What to Know in Washington: Trump Readies Kidney Care Revamp

President Donald Trump is set to reboot Medicare’s approach to kidney care, upending the country’s second largest domestic drain on taxpayers.

The president’s announcement this morning will include proposals to steer Medicare patients into cheaper and more convenient home dialysis treatments, according to a source familiar with the plan. Inpatient dialysis is currently one of Medicare’s leading cost drivers.

The move will mark a crucial next step shifting Medicare to value-based care, which seeks better health outcomes at a lower cost. It also could hurt the $34 billion dialysis industry.

The president’s plan will be part of a broad executive order that will also call for a revamp of the nation’s organ transplant system, including efforts to increase organ donations and shorten wait times for transplants. More than 100,000 people are on waiting lists for organ transplants. Read more from Tony Pugh.

Photographer: Prashanth Vishwanathan/Bloomberg

Happening on the Hill

Republican Support for Defense Bill in Doubt: Republican support for the fiscal 2020 defense authorization bill is hanging by a thin thread as the House begins consideration of the measure today. House Armed Services Republicans have already voted against the bill in committee and are bringing their concerns to the floor. They’d want to see changes on overall funding, nuclear weapons and to keep the military prison at Guantanamo Bay open before they vote for the bill.

In one sign of cooperation, the Democratic and Republican staff of the House Armed Services Committee have been sifting through more than 600 amendments to identify those that would be candidates for en bloc packages. En Bloc amendments are crucial for the consideration of the bill. The House Rules Committee last night made in order 439 amendments to the bill, which the House will begin considering today. Roxana Tiron and Megan Howard run down the amendment highlights in today’s BGOV Defense Briefing.

Trump Pick for Largest Appeals Court Confirmed: The Senate picked up its pace on judicial confirmations yesterday by filling another vacancy on the nation’s largest federal appeals court and advancing three district court nominees for final votes. Kirkland & Ellis partner Daniel Bress became the seventh Trump appointment to the U.S. Court of Appeals for the Ninth Circuit, kicking off what Senate watchers expect will be a busy month of judicial vetting and voting. Bress was confirmed 53 to 45, a party line vote in the Republican-led Senate more typical for circuit court confirmations under Trump. Democrats can have more say on district court nominees, so those votes can be less partisan. Read more from Jake Holland.

Retirement Bill’s Backers Face ‘Do or Die’ July: Supporters of the House-passed retirement tax breaks that have struggled to gain traction in the Senate say they have three weeks to convince holdouts it’s now or never. “We were told it’s do or die time,” an industry professional said of the message Senate Majority Leader Mitch McConnell (R-Ky.) shared with those invested in getting the “SECURE Act” signed into law.

Whatever momentum those long-anticipated changes to employer-sponsored retirement plans had after clearing the Democrat-controlled House has long since dissipated. Talk of rewarding businesses with tax credits for creating new 401(k) accounts and allowing workers to wait until age 72 before emptying their nest eggs has since shifted to shouting matches about languishing trade pacts, migrant detention camps, and Trump’s tax returns. Read more from Warren Rojas.

Thompson Prepares Border Crisis Bill: House Homeland Security Chairman Bennie Thompson (D-Miss.) plans to introduce legislation addressing the humanitarian crisis at the border, according to a statement. The bill would ban family separations, establish minimum humanitarian conditions for short-term detention, and require that members of Congress are allowed to enter the facilities, according to a fact sheet from the panel. Read more from Giovanna Bellotti Azevedo.

Meanwhile, the number of migrants crossing the U.S. southern border fell last month, the U.S. said, in the first major test of an immigration deal that Trump negotiated with Mexico after threatening the country with tariffs. About 104,000 migrants were caught after crossing into the U.S. or turned away at the Mexican border in June, compared to 144,000 a month earlier, Customs and Border Protection said in a statement, though levels normally slump in summer. Read more from Josh Wingrove and Justin Sink.

Reining In Tech’s Liability Shield: Senate Judiciary Chairman Lindsey Graham (R-S.C.) said yesterday he wants to limit a liability exemption treasured by internet platforms such as Google and Facebook if they don’t follow industry best practices. The comments by Graham, an ally of Trump, show congressional skepticism of the legal shield, which says the tech companies can’t be sued for content that third parties produce. That protection is coming under fire on the Hill amid episodes of hate speech, misinformation and election interference online. Read more from Ben Brody and Rebecca Kern.

New Data Cop Eyed for Facebook: Facebook, Google and other tech giants would be regulated by a new federal data protection agency under a proposal by a pair of lawmakers. Reps. Anna Eshoo (D-Calif.) and Zoe Lofgren (D-Calif.) are envisioning a new U.S. Data Privacy Agency to regulate data handling by big tech companies, according to a draft legislative framework obtained by Bloomberg Law.

Under the proposal, consumers would have the right to review automated decision-making activities; to delete and move data from one platform to another; and to access data companies collect. Consumers would have the right to directly sue tech companies for privacy harms under the framework. State attorneys general would also have privacy enforcement authority. Read more from Daniel R. Stoller.

Price Disclosures in Ads: Senate Finance Chairman Charles Grassley (R-Iowa) will push to get his bill requiring drugmakers to disclose the price of their products in TV ads after a federal judge blocked a Trump administration move with the same goal. Grassley said he wants the measure in a package of drug pricing and health care cost-cutting legislation slated to reach the Senate floor ahead of Congress’s August break. The legislation could clear the way for the Trump administration to compel drug price disclosures after a judge blocked a proposed regulation t his week, Alex Ruoff reports.

Presidential Probes and Oversight

Schiff Says Barr Trying to Discourage Mueller: House Intelligence Chairman Adam Schiff (D-Calif.) yesterday accused Attorney General William Barr of trying to “discourage” former Special Counsel Robert Mueller from testifying to Congress next week, or otherwise cooperating. “He is nothing if not transparent. And he is transparently the president’s agent and doing the president’s bidding — which is trying to discourage Mueller from cooperating,” he told reporters. Schiff was reacting to Barr’s comments in South Carolina on Monday, when he said he was “disappointed” that Democrats subpoenaed Mueller to testify July 17, suggesting the hearings had been arranged “to create some kind of public spectacle.” Read more from Billy House.

Democrats Seek Testimony of Mueller Deputies: James Quarles and Aaron Zebley have been in talks about testifying behind closed doors to the House Judiciary Committee on the same day Mueller would appear in an open hearing before that panel and the House Intelligence Committee, The Wall Street Journal reports. Discussions of Mueller’s testimony before the two panels—and the possible inclusion of Quarles and Zebley—are ongoing. The Justice Department doesn’t want either to testify, according to a person familiar.

Subpoena Poking Into ‘Personal Life’: Trump’s personal attorneys attacked House Democrats’ demand for records from his outside accounting firm as an unauthorized attempt to pry into his business dealings as they prepare for a showdown Friday in an appeals court. They’re trying to convince a three-judge panel that a federal judge erred in allowing the House Oversight Committee to demand that Trump’s accountant, Mazars USA, turn over records dating back to 2011, including those pertaining to the Trump Organization. Read more from Andrew Harris.

Census Judge Denies Trump’s Bid for New Team: A federal judge rejected a request by the Trump administration to assign a new legal team to a lawsuit that blocked the U.S. from adding a citizenship question to the 2020 census. U.S. District Judge Jesse Furman in Manhattan called the government’s request “patently deficient,” adding that the U.S. had provided “no reasons, let alone ’satisfactory reasons,’ for the substitution of counsel.” He said the government has to show that replacing the team won’t add further delay to the suit.

The ruling reflects Furman’s frustration with a Justice Department that initially rushed the case to the Supreme Court but is now scrambling to comply with Trump’s demand for a new legal strategy to salvage the citizenship query. Read more from Bob Van Voris and Erik Larson.

Elections & Politics

Harris, Warren, Sanders Boost Staff Diversity: Top 2020 Democratic presidential candidates this year bolstered the share of staffers in their Senate offices who are women and minorities, according to a report obtained by Bloomberg News. Sens. Elizabeth Warren (D-Mass.), Kamala Harris (D-Calif.) and Bernie Sanders (I-Vt.) all hired more diverse staffers in their congressional offices. Women and minorities are key constituencies for both the Democratic nomination and the general election against Trump next year. Read more from Naomi Nix.

Bidens Got $15M Since Leaving White House: Democratic presidential front-runner Joe Biden and his wife Jill earned over $15 million during their first two years out of the White House, according to a financial disclosure filed yesterday. The bulk of the Bidens’ income came from payments for the memoirs they have each written since the former vice president left office in January 2017. The pair in 2017 earned a total of $11 million, with almost $4.6 million in 2018, Jennifer Epstein reports.

Murphy Wins GOP Primary for N.C. Seat: Greg Murphy, a state representative and urologist, has won the Republican primary runoff for North Carolina’s third congressional district, the Associated Press projects, and is favored to win in the Sept. 10 special election over Allen Thomas (D). Murphy defeated Joan Perry, a pediatrician and a first-time candidate; both had advanced to the runoff after the first-round Republican primary vote in April, Greg Sullivan reports.

AOC Sued Over Twitter Blocking: Rep. Alexandria Ocasio-Cortez (D-N.Y.) shouldn’t get to block Twitter users, according to a suit filed hours after a federal appeals court banned Trump from doing so. Ocasio-Cortez allegedly blocked Dov Hikind from viewing her tweets in violation of his First Amendment rights, Hikind said in his lawsuit filed July 9 in a New York federal court. Trump can’t block critics from responding to his posts because it’s effectively a form of viewpoint discrimination, the U.S. Court of Appeals for the Second Circuit said. Read more from Jennifer Bennett.

What Else to Know Today

Darroch Resigns: Kim Darroch has decided to resign as British Ambassador to the United States, according to an emailed statement. “Since the leak of official documents from this Embassy there has been a great deal of speculation surrounding my position and the duration of my remaining term as ambassador,” he said in a letter. The “current situation is making it impossible for me to carry out my role as I would like,” Darroch wrote.

Obamacare Judges Mull Next Steps: The federal judge in Texas who declared President Barack Obama’s signature health-care law unconstitutional might have to take another look at his decision, judges reviewing the ruling hinted yesterday. During oral arguments in the U.S. Court of Appeals for the Fifth Circuit, the two Republican-appointed judges on the three-judge panel seemed sympathetic to Texas and the 18 other Republican-led states that sued to invalidate the Affordable Care Act. They argued the law’s mandate to buy insurance is now unlawful because Congress dropped the tax penalty to zero in 2017.

But the judges questioned what would happen if they affirm U.S. District Court for the Northern District of Texas Judge Reed O’Connor’s decision. Would Obamacare automatically die? Did O’Connor issue an injunction when he said the entire law is invalid? Should he answer those questions himself? One judge on the panel strongly indicated that these are issues for a lower court to decide. Another judge suggested sending the case back to O’Connor. Read more from Lydia Wheeler.

China Talks Resume: The U.S. stance on Hong Kong’s protests, arms sales to Taiwan, and Huawei’s fate are among issues in play alongside trade as the U.S. and China resume talks. The U.S. agreed to tone down criticism of Chinese rule in Hong Kong recently in order to restart trade talks, according to a Financial Times report today. That concession to President Xi Jinping contrasts with the continued restrictions on Huawei, which Commerce Secretary Wilbur Ross said yesterday is still on the ‘entity list’ limiting it s access to U.S. goods and services.

The phone call between the two sides yesterday was the first confirmed contact since Xi and Trump met last month and agreed to resume talks. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke on the phone with their Chinese counterparts Chinese Vice Premier Liu He and Commerce Minister Zhong Shan, according to an emailed statement from a U.S. government official who declined to be named in line with policy. Jenny Leonard and James Mayger have the latest.

Meanwhile, former Defense Secretary Ash Carter said he backed efforts to blacklist Huawei Technologies on national security concerns, saying it’s reasonable to prevent U.S. firms from working with the Chinese firm. The Trump administration says Huawei technology could give China’s government a backdoor to eavesdrop on sensitive communications and that Chinese law exposes the company to interference by the government in Beijing, accusations that Huawei rejects. Read more from Jerrell Dillard.

Trump’s Dollar Concern Shapes Fed Picks: Trump has grown concerned that the strengthening U.S. dollar is a threat to his economic agenda and has asked aides to cast about for ways to weaken the greenback, according to people familiar with the matter. Trump asked about the dollar in job interviews with both Judy Shelton and Christopher Waller last week, whom he’s selected for seats on the Federal Reserve’s board, the people said. He lamented that the currency’s strength could blunt an economic boom that he expects to carry him to a second term.

The president’s top economic adviser, Larry Kudlow, and Treasury Secretary Steven Mnuchin both oppose any U.S. intervention to weaken the dollar, the people said. Read more from Saleha Mohsin and Jennifer Jacobs.

Participation in Summer Meals Program: Only one in seven children who got free and reduced-price lunch also got summer meals in July 2018, according to new findings from the Food Research and Action Center, Teaganne Finn reports. The Summer Nutrition Programs, administered by the Agriculture Department, provides lunch to students in the months when they’re not in school. However, participation has been on a decline recently, FRAC reports, and improvements to the programs in the reauthorization of the Child Nutrition bill are needed.

“The reauthorization should make new investments in the Summer Nutrition Programs to increase access to summer meals while doing no harm to the current structure of the program,” the report released yesterday said. One of the suggestions from FRAC is increasing the eligibility threshold to 40% from 50%. Currently, summer meal sites qualify if 50% of children in a low-income area are eligible for free or reduced priced meals, keeping “many communities where poverty is less concentrated, such as rural and suburban areas, from participating,” the report said.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com

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