Trump Gets a Fiscally Focused Challenger

Plus, can Trump and Pelosi strike a drug-pricing deal? By Yuval Rosenberg and Michael Rainey Can Trump and Pelosi Strike a Deal to Lower Drug Prices? After a summer recess that stretched for more than a month, Congress is back in session, with lots to do. Preventing another government shutdown probably tops the agenda in the near term, even as Democrats explore a possible push to impeach President Trump, other presidential controversies and investigations proliferate and pressure continues for lawmakers to “do something” on gun control. And that’s just the short list. Add in the U.S.-Mexico-Canada trade deal, which the administration wants Congress to approve, and the Senate’s ongoing drive to confirm presidential appointees and the remaining months of 2019 will be jam-packed. As of Tuesday, the House only has 12 legislative days left in September and 44 for the year. The Senate is scheduled to be in session slightly longer. But there’s another key area where Congress and the president may try to make progress and live up to their campaign promised ahead of the 2020 election: Legislation to lower prescription drug prices. “In some ways, the next few months represent the 116th Congress’s last chance to pass major legislation until 2021,” [write]( The Washington Post’s Rachael Bade and Mike DeBonis. “Lawmakers in both parties agree the partisan politics of the 2020 election will kick into high gear as soon as January, making any dealmaking and compromise all the more difficult.” House Speaker Nancy Pelosi is reportedly poised to unveil a new drug-pricing plan shortly. The Post’s Paige Winfield Cunningham [reports]( “The proposal will represent a wish list of new powers Democrats want to give the federal government, including allowing it to directly negotiate with prescription drugmakers for certain high-cost drugs, according to several lobbyists and aides. But Pelosi is hoping President Trump — who has bucked GOP orthodoxy by supporting such negotiations — might be eager enough for a win on drug pricing that he’ll meet her at least part of the way for a grand deal by year’s end.” Pelosi’s proposal reportedly would have the government’s negotiated prices also take effect in the private market, not just for Medicare. The politics at play: Trump may have expressed support in the past for allowing the government to negotiate drug prices, but there are still plenty of obstacles that could derail any potential deal. - Some Democrats may not want to give Trump a big win on an issue that voters say is key. - Some Republicans would object to expanding the government’s role in drug pricing, even if the president comes out strongly in favor of it. - The pharmaceutical industry is lobbying furiously to prevent changes it sees as threatening its business. - On top of all that, Democratic investigations into the president and a Republican-led lawsuit to dismantle Obamacare could cause delicate negotiations on drug prices to collapse. “People following the legislative debate suspect that normal partisan politics will likely take control over this particular plan,” Axios’s Sam Baker and Alayna Treene [report]( — “except if the president is for it. That will change everything,” an industry lobbyist told Baker. But the administration is reportedly making the USMCA trade deal its top legislative priority, and any drug legislation is likely to be packaged with other sensitive legislation, meaning the path to passage will be complicated at best. The bottom line: Whether Trump and Congress can find some consensus on drug prices is still far from certain. Kaiser Health News reports that states aren’t waiting for national politicians to get their act together: “So far this year, 33 states have enacted a record 51 laws to address drug prices, affordability and access.” But federal legislation will be necessary to really change the existing market structure for prescription drugs. If nothing comes to fruition over the next four months, Americans may be left waiting awhile before they see their drug prices change more significantly. Read more at [The Washington Post]( or [Axios](. Trump Gets a Fiscally Focused Challenger Mark Sanford announced Sunday that he is running for president, becoming the third Republican to challenge President Trump for the nomination in 2020. The former South Carolina congressman said he would focus on fiscal issues as part of a larger effort to turn Republicans away from Trump and back toward the issues that occupied the GOP before the president took control of the party and the political landscape. “I think we need to have a conversation on what it means to be a Republican,” Sanford [said]( on Fox News Sunday. “I think that as a Republican Party, we have lost our way. … The epicenter of where I’m coming from is that we have lost our way on debt and deficits and spending.” Sanford joins two other challengers — former Massachusetts Gov. Bill Weld and former Illinois Rep. Joe Walsh — who likely have little chance of defeating Trump. In addition to the constraints imposed by limited financial support, there’s no indication that a majority of Republicans have much interest in changing direction on policy. Trump has an [87% approval rating]( with Republican voters in one recent poll, and the party is reportedly taking steps to eliminate challengers by scrapping primaries and caucuses in Arizona, Kansas, Nevada and South Carolina. But winning the nomination may not be the only goal Sanford and the other challengers have in mind. Weld recently pointed out that incumbent presidents facing challenges from within their own parties tend to lose the general election. And as NPR’s Tamara Keith [wrote]( Sunday, “Trump's opponents are well aware of this history and are hoping for a repeat of what happened to one-term presidents such as George H.W. Bush, Jimmy Carter and Gerald Ford. Each faced a major primary challenger from within his own party, and each went on to be denied a second term.” Trump has shown little concern about his new challengers so far, though. Mocking Sanford, Weld and Walsh on Twitter Monday, the president [wrote]( “The Three Stooges, all badly failed candidates, will give it a go!” Mnuchin Talks More Tax Cuts Treasury Secretary Steven Mnuchin said Monday that a White House push for another round of tax cuts is a possibility in 2020. “And regards to a middle-class tax cut, you know, we’ll be looking at tax cuts 2.0, something that will be something we’ll consider next year,” Mnuchin told reporters. The Trump administration has gone down the “more tax cuts” road before, though, and there’s good reason to take Mnuchin’s comments with a grain of salt. As Politico’s Quint Forgey [points out]( President Trump talked up new tax cuts shortly before the 2018 midterm elections, as did economic adviser Larry Kudlow last month amid growing concerns about a possible recession. But Trump hasn’t had much to say on the topic of a middle-class tax cut since last year, and told reporters less than three weeks ago that, “I’m not looking at a tax cut now.” Chart of the Day: Congress’s Continuing Reliance on Continuing Resolutions Now that Congress is back from its summer recess, lawmakers will have to race to pass legislation funding the government for fiscal year 2020. Congress agreed to spending levels for next year as part of the Bipartisan Budget Act of 2019, which President Trump signed into law early last month. Now lawmakers must decide how to divvy up the pie. But, as we told you last week, they face a time crunch and will likely need to pass a stopgap bill extending funding, known as a continuing resolution, in order to avoid another shutdown as of October 1. That will buy them time, likely until just before Thanksgiving, to hash out the details of a full-year spending deal. The House will vote next week on a continuing resolution to fund the government through the first three weeks of November. Over the past 21 years, Congress has passed 117 continuing resolutions. (The Fiscal Times is an editorially independent site founded and funded by Peter G. Peterson and his family.) Is Trump’s Farmer Bailout Legal? Senior Trump administration officials are reportedly concerned that the president’s $28 billion bailout for farmers hurt by his trade war exceeds the limits of the Commodity Credit Corporation, the government corporation founded during the New Deal that is distributing the funds. While attorneys at the Department of Agriculture have reportedly signed off on the bailouts, some experts say existing laws may not apply to such a large and ongoing operation. “There is little precedent for an open-ended farmer bailout of this nature,” [says]( the Washington Post’s Jeff Stein, who reports there is strong political pressure within the federal government to distribute the bailout funds quickly. Joe Glauber, who served as the chief economist at USDA in the Bush and Obama administrations, said he had doubts about the legality of the program. “This is an incredible amount of money and sets a terrible precedent. What’s unusual is the magnitude: It’s just enormous.” Still, lawmakers have shown little interest in looking into the issue, and Glauber thinks has an idea why. “Congress likes being off the hook, since now they don’t have to take action; the farmers are happy, because they get a lot of money; the administration doesn’t have to worry as much about the fall-out of the trade war,” Glauber told the Post. “The magnitude of these payments is such that there should be much greater scrutiny. But there’s no one guarding the taxpayer here.” Bill de Blasio Calls for a Robot Tax In a piece for [Wired]( the peripatetic New York mayor and long-shot Democratic presidential candidate warns that “automation in our economy is increasing far faster than most people realize, and its impact on working people in America and across the world, unless corralled, will be devastating.” His proposal calls for the creation of a new federal agency, the Federal Automation and Worker Protection Agency (FAWPA), which would oversee automation and create “a permitting process for any company seeking to increase automation that would displace workers.” De Blasio also proposes to institute a “robot tax,” requiring large companies to pay five years of payroll taxes up front for each employee eliminated by automation. That money, he says, “would go right into a new generation of labor-intensive, high-employment infrastructure projects and new jobs in areas such as health care and green energy that would provide new employment. Displaced workers would be guaranteed new jobs created in these fields at comparable salaries.” Losing lessons from the NFL's Week 1: The Cleveland Browns are still the Cleveland Browns and the New York Jets are still the New York Jets. Send your tips and feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( to get their own copy of this newsletter. News - [McConnell Backs Short-Term Spending Bill to Avert Shutdown]( – Politico - [Congress Returns to Face Funding Deadline]( – Marketplace - [Proposed Ban on Pentagon Spending at Trump Properties Gets New Push]( – Politico - [Trump Privately Tells Confidants That ‘Socialism’ Won’t Be ‘So Easy’ to Beat in 2020]( – Daily Beast - [Trump Raids Funds Meant to Deter Russia to Pay for His Wall]( – Daily Beast - [High Debt Levels Are Weighing on Economies]( – Wall Street Journal (paywall) - [Harris Unveils Plan to Offer Health Care, Housing Assistance to Over 500K Veterans]( – The Hill - [Trump Urges House Republicans to Scrap Term Limits for Committee Leaders]( – Washington Post - [States Pass Record Number of Laws to Reel in Drug Prices]( – Kaiser Health News - [Sacklers Reject Demand That They Surrender Personal Wealth to Settle Opioid Claims]( – NPR - [JPMorgan Creates ‘Volfefe’ Index to Track Trump Tweet Impact]( – Bloomberg Views and Analysis - [Congress Needs to Get Its Act Together for Defense Funding]( – Mackenzie Eaglen, The Hill - [Why Your Employer-Sponsored Insurance May Ultimately Not Be Good for You]( – Dana Goldman, The Conversation - [Shhh, I Have a Secret Called the National Debt]( – Joanna Shelton, Missoulian - [A Republican Senator Hints at Gutting Social Security ‘Behind Closed Doors’]( – Michael Hiltzik, Los Angeles Times - [Rising Retiree Bankruptcies? It's a Myth]( – Andrew Biggs, Washington Examiner - [Grandiose, Coercive, and Expensive: Dems’ Climate Plans]( – James B. Meigs, City Journal - [Is There a Recession Coming? Ask Again Later]( – Josh Barro, New York - [Mayor de Blasio Calls for a Tax on Economic Growth and Progress]( – Allan Golombek, RealClearMarkets [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( Copyright © 2019 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.