| | | | |  | | By Ryan Lizza and Eugene Daniels | | | With help from Eli Okun and Garrett Ross
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In a major victory for Senate Democrats, Sen. Kyrsten Sinema (D-Ariz.) and Majority Leader Chuck Schumer reached a deal last night to secure her vote for the reconciliation bill. | Drew Angerer/Getty Images | |  | DRIVING THE DAY | | NEW JOBS REPORT— The July unemployment report drops at 8:30 a.m. The economy added 372,000 jobs in June, and economists are predicting a gain of 250,000 jobs for July. Yesterday, the White House called the anticipated drop an expected "transition" from "record-high-breaking jobs numbers" to "stable and steady growth." SINEMA ON BOARD — Sen. KYRSTEN SINEMA (D-Ariz.) and Majority Leader CHUCK SCHUMER reached a deal last night to secure her vote for the reconciliation bill. In the end, she wasn't hard to get. Democrats wanted to raise $14 billion by narrowing the carried interest loophole . Sinema wanted the provision removed. Instead, Burgess Everett and Marianne Levine report , Democrats added "a new 1 percent excise tax on stock buybacks that will bring in $73 billion, far more than the $14 billion raised by the carried interest provision, according to a Democrat familiar with the deal." What else she got: "The deal with Sinema also adds roughly $5 billion in drought resiliency to the bill, according to another person familiar, and changes portions of the corporate minimum tax structure to remove accelerated depreciation of investments from the agreement. That depreciation-related change will cost about $40 billion. All told, the agreement with Sinema is expected to increase the bill's original $300 billion deficit reduction figure." WSJ's Andrew Duehren adds : "Under the changes negotiated with Ms. Sinema, Democrats will pare back elements of a 15% minimum tax on large, profitable corporations. … Manufacturers had raised concerns that the original corporate minimum tax proposal would negatively affect their businesses by deferring or denying the benefit of accelerated depreciation. The changed deal would preserve the benefit of accelerated depreciation for at least some manufacturers, according to people familiar with the deal." Burgess and Marianne also note this interesting bit of timing: "And it comes hours after [Sinema] was on the floor whipping colleagues to support the final confirmation of ROOPALI DESAI, her nominee to fill an open circuit court judgeship. Desai was nominated only two months ago, a lightning-quick confirmation for the Senate." Now what? Senators will take today off as Byrd Bath discussions continue (see below). Schumer said he would move forward with the bill on Saturday, and warned of "some late nights and extended debates." Sinema's statement: "We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate's budget reconciliation legislation." And she added a very important caveat: "Subject to the parliamentarian's review, I'll move forward." SPEAKING OF THAT — The biggest remaining obstacle for the Democrats is now Senate Parliamentarian ELIZABETH MACDONOUGH, who will continue to host Democratic and Republican aides behind closed doors today (no press allowed) to scrub the reconciliation bill for potential violations of the Byrd Rule. MacDonough broke the hearts of progressives on several occasions last year, including when she nixed the minimum wage from the Covid relief bill, which was passed using reconciliation, and rejected three different versions of immigration reform from the Democratic reconciliation bill that was eventually scrapped in December. Republican budget nerds reviewing the latest reconciliation bill still believe they can knock out certain provisions. On Thursday, for the latest episode of the Playbook Deep Dive podcast , we sat down with two of the GOP's leading experts on the process: ERIC UELAND, who spent 25 years in the Senate, including as staff director of the Budget Committee, and lobbyist GREG D'ANGELO , who spent nearly a decade on the committee. Both men were intimately involved with drafting language for reconciliation bills in the Trump years — including the successful effort to use reconciliation to open the Arctic National Wildlife Refuge to oil drilling and ending the individual mandate in Obamacare.
|  | The fight over the individual mandate is instructive. MacDonough rejected the original GOP plan to repeal the legal requirement to have coverage, which she argued ran afoul of reconciliation rules because the policy effect of repeal outweighed any budgetary effect, one of the core tests of what's allowed in a reconciliation bill. Democrats thought they had won the fight. But D'Angelo returned to MacDonough with a new idea: Rather than eliminating the mandate, what if they simply eliminated the tax penalty used to enforce it? MacDonough agreed that keeping the mandate on the books but dialing the penalty down to zero was within the rules. (Her guidance on the issue led to a heated exchange behind closed doors when Democratic staff learned of what they perceived as her reversal.) In the current Byrd Bath debate, D'Angelo said he "would focus like a laser" on three policies. 1. The drug negotiation price setting program in the Democratic bill. The policy allows Medicare to negotiate prescription drug prices, which would bring costs down for beneficiaires. To expand those savings to Americans outside of Medicare, pharmaceutical companies would have to offer prescription drugs to private insurers at the Medicare prices or face a 95% excise tax. "It's a tax penalty that raises no federal revenue," D'Angelo said. "I.E. has no budget effect, and it appears designed solely for the purpose and intent of altering behavior: forcing drug makers to the table. So I'd argue it's not budgetary." If MacDonough can be convinced that it's "merely incidental to the policy motive of forcing manufacturers to the table," then she could strike it. (Democrats say they are confident the policy will survive any challenges.) 2. The repeal of the Trump administration's drug rebate rule. "Questions are raised about whether it's appropriate to come in and in a single sentence, repeal a 300-page regulation, whole cloth," D'Angelo said. "That's a huge policy element to it, despite the huge budgetary effect." 3. Forcing rebates on drug makers that raise prices faster than inflation. "It has sweeping effects with huge costs that are huge policy changes," he said. In this GOP Byrd Bath dream scenario, each domino would bring the bill closer to collapse. Each of these three policies has savings of about $100 million. "If you can knock out one of those or even a portion of those, you dramatically reduce the savings that are projected under this bill," D'Angelo said. "And I think it complicates the deal that the majority appears to have struck." (Manchin has insisted on $300 billion in deficit reduction.) Ueland added: "If enough of these are knocked out or modified, then suddenly you're skirting the edge of not reducing the deficit." The timing: MacDonough's rulings on the prescription drug provisions of the bill could come as early as today, per Burgess and Marianne. Listen to Ueland and D'Angelo talk reconciliation history and strategy on the new episode of Playbook Deep Dive , and subscribe on Apple Podcasts or Spotify . Happy Friday. Thanks for reading Playbook. Drop us a line: Rachael Bade , Eugene Daniels , Ryan Lizza .
| | A message from Blackstone: Blackstone's investment approach is focused on the future. We identify companies that are shaping a stronger economy and help them accelerate their growth. We can deliver for our investors by strengthening the communities in which we live and work. Learn more. | | | BREAKING OVERNIGHT — "China Announces Sanctions on Nancy Pelosi Over Taiwan Trip," Bloomberg CHENEY SWATS AT TRUMP — DICK CHENEY cut an ad for his daughter, Rep. LIZ CHENEY (R-Wyo.), in her reelection primary fight against HARRIET HAGEMAN, who has the support of DONALD TRUMP. In the ad, the former VP stares straight into the camera and delivers a stark rebuke of the former president. What he says: "In our nation's 246-year history, there has never been an individual who is a greater threat to our republic than Donald Trump. He tried to steal the last election using lies and violence to keep himself in power after the voters had rejected him. He is a coward. A real man wouldn't lie to his supporters. He lost his election, and he lost big. I know it. He knows it, and deep down, I think most Republicans know it." Watch the 60-second ad … More from Myah Ward THE FRIDAY READ — Michael Kruse profiles Sen. RAPHAEL WARNOCK (D-Ga.) for POLITICO Magazine: "There's Never Been Anybody Like Him in the United States Senate" NEW INFO ON WALORSKI CRASH — "Police have changed their description of the crash that killed Indiana Republican U.S. Rep. JACKIE WALORSKI , saying Thursday that it was the SUV in which she was a passenger that crossed a state highway's centerline and caused the head-on collision," AP's Tom Davies reports .
| | A message from Blackstone:   At Blackstone, we're investing in tomorrow. That's why we're backing companies and leaders transforming how we connect through technology. | | | | | PRESIDENT JOE BIDEN'S FRIDAY:
10:30 a.m.: The president will receive the President's Daily Brief.
1 p.m.: Biden will sign two bills that will help hold those who commit fraud under Covid-19 small business relief programs accountable.
VP KAMALA HARRIS' FRIDAY:
3 p.m.: The vice president will convene Latina state legislators from Kansas, Arizona, Utah, Nevada, Illinois, New York and Texas to discuss abortion access.
Press secretary KARINE JEAN-PIERRE will brief at 2 p.m.
THE SENATE and HOUSE are out. | | | | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today . | | | | | PHOTO OF THE DAY
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Hungarian PM Viktor Orbán speaks at the Conservative Political Action Conference (CPAC) in Dallas, Texas, on Thursday. | LM Otero/AP Photo | | | PLAYBOOK READS | | ALL POLITICS THE NEW REALITY — "Republicans Begin Adjusting to a Fierce Abortion Backlash," by NYT's Jonathan Weisman and Katie Glueck AUTOCRAT IN AMERICA — Hungarian PM VIKTOR ORBÁN spoke at the Conservative Political Action Conference in Dallas on Thursday night, where he told conservatives that an ideological "battle for Western civilization" would be fought in D.C. and Brussels. Our colleagues Natalie Allison and Lamar Johnson have the report from the ground : "Inside a half-empty convention hall at the start of CPAC, as expected, Orbán received a welcome reception from American activists who seemed unfamiliar with — but intrigued by — his policy of increased government spending to promote traditional marriage and encouraging citizens to have more children." Orbán: "Politics are not enough. … This war is a culture war. We have to revitalize our churches, our families, our universities and our community institutions." "It was a Trump rally with a Hungarian accent," write WaPo's David Weigel and Isaac Arnsdorf . LAKE CEMENTS TRUMP SWEEP — The Trump-backed KARI LAKE clinched the GOP gubernatorial nomination in Arizona, overcoming an early lead from KARRIN TAYLOR ROBSON, who was backed by MIKE PENCE in a race that turned into something of a proxy battle between the two pillars of the party. "Lake won with a narrow advantage, just shy of 3 percentage points," the Arizona Republic's Stacey Barchenger writes .
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| IN TENNESSEE — "Andy Ogles wins crowded Republican primary for 5th Congressional District as Harwell, Winstead concede," by the Nashville Tennessean's Melissa Brown and Liam Adams — "Jason Martin holds lead over JB Smiley in Tennessee's Democratic gubernatorial race," by the Nashville Tennessean's Adam Friedman and Samuel Hardiman SHADES OF 2016 — The rise of DOUG MASTRIANO — the divisive Pennsylvania GOP gubernatorial nominee — is mirroring that of Trump, Holly Otterbein reports . His fellow Republicans are trying to figure out whether he should be shunned or embraced. "Some party insiders are grumbling about what they see as Mastriano's unforced error, largely privately, and a small handful of Republican candidates in competitive districts are distancing themselves from him. But most GOP leaders, at least publicly, appear to be sticking by Mastriano's side." CONGRESS MANCHIN IN THE MIDDLE — Manchin joined all Senate Republicans on Thursday in a vote to "nullify the Biden administration's changes that tightened environmental rules for major projects," Josh Seigel writes . It's expected to fail in the House. COMING SOON — "Schumer's office says he plans to hold vote on tech antitrust bill," by Brendan Bordelon and Josh Sisco NIGHT OF THE HUNTER — FBI Director CHRISTOPHER WRAY told the Senate Judiciary Committee on Thursday that "allegations of an FBI agent's partisan social media posts and efforts to suppress information in the investigation into HUNTER BIDEN'S business activities were 'deeply troubling,'" Kelly Hooper and Josh Gerstein write . POLICY CORNER MONKEYPOX LATEST — While the White House has declared monkeypox a public health emergency, local leaders are struggling to figure out the best response to the outbreak. "As the Centers for Disease Control and Prevention weighs whether to recommend limiting sex partners, health officials in San Francisco, Chicago, New York and other U.S. cities battling surges disproportionately sickening gay men are avoiding calls for sexual restraint, wary of further stigmatizing same-sex intimacy," WaPo's Fenit Nirappil and Amrita Jayakumar report from San Francisco . — FIRST IN PLAYBOOK: Rep. RITCHIE TORRES (D-N.Y.) is sending a letter to HHS Secretary XAVIER BECERRA and CDC Director ROCHELLE WALENSKY today calling on the agencies to publish national demographic data on monkeypox vaccinations. "The government has an obligation not only to expand vaccine supply, which is lagging far behind demand, but also to ensure equity in vaccine distribution," Torres writes. Read the full letter — "How Serious Is Monkeypox?" by NYT's Knvul Sheikh: "This viral illness is not like Covid, but there is cause for concern. Here's how experts are thinking about it now."
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Speaker Nancy Pelosi speaks at a news conference in Tokyo. | Eugene Hoshiko/AP Photo | TENSIONS OVER TAIWAN — At a news conference in Japan early today, Speaker NANCY PELOSI said "the U.S. would continue engaging with Taiwan despite criticism from China," per WSJ's Peter Landers in Tokyo . "We will not allow them to isolate Taiwan," she said. — The U.S. has is postponing a "routine test launch of an Air Force Minuteman III intercontinental ballistic missile to avoid escalating tensions with Beijing," WSJ's Michael Gordon and Nancy Youssef report . — "With 5 Missiles, China Sends Stark Signal to Japan and U.S. on Taiwan," by NYT's Ben Dooley in Tokyo: "By firing into Japanese waters, Beijing is warning that both countries will become targets if they should come to the aid of Taiwan in any conflict." — TOP-ED: Chinese Ambassador to the U.S. QIN GANG writes for WaPo: "Why China objects to Pelosi's visit to Taiwan" — "White House summons Chinese ambassador for rebuke on Taiwan response," by WaPo's Yasmeen Abutaleb: "Ambassador Qin Gang was called to the White House after China launched ballistic missiles in reaction to Pelosi's visit to Taiwan." — "China's Drills Around Taiwan Give Hint About Its Strategy," by WSJ's Charles Hutzler: "Many military analysts and China specialists … think Beijing would try to squeeze rather than flatten Taiwan into submission." GRINER LATEST — "Griner's Guilty Verdict Strengthens Supporters' Resolve," by NYT's Tania Ganguli and Jonathan Abrams JAN. 6 AND ITS AFTERMATH WHO'S TALKING — Members of Trump's legal team have opened up "direct communication with Justice Department officials," CNN's Katelyn Polantz, Kara Scannell, Gabby Orr and Kristen Holmes scoop , "the first sign of talks between the two sides as the criminal probe into January 6, 2021, accelerates." TO PROSECUTE, OR NOT TO PROSECUTE? — Liz Cheney sat down for an interview with CNN's Kasie Hunt , and said she believes the Justice Department will "follow the facts" in its investigation into Trump's actions related to Jan. 6. "Understanding what it means if the facts and the evidence are there, and they decide not to prosecute — how do we then call ourselves a nation of laws?" THE ECONOMY FED UP — Does the U.S. economy need a recession? That's the question many are asking, even as Fed Chair JEROME POWELL insists that the central bank isn't trying to cause one and doesn't think it necessary. "Some economists — including former Treasury Secretary LARRY SUMMERS — say Powell is being much too optimistic about the Fed's ability to tame prices without pushing unemployment much higher," Kate Davidson writes this morning . Summers: "Unless we have a set of very surprising and positive developments, we're not likely to see the inflation rate come all the way down to [the Fed's] target without there being some level of meaningful economic distress." BEYOND THE BELTWAY JONES ORDERED TO PAY $4M — A jury on Thursday decided that ALEX JONES must pay just over $4 million in damages to the parents of a Sandy Hook shooting victim, "capping a stunning and dramatic case that showcased for the public the real-world harm inflicted by viral conspiracy theories," CNN's Oliver Darcy writes . MEDIAWATCH MEET THE NEW BOSS — Puck's Dylan Byers has the details on new CNN CEO CHRIS LICHT's recent trip to Capitol Hill, where he attempted "to convince highly skeptical Republican leaders like MITCH MCCONNELL, KEVIN MCCARTHY, and JOHN THUNE that they would get a fair hearing on his network, and that they should come back on its airwaves." TV TONIGHT — PBS' "Washington Week": Tim Alberta, Carl Hulse, Asma Khalid and Ashley Parker. SUNDAY SO FAR … FOX "Fox News Sunday": Nikki Haley. Panel: Doug Heye, Francesca Chambers, Aishah Hasnie and Mo Elleithee. CNN "State of the Union": Sen. Lindsey Graham (R-S.C.) … Sen. Richard Blumenthal (D-Conn.). Panel: Rep. Colin Allred (D-Texas), Scott Jennings, Ashley Allison and Kristen Soltis Anderson. CNN "Inside Politics": Panel: Kaitlan Collins, Molly Ball and Harry Enten. ABC "This Week": Panel: Jonathan Karl, Chris Christie, Yvette Simpson and Julie Pace. NBC "Meet the Press": Panel: Cornell Belcher, Pat McCrory, Susan Page and Anna Palmer. MSNBC "The Sunday Show": Kathleen Sebelius … Max Boot … Steve Phillips … Rep Sean Patrick Maloney (D-N.Y.) … Trevor Hunnicutt. CBS "Face the Nation": Scott Gottlieb … Mary Daly.
| | | | INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY . | | | | | | | PLAYBOOKERS | | Kari Lake touted a coming red wave in November with a JibJab-esque video featuring Donald Trump, Don Jr., Ron DeSantis and J.D. Vance surfing. Nancy Mace and a few others wished the U.S. Coast Guard a "happy birthday" by posting photos of a Turkish Coast Guard ship. The Paul Pelosi drama continues . Jon Stewart responded to Tucker Carlson calling him "too short to date" with a rather… unexpected dig . Ana Navarro and Alyssa Farah Griffin have officially been named new permanent co-hosts of "The View." SPOTTED at former Trump White House deputy press secretary and deputy comms director Brian Morgenstern's 40th birthday dinner at Cafe Milano on Thursday night: Teresa Morgenstern, Ninio Fetalvo, Samantha Dravis, Katie Pavlich and Gavy Friedson, Neil Alpert and Damon Dickinson and Andy and Jacqueline Newton. WHITE HOUSE ARRIVAL LOUNGE — Kate Rodriguez is now associate director for racial justice and equity for the Domestic Policy Council. She most recently was a legislative assistant for Sen. Sherrod Brown (D-Ore.). MEDIA MOVE — Russell Moore is taking over as editor in chief of Christianity Today. He previously was public theologian at Christianity Today and director of Christianity Today's Public Theology Project. The announcement FIRST IN PLAYBOOK — Meaghan Byrne is now a policy adviser for Pat Ryan's New York congressional campaign. She is a former legislative fellow for Rep. Bonnie Watson Coleman (D-N.J.). TRANSITIONS — Jaymi Light is now U.S. federal government relations strategist at SAS. She previously was a government affairs principal at Cigna, and is a Todd Young alum. … Jay Jariwala is joining Sidley Austin LLP as senior director of regulatory compliance for the food, drug, and medical device compliance and enforcement practice. He previously was a team leader/combination products subject matter expert at the FDA. … Madison West is now senior director of global corporate responsibility at Intel. She most recently was VP for ESG at government contractor Maximus. WEDDINGS — Laura Cummings, a senior consultant working for government clients at Deloitte, and Alex Horkowitz, a Ph.D. student and aspiring biomedical engineer, got married on Saturday at Congressional Country Club in Potomac, Md., surrounded by family and friends and officiated by Horkowitz's cousin Megan O'Neill. The two met at Baylor University in summer 2013 and have been inseparable since. Pic … Another pic — Julia Tavlas, policy and government relations manager at Deloitte and a Trump CEA alum, and Evan Hunt, associate at Simpson Thacher & Bartlett, recently got married in Athens, Greece. The couple met through a mutual friend when they were at Penn. Pic WELCOME TO THE WORLD — Del Quentin Wilber, White House editor for the L.A. Times, and Andrea Messina, EVP and chief development officer for the Humane Rescue Alliance, welcomed Sofia Messina Wilber on July 22. Pic — Alana Yankowitz, VP of marketing and events at The Impact Agency, and Nassif Dow, VP and senior financial adviser at Merrill Lynch, welcomed Margot Louise Dow on Tuesday. HAPPY BIRTHDAY: A.G. Sulzberger … Rep. Mike Doyle (D-Pa.) … Resident Commissioner Jenniffer González-Colón (R-Puerto Rico) … Planned Parenthood's Alexis McGill Johnson … Chief of Protocol for the U.S. Rufus Gifford … POLITICO's Matt Berg and Meredith Jolivert … Ryan Wrasse of Sen. John Thune's (R-S.D.) office … Boston Globe's Jim Puzzanghera … Jeremy Flantzer … Matt Mandel … Kristofer Eisenla … Cary Gibson of Ascendis Pharma A/S … Cicely Simpson … Molly Donlin of Regent Strategies … Laura Chace of ITS America … Caroline Ehlich … Hunter Anne Stoner of HSP Direct … Sharon Weber … Alicia Amling of Temerity Capital Partners … Nick "Rain Man" Raineri … Mark Brunner of Primer.ai … ABC's Luis Martinez … Michael Chandler ... Katie Vlietstra Wonnenberg of Public Private Strategies … Meta's Monique Dorsainvil ... Pete Snyder … former Nevada Gov. Brian Sandoval … Melissa Canu of ICF International Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us at 202-556-3307. Playbook couldn't happen without our editor Mike Zapler, deputy editor Zack Stanton and producers Setota Hailemariam and Bethany Irvine.
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