Monday Morning Memo - July 11 - O'Donnell & Associates

Good Morning from Weehawken, New Jersey…

It was a mostly slow week in New York State politics as Hochul savored her win and Zeldin named a finance chair while his running mate, Alison Esposito, retired (from her day job that is).

The biggest news was the Working Families Party (WFP) giving their line to Governor Kathy Hochul and Lt. Governor Antonio Delgado. In a statement, the WFP said “our party has never played the role of spoiler and has no intentions of doing so this year.” This was not a surprise; the deal was cut back in May.

Meanwhile, the Joint Commission on Public Ethics (JCOPE) released its final report in the investigation into former Governor Andrew Cuomo’s $5.1 million book deal. The report was critical of Cuomo, pointing to multiple instances where Cuomo misled or strong-armed the ethics commission to gain approval for the lucrative book deal. The report says Cuomo only sought approval for the book after most of it had been written and that he “mischaracterized the book as a continuation of the governor’s prior memoir.” Cuomo “exerted pressure on JCOPE to expedite the approval of the request” and never provided a copy of the transcript to JCOPE, despite their requests. To be clear, JCOPE does not come out of the report looking very good, either. NYS Attorney General Tish James also has an ongoing investigation regarding the book deal.

Back in D.C….

More interesting goings-on in Washington, raising the question (yet again) of whether anything will come from these efforts or not. Eighteenmonths of Democratic rule in Washington inclines towards not. Nonetheless, scaled-back ambitions and the urgency of the clock running out on their majorities have a way of focusing people and renewing hope of a deal. Working to revive President Biden’s stalled agenda, Senate Majority Leader Chuck Schumer introduced text to the Senate Parliamentarian to get the ball rolling on a reconciliation package that, among other things, would allow Medicare to negotiate prescription drug costs. The Parliamentarian must then undertake the formal review process, informally known as the “Byrd Bath”, to ensure the proposal is in line with the Senate’s reconciliation rules. Democratic unanimity on this issue, including Senator Joe Manchin, who has become a roadblock for many of his party’s proposals, explains why Schumer introduced this proposal first. The move is a risk for Senate Democrats and the White House who will be under pressure to come up with a deal now that Schumer has taken the first formal step toward bringing a reconciliation bill to the floor.

To be clear, beginning the reconciliation process does not guarantee any deal will be reached. Democrats will certainly want to address other major policy priorities such as climate provisions and tax reform in the proposal. Manchin has been less receptive on those issues in the past, but negotiations between Schumer and the West Virginia Senator are ongoing.

The text that Manchin and other Senators did agree on would empower Medicare to negotiate drug prices with pharmaceutical manufacturers beginning in 2023, potentially saving the federal government billions of dollars. The plan would also cap out-of-pocket costs at $2,000 annually and allow for monthly payment plans. Other provisions include an “inflation rebate”, a “premium stabilization policy” to prevent ballooning healthcare premiums, provide seniors with free vaccines, and expand co-pay assistance programs. The bill also contains a provision that requires any future administration to continue negotiating prescription drug costs for Medicare recipients.

While the reconciliation package would be a major win for Democrats, it could come at the expense of the China competition bill known as USICA and many other names. Senate Minority Leader Mitch McConnell has promised to kill the bipartisan competitiveness bill if Schumer moves ahead with reconciliation. McConnell offered “Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill.” Schumer is calling McConnell’s bluff and, according to a spokesman, “requested an all-Senators classified briefing from the administration on the global innovation and technology race” to make clear the stakes of not passing USICA.

Even without the political handwringing, passing USICA before the Congressional recess in August will be a tall task. While most Senators agree with the general premise of the bill, boosting domestic manufacturing of semiconductors and other high-tech research to compete with China, negotiations on the details of the proposal have been painstakingly slow. Of the roughly 1,000 line items in the bill, the GOP claims that there are still over 800 items still to be resolved. If the bill does not pass before the end of July, it is unlikely to pass at all.

As the summer campaign season kicks into full swing, the issue of guns is driving the conversation and fundraising for many candidates and voters alike. In June, Congress passed gun legislation with bipartisan support but that was quickly overshadowed by the Supreme Court’s decision to strike down New York’s concealed carry law, handicapping New York and other states as they try to stem the flow of gun violence. The mass shootings in Buffalo, Uvalde, and more recently, Highland Park, have kept this issue at the top of mind for voters all across the country. The Giffords PAC, named after former U.S Rep. Gabby Giffords who narrowly survived an assassination attempt, announced they are investing $10 million this cycle, mainly in Florida, Texas, Georgia, Pennsylvania, Wisconsin, and Colorado to further elevate the issue of gun safety and help Democrats defend their congressional majorities.

President Biden was set to nominate Stephen Chad Meredith to become a federal district judge in Kentucky and the White House had even sent a private “heads up” email that he was set to be nominated. The next day, the Supreme Court overturned Roe v. Wade, and Meredith, an anti-abortion Republican, was never nominated and many on the left were wondering why he was even considered in the first place. The Democratic Governor of Kentucky, Andy Beshear said “it is indefensible” while others have speculated the move could have been a peace offering to Senator Mitch McConnell with the hope that he would not block any further judicial nominations.

While Democrats continue to despair about the House and Senate, some recent polling has been encouraging for their hopes to hold the majority. A poll in Georgia has Senator Raphael Warnock ahead by 10 points against Republican challenger Herschel Walker. In Pennsylvania, FiveThirtyEight has John Fetterman slightly ahead of Dr. Mehmet Oz and in Ohio, Tim Ryan is currently beating J.D. Vance by as much as 12 points in some polls.

Nevertheless, they would not be Democrats if they were not sniping at each other: there is mounting frustration among Democrats aimed towards the White House and President Biden who, they feel, has failed to meet the moment. Recent Supreme Court decisions on abortion, guns, and climate and the Biden Administration’s response, or lack thereof, have reignited frustrations and led dozens of leading politicians and operatives to question the “basic management” of the West Wing. Here’s one account. The President’s defenders have credited him and his management style with being a key factor in getting gun legislation and the infrastructure bill passed with bipartisan support.

Either way, some have begun to wonder and speculate who could lead the Democratic ticket in 2024 should President Biden forgo running for a second term. California Governor Gavin Newsom has been elevating his national profile, being more forceful in his rebuke of Republicans and making his case for why Democrats should be elected, even taking the fight to Republicans on their own turf. Newsom ran ads in Florida over the Fourth of July weekend, looking to draw on the contrasts between his style of governance and that of his Florida counterpart and likely 2024 Republican Presidential candidate, Ron DeSantis.

That said, Biden is still doing better than British Prime Minister Boris Johnson who resigned from office on Thursday following a string of controversies. Despite a defiant tone at what would ultimately become his last Prime Minister’s Questions on Wednesday, Johnson had no choice but to resign after over 50 of his ministers resigned in protest. Johnson will remain as a ‘caretaker’ Prime Minister until a successor is chosen and at the moment, there is no clear favorite.

-Jack O’Donnell

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