The Hill’s Morning Report — More war and US recession ahead?
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President Biden tried to navigate a pair of gloomy warnings on Wednesday.
Russian President Vladimir Putin ramped up his nuclear and other threats against Ukraine and the West, and the chairman of the Federal Reserve hours later foreshadowed a “painful” U.S. economic downturn as collateral damage in a fight against inflation.
The consequences of governing during global unrest and domestic economic jitters in an election year could spell political pain for Biden and his party as well as for leaders in European capitals in the days ahead.
Speaking in New York City to the United Nations General Assembly, Biden said Russia has “shamelessly violated” the body’s basic tenets during its seven-month war with Ukraine and summoned nations to stand firmly behind Ukrainian resistance. Because Russia and ally China have veto power as members of the U.N. Security Council, the world body’s authority against Russia is limited.
Reuters: Ukrainian President Volodymyr Zelensky, speaking to U.N. leaders remotely, demanded a special tribunal to impose “just punishment” on Russia.
Biden pointed to Putin’s Wednesday announcement ordering a partial mobilization of military reservists, an unpopular step that triggered immediate protests in Russia. He also condemned Putin’s nuclear threats aimed at Europe, saying the Russian president showed “reckless disregard” for his country’s responsibilities as a signer of the Treaty on Non-Proliferation of Nuclear Weapons.
Biden, who has promised “consequences” but broached no timeline in reaction to Putin’s struggling war strategy, criticized Russia’s significant escalation using “sham referenda” as a way to annex territory in Ukraine that it has forcibly occupied since February and that Ukrainian forces want back (The New York Times).
“We will stand in solidarity against Russia’s aggression, period,” Biden vowed.
In Washington, central bank Chairman Jerome Powell announcedthe Fed is raising its benchmark interest rate by another three-quarters of a percentage point and noted that the war in Ukraine helped spark rising U.S. energy prices, added to supply chain disruptions and helped trigger inflationary pressures that linger. Food shortages are another consequence of the war in Ukraine and Biden on Wednesday pledged $2.9 billion to tackle global food security and climate change.
The Fed’s hikes aimed at constraining demand have raised mortgage rates and slowed the housing market, curbed some hiring and reined in economic output. The combination of the Fed’s actions should eventually lead to lower inflation, economists agree, but anemic U.S. growth and even a recession are now woven into some forecasts.
Inflation has been stubbornly persistent since the Fed’s rate hikes began, and central bank officials have pledged to continue to raise the costs of borrowing until they see clear signs of slowing at or near the Fed’s target rate of 2 percent, The Hill’s Sylvan Lane reports. Prices continue to increase at more than three times that target.
“We have got to get inflation behind us,” Powell said during a news conference. “I wish there were a painless way to do that; there isn’t.”
▪ MarketWatch: The Fed’s forecast for rising unemployment signals recession ahead. Or does it?
▪ CNBC: DoubleLine Capital CEO Jeffrey Gundlach: “I do think the unemployment rate is going to go up and I do think we’re headed to a recession. … But now [the Fed is] so committed to this 2 percent that I think the odds of a recession in 2023 are very high. I mean, I would put them at 75 percent.”
Former Treasury Secretary Larry Summers, a Democrat and frequent critic of what he describes as the Fed’s overly rosy outlook since last year, tweeted his latest reactions to Wednesday’s data, writing, “Happy to bet anyone that we see 6 months of unemployment above 5 [percent] before we see 6 months of inflation below 2.5.”
Related Articles
▪ The Wall Street Journal: Putin turns to familiar escalation playbook.
▪ Reuters: United Nations showdown looms today between Russian foreign minister and the West over atrocities in Ukraine.
▪ The New York Times: North Korea on Thursday denied U.S. claims it is selling arms to Russia; denounced “reckless” rumor.
▪ The Hill: Putin takes a big risk by mobilizing a larger military force for the Ukraine war.
▪ The Wall Street Journal: How the Fed’s rate increases will hit Americans’ monthly budgets.
LEADING THE DAY
➤ POLITICS & INVESTIGATIONS
Former President Trump on Wednesday found himself newly pressured by an ongoing Justice Department investigation and by a lawsuit alleging fraud brought by the New York attorney general.
A federal appeals court backed the Justice Department and allowed the government to resume a criminal investigation using documents marked as classified that were seized from Trump’s residence last month, blocking for now a lower court’s order that had strictly limited the investigation into Trump’s handling of government materials (The New York Times).
New York Attorney General Letitia James (D) announced that her office is suing Trump and his company, alleging they padded his net worth by billions of dollars by manipulating the value of prized assets including golf courses, hotels and his homes at Trump Tower and Mar-a-Lago.
James dubbed it “the art of the steal” and is seeking repayment of at least $250 million she alleges the Trumps pocketed from the scheme. The attorney general’s lawsuit, filed in state court in New York, is the culmination of the Democrat’s three-year civil investigation of Trump and the Trump Organization. Trump’s three eldest children, Donald Trump Jr., Ivanka Trump and Eric Trump, were also named as defendants, along with two longtime company executives, Allen Weisselberg and Jeffrey McConney (The Hill).
▪ The Washington Post: Five takeaways from the New York attorney general’s sweeping lawsuit against Trump.
▪ ABC News: New York attorney general files a $250 million lawsuit against Trump for defrauding lenders, others.
▪ The New York Times: Trump accused of overvaluing his assets in New York lawsuit.
▪ Politico: Trump: I could declassify documents by thinking about it.
Ginni Thomas, wife of Supreme Court Justice Clarence Thomas, has agreed to an interview with the Jan. 6 select committee (CNN). The committee previously obtained emails between Thomas and attorney John Eastman, a Trump adviser who counseled the former president that then-Vice President Mike Pence had the power to halt the formal certification of Trump’s 2020 election loss (The Washington Post).
Meanwhile, pro-Trump gubernatorial candidates in critical battleground states are running into a familiar problem, writes The Hill’s Caroline Vakil. Like their House and Senate counterparts, they’re struggling to win a wider audience. In states such as Arizona and Pennsylvania, Republican gubernatorial candidates have made no secret about embracing Trump as they’ve tracked to the right on issues ranging from abortion to the 2020 election. But those hard-right stances threaten to cost them in November, when they’ll need the backing of suburban voters and other more moderate voters to pull them over the finish line.
“When you have candidates who essentially aren’t helping themselves by staking out either extreme positions, or extreme positions on weird issues that only speak to a real core Trump part of the base, it’s not a surprise then that there are going to be struggles,” said Republican strategist Doug Heye.
▪ The Hill’s Niall Stanage: The controversy is deepening over migrant flights undertaken at the behest of Florida Gov. Ron DeSantis (R). Here’s a look at legal issues raised and challenges DeSantis faces — including in a class-action suit filed Tuesday afternoon.
The White House sees the GOP’s fumbled abortion messaging as an opportunity, The Hill’s Alex Gangitano and Amie Parnes write. Biden seeks to use recent GOP messaging — such Sen. Lindsey Graham’s (R-S.C.) 15-week abortion ban — to position Democrats as the party of common sense when it comes to reproductive health care policy.
“For once, I think they’re actually doing it,” Democratic strategist Christy Setzer told The Hill. “On [Capitol] Hill, they’re not taking the bait on legislation like Lindsey Graham’s 15 week ban. They’re calling it out as a nationwide ban, which it is, rather than focusing on the policy details.”
Biden has hit his highest approval ratings in nearly a year, leaving Democrats wondering if he can outlast the fall. Less than 50 days out from Election Day, Biden has seen his approval rise with successes as Republicans scramble to reclaim at least one chamber of Congress.
While many Democrats see less than a pot of gold for their party — “Five points of optimism is a lot for a Democrat to imagine,” as one operative put it — others are hoping the recent gains create a ripple effect for Biden’s re-election prospects. The Hill’s Hanna Trudo and Amie Parnes outline five scenarios that could help Biden in 2024.
▪ The Hill: Why Democrats are trying to make midterms a referendum on Trump, GOP.
IN FOCUS/SHARP TAKES
➤ CONGRESS
The House on Wednesday passed the Presidential Election Reform Act 229-203, with nine Republicans supporting it alongside all Democrats. The bill, co-sponsored by Reps. Liz Cheney (R-Wyo.) and Zoe Lofgren (D-Calif.) — two members of the Jan. 6 select committee — seeks to modernize the Electoral Count Act of 1887.
The bill raises the threshold for members of Congress to object to electoral results, clarifies the vice president’s role during the counting of electoral votes and lays out an expedited court process for election challenges among other changes. It seeks to modernize the very law that supporters of former president Trump tried to manipulate during the Jan. 6, 2021 Capitol insurrection (Politico).
The White House announced its support for the bill in a Wednesday statement, saying “the Administration shares the Congress’ interest in safeguarding the electoral process to preserve the will of the people, as expressed through democratic procedures established by law.”
Speaker Nancy Pelosi (D-Calif.) on Wednesday challenged those opposed to the legislation on the House floor, asking, “How could anyone vote against free and fair elections — the cornerstone of our Constitution?”
“How could anyone vote against our founder’s vision, placing power in the hands of the people?” Pelosi asked. “How could anyone vote against their own constituents, allowing radical politicians to rip away their say in our democracy?”
▪ The Hill: These are the nine House Republicans who voted for the Jan. 6 election reform bill.
Meanwhile, the Senate is working on its own version of an Electoral Count Act reform bill, co-sponsored by Sens. Susan Collins (R-Maine) and Joe Manchin (D-W.Va.). While the Senate proposal addresses many of the same key points as the House legislation, it makes no direct references to Jan. 6 (The Hill).
Senators emphasize the bipartisan nature of their bill, which is co-sponsored by 10 Republicans and 10 Democrats (Punchbowl News).
“We will keep working to advance our bill to correct the flaws in this archaic & ambiguous law,” Collins tweeted Wednesday.
The Senate Electoral Count Act reform bill isn’t the only thing on Manchin’s plate. The West Virginia senator on Wednesday evening unveiled legislative language for his permitting reform proposal, which has drawn bipartisan criticism in the past few weeks.
As The Hill’s Rachel Frazin reports, Manchin’s text includes several provisions previously outlined in a fact sheet, including those that would benefit the controversial Mountain Valley Pipeline that runs through his home state to Virginia. The bill would also limit the timelines for environmental reviews and would require the president to keep a list of 25 energy projects of strategic national importance for 10 years.
Sen. Tim Kaine (D-Va.) said Wednesday that he opposes the permitting agreement over its inclusion of the provision. The section “is completely unacceptable. I was not consulted about it. I will do everything I can to oppose it,” Kaine said.
Meanwhile Sen. Brian Schatz (D-Hawaii) told reporters he is in favor of the bill, stating it would help expedite transmission projects.
Manchin reached an agreement with Senate Majority Leader Charles Schumer (D-N.Y.) to move forward with the permitting reforms in exchange for his support of a massive tax, climate and health care bill that Congress approved in August. But Democrats — who see Manchin’s bill as too lax on environmental regulations — and Republicans alike are now raising concerns.
House Natural Resources Committee Chair Raúl Grijalva (D-Ariz.) released a statement in opposition to the bill.
“My colleagues and I don’t want this,” Grijalva said in the statement. “The communities that are already hit hardest by the fossil fuel industry’s messes certainly don’t want or deserve this. Even Republicans don’t want this.”
Many Republicans, who are still angry at Manchin over his support of Schumer’s bill, are backing an alternative measure sponsored by Sen. Shelley Moore Capito (R-W.Va.) that also aims to speed up environmental review timelines, reports The Hill’s Alexander Bolton. GOP Senators say Manchin’s bill is unlikely to pass if it remains attached to a stopgap government funding bill Schumer plans to bring to the floor next week.
▪The Washington Post: Clash over energy projects could threaten government funding bill.
▪ The Atlantic: Manchin’s new bill could lead to one big climate win.
▪ Houston Chronicle: Manchin moves to speed up energy permitting.
▪ Reuters: Manchin releases permitting bill to speed energy projects.
▪ The New York Times: Manchin’s gas pipeline deal irks both parties, snarling spending bill.
Also on the congressional docket:
A House policing package of four bills heads to the floor after centrists and progressives reached an unlikely preelection deal (Politico).
The House on Wednesday passed a bill that allows spouses who combined their student debts under a federal program to split their loans, sending the legislation to Biden’s desk (The Hill).
GOP senators on Wednesday grilled Biden’s nominee, Julie Rikelman, appointed to the 1st Circuit Court of Appeals in Boston, over her past work leading an abortion advocacy organization. Rikelman previously represented the Mississippi abortion clinic at the center of this year’s Supreme Court case that overturned Roe v. Wade (The Hill).
OPINION
■ Putin is getting desperate. Ukraine and the West must keep the pressure on, by The Washington Post editorial board. https://wapo.st/3xIaATb
■ Putin’s new cannon fodder won’t win the Ukraine war, by James Stavridis, Bloomberg Opinion columnist. https://bloom.bg/3Uv30Fe
WHERE AND WHEN
🍁It’s the first day of autumn!
The House meets at 9 a.m. … 🦴Rep. Tony Cárdenas (D-Calif.) will team up with Cruelty Free International and Homeward Trails Animal Rescue in the Rayburn House Office Building beginning at 11 a.m. for a meet-and-greet with adorable, recently rescued beagles as he touts the pending CARE Act, otherwise known as the Companion Animal Release from Experiments Act, which would require research facilities funded by the National Institutes of Health to craft post-research policies for the adoption of dogs, cats and rabbits.
The Senate convenes at 10 a.m. and resumes consideration of the motion to proceed to the Disclose Act. … Sens. John Cornyn (R-Texas), Mark Kelly (D-Ariz.) and Kyrsten Sinema (D-Ariz.) will speak about the CHIPS and Science Act during a newsmaker event beginning at 10:30 a.m. hosted by Arizona State University and the Washington Business Journal. Information is HERE.
The president will hold a bilateral meeting at 11 a.m. in New York City with President Ferdinand Romualdez Marcos Jr. of the Philippines. Biden will receive a 2:15 p.m. briefing about Hurricane Fiona, damage in Puerto Rico and the government’s response. He will headline a Democratic National Committee reception at 4:40 p.m., after which he will depart the Big Apple and return to the White House, arriving at 7:45 p.m.
Vice President Harris will travel to Milwaukee and meet with a group of young people and local Latino leaders at 1 p.m.. She will address the Democratic Attorneys General Association conference at 2:15 p.m. The vice president will return to Washington this evening.
Economic indicator: The Labor Department will report at 8:30 a.m. on filings for unemployment benefits in the week ending Sept. 17.
Second gentleman Doug Emhoff will meet with state and local leaders for a “Communities in Action: Building a Better North Carolina” event at 10:30 a.m. He will address an Equity in Focus Summit at the Labor Department at 1:50 p.m. Emhoff will host a 4 p.m. roundtable discussion at the vice president’s residence with multi-faith college students about the meaning of Rosh Hashanah, the Jewish New Year.
🖥 Hill.TV’s “Rising” program features news and interviews at http://thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.
ELSEWHERE
➤ INTERNATIONAL
The United States supports protests in Iran, which emerged after a 22-year-old woman died while being held by the morality police for violating the country’s strictly enforced Islamic dress code, Biden said on Wednesday in New York. “Today we stand with the brave citizens and the brave women of Iran, who right now are demonstrating to secure their basic rights.” The president also called out human rights abuses by China, Burma and the Taliban.
Iranian President Ebrahim Raisi announced Wednesday that his country is ready to revive its nuclear agreement with the United States but raised questions about Washington’s commitment to the accord. Speaking at the U.N. General Assembly, Raisi said the United States had already “trampled” on a previous deal when it pulled out of the agreement in 2018 during the Trump administration.
Iran has since revived its nuclear program, which it insists is for peaceful energy purposes. In exchange for an agreement to the terms of a new nuclear deal, Iran is requesting relief on economic sanctions and greater access to global financial markets (Axios).
“There is a great and serious will to resolve all issues” in the nuclear talks, Raisi said, adding, “Our wish is only one thing: observance of commitments.”
The Hill: Biden stresses protecting Good Friday Agreement during his first meeting with British Prime Minister Liz Truss.
Ten prisoners, including Americans, were released from captivity on Wednesday as part of a Russia-Ukraine prisoner swap mediated by Crown Prince Mohammed bin Salman, according to Saudi Arabia’s foreign ministry. Among those released were Alex Drueke, a former U.S. Army staff sergeant who served two tours in Iraq, according to his aunt. Andy Tai Ngoc Huynh, a former U.S. Marine, was also released. They had volunteered to fight in Ukraine and were captured near the city of Kharkiv on June 9 alongside other foreign soldiers (The New York Times).
➤ PANDEMIC & HEALTH
Virus trackers this week are focusing on another COVID-19 strain, which may be more transmissible than BA.5, the dominant omicron subvariant now in circulation. Scientists say the new subvariant, BF.7, has been active in other countries and is making its way to the United States. BF.7 is actually a sublineage of BA.5, according to the Centers for Disease Control and Prevention. Its official name is BA.5.2.1.7, but scientists have shortened it to BF.7 in reporting documents (Fortune). The Food and Drug Administration recently approved Pfizer and Moderna vaccine boosters tailored to BA.4 and BA.5 versions of COVID-19. Federal information to help locate the newest booster doses is HERE.
The Hill: Here are five reasons the COVID-19 pandemic in this country may linger.
Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,055,196. Current average U.S. COVID-19 daily deaths are 356, according to the Centers for Disease Control and Prevention.
➤ HURRICANE FIONA
The death toll in Puerto Rico has risen to eight as Hurricane Fiona, now a Category 4 storm, moves toward Bermuda in the open waters of the Atlantic Ocean. It’s estimated that 1.07 million homes and businesses remain without power in Puerto Rico (CNBC).
Biden on Wednesday approved a major disaster declaration for Puerto Rico, according to Gov. Pedro Pierluisi, which will grant access to emergency assistance for residents affected by the storm(NBC News).
Meteorologists predict Fiona will brush Bermuda and then head north toward Atlantic Canada (The Weather Channel and CNN). The Canadian province of Nova Scotia is braced for the storm’s landfall as officials urge residents to prepare for strong winds, heavy rain and storm surges (CBC and Reuters).
THE CLOSER
And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by some interesting recent quotes in the news, we’re eager to hear from puzzle masters who recognize the darnedest things some leaders have said.
Email your responses to asimendinger@thehill.com and/or kkarisch@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.
Biden, during a TV interview that aired on Sunday, said what is “over”?
His patience with TV interviews
The pandemic
Summer
U.S. economic expansion
Putin on Wednesday told Russians during a televised address, “This is not a bluff.” To what did he refer?
His willingness to use Russia’s nuclear arsenal
Russia’s proposed cease-fire with Ukraine
Kremlin’s offer to donate natural gas to Europe this winter
His booking to wrestle a bear on “Last Hero,” Russian TV’s version of “Survivor”
South Carolina Sen. Lindsey Graham surprised some fellow Republicans during a Monday TV interview when he said what is “not a states’ rights issue”?
National Guard
K-12 public education
Abortion
Gun control
Former British foreign secretary and new Prime Minister Liz Truss, who on Wednesday met with counterparts at the U.N., told reporters in August (and was asked again on Wednesday about her comment) that the “jury’s out” whether _____ is the United Kingdom’s friend or foe?
Germany
The House of Windsor
France
Brexit
Stay Engaged
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