Why Trump Thinks He’s Winning the Shutdown Fight

Monday, January 14, 2019

Plus, 7 ideas to lower drug prices

Why Trump Thinks He’s Winning the Shutdown Fight

Here’s your shutdown update in one word: Stuck.

The partial government shutdown is now heading for its 25th day, four days longer than the previous record, and both sides remain firmly dug in on their positions.

President Trump said Monday that he shot down a suggestion by Sen. Lindsey Graham (R-SC) that he reopen the government for three weeks while negotiations continue over funding to build a wall along the border with Mexico, and then declare a national emergency if those talks yielded no progress. “I want to get it solved. I don’t want to just delay it,” Trump told reporters.

The president also said he’s not yet prepared to declare a national emergency in order to bypass Congress to fund construction of a border barrier — a move that would be met with immediate court challenges and set off a constitutional clash.

“I’m not looking to call a national emergency,” Trump said, though White House officials said that an emergency declaration was still possible as a “last resort,” according to Politico.

Trump’s Strategy

The Washington Post reported over the weekend that, in the December days before the shutdown began, Senate Majority Leader Mitch McConnell warned Trump that he had no leverage and would be “boxed in a canyon.” Outgoing House Speaker Paul Ryan (R-WI) told Trump he saw no way to win.

And yet here we are, weeks later, with White House aides and advisers still not sure about how the president plans to resolve the shutdown, according to Politico.

New York magazine columnist Jonathan Chait suggests that Trump has three plausible ways to end the shutdown:

Cave and let the government reopen while blaming Congress for failure to build his wall,
Try to make a larger deal in which he gets border wall money in exchange for a path to citizenship for Dreamers or some other concessions to Democrats,
Declare a national emergency, even with the inevitable political fallout and despite warnings from some conservatives about the dangerous precedent it would set.

Trump has chosen none of the above.

“I do have a plan on the Shutdown,” Trump tweeted on Saturday. “But to understand that plan you would have to understand the fact that I won the election, and I promised safety and security for the American people. Part of that promise was a Wall at the Southern Border. Elections have consequences!”

Outwardly at least, that plan seems to be to insist on getting exactly what he wants and see if moderate Democrats crack. (“Many of them are calling and many of them are breaking,” Trump told reporters Monday, though there’s been no public indication that’s true — but a number of Republicans have broken with Trump and called for reopening the government without a deal on the wall.) Axios reported that Trump chastised his acting chief of staff, Mick Mulvaney, during a meeting with lawmakers earlier this month after Mulvaney tried to compromise with Democrats on a dollar figure for wall construction. Trump cut him off, saying “You just f----d it all up, Mick," according to the Axios report. And a source described as being familiar with Trump’s mindset told CNN, "He's not going to budge even 1 inch."

Whether you see that as being admirably resolute and principled or childishly obstinate and reckless, the practical effect is the same: There’s still no end to the shutdown in sight. “At some point, the economic and political costs of the shutdown will accumulate to such a level that either Trump agrees to end it, or a veto-proof supermajority of his fellow partisans override him,” Chait speculates. “How long that takes is hard to say.”

Polls Show Trump Losing the Public Messaging Battle

National polls leave little doubt that Trump and the Republicans are bearing most of the blame for the continued standoff — though the president is maintaining his strong support among Republicans and is deflecting at least some attention from blockbuster new reports emanating from the investigation into Russia’s election meddling.

A CNN poll released over the weekend shows 55 percent blame Trump while 32 percent point the finger at congressional Democrats. Fifty-six percent of respondents oppose trump’s wall, and 45 percent say the situation at the southern border is a crisis.
Similarly, a new Washington Post-ABC News poll found that 53 percent of respondents say the shutdown is primarily the fault of Trump and Republicans while just 29 percent blame Democrats. Fifty-four percent oppose Trump’s border wall, and just 24 percent call the border situation a crisis. “Not a single part of Trump’s framing has taken hold with a majority of the American public,” writes Washington Post Opinions editor James Downie.

Trump, however, doesn’t see it that way. He’s reportedly touted some of the results of the Washington Post-ABC poll — the ones showing that support for a border wall has increased to 42 percent, up from 34 percent last January, according to CNN.

Tax Cuts Still Not Paying for Themselves

The latest budget data shows, once again, that the tax cuts are not paying for themselves.

The economy grew at a roughly 4.9 percent rate last year (before adjusting for inflation), but tax revenues fell by 1 percent. Adjusted for inflation, the revenue loss is even worse, down 2.7 percent on a year-over-year basis.

“It’s time to put to rest any notion that President Trump’s signature tax cuts are paying for themselves. Anyone who says otherwise is lying with numbers,” Jim Tankersley of The New York Times wrote.

James Pethokoukis of the conservative American Enterprise Institute said that even some tax-cut true-believers are surprised by the now-undeniable drop in revenue, tweeting: “I am not saying nor even suggesting that the tax plan cannot work as conservative economists intended. But even those folks are disappointed so far.”

And the cost is rising: Bloomberg’s Stephen Gandel said that the tax cuts are proving to be “vastly more generous for corporate America, and vastly more expensive for taxpayers, than expected.” How much more expensive? About $600 billion. “That’s how much more than expected I estimate the companies in the S&P 500 are on pace to save,” Gandel wrote. “It is also how much more the tax cut is likely to add to the national debt if it runs as planned for 10 years. The total savings for all of corporate America will be well into the 13 figures.”

House Democrats to Investigate Drug Prices

A key House committee announced Monday that it was launching a wide-ranging investigation into the pricing practices of 12 major pharmaceutical companies, including Amgen, Eli Lilly, Johnson & Johnson, Novartis and Pfizer.

“For years, drug companies have been aggressively increasing prices on existing drugs and setting higher launch prices for new drugs while recording windfall profits,” Rep. Elijah Cummings (D-MD), chair of the House Committee on Oversight and Reform, said in a statement. “The goals of this investigation are to determine why drug companies are increasing prices so dramatically, how drug companies are using the proceeds, and what steps can be taken to reduce prescription drug prices.”

Cummings sent letters to the drugmakers requesting information on how the companies operate, including “information and communications on price increases, investments in research and development, and corporate strategies to preserve market share and pricing power.” The letters specifically cited 19 widely prescribed drugs, including Humira, Enbrel, Crestor, Victoza and Lantus. After gathering the initial responses, the oversight committee plans to hold hearings within the next several weeks.

Pressure is growing: Pharmaceutical companies have been under increasing pressure over pricing, at least at the level of rhetoric. President Trump complained about drug prices last week, calling Health and Human Services Secretary Alex Azar to the White House for a meeting to address the issue. At around the same time, Azar tweeted, “For those listening in the pharmaceutical industry: The list price increases must stop. Prices must start coming down.”

But prices keep rising: The growing political pressure hasn’t produced much in terms of long-term results. As Bloomberg’s Michelle Cortez reported Thursday, “The pressure hasn’t yet curtailed soaring costs, as drug companies boosted U.S. list prices on hundreds of treatments in recent weeks.”

Chart of the Day: A Long-Running ‘Crisis’

Gallup finds that 70 percent of Americans say the U.S. healthcare system is "in a state of crisis" or has "major problems" — consistent with what the public has said since Gallup first started asking the question in 1994.

7 Ideas from Congress to Lower Drug Prices

Lawmakers are pushing multiple policy proposals to address the problem of rising drug prices. Vox’s Dylan Scott provided a roundup Monday of the leading idea for reducing drug prices in the U.S., ranging from “the realistic to the purely aspirational.” Here’s a quick summary:

1. Speed up the generic production process. Bills sponsored by Sen. Amy Klobuchar (D-MN) and Sen. Pat Leahy (D-VT) would tweak some complicated legal rules to make it easier for generic drug producers to get to market. Republican Sen. Chuck Grassley reportedly supports the bills, which means that they have a realistic chance of getting through a divided Congress.

2. Allow Americans to buy drugs from Canada. A bill from Sens. Cory Booker (D-NJ) and Bob Casey (D-PA would allow wholesalers, pharmacies and individuals to import drugs from FDA-approved facilities in Canada.

3. Put a limit on out-of-pocket drug costs. Rather than capping prices, several bills would limit the amount anyone in a group insurance plan can be required to spend in a month. One version from Sen. Tina Smith (D-MN) and Sen. Bernie Sanders (I-VT) would put the cap at $250 per month.

4. Allow Medicare to negotiate drug prices. Many countries use the enormous buying power of their public health systems to negotiate lower drug prices, and several proposals in Congress would allow just that. This popular idea comes with lots of tricky details, however, and would encounter enormous resistance from the pharmaceutical industry.

5. Limit drug prices using foreign prices as a benchmark. A bill from Sen. Sanders and Rep. Elijah Cummings (D-MD) would compare U.S. drug prices to those in Canada, the United Kingdom, Germany, France and Japan. Using that information, the health secretary could declare that certain drugs are “excessively priced” and open them up to generic competition. The Trump administration has issued a similar proposal.

6. Let the federal government manufacture drugs. Sen. Elizabeth Warren (D-MA) and Rep. Jan Schakowsky (D-IL) have a bill that would allow the federal government to make its own drugs in cases where private firms are failing to serve the market.

7. End the 10-year patent monopoly on new drugs. Sen. Sanders has supported a plan to eliminate the decade-long monopoly drugmakers receive on new drugs and replace it with a “prize” system in which pharmaceutical firms share a federally funded pool of money to reward the companies that make the most useful drugs. The pool could be as large as $100 billion per year.

For the full analysis, read Scott’s piece at Vox.

Why Trump Thinks He’s Winning the Shutdown Fight