A Battle Over Spending? White House Says Bring It On

Plus: McCarthy and Schumer aim to avoid an October shutdown ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good evening. If you’re reading this, you probably already know that former president Donald Trump, the current polling leader in the race for the 2024 Republican presidential nomination, has now been indicted in four cases after he and 18 other defendants were charged in Georgia Monday night in a racketeering case stemming from efforts to overturn the state’s results in the 2020 election. Trump, the first former president to face criminal charges, now faces a total of 91 felony counts across his criminal indictments. He and his allies continue to claim that the prosecutions are politically motivated attempts to keep him from running against President Joe Biden. The first Republican presidential debate is eight days away. Here’s what else you should know today. Speaker Kevin McCarthy (Reuters) McCarthy and Schumer Aim to Avoid an October Shutdown When Congress returns from its August recess next month, lawmakers are likely to try to pass a stopgap spending bill to prevent a government shutdown in October. Speaker Kevin McCarthy reportedly told his fellow House Republicans Monday night that he’s looking to pass a short-term extension of government funding when the House returns. And Senate Majority Leader Chuck Schumer [told]( reporters Tuesday that a short-term spending fix “makes a good deal of sense.” A short-term spending bill, known as a continuing resolution or CR, could also include additional aid for Ukraine and disaster relief funding. How we got here: With current funding set to expire when the current fiscal year ends on September 30, funding the government to avoid a shutdown will be a top priority, but lawmakers are far from finalizing the 12 annual spending bills required to fund agencies into 2024. The Senate has advanced all 12 appropriations bills out of committee but still needs to pass them. The House has passed just one of its 12 bills and Republican leaders had to hold off voting on another in the face of pushback from conservatives. The work still to be done on annual appropriations and the little time remaining before the deadline combine to likely make a stopgap bill necessary. McCarthy reportedly told his members on a conference call that his proposed short-term measure would extend funding until early December at the latest, avoiding a pre-Christmas funding cliff. “McCarthy said he’s told Senate Majority Leader Chuck Schumer that the patch would not go near the holidays — a bid to avoid the calendar crunch that we’re all a little too familiar with after the last few years,” Politico [reports]( adding that the speaker expressed confidence that Congress could avoid an October 1 shutdown. Some GOP members were more skeptical. “I just got off a member call - it’s clear President Biden and Speaker McCarthy want a government shutdown, so that’s what Congress will do after we return in September. Everyone should plan accordingly,” Republican Rep. Tony Gonzales of Texas posted Monday evening. Stuck on spending bills: McCarthy reportedly indicated that he opposes the idea of a year-long stopgap spending bill and said he plans to bring additional spending bills to the floor when lawmakers return. He urged his members “to pass their versions of the FY2024 spending bills in order to counter Senate Democrats, who’ve passed their own bills with a ‘97% yes vote,’ Punchbowl News [reported](. House Republicans are looking to set discretionary spending levels for next year more than $100 billion lower than the caps agreed to as part of the deal this year to raise the debt limit. They face pushback from the White House, congressional Democrats and some Senate Republicans as well. “I just hope that House Republicans will realize that any funding solution has to be bipartisan or they’ll risk shutting down the government,” Schumer told reporters. A Battle Over Spending? White House Says Bring It On Although Republicans have sometimes dominated the debate over efforts to reduce deficits and the debt, the Biden administration thinks it may have gained the upper hand on the issue — and looks forward to exploiting its potential advantage in what could be a brutal battle over the 2024 budget this fall. In a memo to supporters Tuesday, deputy White House press secretary Andrew Bates reportedly argued that voters prefer Biden’s plans for raising revenues and reducing outlays — which include income tax increases on the very wealthy, higher corporate taxes and federal negotiation of lower drug prices — to Republican proposals that focus on tax cuts and slashing spending. “Congressional Republicans keep indicating they want to talk about deficits. Not as much as we do,” Bates said, per [Politico](. Bates said that GOP proposals amount to “deficit-increasing tax welfare skewed to wealthy people and large corporations that adds trillions to the debt,” with savings achieved only by reducing benefits in popular programs including Medicare and Social Security. Noting that “congressional Republicans claim to be champing at the bit to have a debate about deficits,” Bates said Democrats would be happy to highlight GOP “plans to eviscerate Medicare and Social Security benefits while spending trillions on tax handouts to the rich and big corporations, and force seniors to pay even higher drug costs so Big Pharma can fill more swimming pools with caviar and diamonds. We’ll book them on TV ourselves if it’s helpful!” Quote of the Day “I knew what would happen is the folks who voted against these things ... when it came to their states, they'd claim credit. That's ok ... I represent all the American people in red states and blue states. But that doesn't mean I can't make fun of the hypocrisy. Like I said in the State of the Union, I will see you at the groundbreakings.” — President Joe Biden, speaking at a wind turbine factory in Milwaukee on Tuesday. Biden was in Wisconsin to promote the investments in manufacturing and green energy fostered by the Inflation Reduction Act, which he signed into law a year ago. Although all Republicans in Congress voted against the bill, some have taken credit for the boom in manufacturing construction that has occurred in its wake, especially in Republican-leaning areas. The Biden law includes $370 billion in tax incentives aimed at boosting clean energy projects, including electric vehicle manufacturing, and most of the spending is occurring in red states. “For the companies that are hoping to reap federal tax incentives as well as state and local sweeteners, Republican parts of the country often look more attractive,” Politico’s Josh Siegel, Kelsey Tamborrino and Jessie Blaeser [wrote]( this week. “Of the 200 project locations that have been announced through July, more than 60 percent are in GOP-held districts.” Department of Justice Defends Medicare Drug Price Negotiation The Department of Justice is pushing back against an effort to stop the new Medicare Drug Price Negotiation Program, which empowers the federal government to negotiate lower prices covered by Medicare. In July, the Chamber of Commerce sued to block the program, which was created by last year’s Inflation Reduction Act, arguing that it would inflict “irreparable harm” on U.S. businesses and patients. In response, the Department of Justice is now questioning the conservative group’s standing to sue while asserting that pausing the program would harm consumers who stand to benefit from lower drug prices. “The public’s interests would be gravely disserved by acceding to Plaintiffs’ premature efforts to take down the entirety of the Negotiation Program — which achieves a longstanding goal of controlling skyrocketing Medicare spending and making drugs more affordable for seniors — before that program even begins,” the recent DOJ motion says, per [The Hill](. The Centers for Medicare and Medicaid Services is scheduled to announce the first 10 drugs subject to price negotiations on September 1. But the price negotiations will not take full effect until 2026, assuming multiple legal challenges are resolved before that date. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [Can Speaker McCarthy Save Christmas?]( – Politico - [McCarthy Eyes a Short-Term Funding Bill to Head Off a Shutdown]( – Roll Call - [Chuck Schumer: A Stopgap Spending Bill Through Early December “Makes a Good Deal of Sense”]( – Politico - [White House Challenges GOP on Debt Reduction Tactics]( – Politico - [Kashkari Says Inflation Rate Too High, but Fed Sees Progress]( – Bloomberg - [The Fed’s Interest-Rate Debate Is Shifting]( – Bloomberg - [Conservative Group Launches Campaign to Push for GOP Support for Ukraine]( – Washington Post - [What Recession? This Summer’s Economy Is Defying the Odds]( – Washington Post Views and Analysis - [A Prosperous Year for the Inflation Reduction Act]( – Janet L. Yellen, Wall Street Journal - [Why Is US Inflation Falling?]( – Jason Furman, Project Syndicate - [Beating Inflation Might Still Need Higher Rates]( – Bloomberg Opinion Editorial Board - [White House Calls for $40 Billion Supplemental]( – Committee for a Responsible Federal Budget - [What Champions of More IRS Funding — Me Included — Got Wrong]( – Catherine Rampell, Washington Post - [Team Biden Wants a Revolution]( – Robert B. Zoellick, Washington Post - [Will Biden Have Enough Chips in 2024?]( – Robert Kuttner, American Prospect - [For a Right-Sized Pentagon Budget, Rethink Confusing Cost Controls]( – John Hoehn and Paul Cormarie, The Hill - [Americans Are Unwittingly Funding China’s Military Expansion]( – Josh Rogin, Washington Post - [I’ll Pass on the Student-Loan Relief]( – Holly Wetzel, Wall Street Journal - [The Inflation Reduction Act One Year Later: Lower Costs, Cleaner Communities, Greater Opportunity]( – House Budget Committee Democrats 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](