress would have to vote on it every year. That amendment is unlikely to pass, although the larger bill is expected to.
“I will hold a new vote this week, and I am urging everyone to vote ‘yes,’” Schumer said during a Sunday press conference with vets.
But don’t think Republicans are the only ones who change their positions. Democrats can do this too. There’s two issues we’re watching.
Biden vowed never to raise taxes on any Americans making less than $400,000 annually. Yet according to the Joint Committee on Taxation, the Schumer-Manchin bill does just that. Up to $16.7 billion worth of tax increases, JCT estimates.
Republicans, as expected, jumped all over this. “The mislabeled ‘Inflation Reduction Act’ will do nothing to bring the economy out of stagflation and recession, but it will raise billions of dollars in taxes on Americans making less than $400,000,” Sen. Mike Crapo (Idaho), the top Republican on the Finance Committee, said in bashing the Democratic plan.
Democrats countered that the JCT analysis failed to factor in several elements of the legislation, including Obamacare credits, savings from allowing Medicare to negotiate on prescription drugs and clean energy credits for individuals, as well as other provisions.
Here’s Ashley Schapitl, spokesperson for Finance Committee Democrats:
“A family making less than $400,000 will not pay one penny in additional taxes under the Inflation Reduction Act …The analysis Republicans are pointing to is also incomplete. It doesn’t include the benefits to middle-class families of making health insurance premiums and prescription drugs more affordable. The same goes for clean energy incentives for families.”
Now, let’s focus on Manchin for a moment. The West Virginia Democrat made the rounds on all five Sunday shows yesterday, and he was pressed repeatedly on his support for tax increases as part of the Inflation Reduction Act (we’re still wondering if he came with that name).
Manchin had previously suggested he’d support a 15% corporate minimum tax, which is a key provision in the Inflation Reduction Act, so that’s not new. His argument is that Democrats are closing loopholes, not raising taxes. Here’s Manchin on NBC’s “Meet The Press”:
“The only thing we have done is basically say that every corporation of a billion dollars of value or greater in America should pay at least 15% of minimum corporate tax… That’s not a tax increase. it’s closing a loophole.”
Now, what we’re watching with Manchin – besides his reversal in cutting a deal with Schumer, which Manchin strongly insists isn’t a reversal at all – is he’s become the one seeking to pull a colleague into a deal, instead of the one being lobbied. Sen. Kyrsten Sinema (D-Ariz.) is the key to whether this proposal succeeds or fails. So we want to see how Manchin handles it. The role reversal, if you will, is a new one for Manchin this Congress.
“Kyrsten Sinema is a friend of mine, and we work very close together. She has a tremendous, tremendous input in this legislation,” Manchin said on “Meet The Press.”
More Manchin:
“And I would like to think she would be favorable towards it, but I respect her decision. She’ll make her own decision based on the contents.”
– John Bresnahan
PRESENTED BY HEALTHCARE LEADERSHIP COUNCIL
Seniors are speaking out! A large majority of seniors on Medicare are not supportive of changing the law so that the government can interfere in the successful Part D program.
Yet, Congress is considering policies that will insert the government into this already successful program. Lawmakers must abandon price setting policies and protect the access seniors depend on under Part D.
Lawmakers say the economy is only getting worse
It’s a Canvass Week! We’ll be rolling out data all week from our survey of top Capitol Hill aides that we conduct with the Locust Street Group. Much of our results will be in the Midday and PM editions, so sign up for premium.
Our first datapoint: 53% of Capitol Hill aides say their boss believes the economy will worsen between now and Election Day. 14% of Democrats say their boss believes it will worsen and 44% say it will improve. 41% say they do not know.
92% of Republicans say their bosses believe the economy will worsen.
K Street and Capitol Hill are mostly aligned on this, according to our survey this month.
👀
Who we’re watching
→ | Speaker Nancy Pelosi. Pelosi has done a lot of international travel this year, but nothing has been as closely watched as her trip to Asia. The speaker’s office announced that she will be traveling to Singapore, Malaysia, South Korea and Japan with a group of lawmakers, including House Foreign Affairs Committee Chair Greg Meeks of New York. But the big question is will Pelosi go to Taiwan? Pelosi’s been a China hawk for decades and a trip there would be a capstone. However, China has threatened retaliation and President Joe Biden has cautioned against it. The stakes are now very high. |
→ | Sen. Joe Manchin (D-W.Va.). Manchin is in an interesting position now. Instead of leadership courting Manchin, he’ll have to appeal to fellow Democratic Sen. Kyrsten Sinema (Ariz.) to support his bill. After a weeklong Covid isolation, Manchin has his work cut out for him. |
→ | Sen. Kyrsten Sinema (D-Ariz.). We’re about to get another round of “Will she or won’t she?” with Sinema and the Democrats’ $740 billion reconciliation package. Sinema has been famously averse to tax increases. Sinema has previously supported a 15% corporate minimum tax, which is a key provision of the Manchin-Schumer plan. Also of interest – carried interest. The loophole has been used by wealthy money managers to lower their tax bills and this proposal eliminates it. Could Sinema ask for this to be stripped out of the bill? It’s only $14 billion in revenue. But what about the politics of such a move? |
– Jake Sherman and John Bresnahan
📅
What we’re watching
→ | Tuesday: The Senate Small Business Committee will have a hearing on the Economic Injury Disaster Loan Program. SBA Associate Administrator Patrick Kelly will testify. Senate Commerce will have a hearing on the future of spectrum. |
→ | Wednesday: The Senate Judiciary Committee will have a hearing on protecting “Democracy’s front line workers.” Senate Rules will have a hearing on the Electoral Count Act. Senate Homeland Security will have a hearing on gain of function research. Senate Foreign Relations will have a closed hearing on Taiwan. |
→ | Thursday: Senate Judiciary will have an FBI oversight hearing. FBI Director Christopher Wray will testify. |
– Jake Sherman
DOWNTOWN DOWNLOAD
→ | Thorn Run Partners has inked lobbying contracts with Billings, Mont., West Hollywood, Calif., and Riverside, Calif. |
PRESENTED BY HEALTHCARE LEADERSHIP COUNCIL
Two-in-three seniors with Medicare prefer drug plans negotiate with the biopharmaceutical manufacturers INSTEAD of government price setting.
THE CAMPAIGN
→ | Matt Mowers, the former Trump administration official running for Congress in New Hampshire, has an ad up outlining his support for a ban on stock trading by members of Congress. This, of course, has been a hotly debated topic. Democrats are readying legislation to institute such a ban. |
https://www.youtube.com/watch?v=0JKf8J4waXo
→ | Rep. Dan Kildee (D-Mich.), whose district got much more competitive during redistricting, has a new ad up in Flint saying he opposed his party on cutting the gas tax and seeking more funding for police officers. |
→ | Sen. Raphael Warnock (D-Ga.) is running an ad statewide about his work on the CHIPS bill. |
– Jake Sherman
FRONTS
PRESENTED BY HEALTHCARE LEADERSHIP COUNCIL
View the senior satisfaction survey here.
MOMENTS
10:15 a.m.: President Joe Biden will get his daily intelligence briefing virtually.
1:45 p.m.: Karine Jean-Pierre will brief.
1:55 p.m.: Vice President Kamala Harris is going to Miami, where she’ll get a hurricane briefing.
4:05 p.m.: Harris will speak about climate resilience at Florida International University.
CLIP FILE
NYT
→ | “Pelosi Heads for Singapore, but Is Silent on Taiwan,” by David Sanger and Vivian Wang |
WaPo
→ | “Major legal fights loom over abortion pills, travel out of state,” by Ann E. Marimow, Laurie McGinley and Caroline Kitchener |
→ | “First ship carrying grain leaves Odessa in deal to ease global food crisis,” by Dalton Bennett and Kareem Fahim in Odessa, Ukraine |
WSJ
→ | “U.S. Eyes Sanctions Against Global Network It Believes Is Shipping Iranian Oil,” by Ian Talley |
Bloomberg
→ | “Manchin Spending Deal Includes Billions in Taxes on Oil Sector,” by Ari Natter |
→ | “China Banks May Face $350 Billion in Losses From Property Crisis,” by Charlie Zhu, Amanda Wang, Emma Dong, Lisa Du, and Yujing Liu |
Politico
→ | “EU braces for China-US escalation risk as Taiwan tensions rise,” by Stuart Lau and Lili Bayer |
USA Today
→ | “Jan. 6 committee’s August plan: More interviews with Trump aides and studying the 25th Amendment,” by Bart Jansen |
PRESENTED BY HEALTHCARE LEADERSHIP COUNCIL
As lawmakers continue to debate prescription drug reforms that could disrupt the Medicare program, Seniors Speak Out went directly to the source to find out exactly how seniors feel about this vital program.
When asked about recent policies being considered in congress, 66% of seniors indicated we should let Part D plans negotiate directly with the biopharmaceutical industry INSTEAD of letting the government set prices.
Despite these findings, lawmakers continue to move forward with bad policy while failing to consider this important input of the beneficiaries who would be directly affected.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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