Playbook PM: Threats, red lines and roadblocks stand in way of a deal

From: POLITICO Playbook - Tuesday Oct 26,2021 05:03 pm

Oct 26, 2021

By Rachael Bade, Eli Okun and Garrett Ross

Presented by

TO FIGHT OR DECLARE VICTORY? — Speaker NANCY PELOSI and House Majority Leader STENY HOYER spent the morning encouraging their members to embrace the soon-to-be-released reconciliation framework, which Hoyer says could be released in a matter of hours. There’s a belief in Democratic circles that if they don’t stop negotiating soon, they’ll undercut their own sales pitch to voters.

The party had a similar problem earlier this year with the $1.9 trillion pandemic relief bill: a lack of public awareness about what was in the bill, or what Democrats were trying to do to improve the lives of everyday Americans.

BUT, BUT, BUT — As we warned this morning might happen, some members of the left are starting to balk. Well, one powerful one in particular. Sen. BERNIE SANDERS (I-Vt.) broke his silence about his Medicare expansion getting gutted and articulated his own red line.

“Bottom line is that any reconciliation bill must include serious negotiations of Medicare and the pharmaceutical industry to lower the cost of prescription drugs, and a serious reconciliation bill must include expanding Medicare to cover dental, hearing aids and vision,” he told reporters today. Read Congress Minutes for more

MEANWHILE, THE BILLIONAIRE TAX TAKES A HIT — Democrats in the House are piling on against the billionaire tax Sen. RON WYDEN (D-Ore.) is working frantically to finalize, a clash that our Hill team writes threatens to “sap Dems’ momentum” on reconciliation. Just look at these sorts of quotes:

— “It’s more of a stunt,” Rep. DAN KILDEE (D-Mich.), a Ways and Means Committee member, told our colleagues.

— “I don’t think it's a reliable offset. So I have concerns about that,” House Budget Chair JOHN YARMUTH (D-Ky.) told Jennifer Shutt of CQ Roll Call.

— “The Senate needs to start saying yes or no on issues and stop fucking talking,” Rep. JIMMY GOMEZ (D-Calif.), another tax panel member, also told our Hill team.

THE CONSTITUTIONALITY QUESTION is another big X-factor. What happens if this pay-for gets nixed by the courts? Rich Rubin at WSJ suggests that the tax “would almost certainly face a legal challenge, given the clear incentive for a taxpayer to spend millions in legal fees to save billions on taxes.

“The likely argument: Taxing capital gains that haven’t been realized yet falls outside the income taxes allowed by the 16th Amendment that don’t have to be apportioned based on state population. Under current law, individuals pay capital-gains taxes only when the gain is realized, typically when they sell an asset, such as a stock, closely held business or painting.”

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(IR)RECONCILABLE DIFFERENCES

DAILY MANCHIN — Sen. JOE MANCHIN (D-W.Va.) is feeling the pressure right now — so says the senator himself. “This position, I wouldn’t wish it on anybody,” he told the Economic Club of Washington today. And on Monday night, at a dinner party at Cafe Milano hosted by STEVE CLEMONS, Manchin similarly waxed about being the proverbial skunk at the garden party.

“I have a hard time, and I’m totally out of sync with 48 other Democrats. I’m so, totally out of sync. … I’m just trying to survive in a very, very, very divided Congress and a very divided country. And I don’t know how this is gonna work out, guys. I really don’t. I can’t tell you what’s going to be the end result. I think we’ll get something. I really do.”

Manchin also reminisced at the dinner about the good ol’ days of bipartisanship — “wining and dining” Republicans and Democrats on his houseboat — and evenings full of singing and good cheer. He told a story about bringing together two senators in particular: The first time he had TOM HARKIN on the boat, Harkin, ecstatic to be there, told him he’d never been on the Potomac at night. Then, as Manchin told the room, “here comes TED CRUZ and [Harkin] said, ‘I’m getting off this damn boat!’ And I said, ‘Come on Tom, it’s going to be fun! You’ll be fine!’ He said, ‘Get me another glass of wine!’ … Before the night was over I couldn’t separate them.” And then they introduced legislation together a few days later.

“We just don’t know each other,” Manchin complained of the current Washington climate.

Another fun bit from the evening: President JOE BIDEN apparently calls Manchin “Joe-Joe.” “I have no idea why he calls me Joe-Joe, I swear to God. Do I look like a Joe-Joe? I think it’s because he’s Joe and I’m Joe-Joe.”

Also at the Economic Club, Manchin sounded optimistic about a deal coming together, saying there’s a “high probability” that Democrats will eventually pass a reconciliation spending bill. He was non-committal on whether he’d support a wealth tax, however.

Separately, he told Bloomberg’s Eric Wasson that he opposes the IRS enforcement provisions in the reconciliation bill. “No one should be in anyone’s bank account.”

INTRODUCING CONGRESS MINUTES: Need to follow the action on Capitol Hill blow-by-blow? Check out Minutes, POLITICO’s new platform that delivers the latest exclusives, twists and much more in real time. Get it on your desktop or download the POLITICO mobile app for iOS or Android. GET A FIRST LOOK AT CONGRESS MINUTES HERE.

AMERICA AND THE WORLD

PRE-TRIP NEWS — Biden will meet with French President EMMANUEL MACRON in Rome on Friday, national security adviser JAKE SULLIVAN said at this morning’s briefing. That’ll be their first time together in person since the Australia submarine diplomatic kerfuffle. Biden will also meet with the Italian president and PM.

— Neither Russian President VLADIMIR PUTIN nor Chinese President XI JINPING will attend the G-20 in person, Sullivan said, “largely, it seems, due to Covid-19.” Biden and Xi will meet virtually before the end of the year, though a date hasn’t been set, he added.

— The global minimum tax is expected to be the biggest key deliverable out of the G-20 meeting, along with actions on climate and global health, Sullivan said.

PAGING XI — Biden at today’s ASEAN summit announced a new $100 billion U.S. commitment to the region, per the AP. “The new funding will include money for health spending, a new climate initiative, programs to assist with the economic recovery caused by the coronavirus pandemic and education programs.”

PULLOUT FALLOUT — The Pentagon’s COLIN KAHL said on the Hill today that about 450 Americans are still in Afghanistan, 196 of whom say they want to escape.

DICTATORSHIP DIGEST — Nicaraguan rulers DANIEL ORTEGA and ROSARIO MURILLO have steadily turned their nation into an authoritarian police state, with their power likely to only deepen after an election next month. Nahal Toosi writes that despite U.S. entreaties, the Nicaraguan problem “has come to epitomize two of the key challenges that President Joe Biden says the world’s democracies cannot ignore: the rise of authoritarianism and the spread of corruption.” And the crackdown could worsen the migration picture. Critics are urging the Biden administration to act more forcefully.

FACEBOOK UNDER FIRE

TODAY’S LATEST ROUNDUP of damaging Facebook stories from around the press:

— Facebook assigned the angry reaction emoji five times the weight of a like in its algorithm, priming the platform to tilt toward the most provocative and controversial content and allowing disinformation and toxicity to fester, report WaPo’s Jeremy Merrill and Will Oremus. No surprise: This was better for engagement (and therefore the company’s bottom line), but the company’s own researchers warned that it would be bad for the world, as “Facebook for three years systematically amped up some of the worst of its platform.”

— Facebook rejected or delayed internal suggestions to reduce the prevalence of anti-vaccine conspiracy theories and misinformation on its platform this spring, report AP’s David Klepper and Amanda Seitz. “Facebook’s response raises questions about whether the company prioritized controversy and division over the health of its users.”

— Facebook has been trying, unsuccessfully, since January to land a bold-face Democratic name to be one of its top lobbyists in Washington, report WSJ’s Julie Bykowicz, Brody Mullins and Emily Glazer. The company is trying to fill more than a dozen D.C. jobs with people from both parties, but it’s particularly struggled to get Democratic lobbyists on board, having hired only one all year. VALERIE JARRETT is among those who have said no. And three Democrats have left recently.

— One of the biggest legal questions for Facebook is whether the SEC will take major action, like fining the company or punishing its leaders for misleading investors, based on FRANCES HAUGEN’s whistleblower info and other complaints. “A case from securities regulators is probably far from a slam dunk, several legal experts said,” writes NYT’s Cecilia Kang , and there would be plenty of hurdles to holding top executives accountable. But even starting an investigation would pose issues for the company.

VA GOV RACE

JOE WHO? — Even though they’ll be campaigning together tonight, TERRY MCAULIFFE barely mentions Biden on the campaign trail in the Virginia gubernatorial race, NYT’s Lisa Lerer reports from Reston. “Mr. Biden has loomed as the unnamed president just offstage: largely ignored in favor of his predecessor, though his own performance is a major factor in the closeness of the race and could play a big role in its outcome.”

POLITICS ROUNDUP

2022 WATCH — For the first time this cycle, the NRCC’s internal polling shows Republicans ahead of Democrats on a generic congressional ballot in battleground districts, Ally Mutnick and Anthony Adragna report in Congress Minutes. That includes an 8-point edge among independents, a 3-point lead with college-educated white voters and a tie among Hispanics.

DEEP DIVE — As KYLE RITTENHOUSE prepares to stand trial on murder charges next month, Charles Homans has a big feature for the NYT Magazine on what happened in Kenosha, Wis. — and what it says about our dangerous political moment. The paramilitaries like Rittenhouse who arrived in Kenosha weren’t really unique to the place, he writes: “The city had simply been first to experience the inevitable consequences of a moment when partisan politics, rather than providing an alternative to political violence, had become an accelerant of it.”

2024 WATCH — Kansas City is planning to bid for the next Republican National Convention, per The Kansas City Star’s Anna Spoerre.

POLICY CORNER

INFLATION WATCH — Persistently high inflation and the related supply chain crisis have posed unexpected challenges to the White House, which is scrambling to frame its legislative agenda as a tool to fight rising prices, reports NYT’s Jim Tankersley. Inflation increasingly threatens Biden’s plans, in both politics and policy, although “[t]he president and his top advisers remain confident that price growth will start to fall well before the midterms.”

CLIMATE FILES — Immigration arrests within the U.S. dropped to a decade low in the past fiscal year, WaPo’s Nick Miroff and Maria Sacchetti report. ICE data showed 72,000 administrative arrests — about half the number from the first few years of the Trump administration. That’s largely due to a different prioritization scheme put into place by the Biden administration.

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THE PANDEMIC

HAPPENING TODAY — An FDA advisory panel is meeting to discuss whether to authorize the Pfizer Covid-19 vaccine for children ages 5 to 11. If the FDA and the CDC sign off, kids could start getting jabbed as soon as the next couple of weeks. More from CBS

STEPPING UP ABROAD — The White House has helped broker a deal for the African Union to buy as many as 110 million doses of Moderna’s vaccine, Reuters’ Jeff Mason reports. That’ll be possible in part because the U.S. is giving up its spot in line, delaying the arrival of 33 million doses intended to come here.

JAN. 6 AND ITS AFTERMATH

SELECT COMMITTEE LATEST — CNN’s Kaitlan Collins reports that at least five former Trump administration staffers have voluntarily sat for interviews with the House Jan. 6 committee, which is “often looking for context on what happened inside the West Wing before the insurrection on January 6.”

PLAYBOOKERS

STAFFING UP — The White House officially announced several nominations: Jessica Rosenworcel as FCC chair and Gigi Sohn as a commissioner, Alan Davidson to head Commerce’s National Telecommunications and Information Administration ( more on these noms, as scooped by our John Hendel), Kathi Vidal as undersecretary of Commerce for intellectual property and director of the U.S. Patent and Trademark Office, and Laurel Blatchford as controller of the Office of Federal Financial Management at OMB.

TRANSITION — Allyson Baker is now a partner at Paul Hastings LLP, heading the Consumer Financial Protection Bureau practice. She most recently was a partner at Venable, and is a CFPB and DOJ alum.

BONUS BIRTHDAY: Rep. Troy Carter (D-La.)