Fed Chair Powell will testify at 10 AM EST before the House Financial Service Committee. Watch the hearing live here. I will forward a transcript as soon as it becomes available.
Debt Limit: CBO estimated Treasury will run out of cash in September or October. Yesterday’s 4-page Congressional Budget Office report described the present law debt limit, which will reset on March 2, after which Treasury will use “extraordinary measures,” basically reducing trust funds to fund the government for the next several months. CBO estimated “Treasury will probably run out of cash near the end of this fiscal year or early in the next one.” See this 73-page 2015 GAO report for details of the 2013 experience.
“More than 100 House Democrats to unveil ‘battle-ready’ Medicare-for-all plan as 2020 election looms.” Last night’s Washington Post article led with:
More than 100 House Democrats plan to unveil a new “Medicare-for-all” plan Wednesday to provide government health insurance to every American, according to a copy of the bill provided to The Washington Post, as a number of Democratic-leading presidential candidates for 2020 feud over the party’s health-care platform.
Rep. Pramila Jayapal (D-Wash.), co-chair of the Congressional Progressive Caucus, is expected to release legislation Wednesday that incorporates key policy demands of single-payer activists, aiming to overhaul the U.S. health-care system even faster and more dramatically than legislation proposed in 2017 by Sen. Bernie Sanders (I-Vt.).
Jayapal’s Medicare-for-all would move every American onto one government insurer in two years, while providing everyone with medical, vision, dental and long-term care at no cost. Similar proposals have been projected to increase federal expenditures by at least $30 trillion but virtually eradicate individuals’ health spending by eliminating payments such as premiums and deductibles. About 30 million Americans do not have insurance, while tens of millions more are “underinsured,” meaning they cannot afford or do not seek care, according to the nonpartisan Kaiser Family Foundation.
This is very unlikely to pass the Senate or to be enacted before 2021, but a sweep of Congress and the White House in the 2020 election would probably lead to enactment of a scaled-down version of this.
President Trump’s schedule (EST):
11:10 PM: Meets with the Vietnamese Communist Party General Secretary and
the President of Vietnam at the presidential palace in Hanoi, Vietnam;
11:45 PM: Signs commercial trade agreements;
12:15 AM: Meets with Vietnam’s Prime Minister;
6:30 AM: Greets North Korean dictator Kim Jong-un;
6:40 AM: Meets one-on-one with Kim Jong-un; and
7:00 AM: Has dinner with Kim Jong-un.
All times are Eastern Standard Time, 12 hours behind Vietnam time.
“Trump Undermines Top Trade Adviser as He Pushes for China Deal.” Yesterday’s New York Times article led with:
WASHINGTON — President Trump has signaled that he is moving toward peace with China in a trade standoff that has rattled markets and businesses globally. But as he backs off his threat to impose higher tariffs, the president’s relationship with his own trade negotiator is now showing signs of strain.
The situation has left Mr. Trump’s trade representative, Robert Lighthizer, who is both an ardent supporter of the president and a longtime China critic, in an uncomfortable bind. While broad tariffs on Chinese imports brought Beijing to the negotiating table, Mr. Trump has grown impatient with the talks, and a consensus is growing in Washington that Mr. Trump will ultimately accept a weak deal.
And despite the lack of a transformative arrangement he once promised, the president has begun dangling the idea of a “signing summit” with President Xi Jinping of China at Mar-a-Lago, Mr. Trump’s Florida resort. As a result, the president is undermining Mr. Lighthizer as he tries to pressure China to make big concessions.
“Trump is certainly doing his negotiating team no favors by undercutting them in public,” said Eswar Prasad, a trade expert and the former head of the China division of the International Monetary Fund. The president’s actions, he said, “weakens rather than fortifies Lighthizer’s leverage.”
On Wednesday, Mr. Lighthizer will testify before House lawmakers, where he will have to credibly defend a pact that is shaping up to be less ambitious than he might have hoped.
USTR Lighthizer will testify at 10 AM today before the House Ways and Means Committee, live here. I have long predicted that President Trump would cut a deal with China that avoids additional tariffs and which eventually backs down from existing tariffs.
“Drug Makers Try to Justify Prescription Prices to Senators at Hearing.” Yesterday’s New York Times article led with:
WASHINGTON — Pharmaceutical executives, testifying before Congress, could not readily explain on Tuesday why the prices for many brand-name prescription drugs were much higher in the United States than in other developed countries.
“It is almost as if the taxpayer has ‘stupid’ written on their face,” Senator Bill Cassidy, Republican of Louisiana, told the seven executives, who faced a barrage of questions and criticism at a three-hour hearing of the Senate Finance Committee.
Mr. Cassidy joined two other Republican senators, Charles E. Grassley of Iowa and John Cornyn of Texas, and all the Democrats on the panel in expressing deep concern about constituents who could not afford the drugs they needed to survive.
Senator Robert Menendez, Democrat of New Jersey, the home to many drug and biotechnology companies, offered what he described as “a friendly warning” to the witnesses. “If you don’t take meaningful action to reduce prescription drug prices,” he said, “policymakers are going to do it for you.”
Bipartisan Rx pricing bills are very likely to pass each house this year. The only question is whether the House and Senate can support the same bill and whether President Trump will sign it. Often members of Congress clamor to vote for bills they hope won’t be enacted because it would cut off campaign finance.