Republicans Try to Squeeze Biden on the Border

Speaker Johnson in Texas
Reuters
By Yuval Rosenberg

Happy Wednesday! It took nearly 40 years and 157 levels, but an Oklahoma teenager reportedly became the first person to beat the classic video game Tetris. Here’s what else is happening.

Johnson, House GOP Visit Texas to Pressure Biden on the Border

House Speaker Mike Johnson and more than 60 of his Republican members toured the southern border at Eagle Pass, Texas, today to ramp up pressure on President Joe Biden to make more concessions on immigration policy. The visit comes as record numbers of migrants have crossed into the United States illegally in recent weeks and Senate and White House negotiators continue to work on a bipartisan deal combining border policy changes with funding for Ukraine, Israel and Taiwan. Those talks have not included Johnson or House Republicans.

Democrats have reportedly made significant concessions in the Senate negotiations, but any bipartisan deal is unlikely to be able to get through the House given the demands by Johnson and his members that border policy changes closely reflect the much more restrictive bill they passed, H.R. 2. Democrats have rejected the GOP provisions as non-starters.

"This is a catastrophe down here, and what the White House is proposing is more money to process and allow more illegals into the country. We need to do the opposite of that," Johnson told CNN Wednesday afternoon. "This is not about sending more money down here. It’s about changing the policy, and the White House seems not to understand that."

U.S. agents reportedly recorded more than 300,000 illegal crossings along the southern border in December, the highest ever for a single month, according to preliminary data cited by ABC News. The Biden administration has requested nearly $14 billion in additional border funding, which it says would provide for an additional 1,300 border patrol agents, another 1,000 law enforcement personnel and inspection machines to keep fentanyl out of the country, 1,600 more asylum officers and 375 new immigration judges.

"We got to do something. They ought to give me the money I need to protect the border," Biden told reporters Tuesday night as he returned to the White House from his holiday.

As House Republicans look to squeeze Biden on the border issue, the House Homeland Security Committee led by Republican Rep. Mark E. Green of Tennessee announced Wednesday that it is moving ahead with impeachment hearings against DHS Secretary Alejandro Mayorkas. The Department of Homeland Security has called such proceedings a baseless waste of time and taxpayer dollars, and Mayorkas says that he has taken the steps allowed by law to deal with the border crisis, pointing the finger at lawmakers. "Fundamentally, the laws themselves must change," Mayorkas told CNN.

Democrats also preemptively hit back at Johnson over his trip, with the White House telling reporters that Republicans are "playing politics" and hamstringing efforts to provide vital funding.

"Actions speak louder than words," White House Spokesman Andrew Bates said in a statement. "House Republicans’ anti-border security record is defined by attempting to cut Customs and Border Protection personnel, opposing President Biden’s record-breaking border security funding, and refusing to take up the President’s supplemental funding request."

Senate Democratic Leader Chuck Schumer said that bipartisan negotiations were the only solution. "It’s very nice that they have a trip to the border, but the only way to solve this is here working in a bipartisan way with Senate Republicans, Senate Democrats and House Democrats to get it done, period," Schumer told reporters Wednesday. "And I hope the speaker will realize that if he wants to solve the problem on the border."

The bottom line: Senate negotiators resumed their in-person talks this week and Schumer said they are making progress. "We’re closer than we’ve ever been," he said, suggesting that a bipartisan deal would pressure House Republicans to go along. But immigration reforms and a supplemental spending deal likely still face a host of obstacles.

Quote of the Day

"I'm hopeful that we can get a budget agreement soon and I'm hopeful that we could avoid a shutdown, given the good progress we've made. That is certainly not out of the question, as some people have said it would be."

– Senate Majority Leader Chuck Schumer, updating reporters on budget negotiations ahead of a January 19 deadline to fund some federal departments and avoid a partial government shutdown.

Rate Hikes Probably Done, Fed Officials Say

At their final meeting of 2023 last month, members of the Federal Open Market Committee signaled that they thought the central bank’s campaign of interest rate increases had likely come to an end, according to meeting notes released Wednesday.

The Fed raised its key interest rate to a range between 5.25% and 5.5% in July as part of its effort to bring inflation in the U.S. economy under control. Inflation has eased significantly since hitting a peak of 9.1% on a 12-month basis in June 2022, with many economists crediting the Fed’s monetary tightening campaign for much of the improvement.

As for what comes next, Fed officials provided little sense of when they might start to cut rates. "Participants generally stressed the importance of maintaining a careful and data-dependent approach to making monetary policy decisions and reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably toward the Committee’s objective" of 2%, the notes said.

At the same time, officials noted that additional rate hikes could not be ruled out entirely. "It was possible that the economy could evolve in a manner that would make further increases in the target rate appropriate," the notes said. "Several also observed that circumstances might warrant keeping the target range at its current value for longer than they currently anticipated."

Still, absent any unforeseen developments, the committee said that "clear progress" in the battle against inflation suggests that it will cut interest rates at some point this year. Economic projections from various committee members indicate they believe that "a lower target range for the federal funds rate would be appropriate by the end of 2024."

The bottom line: Unless inflation flares up again, interest rates are probably headed lower in 2024.

Number of the Day: 8.79 Million

The number of available jobs in the U.S. shrank modestly in November, as vacancies fell to 8.79 million, down from 8.85 million in October, according to the Job Openings and Labor Turnover Survey (JOLTS) released by the Bureau of Labor Statistics Wednesday. The results came in slightly below expectations.

The number of hires also decreased, falling by 363,000 to 5.5 million. And the number of people voluntarily leaving their jobs — called quits and seen as a positive sign of labor market strength — fell as well, dropping 157,000 to 5.3 million. The quits rate dropped to its lowest level since September 2020.

Bloomberg economist Stuart Paul said the data is consistent with a slowing labor market that will help ease upward pressure on wages. "The downside surprise in November’s job openings, paired with a decline in the quits rate, will contribute to slowing wage growth in months ahead," he said. "As excess demand for labor dissipates, so too will firms’ willingness to bid up workers’ wages."

As Drug Prices Rise, $35 Cap on Insulin Takes Effect

Pharmaceutical companies rang in the New Year as they usually do: raising prices on hundreds of medications.

According to research cited by Reuters, companies like Pfizer, Sanofi and Takeda will raise prices on more than 500 drugs in early January. Pfizer is leading the way, accounting for about 25% of all drug price hikes.

The insulin exception: Not all drug prices are going higher this year. The cost of insulin is dropping to a maximum of $35 per month for millions of Americans as of January 1, thanks to the Inflation Reduction Act, which Democrats pushed through Congress in 2022.

The law applies to Medicare beneficiaries, but the three major producers of insulin — Sanofi, Novo Nordisk and Eli Lilly — have announced their own discount programs to match the $35 cap for most patients.

The firms are also lowering retail prices on their insulin drugs. As CNN reports, Sanofi reduced the list price of Lantus by 78% starting January 1. Novo Nordisk lowered list prices of multiple insulin drugs by as much as 75%. And Eli Lilly said it would cut the price of Humalog and Humulin by 70%.

Responding to pressure – and new rules: The drugmakers are cutting insulin prices due to the new rules laid out in the Inflation Reduction Act, as well as increased pressure from the Biden administration and consumer advocates. Another factor is the 2021 American Rescue Plan, which requires drugmakers starting in 2024 to pay higher rebates on medications that have seen price increases above the inflation rate.

The price cuts are expected to actually save the companies money overall as they avoid what could have been massive rebate payments under the new rules. Spencer Perlman of the consulting firm Veda Partners told CNN that the savings will total hundreds of millions of dollars. Eli Lilly, for example, is expected to avoid paying $430 million in Medicaid rebates this year thanks to its timely price cuts on its insulin drugs.

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