Senators Near $10 Billion Covid Aid Deal

By Yuval Rosenberg

Good evening. Lawmakers are closing in on a deal to fund the ongoing federal response to Covid-19, and President Biden announced an unprecedented release of oil from reserves to combat high gasoline prices. Here's what you need to know.

Senators Near $10 Billion Bipartisan Covid Aid Deal

Senate negotiators are closing in on a bipartisan deal to direct $10 billion more toward combatting the Covid-19 pandemic.

“We’ve reached an agreement in principle on all the spending and all of the offsets,” Sen. Mitt Romney (R-UT), the lead GOP negotiator, told reporters Thursday, adding that the new spending is “entirely balanced by offsets,” meaning that it is paid for by savings elsewhere.

“Romney said the bill would be paid for ‘almost exclusively’ by redirecting money from the American Rescue Plan -- the law that Democrats pushed through last year,” CNN reports. “As part of the offsets, he said that they are pulling money that would have gone to states to provide grants for local businesses.”

Sen. Roy Blunt (R-MO), another Republican negotiator, said that half of the new money would go toward therapeutics and the other half would be directed to the Department of Health and Human Services, which would have “broad discretion” on how to use it for Covid-related needs.

Not done yet: The goal is to pass the bill next week — the Senate has adjourned for this week — but the legislative text still needs to be drafted and scored by the Congressional Budget Office, and other senators signaled that the deal had yet to be finalized.

Senate Majority Leader Chuck Schumer (D-NY) said that negotiators are “getting close to a final agreement that would garner bipartisan support,” but that some more work needs to be done.

"We are working diligently to finalize language of scoring and the final agreement on what should be funded in the final COVID package both domestic and international," Schumer said, He added that he would reschedule a procedural vote planned for today “as a sign of good faith, and to encourage us to come to a final agreement.”

The additional funding would be less than half the $22.5 billion the White House had sought — and less than the $15.6 billion that had initially been packaged with a $1.5 trillion annual spending bill passed by Congress earlier this month. Democrats were forced to pull that Covid funding from the bill after some of their members objected to a compromise that would have repurposed billions of dollars in previously approved pandemic aid to states. Republicans have insisted throughout the talks that the cost of any new spending be covered by unspent funds from previous pandemic relief bills.

The latest round of funding was reportedly scaled back by dropping roughly $5 billion aimed at helping boost global vaccination efforts. “I don’t think the Dems would agree to offsets that would allow them to cover that. So it’s dropped down to the size that they were willing to pay for,” Sen. John Thune (R-SD), a member of Senate Republican leadership, told The Hill on Wednesday night.

Romney told reporters that negotiators were still deciding whether to shift $1 billion toward foreign assistance through the United States Agency for International Development.

House Speaker Nancy Pelosi criticized Republicans Thursday for dialing back the Covid funding, warning that more money would be needed soon. “This is shameful,” Pelosi said. “We have to get the money. It's not going to last us past probably June 1. So, for them to just, I mean, they're making statements saying this is not, we don't see this as a problem. It's a problem. It's a shame.”

The bottom line: The Biden administration has been warning for weeks that additional funding for vaccines, treatments and tests is urgently needed and that efforts to combat the pandemic could be severely undermined if Congress fails to act. Both Romney and Blunt said they believe the deal will garner more than the 10 GOP votes needed for it to pass the Senate.

Biden Will Tap US Oil Reserve, Up to 180 Million Barrels

In an effort to bring down soaring gasoline prices, President Joe Biden announced a plan Thursday to release 1 million barrels of oil per day from the nation's strategic reserves over the next six months.

"Our prices are rising because of Putin's actions,” Biden said, pinning the blame for higher fuel costs on Russian President Vladimir Putin's invasion of Ukraine, in addition to pandemic-induced shortages. “There isn't enough supply. And the bottom line is if we want lower gas prices we need to have more oil supply right now,” Biden added.

The release of up to 180 million barrels, the largest since the oil reserve was created in 1974, would act as a “wartime bridge” through the current crisis to get the country to later in the year, when the White House expects to see higher production levels.

Biden also called on Congress to impose new fees on oil companies that hold roughly 9,000 permits to drill on federal lands but aren’t producing oil — what he called a “use it or lose it” policy to increase supply. “U.S. oil companies are recording their largest profits in years and can put those profits toward productive use,” a senior White House official said. “While some companies have already announced they are increasing immediate production, too many are choosing right now to make extraordinary profits without investing in more supply.”

Still, as in previous efforts to combat gasoline prices through oil reserve releases, critics were skeptical about the impact the release would have. “I do believe the national average could eventually fall under $4/gal in the weeks ahead, but I don't necessarily think this [Strategic Petroleum Reserve] release is the event that will be the primary catalyst for it,” Patrick De Haan of Gas Buddy tweeted. “If anything it could help get us there quicker, but again, likely at the expense of long term stability.”

112 Million Americans Struggle to Pay for Health Care: Report

A staggering number of Americans are finding it hard to pay for health care, according to a new report from Gallup and West Health, and the great majority don’t think the services they receive are worth the cost.

In a pair of surveys of more than 6,600 people conducted last fall, 44% of adult respondents — representing about 112 million people — said they are struggling to pay for health care. More than twice that number, or 93%, said what they pay isn’t worth it.

“Bottom line – Americans are increasingly getting priced out of the system and many of those who can still afford to pay don’t think they’re getting their money’s worth relative to the cost,” West Health president Tim Lash said in a press release. “We must begin to change this trajectory with smarter policies that put patients over profits.”

Pain points: The surveys asked respondents if they had been unable to pay for health care or skipped a prescription medicine due to cost in the last three months, or if they would be unable to afford medical care if they needed it right away. Those who said no to all questions — 56% of respondents — were classified as “cost secure,” while those who said met one of the conditions (36%) were classified as “cost insecure.” Respondents who met at least two conditions (8%) were classified as “cost desperate.”

Not surprisingly, the odds of being “cost desperate” rise as income falls. Only 3% of respondents earning more than $90,000 a year were classified as such, while 13% of those earning less than $48,000 met those conditions.

The survey also shows that many people make sacrifices to afford health care. More than a third of cost desperate adults said they had cut back on utilities to pay for health care, while about half said they had cut back on food purchases.

A lack of value: Only 5% of respondents said they think the American health care system delivers high value relative to its cost, both generally and for their household. Half said the system delivers inconsistent value, while the remaining 45% said it delivers poor value for them and their fellow citizens.

The bottom line: “The U.S. spent $3.8 trillion on healthcare in 2019, accounting for 17.7% of gross domestic product,” Gallup’s Dan Witter writes, adding that per capita spending of $10,948 is far higher than in any other developed country. “The notion among some that high healthcare costs are justified by the quality of care received is unsupported by these public opinion data. Nearly three-quarters of adults do not believe that the quality of their care is worth the cost, a sentiment that is consistent across demographic subgroups including age, gender, race, ethnicity and household income.”

Editorial of the Day: Biden Budget Disappoints on Deficits

The editors at Bloomberg on Thursday panned President Biden’s new budget proposal, arguing that the White House has failed to rein in deficits enough. “It’s still working on the assumption that an enormous expansion of government spending can be financed entirely with tax increases on corporations and the very rich,” they write. “The arithmetic, and the realities of tax enforcement, say otherwise.”

Here’s more from the editorial:

“If you meant to discredit the U.S. government’s whole approach to budget planning, you’d struggle to improve on the proposal announced this week by President Joe Biden’s administration. … The 149-page document, plus expansive appendices and supplementary materials, tucks the administration’s core fiscal-policy ambitions into an empty line and a footnote. ... It renders the budget and its supporting volumes not just largely pointless, as usual, but absurd. …
“[T]he average deficit over the next 10 years is still projected to be 4.7% of gross domestic product. Public debt would continue to rise, from 102% of GDP this year to 107% in 2032. In effect, the administration wants to make the massive increase in public debt due to the pandemic permanent. That would be imprudent even if the recent fiscal emergency were sure to be the last — and, needless to say, it won’t be. A responsible budget would instead focus on getting borrowing firmly under control over the next decade.”

Read the full piece at Bloomberg.

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