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Dems hatch plan to pay for soft infrastructure with renegotiated drug prices

Senate Democrats have a new pay-for to finance a "soft" infrastructure bill: renegotiating Medicare prescription drug prices to save $600 billion — setting up a battle between progressives and well-capitalized drug companies.

Why it matters: By targeting pharma, Democrats are opening up a funding stream President Biden didn't initially include in his $4 trillion Build Back Better agenda. It relied on hiking taxes on corporations and Americans earning over $400,000.

  • Democrats also pick a fight with an industry prepared to spend millions to fend off attempts to alter its lucrative reimbursement rates.
  • Using drug-price savings to finance an already complex legislative package adds another powerful player to a game with no margin for error — complicating final passage of the legislation.

What they are saying: “It's time that the pharmaceutical industry realizes that the federal budget is not a cow to be milked,” Sen. Elizabeth Warren (D-Mass.) told Axios.

  • Sen. Bernie Sanders (I-Vt.), chair of the Senate Budget Committee, not only confirmed the $600 billion figure but suggested it was slightly higher.
  • "I am definitely in favor of saving money from pharmaceutical drug prices," said Sen. Joe Manchin (D-W.Va.). “I think Medicare should be competitive. It’s bullshit that Medicaid is and Medicare is not. That doesn’t make any sense at all.”
  • The federal government already exerts its considerable market power to negotiate down Medicaid drug prices.

The big picture: Renegotiating Medicare drug prices has long been a goal of Democratic politics, but the industry has successfully thwarted efforts to cut its profits.

  • In May, the path ahead for the House’s drug pricing bill — HR 3, the technical name for a measure allowing Medicare to negotiate prices — suffered a blow when 10 centrist Democrats signaled their opposition in a letter to Speaker Nancy Pelosi (D-Calif.).
  • In the Senate, any bill would face an even heavier lift, because it would require the support of all 50 Democrats.

Driving the news: Democrats are proceeding with a two-track infrastructure process: a $579 billion infrastructure "hard" package to pay for roads and bridges, and a Democrat-only, $3.5-trillion, tax-and-spending plan covering other concerns like climate change and child care.

  • Biden paid Senate Democrats a lunchtime visit Wednesday to sell both packages. "We’re going to get this done," he later told reporters.
  • Democrats working on the bipartisan component insist they're closing in on a deal, Axios' Alayna Treene reports.
  • "I am optimistic that we can resolve the remaining issues and be in a place for floor action next week," Sen. Chris Coons (D-Del.) said.
  • Sen. Jon Tester (D-Mont.), a key negotiator, echoed the same timeline.

Between the lines: The industry is counting on Democrats like Sen. Bob Menendez (N.J.), whose state is home to many drug companies, to fend off any challenges. Menendez was noncommittal.

  • "I got to look at the whole package," he told Axios.
  • "They will be at the table and participate in some way. What this is, and what’s the amount? That’s an open question."
  • His Democratic colleague from New Jersey, Sen. Cory Booker, appeared more open to the proposal.
  • "It’s an aberration of the free market not to be able to negotiate for drug prices," Booker told Axios.

American Carissa Moore wins first-ever women's Olympic gold in surfing

Team USA's Carissa Moore won gold in the first-ever Olympic women's surfing final, at the Tokyo Games on Tuesday.

The big picture: Brazil's Italo Ferreira won the gold medal in the inaugural men's Olympic surfing contest. The finals were brought forward a day due to the threat of Tropical Storm Nepartak.

Editor's note: This a breaking news story. Please check back for updates.

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Editor's note: This a breaking news story. Please check back for updates.

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Editor's note: This a breaking news story. Please check back for updates.

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What's happening: Lake Powell, the second largest reservoir in the U.S., has fallen 3,554 feet in elevation, leaving the crucial reservoir on the Colorado River, at 33% capacity — the lowest since it was filled over half a century ago, new U.S. Bureau of Reclamation data shows.

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Details: South Korean President Moon Jae-in and North Korean leader Kim Jong-un agreed to "restore mutual confidence and develop their relationships again as soon as possible," South Korea's Blue House spokesperson Park Soo Hyun said in a televised briefing, AP notes.

  • This followed an exchange of letters between the two leaders since April.

Go deeper: Kim Jong Un says prepare for "dialogue and confrontation" with U.S.

Editor's note: This a breaking news story. Please check back for updates.

U.S. teen Lydia Jacoby wins Olympic gold medal in 100m breaststroke at Tokyo Games

Team USA's 17-year-old swimmer Lydia Jacoby has won the Olympic gold medal in the women's 100-meter breaststroke at the Tokyo Games.

Of note: The Alaskan is the first American woman to win an Olympic gold medal in Tokyo, and she beat Lilly King into second place.

Editor's note: This a breaking news story. Please check back for updates.

Pelosi expected to extend proxy voting as Delta variant surges

House Speaker Nancy Pelosi (D-Calif.) is expected to extend proxy voting through the fall — and potentially until the end of the year — Democratic lawmakers and aides tell Axios.

Why it matters: The spread of the Delta variant has alarmed both members and staffers anxious about interacting with the unvaccinated. Pelosi’s anticipated move — continuing an emergency COVID-19 measure enacted last year so lawmakers could vote remotely — is aimed at allaying those concerns.

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Jan. 6 panel to paint haunting scene of Capitol attack with graphic footage

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Why it matters: The nine-member panel will not only hear from four police officers on the grounds that day, but show graphic video footage similar to the chilling 13-minute video Democrats aired during Donald Trump's second impeachment trial.

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