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The Hill's Morning Report — House passes spending bill, narrowly avoiding shutdown
Editor’s note: The Hill’s Morning Report is our daily newsletter that dives deep into Washington’s agenda. To subscribe, click here or fill out the box below.
The House on Wednesday passed a short-term funding bill to avert a government shutdown, moving the Friday funding deadline to next week and allowing lawmakers more time to pass an omnibus spending package for the remainder of fiscal 2023.
The so-called continuing resolution (CR) passed the House in a 224-201 vote, and now heads to the Senate, where it must pass and be sent to President Biden’s desk before midnight on Friday to avoid a shutdown. The measure will keep the government funded at current levels through Dec. 23. Senate Appropriations Ranking Member Richard Shelby (R-Ala.) didn’t wade into details about the broader spending deal Wednesday, only saying negotiators now needed to “do some allocation.”
“We’ve made the first big, big, big, big step,” Shelby said.
Senate Majority Leader Charles Schumer (D-N.Y.) said Wednesday that the Senate could pass the measure as soon as Thursday, provided there aren’t any “unwelcome brouhaha” — or actions by one senator that could hold up the bill in exchange for concessions or amendments.
House Republicans largely voted against the one-week stopgap, and House Minority Leader Kevin McCarthy (R-Calif.) is signaling opposition to a broader spending deal, too. This comes in contrast to others in Republican leadership, such as Senate Minority Leader Mitch McConnell (R-Ky.), who has expressed support for an omnibus to be enacted sooner, citing concerns about funding for defense and national security.
“We were basically negotiating with the House Democrats and the Democrats here because some of the House Republicans have not shown as much interest in getting an omnibus,” Shelby told reporters on Wednesday (The Hill and Politico).
McCarthy’s opposition to the omnibus is fueling tensions between Senate and House GOP leaders. As The Hill’s Alexander Bolton reports, McConnell’s Senate allies say that McCarthy’s criticisms are “not helpful” to their efforts to pass the year-end spending package. One GOP senator, who spoke anonymously with The Hill, said McCarthy is making it tougher to wrap up the unfinished business of the 117th Congress and stirring up conservative critics.
“I understand the politics of criticizing McConnell but they need to have a relationship,” the lawmaker said. “McConnell’s got pretty thick skin but I think there’s a way for McCarthy to try to placate conservatives in the House without attacking McConnell.”
McCarthy is also facing scrutiny as he negotiates a fragile path to the Speakership next year despite opposition from a handful of conservatives within his own conference who are resisting all entreaties to alter course for the sake of party unity. It has sparked a number of predictions — some of them more far-fetched than others — about how the day might evolve and who might emerge as the next Speaker if McCarthy falls short.
The Hill’s Emily Brooks and Mike Lillis have mapped out seven scenarios being floated heading into the vote, ranked from least to most likely.
▪ Politico: Come on down? House GOP weighs the right price to topple a speaker.
▪ The Washington Post: Where McCarthy stands with the GOP base.
▪ CNN: McCarthy’s impossible GOP math.
Increased migrant border crossings near El Paso, Texas, are drawing attention back to the border, The Hill’s Rafael Bernal reports, as Congress grapples with must-pass end-of-year legislation that could include an immigration deal. The focus on a chaotic border has fueled calls for draconian measures, including extending the much-criticized Title 42 border control policy, which was ruled illegal by a federal judge last month.
The Hill’s Niall Stanage: A surge of migrants into El Paso is raising new political risks around immigration for the Biden White House.
▪ The Hill: Democrats link surging violence toward LGBTQ community with GOP rhetoric.
▪ The New Republic: House Republicans gear up to investigate the Afghanistan withdrawal.
Related Articles
▪ Roll Call: No one reads congressional committee reports. But will they watch a documentary?
▪ The Atlantic: The crunchy-to-alt-right pipeline shows that those living on the fringe of the left and the right share more in common than you might think.
▪ Washington Monthly: Plenty of appellate and district courts are now acting like the Supremes — blowing up precedents and embracing slipshod legal theories.
▪ The Atlantic: “She Made an Idiot Out of Me”: Conversations with Sen. Kyrsten Sinema’s former canvassers reveal anger and disappointment with the newly Independent senator from Arizona.
LEADING THE DAY
➤ POLITICS
Democrats are quietly discussing plans to propose a compromise state as the nation’s first-in-the-nation primary following vocal concerns about South Carolina from all corners of the party, writes The Hill’s Hanna Trudo. The informal talks between party officials, former campaign workers, strategists, and activists are centering around three states — Georgia, Nevada, and North Carolina — as possible alternatives to kick off the 2024 nominating contest, with proponents citing their ample diversity and general election importance as upsides.
“There are still conversations happening behind the scenes about this,” said Adam Green, co-founder of the Progressive Change Campaign Committee. “The White House put a lot of people in a difficult situation because nobody wants to be fighting the White House on this thing. I think there’s a process right now of conversations happening, people getting ducks in a row, and seeing if there’s a collective effort to make this push.”
When Biden put his thumb on the scale for South Carolina, the state he won handily in 2020, it rankled Democrats who saw the move as politically calculated and shortsighted in planning ahead for a general election that’s likely to be highly competitive in two years. It’s not that Democrats don’t like Biden’s choice, it’s just that they see more viable options in states that check all the same boxes and offer even more potential benefits in their swing state calculations.
The Trump Organization was held in criminal contempt in a secret trial last fall for failing to comply with several grand jury subpoenas and court orders related to a criminal tax fraud investigation, court documents unsealed on Tuesday show. Former President Trump’s company was ordered to pay a $4,000 fine for “willfully disobeying” four subpoenas and three court orders following the one-day contempt trial in October 2021 (The Hill and The New York Times).
Most unsuccessful Arizona statewide Republican nominees have formally contested their opponents’ certified victories, pushing vast allegations in arguing votes should be set aside or adjusted, moves that would flip the outcomes. The Hill’s Zach Schonfeld has a rundown of the election challengers.
The Arizona Republic: What’s next for Kari Lake, Mark Finchem election lawsuits.
In Georgia, Republican Secretary of State Brad Raffensperger is calling on legislators to end the state’s runoff system for general elections, arguing that the process places too heavy a burden on voters and election officials.
“Georgia is one of the only states in [the] country with a General Election Runoff,” Raffensperger said in a Wednesday statement. “We’re also one of the only states that always seems to have a runoff. I’m calling on the General Assembly to visit the topic of the General Election Runoff and consider reforms.”
His comments come just over a week after Georgia held its second Senate runoff election in less than two years, which saw Sen. Raphael Warnock (D) defeat Republican Herschel Walker. State law currently requires a candidate to receive more than 50 percent of the vote in a general election to win outright, and if no one hits that threshold, the race heads to a runoff between the top two candidates (The Hill).
➤ ADMINISTRATION
Biden on Wednesday said the U.S. should have “societal guilt” over taking too long to address gun violence and school shootings in a statement to commemorate the 10-year anniversary of the Sandy Hook Elementary School shooting in Newtown, Conn. — where 20 children and six adults were killed.
“We should have societal guilt for taking too long to deal with this problem,” Biden said in the statement. “We have a moral obligation to pass and enforce laws that can prevent these things from happening again. We owe it to the courageous, young survivors and to the families who lost part of their soul 10 years ago to turn their pain into purpose.”
Biden referenced the progress made on gun policy reform this year. In June, he signed the Bipartisan Safer Communities Act (BSCA), the first major gun safety bill in nearly 30 years (The Hill and The Guardian).
▪ The Washington Post: On the 10th anniversary of the Sandy Hook massacre in Newtown, Conn., four survivors of elementary school shootings, ages 52 to 10, talk about what it’s done to them.
▪ The 19th: 10 years after Sandy Hook, Moms Demand Action volunteers are turning activism into political power.
Biden on Wednesday announced new trade opportunities and investments in Africa to establish the United States’s commitment to Africa’s future during the U.S.-Africa Leaders Summit.
“The United States is all-in on Africa’s future,” Biden said at the meeting, which included CEOs from more than 300 U.S. and African companies. “Improving Africa’s infrastructure is essential to our vision of building a stronger global economy that can better withstand the kinds of shocks that we’ve seen the past few years.”
The U.S. this week is hosting the summit for the first time since 2014, inviting 50 leaders from Africa and seeking to bolster future relations with the continent and counter Chinese and Russian influence (The Hill).
The Hill: These five African countries were not invited to Biden’s summit.
IN FOCUS/SHARP TAKES
➤ INTERNATIONAL
The Biden administration is planning to send Ukraine advanced electronic equipment that converts unguided aerial munitions into “smart bombs” in order to target Russian military positions with a high degree of accuracy, senior U.S. officials told The Washington Post. Those familiar with the matter did not say whether Ukrainian forces would employ the kits on aircraft or ground-based weapons, or what specific systems in Kyiv’s arsenal could be augmented with the technology.
The offer comes as Russia continues to attack Kyiv and other parts of the country with drone and missile strikes that have taken out power and other infrastructure as the country heads into the cold winter months, while Ukrainian forces staged their heaviest shellings in the country’s eastern, Russian-controlled region (The New York Times and Reuters).
▪ NBC News: What the U.S. sending a Patriot missile defense system to Ukraine could mean for Russia’s war.
▪ The New York Times: Russia is building a vast network of trenches, traps and obstacles to slow Ukraine’s momentum. Will it work?
▪ The Washington Post: Russia is destroying Ukraine’s economy, raising costs for U.S. and allies.
A U.S.-led effort to push Iran off a United Nations panel that promotes women’s rights succeeded on Wednesday, marking the latest move in a broader campaign to punish the country for its crackdown on widespread protests. The U.N. Economic and Social Council voted to remove Iran from the Commission on the Status of Women, with 29 member states voting in favor of the U.S.-drafted resolution. Another eight voted against the resolution and 16 abstained (Politico and The Hill).
Belgian police have seized roughly $1.6 million during searches in the Brussels region during corruption investigations within the European Parliament. The Federal Judicial Police announced the seizure on Wednesday, after a sprawling police probe into allegations of “criminal organization, corruption and money laundering” rocked the European Parliament. The list of people under investigation by Belgian and Italian police continues to grow, and include Eva Kaili, a now-former European Parliament vice president from Greece, (Deutsche Welle and Politico EU).
▪ Politico EU: EU’s Qatar corruption scandal brings French links under scrutiny.
▪ The Hill: EU to U.S.: We already have war, don’t give us trade war, too.
⚽ Defending World Cup champion France defeated Morocco 2-0 in Wednesday’s semifinal in Doha, Qatar. Theo Hernández scored on five minutes with an acrobatic finish, and substitute Randal Kolo Muani made the decisive goal late in the game, securing Franc entry into its fourth World Cup final — just four years after winning in Russia. Morocco, meanwhile, became the first African team to reach the tournament’s semifinal stage.
France will face Argentina in the final on Sunday (CNN).
▪ The New Republic: Morocco is the World Cup’s best story.
▪ Vox: How migration has shaped the World Cup.
OPINION
■ Trump made a huge mistake by announcing early, by Rich Lowry, contributing writer, Politico Magazine. https://politi.co/3HCRDHk
■ FTX lesson No. 1: Don’t fall asleep in accounting class, by Michelle Hanlon and Nemit Shroff, contributors, Bloomberg Opinion. https://bloom.bg/3HC431N
WHERE AND WHEN
👉 The Hill: Share a news query tied to an expert journalist’s insights: The Hill launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.
The House will convene at 9 a.m.
The Senate will convene at 10 a.m. and proceed to a roll call vote on confirmation of Musetta Tia Johnson to be a Judge of the United States Court of Appeals for the Armed Forces at noon.
The president will receive the President’s Daily Brief at 9 a.m. At 11:05 a.m., he will participate in the U.S.-Africa Summit Leaders session on partnering on the African Union’s Agenda 2063 in Washington, D.C., followed by a 3:40 p.m. photo with summit leaders and a 4 p.m. closing session on promoting food security and food systems resilience. At 8 p.m., the president departs the White House for Joint Base Andrews, from which he will head to New Castle, Del.
The vice president will participate in a 2 p.m. U.S.-Africa Leaders Summit working lunch on multilateral cooperation.
The first lady will host a lunch for spouses of African leaders at the Smithsonian National Museum of African American History and Culture at 10:15 a.m.
The second gentleman will attend the lunch for spouses of African leaders.
Secretary of State Antony Blinken will participate in the U.S.-Africa Leaders Summit in Washington, D.C.
ELSEWHERE
➤ FINANCE
The Federal Reserve on Wednesday issued its smallest interest rate hike since June as the central bank attempts to curb high inflation without derailing a surprisingly resilient economy. The bank’s baseline interest range increased by 0.5 percentage points to a span of 4.25 to 4.5 percent, the highest level in 15 years.
The Fed’s smaller increase marks a turning point in its battle with high inflation after it issued four straight rate hikes of 0.75 percentage points earlier in the year. Even so, households will still see rates on mortgages, auto loans, and credit cards rise well into next year — and Fed leaders have pledged to keep interest rates high until inflation is finally quashed for good (The Hill and CNBC).
Democrats, meanwhile, are starting to feel good about the economy’s direction, writes The Hill’s Tobias Burns, with a five-month downward trend in prices and less aggressive action on interest rates signaling a possible change in fortunes.
“I think we’re in a better moment, I think we’re in a better moment,” Sen. Jon Tester (D-Mont.), who sits on the Banking, Housing and Urban Affairs Committee, said Wednesday, cautioning that “inflation is [something] we still need to be dealing with.”
With both parties recognizing improving economic conditions, for some Republicans, like House Energy and Commerce Committee member Rep. Brett Guthrie (R-Ky.), the only issue is timing.
“Decreasing inflation is always good, I just wish it was where it was before President Biden took office,” he said.
▪ The New York Times: What Fed rate increases mean for mortgages, credit cards and more.
▪ Bloomberg News: Chairman Jerome Powell says Fed still has a “ways to go” after half-point hike.
The Securities Exchange Commission says social media influencers used Twitter and Discord to manipulate stocks, NBC News reports. The regulatory agency charged them in what it says was a $100 million securities fraud scheme run by people who portrayed themselves as successful stock traders.
▪ The Washington Post: FTX’s Bankman-Fried donated about $40 million this political cycle. Here’s who benefited.
▪ The Atlantic: Crypto was always smoke and mirrors. The fall of FTX shocked everyone — except this guy.
➤ PANDEMIC & HEALTH
COVID-19 infections and hospitalizations are on the rise, posing a major threat to nursing home residents and staff, writes The Hill’s Nathaniel Weixel. Less than half of all nursing home residents and less than a quarter of staff are up to date with their COVID-19 vaccinations.
The Biden administration recently launched a new vaccine push focused on nursing facilities, but experts say the barriers have remained the same: messaging about the need for boosters, pandemic fatigue and lack of federal support for individual vaccine clinics. As the coldest months approach, the low vaccination rates portend a difficult and potentially deadly winter.
Long COVID has caused or contributed to at least 3,500 deaths in the United States, according to an analysis of death certificates by the Centers for Disease Control and Prevention (CDC). Researchers and other experts said the results added to growing recognition of how serious long-term post-COVID-19 medical problems can be.
Long COVID describes a complex constellation of symptoms that may last for months or longer and can affect virtually every organ system; some of the most debilitating include heart issues, breathing problems, extreme fatigue and neurological and cognitive issues (The New York Times).
“It’s not one of the leading causes of death, but, considering that this is the first time that we’ve looked at it and that long Covid is an illness that we’re learning more about day after day, the major takeaway is that it is possible for somebody to die and for long Covid to have played a part in their death,” Farida Ahmad, a health scientist at the National Center for Health Statistics at the CDC who led the study, told the Times.
Information about COVID-19 vaccine and booster shot availability can be found at Vaccines.gov.
▪ CNN: What parents should know about COVID-19 vaccine boosters for kids age 5 and under.
▪ WTOP: DC leaders, hospital association to discuss solutions to staffing shortages as “perfect storm” looms.
▪ NBC News: How dangerous is the flu? What to know about symptoms and signs of complications.
Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,086,199. Current U.S. COVID-19 deaths are 2,981 for the week, according to the Centers for Disease Control and Prevention. (The CDC shifted its tally of available data from daily to weekly, now reported on Fridays.)
THE CLOSER
Take Our Morning Report Quiz
And finally … 🎄It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by the upcoming holidays, we’re eager for some smart guesses about holiday traditions and milestones.
The first printed reference to Christmas trees appeared in what country?
1. The United Kingdom
2. Norway
3. Germany
4. Sweden
What year was the first New Year’s Eve Times Square ball drop held in New York City?
1. 1907
2. 1928
3. 1965
4. 1972
Who was the first president to celebrate Hanukkah at the White House?
1. FDR
2. Calvin Coolidge
3. Harry Truman
4. Herbert Hoover
According to news reports, approximately how many people are expected to journey 50 miles or farther over the holidays?
1. 180 million
2. 30 million
3. 78 million
4. 113 million
Email your responses to kkarisch@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.
Stay Engaged
We want to hear from you! Email: Alexis Simendinger and Kristina Karisch. Follow us on Twitter (@asimendinger and @kristinakarisch) and suggest this newsletter to friends!
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GOP tempers flare as McCarthy pans McConnell's spending strategy
House Minority Leader Kevin McCarthy (R-Calif.) is taking public shots at Senate Republican Leader Mitch McConnell’s (Ky.) plan to pass an omnibus spending package before Christmas, fueling tensions between Senate and House GOP leaders.
McConnell’s Senate allies say that McCarthy’s criticisms are “not helpful” to their efforts to pass a year-end spending package and avoid a government shutdown.
And they worry this could be a preview of a potentially “challenging” working relationship between McConnell and McCarthy in the next Congress.
McCarthy told Fox News host Sean Hannity on Tuesday evening that he hopes Senate Republicans won’t vote for the omnibus spending bill, arguing that they could save almost $100 billion in taxpayer money by voting instead for a stopgap measure that would freeze federal funding levels until next year when Republicans will take control of the House.
“They’re trying to jam us right before Christmas. Why would you ever move forward when there’s a change in power in 21 days where Republicans would have a stronger hand?” McCarthy said. “We wouldn’t be talking about adding more money. We’d talk about decreasing.”
McCarthy doubled down on his tough talk during a press conference Wednesday.
He also vowed to “sit down” with his colleagues next year and “take how much money we’re able to afford and we’d proportion it out and let all the members have that debate” on how to spend it.
But Senate Republicans predict that McCarthy — or anyone else elected Speaker in 2023 — will have a very tough time passing spending bills and will have to depend on House Democratic votes since there’s a group of House conservatives unlikely to vote for any appropriations legislation.
McCarthy himself has yet to nail down the majority of House votes he needs to become Speaker amid opposition from a small group of hard-line conservatives.
“He’s got a very thin majority and I know he knows it’s going to be hard to do some of the things they want to do,” Sen. John Cornyn (R-Texas), an adviser to the Senate GOP leadership team and a McConnell ally, said of McCarthy’s challenges running the House next year.
Asked about McCarthy’s criticism of Senate Republicans on Fox News, Cornyn said “he’s trying to navigate very difficult shoals,” referring to his quest to round up enough votes to become Speaker.
“I think it’s going to be a challenge every day,” he added, of the impact McCarthy’s need to cater to conservatives in his conference will have on working with Senate Republican leaders next year.
One GOP senator, who requested anonymity to vent frustration with McCarthy’s tactics, said he’s making it tougher to wrap up the unfinished business of the 117th Congress and stirring up conservative critics.
“I understand the politics of criticizing McConnell, but they need to have a relationship. McConnell’s got pretty thick skin but I think there’s a way for McCarthy to try to placate conservatives in the House without attacking McConnell,” the lawmaker said.
“It’s not helpful,” the senator added. “I guess most of our Senate colleagues have a pretty staked-out position on whether they vote for an omnibus or they don’t, but where it hurts is it gets our constituents calling us saying, ‘Don’t you dare vote for the omnibus.’”
Senate Republicans warn that if McCarthy doesn’t tone down his rhetoric, he may well wind up with a mess of unfinished spending bills on his lap when Republicans take control of the House next year, presenting the new House GOP majority with the enormous challenge of negotiating a major spending deal only weeks into the new Congress.
“Be careful what you wish for,” advised one Senate Republican aide in response to McCarthy’s complaints that the Senate is trying to “jam” the House by moving forward with an omnibus spending package next week.
The GOP senator said McCarthy probably couldn’t even get a spending deal passed in the first six months of next year given the internal divisions in the House GOP conference.
“We should do a bill now because I don’t see a path for a bill in the next year. [Continuing resolutions] become more damaging the longer they last,” the senator said. “Everything I know is that McCarthy is privately cheering us on to get it done but he’s in this position of trying to get the votes for Speaker.”
A second Republican senator also asserted that McCarthy privately is hoping Congress passes an omnibus bill to avoid a legislative pileup at the start of next year.
“He needs votes for the Speaker’s job but I’m told he wants it passed,” the lawmaker said. “I just can’t believe he wants all these bills piled in his lap in February.”
McConnell indicated to reporters after attending a meeting with him at the White House two weeks ago that McCarthy was on board with passing a year-end omnibus.
“We had a really good meeting. Laid out the challenges that we’re all collectively facing here. I think there’s widespread agreement that we’d be better off with an omnibus than a [continuing resolution], but there are some significant hurdles to get over to do that,” McConnell said on Nov. 29 after meeting with McCarthy, President Biden, Senate Majority Leader Charles Schumer (D-N.Y.) and outgoing Speaker Nancy Pelosi (D-Calif.).
A spokesman for McCarthy told The Hill Wednesday that McCarthy never agreed to do an omnibus during or after the White House meeting.
The House GOP leader said that passing regular appropriations bills would be better than passing continuing resolutions and he remains a “hard no” on the pending omnibus package, the aide explained.
“CRs are not where we want to be but if we cannot get our work done now — the outgoing majority, if they don’t want to work with us, we can get this work done in January as well,” McCarthy told reporters outside the White House after the Nov. 29 meeting.
Sen. Richard Shelby (Ala.), the senior Republican on the Senate Appropriations Committee, said McCarthy has to walk a fine line to keep his hopes of becoming Speaker alive.
“Basically, McCarthy is the Republican leader, he wants to be Speaker of the House and he’s got some dissidents there and a lot of his dissidents are going to be no on anything,” he said.
Asked about the fears of fellow Republican senators that McCarthy couldn’t get any spending deal passed if Congress punts the omnibus into 2023, Shelby said: “He could be in limbo the whole year.”
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Democrats mull alternative to South Carolina amid divisions over first-in-nation primary
Democrats are quietly discussing plans to propose a possible compromise state as the nation’s first-in-the-nation primary following vocal concerns about South Carolina from all corners of the party.
The informal talks among strategists, former campaign advisers, activists and those close to state parties are largely centering around three states — Georgia, Nevada and North Carolina — as possible alternatives to kick off the 2024 nominating contest, with proponents citing their racial diversity and general election importance as upsides.
“There are still conversations happening behind the scenes about this,” said Adam Green, co-founder of the Progressive Change Campaign Committee. “I think there’s a process right now of conversations happening, people getting ducks in a row, and seeing if there’s a collective effort to make this push.”
When President Biden put his thumb on the scale for South Carolina, the place he won handily in 2020 that supercharged his ascent to the nomination, it rankled Democrats who saw him as having politically motivated tunnel vision about the next presidential election.
It’s not that Democrats don’t like his choice, but many see more viable options that check the same boxes and offer more benefits — and are now finding themselves in uncomfortable opposition to the administration.
“The White House put a lot of people in a difficult situation because nobody wants to be fighting the White House on this thing,” Green said. “The obvious move is for people to say together that it should be a diverse state that is competitive in the general election like Nevada, Georgia and North Carolina, and let the White House choose which one they want to go first.”
Over the past few days, the trio of alternatives have taken on new consideration as calls for another choice intensify. Those three states have been discussed among Democrats who want to maximize the party’s chances of winning against the eventual Republican nominee in 2024, regardless of who’s on the ticket on their own side.
“Lot more pushback than I expected for the 2024 primary Joe Biden Protection Plan,” said Democratic strategist Max Burns, noting the swiftness of the criticism after Biden sent a letter to the Democratic National Committee (DNC) earlier this month.
Georgia, in particular, is top of mind for Democrats eager to find a suitable swap for South Carolina, and Sen. Raphael Warnock’s (D-Ga.) success in last week’s runoff has allowed for those voices to be heard with fresh interest.
Biden won Georgia narrowly while running for president, and now, for the second consecutive cycle, the state has sent Democratic candidates to the Senate, indicating that they can be more effective in their quest to turn the state from purple to blue.
“Georgia, I think, makes a lot of sense because now it is a major swing state and reliably Democratic in the last couple cycles,” said one former campaign worker who advised a presidential candidate in 2020.
The large population of Black voters also helps those in favor of the state make their case. In Biden’s letter to the DNC, whose rules and bylaws committee recently voted in favor of South Carolina, Biden emphasized the significance of that crucial constituency having more of a say in shaping the electoral process.
Those who want Georgia say that state is appealing for the same reason Biden mentioned and note that prominent figures like former Democratic gubernatorial nominee Stacey Abrams and other voting rights advocates have already put in the organizational muscle to make it competitive long-term.
On top of that, Georgia doesn’t have the baggage that many say South Carolina will have after Biden pushed it to the front of the line.
Still, Georgia has its drawbacks, according to some. First, it’s really big, and second, the Atlanta-area media market costs a lot of money, potentially causing smaller upstart candidates with little name recognition or less money to be sidelined from the start.
“It’s just very expensive. That’s not a consideration that should be easily dismissed,” the former campaign worker conceded, who noted the relative cheapness of other smaller contests with ample diversity. “You couldn’t be an insurgent candidate and win there.”
Just a few hundred miles away, North Carolina is attractive to many in the party who see its potential to become a mini Georgia. Some believe that with a bigger commitment toward untapped communities, particularly in rural areas and surrounding cities, there are signs that voters may show up for Democrats.
That won’t happen overnight. But moving it up would go a long way. Democrats will spend the next two years campaigning on the ground on behalf of Biden — or if he declines to run again, other candidates — and will invest valuable time and resources in messaging to make the Democratic Party’s pitch to voters.
The fast, all-in approach for South Carolina discounts other contests that were working on presenting their cases to the DNC in hopes of securing a better place in the process.
“All the states who were putting out their proposals are now kind of shoved into the corner,” said the former campaign aide. “They should be pissed.”
While some feel strongly about proposing alternatives, others have taken a more measured approach in the preliminary conversations. They see strong arguments for a variety of southern states and aren’t necessarily tied to a certain outcome.
“South Carolina, North Carolina, and Georgia are really not, in my mind, electorally that far apart from each other to have the votes for Democrats to be established,” said Michael Ceraso, a Democratic strategist who worked for Transportation Secretary Pete Buttigieg and Sen. Bernie Sanders (I-Vt.) when they each sought the presidential nominations.
Like others supportive of nixing Iowa and New Hampshire from their top perches, Ceraso says there are plenty of reasons to allow the Palmetto State to go first.
“South Carolina has paid its dues,” he said. “Black voters and their way of life is very reflective in South Carolina.”
Plus, he said, “Clyburn earned it.”
House Majority Whip James Clyburn (D-S.C.) was key in helping Biden become the party’s nominee who eventually beat former President Trump, Democrats’ top priority last cycle.
But there are many who believe other states that may hold less personal nostalgia for Biden still deserve a realistic shot to be first.
That’s the case with Nevada. Biden earned second place in the Silver State to Sanders and some Democrats believe he wouldn’t have made such a splash in the first Southern primary and gone on to sweep Super Tuesday if he hadn’t gotten a burst of momentum from that caucus, especially after losing so badly in Iowa and New Hampshire.
“Joe Biden came in second place in Nevada. He wouldn’t have won South Carolina without Nevada. It’s not a harmful state to him,” said the former campaign adviser, who spent considerable time working in the state. “I don’t really understand why they screwed Nevada so much.”
It’s also inexpensive to compete in and is home to many Black and Latino voters, the latter being a critical bloc that Democrats often admit they are struggling with. A steady investment as first to vote would give the party time to make inroads with that constituency, while also elevating the Black community, some supportive Democrats say.
“Not only is it very representative, it’s heavily Latino, which South Carolina by the way is not at all, it is also heavily African American,” the former staffer said. “It’s a lot cheaper, it’s much more working-class, it’s out west in the Sun Belt, which is probably the future of how we’re going to win elections at the presidential level.”
It also has a significant pro-labor workforce, one of the biggest elements of Biden’s last campaign and governing principles as president. Democrats expect unions to play a critical role in the next election against the GOP nominee and believe Nevada would help draw that inherent contrast.
“Nevada has a good case,” said Burns. “They can argue if they’re left out Dems are spitting in the face of the unions that won them a lot.”
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Seven scenarios for McCarthy’s Speakership vote — ranked least to most likely
All eyes are on House Minority Leader Kevin McCarthy (R-Calif.) as he negotiates a fragile path to the Speakership next year in the face of opposition from a handful of conservatives within his own conference.
The Republicans flipped control of the House in last month’s midterms, but their razor-thin majority has empowered the far-right firebrands who are vowing to block McCarthy’s Speakership bid — and are resisting all entreaties to alter course for the sake of party unity.
The entrenched opposition has raised the specter that McCarthy simply won’t have the support he needs to win the gavel when the House gathers on Jan. 3 to choose the next Speaker.
And it’s sparked a number of predictions — some of them more far-fetched than others — about how the day might evolve and who might emerge as the next Speaker if McCarthy falls short.
Here are seven scenarios being floated heading into the vote, ranked from least to most likely:
A Democrat squeaks in
It’s theoretically possible that discord within the GOP could lead to a Democratic Speaker.
Such a result is very, very unlikely because Republicans will have the majority in the vote and do not want this to happen.
But it is possible — if chaos on the floor prompted frustrated GOP moderates to back a centrist Democrat — that a member of the minority could be elected Speaker.
In fact, it’s one of the warnings that McCarthy and his allies have sounded in recent weeks as they seek to break the logjam of opposition and win him the gavel.
“If we don’t do this right, the Democrats can take the majority. If we play games on the floor, the Democrats can end up picking who the Speaker is,” McCarthy said in a November Newsmax interview after he won the House GOP nomination for Speaker 188 to 31 over Rep. Andy Biggs (Ariz.).
The warning, however, is more threat than prospect, as Republicans would never back a Democrat for Speaker after four years in the minority wilderness under Speaker Nancy Pelosi (D-Calif.). And even McCarthy has seemed to acknowledge that implausibility, by shifting his argument elsewhere in the weeks since.
House elects a Speaker who is not a member of Congress
House rules do not technically require that the Speaker is a sitting, elected member of House — though every Speaker in U.S. history has been. That leaves open the possibility of members looking for a McCarthy alternative elsewhere.
When conservative House Republicans aimed to mount a challenge to Speaker John Boehner (R-Ohio) in 2014, they tried to recruit Ben Carson, who later went on to be Secretary of Housing and Urban Development. Rep. Jim Cooper (D-Tenn.), a Pelosi detractor, made a habit of voting for former Secretary of State Colin Powell.
Rep. Brian Fitzpatrick (R-Pa.), a supporter of McCarthy, told The Hill last week that there is no other member of the House Republican Conference who can get the support needed to be Speaker. And Rep. Ro Khanna (D-Calif.), a liberal who’s been open to supporting a moderate “unity” candidate as a last resort, has said it does “not necessarily” have to be a sitting member.
A moderate Republican wins with backing of some Republicans and Democrats
That is a top worry of Rep. Marjorie Taylor Greene (R-Ga.), who has emerged as one of the most vocal supporters of McCarthy for Speaker.
Greene, who got a seat at the table from McCarthy rather than being made an outcast in the GOP conference, has repeatedly warned that moderate Republicans could flip to work with Democrats and support someone who is not as conservative as McCarthy — and less accommodating.
But Rep. Don Bacon (R-Neb.), who has said he’s talked to Democratic members about the possibility of backing an alternative candidate, has said he will only consider such a drastic measure if McCarthy drops out of the race for Speaker after repeated failed votes.
Still, at least one Democrat, Khanna, has expressed openness to backing a Republican Speaker candidate who will take certain measures to open up the House process to give Democrats more power in the minority, like equal subpoena power on committees. It is unlikely that Republicans would agree to such a concession.
Other lawmakers are skeptical of the chances for a bipartisan consensus candidate, saying it would be political suicide, particularly for Republicans.
“Let’s just say 20 of them joined with us to nominate somebody like Don Bacon, or bring Fred Upton back, or whatever,” said Rep. Don Beyer (D-Va.). “Those 20 will be not quite as bad as if they voted for [former President Trump’s] impeachment, but moving in that direction. I just think that they’ll get beat to death.”
McCarthy drops out of Speakership race to make way for consensus pick
The first time McCarthy sought the Speaker’s gavel was in 2015, to replace the retiring Boehner. That effort ended before the process ever reached the floor.
Faced with conservative opposition, McCarthy stunned Washington by dropping out of the race at the last moment, leaving Republicans scrambling for a viable candidate, who ultimately emerged in the form of Rep. Paul Ryan (Wis.).
The difference this year is that there is no obvious figure who can easily win the support of both far-right conservatives who want to alter fundamentally how the House functions and the moderates ready to get on with the process of governing.
Rep. Steve Scalise (R-La.), McCarthy’s top deputy, has been floated as a possible alternative.
But there’s no indication the conservatives would support anyone who didn’t accept the same demands they’re making of McCarthy, including a controversial rule change making it easier to oust a sitting Speaker — a change that would empower the right wing even further.
While Biggs continues his protest challenge to McCarthy, he has teased that there are other Republicans who have privately expressed interest in being an alternative if it becomes clear McCarthy cannot win the gavel.
But Biggs and his allies won’t name names, fearing doing so would put a target on their back.
House agrees to make McCarthy Speaker with a plurality of votes
If the House Speakership election drags on for multiple votes with McCarthy in the lead but not securing enough votes for a majority, the House could agree to adopt a resolution to declare that a Speaker can be elected by a plurality rather than by a majority.
That would require cooperation from Democrats, and it is not clear whether they would support such a resolution.
But there is precedent for the House agreeing to elect a Speaker by plurality, as it has happened twice before in House history.
The first time was in 1849, after the House had been in session for 19 days and held 59 ballots for Speaker. It happened again in 1856, when the House had taken 129 Speaker votes without any candidate winning a majority.
With so much uncertainty, some lawmakers are already bracing for a long day on Jan. 3.
“I’m obviously observing it from the other side, but all the intel I get from my Republican friends is that: expect it to go late,” said Rep. Scott Peters (D-Calif.). “And I plan to wear my comfortable suit.”
Rep. Matt Gaetz (Fla.), a top “Never Kevin” Republican, floated that the Speaker election could take months — rivaling the longest-ever Speaker election in 1855, which took two months and 133 ballots.
“We may see the cherry blossoms before we have a Speaker,” Gaetz said, referring to the blooms that emerge in March or April in Washington, D.C.
McCarthy elected Speaker because of Democratic absences
A Speaker is elected by a majority of all of those present and voting, meaning that McCarthy does not necessarily need 218 votes to win the Speakership. If some members are absent or vote “present,” it lowers the threshold from 218.
Pelosi won the Speakership in 2021 with 216 votes due to vacancies and absences. And Boehner also won the Speakership with just 216 votes in 2015, when 25 members did not vote. Many Democrats were attending a funeral for the late New York Gov. Mario Cuomo (D) that day.
If the Speakership election drags on and Democrats tire of the repeated ballots, it is possible that Democratic members miss subsequent votes, which could lower the majority threshold just enough for McCarthy to squeak out a victory.
Illness, weather or other unforeseen circumstances could also affect member attendance on Jan. 3. And because Republicans are planning to eliminate the proxy voting installed by Democrats during the pandemic, lawmakers would not have the option of voting remotely for Speaker.
In the closely divided House, with 222 Republicans to 212 Democrats and one vacancy, McCarthy needs 218 votes if every member votes for a Speaker candidate.
McCarthy wins an outright majority of votes
Many Republicans supportive of McCarthy are optimistic that he will ultimately win a majority of votes without having to worry about Democrats.
These lawmakers see the opposition from hard-line GOP members as little more than political posturing as they aim for concessions on rules changes and tactics.
Some members think that McCarthy may even be able to strike a deal with his detractors and win on the first ballot. Others think that once the McCarthy detractors make their point with at least one failed ballot, they might switch votes to allow him the gavel.
Rep. Blake Moore (R-Utah) compared McCarthy’s situation to that of Pelosi after the 2018 election, when she started off with enough opponents to deny her the Speakership but made enough agreements to earn majority support from Democrats.
“It is not any different. Like, they have a month the jockey and people vote against Pelosi, and ultimately they all get to the point they need to get to. I’m confident we’ll do the same,” Moore said. “If I’m blindsided and we’re doing 700 rounds and we’re here till July, you can come back to me and say, ‘You were wrong.’”
McCarthy said on Fox News on Wednesday that he will have the votes to become Speaker either on Jan. 3 or before then.
“It could be somebody else, but whoever the somebody else is, everyone has a similar problem [with conservatives],” said Rep. Dan Kildee (D-Mich.). “Which makes me believe that ultimately he’ll probably pull it together.”
Source: TEST FEED1
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The Memo: Biden feels the pressure on migration amid El Paso crisis
Two big developments are putting immigration front and center — and threatening to disrupt the momentum that President Biden and the Democrats had been enjoying in the wake of better-than-expected midterm results.
First, there has been a startling surge of migrants across the border at El Paso, Texas.
Second, the ending of Title 42 is imminent unless courts intervene at the last moment — a shift that is sure to see the high numbers of migrants at the border climb even higher.
Those developments, along with the inherently emotive nature of immigration, could complicate life for Democrats when they are otherwise enjoying a post-midterm boost and feeling optimism that inflation may be past its peak.
Even relatively moderate Republicans like Sen. Bill Cassidy (La.) are blaming the administration for the “crisis at the border.”
In a video clip posted to Twitter Wednesday, Cassidy complained the Biden administration “is ignoring both the cause and the fact of people coming to our border. That’s got to stop.”
Sen. Marco Rubio (R-Fla.) called for Republicans and “common sense Democrats” to work together to extend Title 42’s powers in a Tuesday op-ed on the website of Fox News, arguing it would be “insane” to let its provisions lapse without an alternative plan.
Meanwhile, a spokesman for the Republican National Committee emailed reporters Tuesday pointing to comments from Biden earlier this month saying, when asked why he would not visit the border, “there are more important things going on.”
Biden’s disinclination to visit the border seems likely to grow into a bigger issue, just as a similar stance by Vice President Harris did in the first months of the administration.
In October of this year, U.S. Customs and Border Protection reported 2.3 million migrant encounters in the previous 12 months at the southern border — the highest number ever.
If Title 42 ends, it seems clear that the situation will grow graver.
Title 42 is the measure deployed by the Trump administration at the outset of the COVID-19 pandemic to speed the expulsion of asylum-seekers and other migrants from the U.S. under the auspices of protecting public health.
The provision has been used in about 2.4 million encounters since March 2020.
But a court ruling in November ordered an end to the use of the regulation, setting a deadline of Dec. 21 for its expiration. The Biden administration has appealed that ruling, and a decision on the appeal may come this week.
If the appeal fails, virtually everyone expects a migrant surge — at a time when facilities already appear strained to capacity.
Democrats and their allies argue that they are still grappling with the problems caused by the Trump administration’s changes to the immigration system, as well as broader migratory trends.
In a statement Monday, Homeland Security Secretary Alejandro Mayorkas asserted that “economic and political instability around the world is fueling the highest levels of migration since World War II, including throughout the Western Hemisphere.”
Mayorkas added that, while the administration was doing its best in the circumstances, “a real solution can only come from legislation that brings long-overdue and much-needed reform to a fundamentally broken system.”
Meanwhile, the people actually charged with law enforcement on the border are disenchanted.
“I’ve been doing this job for 25 years and I have never seen morale lower than it is,” Brandon Judd, the president of the National Border Patrol Council, the labor union that represents border patrol agents, told this column.
“We feel defeated. We feel like we are not able to do the job.”
Judd cited the increased use of border patrol agents to make initial assessments of asylum claims as one problem. The task forces agents into roles very different from the law enforcement responsibilities for which they are trained, he argued.
“The job is to be in the field, patrolling the border,” Judd added. “Instead, we are doing asylum work, which was never the job. That makes it pretty difficult right on the front end.”
El Paso experienced an influx of more than 50,000 migrants in October alone, the most recent month for which data is available.
That has left the city’s services close to breaking point, strained its finances — the city says it has spent $9.5 million on migrant services this year — and has also led to emotive TV footage of long lines of migrants crossing the border.
According to the Texas Tribune, one processing facility in El Paso, intended for 3,500 migrants at most, was hosting more than 5,100 as of Sunday.
Liberal activist groups, meanwhile, contend that key facts in the debate are consistently overlooked, often in favor of demagoguery.
Douglas Rivlin, the director of communication for America’s Voice, a liberal group, emphasized that people are legally entitled to claim asylum and to have their claims heard.
“Things are always framed in terms of, Should we have more harsh or less harsh enforcement?” Rivlin said. “In a political atmosphere, the argument for more harsh enforcement gets more traction.
“It is harder to argue that we should have a system where people ask for asylum, adjudicates asylum claims, sends home people who don’t quality and allows people who do to go on through the process,” Rivlin added.
For now, however, those voices are struggling to be heard amid the scenes from El Paso, and the fear that there are more troubles to come.
The Memo is a reported column by Niall Stanage
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These 9 House Republicans broke from the party to vote for stopgap funding bill
Nine House Republicans voted with Democrats on Wednesday to pass a stopgap funding bill that will avert a government shutdown, despite GOP leadership recommending a “no” vote.
The House passed the one-week continuing resolution in a 224-201 vote which will push Friday’s funding deadline to Dec. 23, giving appropriators more time to approve spending for the rest of fiscal year 2023.
It now heads to the Senate, which is expected to take up the measure before Friday’s deadline. If passed and signed into law by President Biden, the continuing resolution will keep the government funded at current levels until Dec. 23.
Nine House Republicans crossed the aisle and joined all voting Democrats in backing the measure: Reps. Adam Kinzinger (Ill.), Liz Cheney (Wyo.), Chris Jacobs (N.Y.), Anthony Gonzalez (Ohio), John Katko (N.Y.), Jaime Herrera Beutler (Wash.), Fred Upton (Mich.), Steve Womack (Ark.) and Brian Fitzpatrick (Pa.).
Herrera Beutler and Womack are both members of the House Appropriations Committee. Kinzinger, Jacobs, Gonzalez, Katko, Upton, Womack and Fitzpatrick voted for the continuing resolution signed into law at the end of September, which kicked the funding deadline to Dec. 16. Lawmakers are now trying to push that back even further.
Kinzinger, Cheney, Jacobs, Gonzalez, Katko, Herrera Beutler and Upton are all leaving the House at the end of this Congress after opting against running for reelection or losing bids for another term.
The Hill reached out to the nine Republicans for comment on their votes.
That group of Republicans voted for the stopgap bill despite House GOP leadership recommending a “no” vote. The office of House Minority Whip Steve Scalise (R-La.) sent a notice to all House GOP offices Tuesday night urging members to vote against the continuing resolution.
The notice called the measure “an attempt to buy additional time for a massive lame-duck spending bill in which House Republicans have had no seat at the negotiating table.”
A contingent of House Republicans have called for passing a continuing resolution into next year that would allow the incoming House GOP majority to have more of an input in fiscal year 2023 spending. Others, however, are holding out for an omnibus spending bill over concerns regarding funding for defense and national security.
The continuing resolution gives appropriators another week to come to a consensus on a full-year spending measure. Negotiators announced an agreement on an omnibus framework Tuesday night, but the details have not yet been revealed.
Notably, the appropriations have not disclosed the top-line figures, which have been a key focus of negotiations.
Source: TEST FEED1
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Senate votes to ban TikTok use on government devices
The Senate on Wednesday unanimously approved legislation that would ban the use of TikTok on government phones and devices as part of the push to combat security concerns related to the Chinese-owned social media company.
The “No TikTok on Government Devices Act,” introduced by Sen. Josh Hawley (R-Mo.), was passed via unanimous consent late Wednesday, meaning that no member objected to the bill. The proposal would “prohibit certain individuals from downloading or using TikTok on any device issued by the United States or a government corporation.”
The move comes as state governments, especially those led by Republicans, have taken steps to limit the use of the app on state-owned devices. Thirteen states overall have taken action against TikTok, which is owned by ByteDance, a Beijing-owned entity. Eleven of those actions have taken place since the beginning of the month.
“TikTok is a Trojan Horse for the Chinese Communist Party. It’s a major security risk to the United States, and until it is forced to sever ties with China completely, it has no place on government devices,” Hawley said in a statement. “States across the U.S. are banning TikTok on government devices. It’s time for Joe Biden and the Democrats to help do the same.”
The bill would still need to be passed by the House and signed by President Biden to become law.
In Alabama, Gov. Kay Ivey (R) said in a memo on Tuesday that data collected by TikTok could be subject to Chinese laws and allow it to be shared with the Chinese Communist Party. A group of 15 Republican state attorneys general also called on Apple and Google this week to increase the age-rating for the app.
Hawley’s effort is by no means the lone bill aimed at limiting TikTok’s use. A bill authored by Sen. Marco Rubio (R-Fla.) seeks to ban the app from operating within the U.S. due to national security concerns.
“The federal government has yet to take a single meaningful action to protect American users from the threat of TikTok,” Rubio said in a statement about the ANTI-SOCIAL CCP Act. “This isn’t about creative videos—this is about an app that is collecting data on tens of millions of American children and adults every day.”
Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.) have authored a companion bill in the House.
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House passes short-term funding bill to avert government shutdown
The House on Wednesday passed a short-term funding bill to avert a government shutdown, kicking Friday’s funding deadline to next week to allow lawmakers more time to strike a deal on spending for the remainder of fiscal year 2023.
The continuing resolution passed in a 224-201 vote. It now heads to the Senate, where it must pass and be sent to President Biden’s desk before midnight on Friday to avoid a shutdown.
The measure will keep the government funded at current levels until Dec. 23.
Nine Republicans voted with Democrats in supporting the measure after GOP leadership urged rank-and-file members to oppose the legislation shortly after its release the day prior: Reps. Adam Kinzinger (Ill.), Liz Cheney (Wyo.), Chris Jacobs (N.Y.), Anthony Gonzalez (Ohio), John Katko (N.Y.), Jaime Herrera Beutler (Wash.), Fred Upton (Mich.), Steve Womack (Ark.) and Brian Fitzpatrick (Pa.).
In a notice sent out by the House Minority Whip Steve Scalise’s (R-La.) office on Tuesday evening, leadership recommended Republicans to vote “no” on the bill, while calling it an “attempt to buy additional time for a massive lame-duck spending bill in which House Republicans have had no seat at the negotiating table.”
The GOP faces internal divisions over how to move forward on funding the government.
Some want to freeze current funding levels into next year to allow the newly-elected GOP-led House more say in how the government should be funded for fiscal 2023, which began in October. Republicans are projected to have a 222-212 majority in the chamber at the start of the next Congress.
During a press conference on Wednesday, House Minority Leader Kevin McCarthy (R-Calif.) noted that the top appropriators in the Senate — Sens. Patrick Leahy (D-Vt.) and Richard Shelby (R-Ala.) — are both retiring at the end of this term.
“We’re 20 days before the new members are being sworn in. We’ve got two members leading appropriations in the Senate who will no longer be here, or be able to be held accountable to the constituents,” McCarthy said.
“We should not move a short-term CR. We should move one further into the new year. Allow the American people what they said a month ago — to change Washington as we know it today. We can’t afford to continue to spend the way the Democrats have. The future generation cannot afford it as well,” he added.
Rep. Kay Granger (R-Texas), ranking member on the House Appropriations panel, at the same press conference said a Republican-led House would “work toward a spending agreement that cuts wasteful spending, reduces inflation and prioritizes border security and national defense.”
But other Republicans, including top Senate negotiators and Senate Minority Leader Mitch McConnell (R-Ky.), have expressed support for an omnibus to be enacted sooner, citing concerns about funding for defense and national security.
“We were basically negotiating with the House Democrats and the Democrats here because some of the House Republicans have not shown as much interest in getting an omnibus,” Shelby, top Republican on the Senate Appropriations Committee, told reporters on Wednesday.
McConnell said earlier on Tuesday that lawmakers are “very close to getting an omnibus appropriations bill,” while also setting the timeline for passage by Dec. 22.
Negotiators announced an agreement on a framework for the omnibus late Tuesday, with sights set on moving the forthcoming package through Congress by Christmas Eve. However, the recent announcements contained few details about the deal, including topline figures.
In a letter to Senate Majority Leader Charles Schumer (D-N.Y.) last month, Defense Secretary Lloyd Austin said “operating under a CR moves our budget backward, not forward,” adding that failure to pass a full-year government funding bill “will result in significant harm to our people and our programs and would cause harm to our national security and our competitiveness.”
Source: TEST FEED1
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Democrats dare to sound bullish on the economy
Democrats are starting to feel good about the economy’s direction, with a five-month downward trend in prices and less aggressive action on interest rates signaling a possible change in fortunes.
“I think we’re in a better moment, I think we’re in a better moment,” said Sen. John Tester (D-Mont.), who sits on the Banking, Housing and Urban Affairs Committee, on Wednesday, cautioning that “inflation is [something] we still need to be dealing with.”
Democratic moderate Joe Manchin (W.Va.), who has broken several times with his party on legislative initiatives related to the economy, agreed: “We’re going in the right direction.”
While Democrats have been emphasizing the strength of the economy just as Republicans have been playing up its weaknesses, both parties are recognizing some improving conditions.
House Energy and Commerce Committee member Rep. Brett Guthrie (R-Ky.) bemoaned only the timing.
“Decreasing inflation is always good, I just wish it was where it was before President Biden took office,” he said.
“It is slowly moving in the right direction,” Mike Rounds (R-S.D.), a member of the Senate Banking Committee, said about inflation in an interview. “But the reality is that this is a policy-induced issue, and policy is what should change it.”
Amid widespread warnings of a recession in 2023 and a loss of jobs that could come along with it, the Department of Labor announced Tuesday that companies were charging prices that were 7.1 percent higher for consumers in November than they were the November prior. That’s still near a decades-long high, but it’s down from 7.7 percent in October and from 9.1 percent in June.
“7.7 [percent inflation] to 7.1 is pretty good,” Manchin said Wednesday.
As a result, the Federal Reserve slowed the pace of its rate hikes on Wednesday for the first time since it started raising them in March, adding 50 basis points to the federal funds rate instead of 75 as it did in its last four meetings.
“The Fed – God bless them – they were AWOL for much of last year in the run up to the end of summer, and then they got religion and have behaved admirably,” said Senate Finance Committee member Tom Carper (D-Del.) in an interview.
Carper said the week’s inflation numbers “are very encouraging” and indicate “we’re on the right track.” He noted job growth remains strong.
But Democrats are not in complete agreement on how the Fed should proceed.
Asked if the Fed should stop raising interest rates at its next meeting, Tester indicated he thought the central bank would keep going, pressing ahead toward a revised median target rate of 5.1 percent next year.
“I talked to [the Federal Reserve chair] last week, and they’re not intending to do anything unless something changes dramatically for some time,” he said.
“The Fed’s got to do their job. They were slow coming out of the gate, and they’re doing their job now,” Manchin added.
Other Democratic lawmakers have said they think it’s time for the Fed to stop raising rates altogether so as not to risk a recession.
“I think the Fed should stop raising rates,” Ted Lieu (D-Calif.) said Wednesday. “What you saw was a surge in inflation because of the pandemic. And now that the pandemic has waned and the United States and countries around the world are getting supply chains back up and running, and now that we have very few countries that have any sort of pandemic restrictions except for China, we’re in a place where we don’t need any more rate hikes.”
Republicans have been critical of U.S. economic performance during the pandemic, calling attention to how economic stimulus packages passed by the Democratic-controlled Congress likely increased demand for goods just as faltering supply chains made them harder to get.
“I think the Fed has done, in my opinion, the only thing they can do with a very blunt-force instrument, which is interest rates. I think they’re probably going to continue for a while,” Rounds said.
A top concern for economists now is whether the Fed’s increasing interest rates, which are intended to slow demand by making it more expensive to transact throughout the economy, will end up triggering a recession.
Predictions about a severe recession reached a fever pitch over the summer, and contractions in gross domestic product during the first two quarters led many Americans to believe a recession had already begun.
But some market commentators have started softening their language, with some lawmakers following suit.
“I think we’re going to have a recession next year but it’s going to be very shallow and it won’t be more than two quarters,” Senate Finance Committee member Chuck Grassley (R-Iowa) said Wednesday, echoing recent comments by Bank of America CEO Brian Moynihan who said he was anticipating a “mild recession” in 2023.
Other segments of the banking industry have also been telling Congress that the economy is holding up.
“I met with some CEOs of some banks recently. They say that notes are performing well, there’s no red flags that are shocking the banking community right now to signal any downturn in the economy. I know you hear pundits on TV talking about it, but the fact is our economy is humming,” House Financial Services Committee member Rep. Vincente Gonzalez (D-Texas) said on Wednesday.
Gonzales said that banks are not seeing much in the way of credit card defaults, which are one of the first signs of an economic downturn.
“One thing they did mention is that people who were in trouble prior to the pandemic are now going back to borrowing money. And they saw that maybe some of the people with lower credit ratings are the first people who seem to be [getting] some small loans across the country,” he said.
Economists say they’re anticipating continued spending from consumers, which should also help to stave off a recession.
“The labor market continues to be very strong with employment rising and [workers] seeing healthy (perhaps too healthy) wage gains. With inflation slowing, workers have rising real wages, which they will largely spend,” Dean Baker, an economist with the Center for Economic Policy and Research, wrote in an email to The Hill.
“With strong consumption, strong investment and rapidly falling inflation, that all looks like a pretty good picture, unless the Fed goes nuts with rate hikes.”
Source: TEST FEED1