McConnell: Debt Deal Will Have to Come From the House

Plus: Amazon to offer $5 generic drugs ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Tuesday! Yet another shoe dropped today in the classified documents scandal as a small number of documents were found at the Indiana home of former Vice President Mike Pence. And the Oscar nominations were announced today, with “Everything Everywhere All at Once” garnering 11 nods, eight movies receiving at least five nominations and a couple of mega blockbusters — the “Avatar” and “Top Gun” sequels — on the short list for best picture. Here's what else is going on. Senate Minority Leader Mitch McConnell (Reuters) McConnell: Debt Deal Should Come From McCarthy and Biden As analysts and pundits try to game out how the fight over raising the debt limit might end, one scenario has President Joe Biden, Senate Democrats and Senate Republicans led by Mitch McConnell hashing out a deal to raise the borrowing cap and avert a potentially catastrophic default. McConnell on Tuesday weighed in on that possibility, essentially telling reporters: Nope. “You’re probably wondering what role if any the Senate would play in this. As some of you recall, I’ve been through a few of these debt ceiling situations,” McConnell said, according to [The Hill](. “I can’t imagine any kind of debt ceiling measure that could pass the Senate would also pass the House, so even though the debt ceiling could originate in either the House or the Senate, in this current situation, the debt ceiling fix, if there is one, or how it’s to be dealt with, will have to come out of the House.” McConnell has worked with Democrats in the past to find ways to avoid a debt crisis, and he has emphasized in recent days that the nation can’t be allowed to default. “It never has, and it never will,” he said last week, predicting negotiations would land on some deal to raise the borrowing limit. For now, though, McConnell and Senate Republicans are going to let House Republicans take the lead. “McConnell and his leadership team are wary about appearing to undercut the House GOP’s position and see little chance at success by trying to hash out a deal without the explicit blessing of Speaker Kevin McCarthy,” CNN’s Manu Raju and Ted Barrett [report](. “With roughly four months before fears of a default dramatically intensify, Senate Republicans say they will sit back and see how the House GOP maneuvers a way to raise the $31.4 trillion borrowing limit – before deciding if they need to insert themselves into the process.” Democrats, meanwhile, are pressing for Republicans to lay out their demands, or a plan. “One of the things we want to do on the debt ceiling is say to the Republicans: Show us your plan,” Senate Majority Leader Chuck Schumer (D-NY) said. Similarly, House Minority Leader Hakeem Jeffries (D-NY) said Republicans should specify the cuts they want: “Is your plan to cut or eliminate Social Security? Show the American people,” he said. What it means: Senate Republicans aren’t about to undercut whatever leverage their House counterparts might have in the current standoff — not yet anyway. “Some believe that a Senate deal could be reached and would receive 60 votes to break a filibuster, but only if McConnell is on board,” CNN’s Raju and Barrett say. “At that point, a House vote could occur if 218 members sign a ‘discharge petition’ and force a floor vote in that chamber, meaning at least six Republicans would have to join 212 Democrats. But that time-consuming process rarely succeeds, and several swing-vote House Republicans say they won’t go for that effort – at least not yet.” Politico’s Burgess Everett [notes]( that McConnell might not have the nine Republican votes he’d need right now to clear a debt limit increase, having spent so much political capital to pass a $1.7 trillion omnibus budget bill last month. The bottom line: We’re still in the early stages of this standoff and it could well be months before we see progress. While the parties continue their game of chicken, Treasury Secretary Janet Yellen on Tuesday [notified lawmakers]( of an additional measure she’s taking to push off a potential default: deferring investments for the Federal Employees’ Retirement System, with a plan to make the fund whole once the debt limit is addressed. “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” she wrote, again. Column of the Day: Republicans Have No Viable Plan to Balance the Budget Led by newly empowered firebrands, Republicans in the House are working on a plan to slash spending and balance the federal budget within 10 years. According to The Washington Post’s Catherine Rampell, there are several problems with this effort, not least the fact that Republicans seem to have no idea how they can accomplish their goal. “They say they want to reduce deficits,” Rampell writes in an op-ed Tuesday, “but meanwhile have ruled out virtually every path for doing so (cuts to defense, cuts to entitlements, wiping out nondefense discretionary spending, or raising taxes).” Some GOP lawmakers have said that everything is on the table for possible cuts, but others have quickly pulled whole sections of the federal budget back from the chopping block. For example, both House Speaker Kevin McCarthy (R-CA) and Rep. Jim Jordan (R-OH) have said they are open to reductions in defense spending, but House Appropriations Chairwoman Kay Granger (R-TX) and Rep. Michael Waltz (R-FL) have said no to that idea. Instead of military cuts, Waltz said lawmakers need to look at “entitlements programs,” which would include Social Security and Medicare. But Rep. Nancy Mace (R-SC) and former president Donald Trump, among others, have ruled that option out. “Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security,” Trump warned last week. One thing that does seem to be acceptable to Republican lawmakers is cutting funds for what some conservatives call “wokeism,” but as Rampell notes, there isn’t really a line item for that in the federal budget. So, faced with a roughly $20 trillion shortfall in the budget over the next 10 years, and standing firm with their principled refusal to raise taxes, Republicans would have to make ruthless cuts in non-defense discretionary spending. “Closing that gap would require eliminating nearly all other domestic spending,” Rampell writes. “That means axing border protection, air-traffic control, farm subsidies, infrastructure and many other categories that both voters and elected officials hold dear.” But voters — and even some Republican lawmakers — may not embrace such a draconian approach. “In short, virtually every possible avenue available for reducing the deficit would be unpopular,” Rampell says. “Which probably explains why supposedly fiscally conservative Republicans chose not to take them when they controlled both houses of Congress during Trump’s presidency.” Read Rampell’s column at [The Washington Post](. Insulin Price Cap Could Save Patients $500 on Average: Report The Inflation Reduction Act signed into law by President Biden last summer places a $35 cap on the monthly cost of insulin for many patients in the Medicare program. Using data from 2020 as a baseline, a study by the Department of Health and Human Services finds that more than 1 million patients would save about $500 a year under the new plan. “Researchers estimate that 1.5 million people with Medicare would have benefited from the new Inflation Reduction Act insulin cost-sharing limits if they had been in effect in 2020, with total savings to beneficiaries of about $734 million in Part D and $27 million in Part B – an average savings of approximately $500 for those Medicare beneficiaries,” HHS said in a press release. The Biden administration celebrated the findings. “That’s more money in seniors’ pockets and more breathing room for American families,” the White House said in a statement. The new law took effect January 1 and beneficiary cost-sharing for traditional insulin pumps covered under Medicare Part B will kick in starting in July. Medicare plans have until the end of March to update their systems to reflect the new $35 price cap on insulin. Amazon to Offer $5 Generic Drugs Retail giant Amazon announced Tuesday that it is offering a selection of generic drugs for $5 a month. The program, called RxPass, is available to members of Amazon Prime in most states and operates through the company’s existing pharmacy service. The available drugs treat about 80 common conditions, the company [says]( including high blood pressure, anxiety and acid reflux. Wall Street analysts said the move represents a further step into to health care industry for Amazon, though not one that will necessarily save patients much money. “While it is possible that the $5 price point could offer savings for uninsured and underinsured patients who take multiple (generic) prescriptions, we do not believe it is significantly lower than that available from community and mail pharmacies, especially after taking into account the cost of a Prime membership,” [said]( Eric Percher, an analyst at Nephron Research. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [House GOP Eyes Social Security, Medicare Amid Spending Battle]( – Washington Post - [McConnell Plans Backseat Role as McCarthy Battles White House Over Debt Ceiling]( – CNN - [McConnell: U.S. Debt Limit Solution Must Come From Biden, McCarthy]( – Reuters - [Senate GOP to McCarthy: Debt Fight Is All Yours]( – Politico - [‘Show Us Your Plan’: Democrats Push GOP to Deliver Debt Proposal]( – Bloomberg - [Khanna: Biden May Have to Take Unilateral Action to Prevent Debt Crisis]( – The Hill - [Debt Limit Crisis: Why People Won't Stop Talking About the Trillion-Dollar Coin]( – Yahoo Finance - [Bob Good, Emboldened After Speaker Fight, Gears Up for Debt Limit Battle]( – Washington Post - [Here’s What You Need to Know About the GOP Bill to Abolish the Tax Code]( – The Hill - [After Past Farm Bill Stumbles, GOP This Year Faces the Challenge of Inexperience]( – Roll Call - [Rebranding Rift Guts Blue Dog Dem Ranks]( – Politico - [Pentagon Will Increase Artillery Production Sixfold for Ukraine]( – New York Times - [In Reversal, US Poised to Approve Abrams Tanks for Ukraine]( – Associated Press - [A Dilemma for Governments: How to Pay for Million-Dollar Therapies]( – New York Times - [Covid, Flu, RSV Declining in Hospitals as ‘Tripledemic’ Threat Fades]( – Washington Post - [Major Medical Schools Join Widening Revolt Against U.S. News Rankings]( – Washington Post Views and Analysis - [Republicans Pledge to Balance the Budget. But They Have No Idea How]( – Catherine Rampell, Washington Post - [The Trillion-Dollar Coin Might Be the Least Bad Option]( – Annie Lowrey, The Atlantic - [Please Don’t Feed the Debt Scolds]( – Paul Krugman, New York Times - [The Case for the Federal Reserve to Pause Right Now]( – Karl W. Smith, Bloomberg - [What’s Biden Going to Do Without Ron Klain?]( – Chris Whipple, New York Times - [Biden’s Uphill Battle With Working-Class Voters]( – Ruy Teixeira, Washington Post - [Centrist House Democrats Picked a Bad Time to Have an Identity Crisis]( – Ed Kilgore, New York - [The Democrats’ Green Investments Are Going to Republican States]( – Harold Meyerson, American Prospect Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](