Trump to unveil Medicare drug pricing plan after teasing ‘earth-shattering’ announcement – CBS News
The major “earth-shattering” announcement Donald Trump teased earlier this week in the Oval Office is a “most favored nation” plan to cut Medicare drug prices, sources have told CBS News.
In his first administration, Trump signed an executive order to implement a “most favored nation” clause that would have required Medicare to pay drug companies the lowest price paid in similar countries for some expensive, physician-administered drugs. The Biden administration rescinded the proposal under pressure from hospitals and drug companies.
Trump teased in the Oval Office on Tuesday that in the coming days, he would reveal “a truly earth-shattering and positive development for this country and for the people of this country”. He said:
We’re going to have a very, very big announcement to make – like as big as it gets. It will be one of the most important announcements that have been made in many years about a certain subject.
“The president will make a big and historic announcement on Monday. Until then, everyone can keep guessing!” White House press secretary Karoline Leavitt said coyly.
CBS reports: “Court orders sought by the drug industry and others blocked the Centers for Medicare and Medicaid Services from implementing the proposal in Trump’s first term, saying that the government failed to go through the proper rulemaking steps to create and implement the policy, which was finalized in late 2020.
“The Biden administration abandoned the proposal in 2022, blaming court orders blocking the model and concerns raised by stakeholders, including fears that it could cut off some Medicare beneficiaries from drugs and strain providers.”
Politico reported earlier this week that Trump would direct aides to pursue the initiative to reintroduce the drug pricing plan he wanted in his first term.
Key events
Large investors increased stake in Trump Media by hundreds of millions
Jason Wilson
Large institutional investors have massively increased their holdings of Trump Media and Technology Group (TMTG) in recent months according to SEC filings, with many enlarging their positions by hundreds of millions of dollars.
The revelations raise further questions about big business’s desire to curry favor with Donald Trump and his administration via the enterprises he has maintained or commenced. TMTG runs the Truth Social social media platform – on which the US president himself posts almost daily – as well as financial services and a film and TV streaming service.
Some of the investing funds have prior connections with Trump and Republican political causes. Among those buying in was Charles Schwab Investment Management (Schwab), founded by the Trump associate Charles Schwab.
Critics say that the investments do not reflect any obvious improvement in the business prospects of the company, which lost more than $400m in its 2024 financial results.
Tony Carrk, executive director of Accountable.us, a non-profit that monitors the influence of special influence on US politics, said:
Donald Trump’s refusal to divest from his publicly traded company has predictably prompted huge investments from wealthy special interests that could use a favor from the president.
Institutional Wall Street investors and even a foreign company with business before the administration have effectively offered a form of tribute by bulk purchasing shares in DJT on the open market, which helps juice the value of Trump’s own shares.
At an Oval Office meeting on 11 April, Trump told a group of Nascar drivers of Schwab “he made two and half billion today”, the same day that markets rallied after Trump partly suspended his so-called “liberation day” tariffs announced on 2 April.
Earlier that day, on his Truth Social account, Trump infamously posted ““THIS IS A GREAT TIME TO BUY!!! DJT”, with the post and Schwab’s presence both igniting accusations of market manipulation and “insider trading”.
Trump to unveil Medicare drug pricing plan after teasing ‘earth-shattering’ announcement – CBS News
The major “earth-shattering” announcement Donald Trump teased earlier this week in the Oval Office is a “most favored nation” plan to cut Medicare drug prices, sources have told CBS News.
In his first administration, Trump signed an executive order to implement a “most favored nation” clause that would have required Medicare to pay drug companies the lowest price paid in similar countries for some expensive, physician-administered drugs. The Biden administration rescinded the proposal under pressure from hospitals and drug companies.
Trump teased in the Oval Office on Tuesday that in the coming days, he would reveal “a truly earth-shattering and positive development for this country and for the people of this country”. He said:
We’re going to have a very, very big announcement to make – like as big as it gets. It will be one of the most important announcements that have been made in many years about a certain subject.
“The president will make a big and historic announcement on Monday. Until then, everyone can keep guessing!” White House press secretary Karoline Leavitt said coyly.
CBS reports: “Court orders sought by the drug industry and others blocked the Centers for Medicare and Medicaid Services from implementing the proposal in Trump’s first term, saying that the government failed to go through the proper rulemaking steps to create and implement the policy, which was finalized in late 2020.
“The Biden administration abandoned the proposal in 2022, blaming court orders blocking the model and concerns raised by stakeholders, including fears that it could cut off some Medicare beneficiaries from drugs and strain providers.”
Politico reported earlier this week that Trump would direct aides to pursue the initiative to reintroduce the drug pricing plan he wanted in his first term.
Trump names Fox News host Jeanine Pirro as top DC federal prosecutor
Hugo Lowell and Chris Stein in Washington
Donald Trump said on Thursday he would name Jeanine Pirro, a Fox News host and former state-level prosecutor, to be the interim US attorney for the District of Columbia after a key Republican senator said he would not support the candidate initially selected for the job.
Pirro, a former district attorney of Westchester county, New York, is a diehard Trump supporter whose false claim that the 2020 election was rigged by Dominion Voting Systems was used against Fox in court.
The move to select Pirro to lead the office that prosecutes felonies and national security-related cases in the capital pulled Trump out of a fraught situation after he was forced to withdraw the nomination of Ed Martin, who has been serving as the interim US attorney since the start of Trump’s second term in January.
Interim US attorneys can serve for 120 days until they need to be confirmed permanently by the Senate. If they do not win confirmation, or if the president has not named a successor, the vacancy is filled by the judges who sit on the bench in federal district court in Washington.
Republicans to leave out some of Trump’s tax priorities after failing to build GOP support for deep spending cuts – Politico
In a sign of just how tricky it may be to get Republicans to vote for raising anyone’s taxes, the tax portion of the GOP mega-bill is at risk of unraveling, three people have told Politico.
House ways and means chair Jason Smith is set to meet on Friday with Trump to inform him that the tax portion of the megabill has been limited by the GOP’s inability to build support for deep spending cuts. That means Republicans will have to leave out some of Trump’s tax priorities, according to the people.
It comes a day after House speaker Mike Johnson privately announced to House Republicans that he was scaling down ambitions for the package. He’ll now be seeking $1.5tn in spending cuts and $4tn in tax cuts, down from the $2tn and $4.5tn respectively.
At this new size, writes Politico, it will “present a huge challenge to House Republicans and their ability to include all of their priorities – not to mention the priorities of President Donald Trump”.
Per Politico this morning:
On the chopping block could be a litany of Trump demands, including a permanent extension of the tax cuts passed during his first term, as well as second-term campaign promises to provide tax relief to seniors while also exempting taxes on tips and overtime earnings. Those provisions could end up getting enacted only temporarily, according to four Republican lawmakers, some of whom spoke on the condition of anonymity.
That cake is not yet totally baked: Republican leaders are still exploring a request from Trump to increase income taxes on the highest-earning Americans — from 37 percent to 39.6 percent, the level that prevailed before the 2017 law — in order to make room for more tax cuts elsewhere.
Why is Trump considering raising taxes on millionaires?
Alex Bronzini-Vender
“I actually love the concept,” Donald Trump recently told Time magazine of a proposal circulating within his cabinet to raise taxes upon those earning over $1m. “I don’t want it to be used against me politically, because I’ve seen people lose elections for less, especially with the fake news.”
Few presidential administrations have killed sacred cows at a faster rate than that of Donald Trump. But this really is shocking: a sitting Republican president praising a proposal to raise taxes upon the wealthy, adding only the slight caveat that it would be adversely spun by those in “the fake news”. A tax increase, Trump apparently believes, would be tenable as policy but not as politics.
Perhaps more interesting than Trump’s judgment on the issue, then, is that leading members of his cabinet have endorsed a similar tax hike. Longtime anti-tax activists are panicked. As the Lever recently noted, there’s every reason to believe that serious cracks are appearing in the Republican anti-tax coalition.
First: why? The proposal itself is a brainchild of the conservative American Compass thinktank, which, in a June 2024 white paper, proposed raising taxes upon the wealthy to pay down the American national debt. “The constituency and base of the Republican party is shifting,” Oren Cass, American Compass’s founder, told the Atlantic in April. To extend Trump’s 2017 tax cuts by simply adding $5tn to the American national debt would be, in Cass’s words, “pathetic, embarrassing, and outright cheating”.
Their voices confound the expectation that the party’s “realignment” wing is driving the breakdown of the Republican consensus on tax-cutting. Instead, it’s something much more prosaic: the Trump administration’s economic team has realized that an abnormally large slice of the American debt needs to be refinanced this year.
The Trump administration’s one weird trick to refinance at lower costs than necessary – his “liberation day” tariff announcements – failed. Now, the Republicans have two remaining options: cut spending, or cut the tax-cutters loose.
What does that portend for the future of American conservatism? Whether or not the Trump administration follows through on raising taxes on the wealthy – it probably won’t – the fiscal compact that’s underpinned American conservatism has, at least in the near term, become unsustainable.
What is certain, however, is that the tax-cutting coalition as we know it has become deeply unsustainable. Tax-cutting once unified the Republicans. But, in forcing Trump to choose between taxing the top or deeper austerity for the bottom, it now threatens to blow it apart.
Putin and Trump exchanged second world war anniversary greetings via aides, Kremlin says
Vladimir Putin and Donald Trump congratulated each other with “warm words” on the 80th anniversary of the defeat of Nazi Germany via their aides, the Kremlin said on Friday.
“Through their aides, the Russian president and President Trump exchanged congratulations on the occasion of our common celebration,” Yuri Ushakov, a foreign policy adviser to Putin, told state TV’s Channel One.
“These were warm words, mutual congratulations on our common great celebration,” Ushakov said.
Russia marked the 80th anniversary of the Soviet Union’s victory in the second world war on Friday with a military parade on Moscow’s Red Square attended by dozens of world leaders, including China’s Xi Jinping.
The Tass state news agency reported that Lynne Tracy, the US ambassador to Russia, had not been a spectator at the Moscow parade.
My colleague Jakub Krupa is covering Moscow’s Victory Day parade over on Europe live:
The quote Trump is referring to from George HW Bush comes from the former president’s acceptance speech at the Republican national convention on 18 August 1988.
And my opponent won’t rule out raising taxes. But I will. And the Congress will push me to raise taxes, and I’ll say no, and they’ll push, and I’ll say no, and they’ll push again. And I’ll say to them: Read my lips. No new taxes.
As Jeffrey Frankel writes in our Bush obituary, his tax pledge helped him win the election, and some believe that his reversal on taxes is what cost him re-election in 1992. These extracts will no doubt contain interesting food for thought as GOP leaders fiercely debate Trump’s budget plan:
But Bush’s mistake was that he made that anti-tax pledge in the first place and stuck to it in the first part of his presidency. His courageous 1990 reversal on fiscal policy set the stage for a decade of economic growth that eventually achieved budget surpluses.
The budget deal that Bush reached with congressional Democrats in 1990 may indeed have contributed to his failure to win re-election in 1992. There is no question that the timing was terrible. The move to fiscal discipline coincided with the onset of a recession, probably made the downturn worse than it otherwise would have been, and slowed the subsequent recovery.
Bush actually had known better than to support the claim that tax cuts would reduce the budget deficit by boosting revenues. When he ran against Reagan for the Republican nomination in 1980, he famously called such claims “voodoo economics”. But he put aside his doubts when he agreed to serve as Reagan’s vice-president, and eventually he issued his fateful vow at the Republican National Convention in August 1988, when he accepted the party’s nomination to succeed Reagan. He predicted that Democrats would repeatedly push him to raise taxes, and he swore that he would forever refuse: “Read my lips: no new taxes.”
But the economy at the end of the 1980s was at the peak of the business cycle. This was a proper time to begin addressing the longstanding budget deficit. As Keynes famously said, “The boom, not the slump, is the right time for austerity at the Treasury.” Instead, Bush agreed to double down on the Reagan-era policies that had produced record peacetime deficits. And the bet paid off, in the sense that the tax pledge helped him win the election.
After a year and a half in office, Bush decided to address the long-postponed deficit problem that he had inherited. He entered into difficult negotiations with the congressional leadership. The Democrats controlled both houses of Congress and refused to agree to restrain domestic spending unless taxes also contributed to fiscal consolidation. Thus, in June 1990, Bush admitted that any agreement to cut the deficit would require tax increases.
This was universally viewed as a retraction of his “no new taxes” pledge. The taxes that were raised were, in fact, old taxes. But that was considered a technicality. On 9 October, the House and Senate announced a budget plan, narrowly avoiding a full government shutdown.
Republicans since Bush have followed his lead in one respect: a pattern of pro-cyclical fiscal policy. They engaged in fiscal expansion during the recovery of 2001-07 and then fought Barack Obama’s attempts to respond to the 2007-09 recession with fiscal stimulus. As a result, the recovery from the Great Recession was slower than it had to be, just as had been the case with the 1990-91 recession.
Over the last year Donald Trump has pursued an even more flagrantly pro-cyclical fiscal expansion, with ill-timed tax cuts and spending increases. The result could be an even worse mess than Bush 43 left behind in 2008.
Trump says he is ‘OK’ with Republicans raising taxes on the rich
Donald Trump said he would be “OK” if Republicans in Congress raised the tax rate on the wealthiest Americans, but warned of political consequences.
He wrote on his Truth Social platform: “Republicans should probably not do it, but I’m OK if they do!!!”
The problem with even a “TINY” tax increase for the RICH, which I and all others would graciously accept in order to help the lower and middle income workers, is that the Radical Left Democrat Lunatics would go around screaming,“Read my lips,” the fabled Quote by George Bush the Elder that is said to have cost him the Election. NO, Ross Perot cost him the Election! In any event, Republicans should probably not do it, but I’m OK if they do!!!
He had privately urged House speaker Mike Johnson to raise the tax rate, sources told Reuters on Thursday.
The president suggested an increase to 39.6% from 37% for those earning $2.5m and higher or joint filers earning $5m, with carve-outs for small businesses, one source said.
Trump said in his post that Democrats would seize on “even a ‘TINY’ tax increase for the ‘RICH,’” citing former Republican president George HW Bush, who lost his re-election bid after saying “Read my lips: no new taxes” during his 1988 election campaign. But Trump seems to be confusing raising taxes for regular Americans with raising tax rates for super-rich individuals and corporations, the latter of which is supported by the Democrats.
Republicans in the House and Senate are seeking to extend the 2017 tax cuts enacted during Trump’s first term in the White House that are set to expire this year.
Trump and Republican lawmakers have cited the potential extension as relief for Americans and an economic boost amid Trump’s tariffs on imported goods, and vowed to pass it as part of a larger budget bill this summer.
So far, Johnson and other top Republicans have resisted higher taxes on the wealthy despite pressure from Trump’s populist Maga base.
Trump: China tariffs should be 80%
Graeme Wearden
In other Trump news, the president has begun his Friday morning by posting on Truth Social about his tariffs on Chinese goods.
He wrote:
80% Tariff on China seems right! Up to Scott B.
Scott B is presumably Treasury secretary Bessent, who is due to meet with officials from China in Switzerland this weekend to discuss the trade war.
An 80% tariff would be a notable reduction on the 145% which Trump has imposed last month, but would still make it significantly more expensive for US companies to import goods from China.
Trump has also urged Beijing to open up its markets, posting:
CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!
You can follow the latest on our business blog:
Majority of Americans disapprove of Trump’s approach to higher education, poll finds
Good morning and welcome to the US politics blog.
A majority of US adults disapprove of Donald Trump’s handling of issues related to colleges and universities, as his Republican administration escalate threats to cut federal funding unless institutions align with his political agenda.
According to a poll by the Associated Press-NORC Center for Public Affairs Research, 56% of Americans said they disapproved of the US president’s approach to higher education, while about four in 10 expressed approval, which is broadly consistent with his overall job approval ratings.
Trump has tried to impose changes on universities he claims have become hotbeds of liberal ideology and antisemitism, the Associated Press notes. But the poll suggests a disconnect between Trump’s rhetoric and a public that views universities as vital to scientific research and innovation.
In other recent news:
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Donald Trump named Jeanine Pirro, a Fox host, to his administration as interim US attorney for DC after he was forced to admit that his first pick, Ed Martin, did not have the votes to be confirmed.
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The Pentagon has begun removing the 1,000 members of the military who openly identify as trans, and giving those who have yet to openly identify as transgender 30 days to remove themselves.
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The US state department said a solution to be able to deliver food aid to Gaza was “steps away” and an announcement was coming shortly, although it fell short of detailing what the plan would entail.
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Trump congratulated the first American pontiff, Pope Leo XIV, on becoming the head the Catholic Church.