Good evening. The death toll from the Maui wildfires has climbed to at least 111, with potentially more than 1,000 people still missing. Mortgage rates hit a 21-year high. And a new poll suggests President Joe Biden’s efforts to sell “Bidenomics” still aren’t resonating with Americans. Here’s your fiscally focused update.
Americans Still Aren’t Warming to ‘Bidenomics’: Poll
Seeking a political boost as he heads into the 2024 election season, President Joe Biden has spent the past few weeks highlighting the nation’s low unemployment, continued GDP growth and declining inflation rate, all of which he credits to the economic policies put into place under his watch. His sales pitch, however, doesn’t seem to be getting through to most American voters. Just 36% of respondents in a new poll said they approve of Biden’s handling of the economy — an even worse outcome than the 42% expressing approval for his performance overall.
The results of the Associated Press-NORC Center for Public Affairs Research poll vary sharply by party. While a majority of Democrats (65%) expressed support for Biden’s economic policies, only 8% of Republicans did the same.
Overall, most Americans seem to share a fairly pessimistic outlook on the economy. Just 34% of respondents said the economy is “good.” That number includes a scant majority (52%) of Democrats and only 15% of Republicans.
“Despite positive indicators the economy is improving, Americans appear to be hesitant to credit the president,” The Hill’s Lauren Sforza wrote Thursday.
The poll, conducted August 10-14 with 1,165 adults, has other bad news for the president. A majority of respondents said they had “hardly any confidence” or “only some confidence” in Biden’s ability to handle the basic duties of his office, including managing the White House (45% had hardly any confidence, 31% had only some confidence), handling a crisis (46%, 32%) or reducing corruption in Washington (58%, 30%).
The sour mood extends to his own party. A majority of Democrats (55%) said they don’t want to see Biden run again in 2024. Younger Democrats were even more negative, with 66% saying they would like to see a different candidate next year. The silver lining for Biden is that a solid majority of Democrats (82%) said they would get behind him if he is the party’s presidential candidate, as expected. Overall, though, just 24% of Americans want to see Biden run again.
The bottom line: Biden’s inability to convince most Americans that his economic policies are making their lives better suggests he could be in for a tough fight in 2024 – even if his opponent is under a cloud of his own. “I think it’s going to be a miserable election cycle,” one poll respondent said in a follow-up interview. “We’re going to see a lot of the same stuff that we saw in 2020.”
A Major Insurer Has a New Plan to Save Big Money on Drug Costs
The U.S. system of pricing and insurance coverage for prescription drugs has come under immense criticism for being overly complicated and costly. Now, a major health insurer — Blue Shield of California — says it is opting out of that system to try a new model “designed to fix problems in today’s broken prescription drug system.”
The non-profit insurer, with some 4.8 million members, said Thursday that it will stop using the CVS Caremark pharmacy benefit management service. Pharmacy benefit managers serve as middlemen who negotiate drug prices and rebates with manufacturers in a complex and opaque system that critics contend drives up costs. Blue Shield of California will instead work with five different companies, including Amazon.com and Mark Cuban's Cost Plus Drug Company, in an effort to lower drug costs for those it insures. Blue Shield of California said it will continue to use CVS Caremark to manage specialty drugs for members with complex conditions.
“The current pharmacy system is extremely expensive, enormously complex, completely opaque, and designed to maximize the profit of participants instead of the quality, convenience and cost-effectiveness for consumers,” Paul Markovich, president and CEO of Blue Shield of California, said in a statement. “That is why we are working with like-minded partners to create a completely new, more transparent system that gets the right drugs to the right people at the right time at a substantially lower cost."
Blue Shield of California reportedly aims to eliminate rebates and hidden fees from its negotiations with drug companies. It says that once its strategy is fully implemented it expects to save as much as $500 million a year, or roughly 10% to 15% of what it now spends on drugs.
Industry experts said that the logistics of the new approach and coordinating among so many companies will likely prove challenging — and that the discounts achieved under the new system might not match the ones negotiated by pharmacy benefit managers. "Many in the industry will likely be watching this situation closely as managing the five partnerships could prove tricky, but if it (Blue Shield) is successful, we could see additional regionals move more in a similar direction," Evercore ISI analyst Elizabeth Anderson told Reuters.
Quote of the Day: Shutdown Odds Still High
"You could see a 60/40 chance of a shutdown at the end of September."
– Jake Sherman of Punchbowl News in an interview with CNBC this morning. While House Speaker Kevin McCarthy and Senate Majority Leader Chuck Schumer have both expressed interest in a short-term spending bill to avoid a shutdown when current funding runs out on September 30, Sherman noted that McCarthy may be pressured by GOP conservatives to load up a stopgap bill with spending cuts or controversial provisions involving the border or the Justice Department that would be poison pills for Schumer and the Democrats. “The question is, Can McCarthy put a bill on the floor without any of those things?”
TD Cowen analyst Chris Krueger said in a note to clients that he would not be surprised if the short-term spending patch lasted just a matter of weeks, perhaps only until mid-October. “The next catalyst to watch on the spending side will likely be next Wednesday's GOP Presidential debate with a number of candidates likely to add their advice on funding (or defunding) the government,” he added.
Fiscal News Roundup
- Biden's Approval Rating on the Economy Stagnates Despite Slowing Inflation, AP-NORC Poll Shows – Associated Press
- A Big Health Insurer Is Ripping Up the Playbook on Drug Pricing – Wall Street Journal
- Blue Shield California Ditches CVS for Amazon and Mark Cuban’s Drug Company – CNN
- CVS Stock Plunges After Blue Shield of California Drops Retailer’s Pharmacy Services – CNBC
- Health Care CEOs Hauled in $4 Billion Last Year as Inflation Pinched Workers, Analysis Shows – STAT
- U.S. Mortgage Rate Jumps to Highest Level Since 2002 – New York Times
- America’s Obsession With Weight-Loss Drugs Is Affecting the Economy of Denmark – Wall Street Journal
- New Vaccines This Fall Could Curb Covid Variant, Respiratory Viruses – Washington Post
- The $362 Million Warship the US Navy Just Decommissioned Wasn't Even in Service 5 Years – Business Insider
- DeSantis’ Travel, Security Cost Florida Taxpayers $13 Million as He Runs for President – Miami Herald
- The World Shed 3.5 Million Millionaires in 2022 as Market Losses Drained Wealth at the Top – CNN
Views and Analysis
- How Do We Fix the Scandal That Is American Health Care? – Nicholas Kristof, New York Times
- 5 Ways the IRS Funding Boost Is Paying Off – Natasha Sarin, Washington Post
- How State Capacity Can Help America Build – David Dayen, American Prospect
- Why Child-Care Prices Are Rising at Nearly Twice the Overall Inflation Rate – Christian Robles, Wall Street Journal
- How Do Prices of Drugs for Weight Loss in the U.S. Compare to Peer Nations’ Prices? – KFF
- This Law May Be the Turning Point in America’s Fight to Save the Planet – John Podesta, MSNBC
- Bidenomics and the New Political-Subsidy Economy – Wall Street Journal Editorial Board
- Over Budget and Delayed—What’s Next for U.S. Nuclear Weapons Research and Production Projects? – GAO