Border Battle Pushes Congress Toward a Shutdown

Border Battle Pushes Congress Toward a Shutdown

By Yuval Rosenberg and Michael Rainey
Monday, March 18, 2024

Happy Monday! Congress is cutting it awfully close as it tries to avert a partial government shutdown this weekend. Here’s what you need to know.

Congress Flirts With a Partial Government Shutdown

Congressional lawmakers have until midnight Friday to pass a package of spending bills needed to keep large portions of the government from shutting down, but a lengthy and ongoing dispute over funding for the Department of Homeland Security means that they may run out of time as they try beat the deadline.

With funding for about 70% of the federal government set to expire in just days, appropriators have been scrambling to finalize a “minibus” of six annual spending bills covering Defense, Labor-HHS, State-Foreign Operations, Homeland Security, the Legislative Branch and Financial Services-General Government. Five of the six measures have reportedly been finalized, but the Homeland Security funding has been the subject of some ongoing disputes and dramatic late maneuvering.

After talks on that legislation broke down last week, appropriators had reportedly been working on a year-long stopgap measure to be packaged with the five other appropriations bills. But discussions about adjustments to the stopgap also hit some snags. As Roll Call reports, those differences centered on two issues: “Republicans’ desire for more funding for Immigration and Customs Enforcement detention bed capacity, and Democrats’ push for more money for Transportation Security Administration pay raises, as TSA workers have historically been paid less than counterparts at other agencies.”

As appropriators were finalizing those matters and preparing to release their legislative text, the White House reportedly stepped in with an eleventh-hour request for an added $1.56 billion, arguing that a full-year stopgap that kept funding flat wouldn’t be enough to meet the needs at the border.

The White House intervention ultimately led appropriators back to drafting an updated Homeland Security bill for fiscal year 2024 — a shift that meant that the full text of the six-bill package would be delayed. As of Monday evening, the text of the package had not been released and congressional leaders reportedly did not expect to have it done today. Adding to the battle, a group of more than 40 House Republicans today sent a letter urging their colleagues to vote against the appropriations package because it does not include conservatives’ preferred border reforms.

Given that House rules allow members 72 hours to read legislation before voting on it and the Senate typically takes a day or more to process legislation, lawmakers may have little room, if any, to avoid at least a brief funding lapse. As Sahil Kapur of NBC News noted, for the shutdown deadline earlier this month, congressional leaders released the bill text Sunday night and Congress only passed the package with hours to spare.

Why it matters: Following the quick collapse of a bipartisan border security and foreign aid deal in the Senate last month, Politico’s Caitlin Emma and Jennifer Scholtes point out that the Homeland Security bill is likely the last chance to boost funding for the border this fiscal year. They also note that “the entire spending package is expected to hinge on the fate of the border and immigration negotiations, since it is politically unworkable to try to pass the homeland security bill on its own once the military and key non-defense agencies are fully funded.”

The bottom line: The delay in finalizing the six-bill spending package likely means that, at best, the House and Senate will have to rush to pass this “minibus” on Friday before they are scheduled to leave town for a two-week recess.

Number of the Day: $35

Drugmaker AstraZeneca announced Monday that it will cap out-of-pocket costs for its inhaler products at $35 per month. The pricing decision covers a number of widely used products including Symbicort and Airsupra. It will apply to both insured and uninsured customers starting June 1.

The pricing change comes amid growing pressure from the White House and lawmakers led by Sen. Bernie Sanders to lower the cost of prescription drugs. In January, Sanders, a Vermont independent, announced an investigation into the pricing of inhalers, which are used by millions of Americans with asthma and other respiratory illnesses and which generate billions of dollars in revenues for pharmaceutical firms. Lawmakers requested information from the four leading manufacturers of inhalers — AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline and Teva — on production costs and pricing strategies, while noting the enormous price discrepancies between the U.S. and Europe for the same products.

“There is no rational reason, other than greed, as to why GlaxoSmithKline charges $319 for Advair HFA in the United States, but just $26 for the same inhaler in the United Kingdom,” Sanders said as he launched the investigation. “It is unacceptable that Teva is charging Americans with asthma $286 for its QVAR RediHaler that costs just $9 in Germany. It is beyond absurd that Boehringer Ingelheim charges $489 for Combivent Respimat in the United States, but just $7 in France.” One of AstraZeneca’s inhalers, Breztri Aerosphere, was also cited for costing $645 in the U.S. but just $49 in the U.K.

Earlier this month, Boehringer Ingelheim announced it would cap the cost of inhalers at $35. On Monday, Sanders applauded both companies for capping costs and turned his attention to those that have not done so. “Today, I am calling on the two other major manufacturers of inhalers — GlaxoSmithKline and Teva — to take similar action,” he said. “If AstraZeneca and Boehringer Ingelheim can cap the cost of inhalers at $35 in the United States, these other companies can do the same.”

Goldman Sachs Sees Fewer Rate Cuts This Year

With Federal Reserve policymakers set to begin a two-day meeting tomorrow, Jan Hatzius, chief economist at Goldman Sachs, said in a research note Monday that hotter-than-expected inflation at the start of 2024 has prompted the investment bank to trim its forecast for interest rate cuts by the Fed this year. Instead of four cuts of 0.25 percentage points each, the bank now sees three cuts coming in June, September and December, for a total of 0.75 percentage points.

At the same time, Hatzius said the economy still appears to be on a glide path to a “soft landing,” in which inflation returns to its pre-pandemic norm closer to 2% without the economy falling into a recession. Hatzius said a softening labor market, higher immigration levels, decelerating wage growth and an expected easing of housing and used car price increases strengthened the bank’s conviction that a soft landing is still within reach.

Fed Chair Jerome Powell will hold a press conference on Wednesday afternoon after the rate-setting committee issues its post-meeting statement.

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