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Lobbying gold rush may persist despite divided Congress

Lobbying giants expect a historic earnings boom to continue, even as a divided Congress threatens to slow legislation to a crawl.

The top Washington, D.C., lobbying firms on Friday reported massive earnings for the final three months of 2022, capping off a record-breaking year for K Street.

The strong fourth-quarter performance, which defied election season norms, boosted hopes that corporations will continue to spend big on D.C. lobbyists in the new year. 

Lobbyists said that clients are particularly interested in must-pass spending bills, the tenuous debt ceiling battle and GOP investigations that will implicate major companies. 

“People making the assumption nothing is going to happen over the next two years might be making a mistake,” said former Speaker John Boehner (R-Ohio), a senior adviser at Squire Patton Boggs, pointing to House Republicans’ investigations and proposals impacting the energy and tech industries. 

Gridlock is bad for business. Lobbying spending hit record levels in recent years amid bipartisan bills to combat COVID-19 and Democratic control of D.C., which introduced trillions of dollars in new government spending. 

Demand for lobbyists typically plummets when legislation stalls, but K Street is eyeing a host of bipartisan legislation. 

“Contrary to predictions of partisan doom and gloom, we expect significant activity around the debt limit, cryptocurrency, the farm bill, FAA and Defense reauthorizations, expiring TCJA [Tax Cuts and Jobs Act] tax provisions, and issues regarding China,” said Brian Pomper, a partner at Akin Gump Strauss Hauer & Feld and former Democratic Senate aide.

Lobbying firms expect the spending boom to continue through the early part of the year, when clients aim to introduce themselves to new lawmakers and committee chairs and help them navigate an unpredictable Congress. 

“Right now, the focus is on: Who do we need to know? Who do we need to meet? How do we need to position ourselves going forward on some of these issues?” said Nadeam Elshami, co-chair of government relations at Brownstein Hyatt Farber Schreck and former chief of staff to former Speaker Nancy Pelosi (D-Calif.). 

In many cases, lobbying efforts have already moved beyond Congress. 

Major bills from last Congress like the Inflation Reduction Act and the CHIPS and Science Act are the gift that keeps on giving for K Street. Corporate clients that lobbied the bills when they were being drafted are now lobbying agencies that write the new rules and dole out lucrative contracts. 

“Regulatory implementation is a very significant area of focus right now,” said Karishma Page, co-leader of K&L Gates’s policy practice. “So much significant policy came out of the Inflation Reduction Act and we’re spending a significant amount of time for our clients analyzing the implementation guidance and providing feedback.”

Large corporations are fretting about the debt ceiling fight, which has the potential to result in an economy-crushing default, but also see a potential debt limit package as an opportunity to secure priorities such as tax reforms. 

Earlier this month, the U.S. Chamber of Commerce, corporate America’s largest lobbying group, warned that businesses are “fed up” with inaction from Congress and won’t accept gridlock on priorities like the debt limit, immigration and permitting reform.  

“Return of a divided Congress will put a huge premium on bipartisan reach and solutions, demanding a lot more patience and persistence from companies aiming to shape policy outcomes,” said Bruce Mehlman, a partner at Mehlman Consulting.

Several firms set new earnings records

Brownstein Hyatt Farber Schreck reported $61.6 million in annual earnings, a 9 percent increase from its 2021 total, which smashed records at the time. The firm captured the No. 1 spot among lobbying firms for the second straight year.  

Akin Gump brought in $14 million in the final three months of 2022, its best quarter on record. The firm reported $53.1 million in yearly revenue, down less than 1 percent from its record-breaking 2021 haul.

The top lobbying firms have sought to cement their dominance by hiring senior staffers with close ties to D.C. power players.

Akin Gump recently hired Reggie Babin, former chief counsel to Senate Majority Leader Charles Schumer (D-N.Y.). In October, Brownstein hired Will Dunham, former deputy chief of staff for policy to Speaker Kevin McCarthy (R-Calif.).

Holland & Knight brought in an estimated $43.4 million, a 24 percent increase from 2021. Recently retired Rep. Ed Perlmutter (D-Colo.) joined the firm’s lobbying team earlier this month. 

BGR Group, meanwhile, earned $10.1 million in the fourth quarter and $39.2 million in 2022, both high-water marks for the firm.

“We were helping protect client priorities in the defense, health and appropriations bills that the Democratic majorities in Congress were finishing at the same time as engaging with the incoming House majority as Republican leaders were setting the 2023 agenda,” said Loren Monroe, a principal at the BGR Group.  

Invariant earned $9.9 million in the fourth quarter and $38.2 million on the year, a nearly 23 percent increase from 2021. Cornerstone Government Affairs brought in $37.4 million, an 8 percent year-over-year increase.

Mehlman Consulting reported $25.7 million in annual earnings, up 8 percent from the previous year. Squire Patton Boggs boosted its earnings from $24.4 million to $25.3 million. The Tiber Creek Group brought in $25.2 million, up from $24.6 million the year prior. 

Cassidy & Associates saw its earnings rise from $20.6 million to $22 million. Van Scoyoc Associates boosted its yearly revenue from $19.5 million to $21.2 million. 

K&L Gates posted $21.4 million in lobbying revenue, up slightly from 2021. The firm hired former Rep. Mike Doyle (D-Pa.), a longtime member of the influential House Energy and Commerce Committee, to its government affairs team last month.

K Street has been scooping up former lawmakers and leadership staffers as if there’s no slowdown on the horizon. 

Former Rep. Rodney Davis (R-Ill.) joined Cozen O’Connor last week, while former Rep. G.K. Butterfield (D-N.C.) joined McGuireWoods Consulting earlier this month.

Source: TEST FEED1

Police identify deceased 72-year-old suspect in Monterey Park mass shooting 

Police have identified the suspect in Saturday night’s mass shooting in Monterey Park, California, as Huu Can Tran, a 72-year-old Asian man.

Authorities say Tran died after shooting himself in a van that police surrounded Sunday in nearby Torrance.  

The shooter killed 10 and injured 10 others following a Lunar New Year celebration in the Los Angeles County city of Monterey Park. A separate incident occurred in neighboring Alhambra shortly thereafter, but no one has been reported injured.

“We still are not clear on the motive,” Los Angeles County Sheriff Robert Luna told reporters Sunday evening. “The investigation continues and that is something that… we want to know. We want to know how something like this, something this awful can happen.”

Torrance police officers located a white van matching a description from the shooting and followed it into the parking lot of a shopping center, according to Luna.

When officers got out of their vehicle to contact the van’s driver, a gunshot rang out. The officers did not return fire.

The officers pulled back and two armored SWAT vehicles responded to the scene as backup, but examination of the scene found the suspect had sustained a self-inflicted gunshot wound, he added. The suspect was pronounced dead at the scene.  

“Investigators conducted a search of the vehicle and determined the male inside the van was the mass shooting suspect,” Luna said at the press conference, noting that the vehicle’s plates are assumed stolen.

“During the search, several pieces of evidence were found inside the van, linking the suspect to both locations in Monterey Park and Alhambra. In addition, a handgun was discovered inside the van.” 

Luna said there were “no outstanding suspects” from the shooting, but emphasized that the investigation was ongoing.

The sheriff on Sunday noted that most of the victims were in their 50s, 60s or older.

Authorities are also looking into Tran’s criminal and mental health history as they examine possible motives in the case.

Source: TEST FEED1

2024 Republicans search for lane between Trump and DeSantis

Prospective Republican presidential contenders are facing a dilemma: How to break into a field that has so far been dominated by former President Trump and Florida Gov. Ron DeSantis. 

Trump is the only candidate as of now to have formally launched a campaign, though DeSantis is said to be closing in on a final decision. And early polling shows the two Floridians easily topping the list of 2024 contenders. 

The dynamic poses a challenge for the long list of other Republicans weighing a bid for the White House, including former Vice President Mike Pence, former United Nations Ambassador Nikki Haley and former Secretary of State Mike Pompeo, all of whom are in need of a political lane that will distinguish them from the front-runners while also resonating with the GOP base.

“I think they’re all looking for something,” said Keith Naughton, a veteran Republican strategist. “None of them really have anything. None of these candidates seem to have a real clear opening right now.”

It’s still exceedingly early in the process. The Iowa caucuses, the first-in-the-nation nominating contest, are still more than a year away, and most would-be candidates are still in the process of hiring consultants and discussing their prospects before making any official decisions.

But the political posturing has already begun. In an interview with Fox News on Thursday, Haley acknowledged that she’s close to making a decision on a White House bid, casting herself as the face of “generational change” in the country’s politics. At 51 years old, Haley is nearly 26 years Trump’s junior.

“It’s bigger than one person. And when you’re looking at the future of America, I think it’s time for new generational change. I don’t think you need to be 80 years old to go be a leader in D.C.,” Haley told Fox News. “I think we need a young generation to come in, step up, and really start fixing things.”

Haley’s not the only one angling for a White House run. Pompeo, who served as both secretary of State and CIA director under Trump, is set to embark on a tour to promote a new book, a move widely seen as laying the groundwork for a potential 2024 bid. Pompeo has been open about his ambitions, saying previously that he’ll make a decision on a White House run by this spring. 

And there’s no shortage of potential candidates. Pence has been traveling the country for months, most recently paying visits to churches in what many Republicans see as an effort to court evangelical voters amid signs that Trump’s ties to the key conservative constituency may be weakening.

Pence has also made clear that a 2024 run isn’t out of the question, telling The Hill in an interview last week that he would make a decision in the coming months about what his role in politics should be.

“We’ll make a decision I’m sure that in the months ahead about what role we might play, whether it be as a national candidate or as a voice for our conservative values,” he said.

In a sign of DeSantis’s rising status in the party, a spokesperson for South Dakota Gov. Kristi Noem (R), another prospective presidential contender, opened up on the governor earlier this month, criticizing him for failing to push tougher abortion restrictions in Florida. DeSantis signed a 15-week ban on the procedure last year, though he has signaled that he would like to go further.

“It’s almost like the pro-lifers don’t have a candidate. I think you have some people — I think of Pence and Noem — who want to be the candidate for them,” one Republican strategist said.

Then there are Trump critics, like now-former Maryland Gov. Larry Hogan, who has been moving toward a 2024 campaign for months. He’s argued that the GOP’s disappointing performance in last year’s midterm elections should prompt the party to reevaluate its ties to Trump, and has cast himself as a Reagan-esque alternative to the bombastic former president. 

But as it stands right now, any Republican that jumps into the race will have a lot of catching up to do if they hope to beat out Trump or DeSantis. A Morning Consult poll released this week showed Trump as the heavy favorite for the 2024 GOP nomination, scoring 48 percent support to DeSantis’s 31 percent.

No other potential candidate included in that poll — Pence, Haley and former Rep. Liz Cheney (R-Wyo.), among others — managed to notch double-digit support. 

Similarly, a Harvard CAPS-Harris poll released exclusively to The Hill on Friday found Trump leading DeSantis 48 percent to 28 percent in an eight-way hypothetical primary. Pence finished in a distant third place with just 7 percent support. 

One swing-state GOP strategist and operative cautioned that the playing field could change over the next year, noting that few Republicans would have pegged Trump as the primary’s front-runner when he launched his first bid for the White House in 2015.

Still, the strategist said, there’s been little interest in anyone other than Trump and DeSantis among the GOP’s influential grassroots. 

“If you would have told me in Jan. 2015 that Donald Trump would win the Republican nomination, I would have thought you were f—— nuts,” the strategist said. “But you’re not hearing Pompeo from the grassroots. You’re not really hearing Nikki Haley from the grassroots. Trump and DeSantis are the big names that keep coming up.”

Even so, things are far from settled. Trump is still facing a long list of legal problems and investigations, as well as questions about his political instincts after several of his endorsed candidates were defeated in last year’s midterm elections. DeSantis, on the other hand, remains a relatively unknown quantity on the national stage, making his political stature at least somewhat tenuous.

Mike Hartley, an Ohio-based Republican strategist, said that it’s still too early to get a good read on the 2024 primary field and which candidates will be able to break through the noise. Ultimately, he said, Republican voters are only concerned about one thing: who can beat President Biden.

“We’re so early on,” Hartley said. “There will be a lot of ebbs and flows.”

“We’re going to go through the process. They’re going to come into the state and talk to the voters,” he added. “But in Republican voters’ minds, the first question is going to be can they beat Joe Biden in November of 2024.”

Source: TEST FEED1

Driver found dead in van linked to Monterey Park mass shooting

The driver of a white van connected to the Monterey Park mass shooting was found dead after apparently shooting himself after being surrounded by police in nearby Torrance, Calif., according to multiple reports.

A gunman killed at least 10 people following a Lunar New Year festival near Los Angeles on Sunday night. It was not immediately clear if the body found in the van was the suspect identified earlier in the day by police.

Police on Sunday released photos of an Asian male suspect in a black leather jacket, black and white beanie, and glasses but declined to share the suspect’s name.

At a press conference Sunday afternoon, Los Angeles County Sheriff Robert Luna addressed the “tactical incident” playing out in Torrance, where police and armored SWAT vehicles surrounded the “white box van.”

Authorities said at the presser that they believed a person was in the vehicle but didn’t have a clear sense of the individual’s condition and indicated that the driver may be dead. 

“People have asked, is that your suspect? We don’t know. … There’s a van that looks just like what was described to us in the city of Torrance. It’s a barricaded suspect situation,” Luna said.

The driver is believed to have died from a self-inflicted gunshot wound, according to the Los Angeles Times.

CNN reported that when officers told the occupant to exit the vehicle, they heard what they believe was the sound of the driver shooting himself.

The Los Angeles Sheriff’s Special Enforcement Bureau tweeted Sunday afternoon that its operation involving the van was complete. “Neighborhood safe,” it added.

Though images of just one suspect were being circulated Sunday, the sheriff didn’t rule out the possibility of multiple suspects and multiple weapons. Luna wouldn’t share specifics about a weapon seized at the scene but said it was “not a high-powered assault rifle.” 

“Just like I’m saying there may be more suspects — we think there’s one, there may be more — we have to assume there may be more than one weapon, right? We may have recovered one. When we find him, that doesn’t mean he’s not armed and dangerous,” Luna said.

The Monterey Park shooting occurred at a dance club late Saturday evening, killing 10 and injuring 10 others. The suspect’s motive is unknown, but Luna did not rule out a possible hate crime.

The name of the suspect in the circulated photos is being withheld for fear its release could “inhibit our ability to potentially arrest the suspect if he is out there or maybe flee[ing],” Luna said.  

Source: TEST FEED1

How Arizona, California and other states are trying to generate a whole new water supply

Underground storage may be a key for Western states navigating water shortages and extreme weather.  

Aquifers under the ground have served as a reliable source of water for years. During rainy years, the aquifers would fill up naturally, helping areas get by in the dry years. 

But growing demand for water coupled with climate change has resulted in shortages as states pump out water from aquifers faster than they can be replenished. 

The fallout can also lead to damaged vegetation and wildlife as streams run dry and damage to aqueducts and flood control structures from sinking land. 

Municipalities and researchers across the country are working on ways to more efficiently replenish emptied-out aquifers.  

By overpumping aquifers “you’ve created space. There’s space under the ground that used to be filled with water,” explained Michael Kiparsky, water program director at the Center for Law, Energy & the Environment at the University of California, Berkeley School of Law.   

“And what we can do with these groundwater recharge projects is take advantage of that space, which is vastly greater than the sum of all of the surface storage reservoirs that exist now or could be built,” he said.  

Several communities across California, Arizona and other states have been using managed aquifer recharge for years to better regulate local water supplies.  

If implemented on a wide enough scale, recharge projects hold the potential to bolster water security in drought-stricken regions while improving the health of the environment.  

Kiparsky said if it can be pulled off, “it holds the promise of being able to generate a whole new water supply we really didn’t even know that we had.”  

Regional efforts  

In California — where 85 percent of the population relies on groundwater for some portion of their supply — more than 340 recharge projects have already been proposed.  

The California Department of Water Resources announced this month it will expedite the permitting process for recharge projects to help meet its goal of expanding average groundwater recharge by at least 500,000 acre-feet each year.  

In Orange County alone, officials pump 65 million gallons of treated water into recharge basins in Anaheim each day. The county began recharging water through infiltration basins in 1936 and serves as a model for other communities looking to implement managed aquifer recharge projects.  

“If we want to maintain our groundwater systems and sustain them, not deplete them, not mine the water, and we want to have enough water for everything else — for agriculture, for cities, for the environment, for the streams — so forth, we have to put a lot of water into the ground,” said Andrew Fisher, a professor of earth and planetary sciences at the University of California, Santa Cruz. “There is literally no choice if we do not do that.” 

Groundwater recharge projects can take many different forms.  

Communities could create percolation basins, where stormwater or excess river flows are collected in basins that are intentionally left open. Over time, water settles itself into the soil below and eventually into aquifers. Dry wells, which stop above the water table and allow water to percolate the rest of the way, can be constructed, along with injection wells, which lead water directly into aquifers.  

Arizona has a long history of managed aquifer recharge efforts, thanks in part to the 1996 establishment of the Arizona Water Banking Authority (AWBA). Since its inception, the authority has used recharge to store nearly 5,600 million cubic meters of surface water from the Colorado River, as of 2019.  

The number and capacity of recharge projects increased throughout Arizona during the early 2000s, with researchers crediting the project’s success to local political consensus, favorable hydrogeology and public funding, along with other factors.  

“AWBA is an important example of how a strong regulatory framework, coupled with public institutions and funding can help support the adoption of [managed aquifer recharge] on a large scale, and how [managed aquifer recharge] can achieve broad water management and public policy objectives,” a 2021 Unesco report said of the practice. 

The city of Tucson also serves as a model example thanks to its flexible approach to using renewable surface water supplies.  

In 2018, the city stored and recovered 76 million cubic meters in the same year, while an additional 76 million cubic meters was stored for long-term use. 

The city uses “soils as the treatment method for the surface water,” explained Sharon B. Megdal, director of the University of Arizona Water Resources Research Center in an interview with Changing America.  

The surface water infiltrates into the aquifers and mixes with the existing groundwater, and then officials can pull out that blended mixed water to serve customers, she said.  

Despite the established nature of Arizona’s programs, groundwater is still over pumped in some areas, and aquifer levels continue to decline.  

“Arizona has quite an extensive history of utilizing managed aquifer recharge successfully, and yet there are still more opportunities,” said Megdal. “We don’t have all the answers. We still have lots to do. But from the basic point of what’s going on in managed aquifer recharge, we’ve done quite a lot successfully.”  

When it comes to expanding the scope of recharge operations, “it’s very important that you have the right regulatory framework for it both for sufficient protections — because there are water quality implications, other types of implications — as well as predictability,” Megdal said.  

Challenges remain  

One type of groundwater recharge project is called Flood-MAR, or flood-managed aquifer recharge. As part of this process, water managers could divert water accumulated in rivers during big flows to other areas, flooding land during the winter, or wet season, and farming the land in the summer. 

“Part of the challenge for flood recharge is finding land that’s not already in use for other things, houses or fields. And finding areas where there’s enough infiltration capacity, which is a term of art that means where water can flow quickly underground and into the groundwater aquifers,” Kiparsky explained. Legal questions also come into play when projects aim to capture floodwater, as claims on downstream flows may already exist. 

Additional challenges with recharge projects arise when water is collected in urban settings. Cities may not be located above opportune geological conditions for water to seep into aquifers. Groundwater in urban areas can also be contaminated with oil drippings or bits of tires from cars. Although this water can be treated before it’s put into the aquifer, treatment can be expensive.  

For other projects, communities need to determine the best sites for recharge to mitigate the need for building new transfer infrastructure. 

“In some cases, some of that stored water has to remain in the aquifer and can’t be pulled out later on,” said Megdal. That’s because groundwater is in motion, and communities may not be able to get back all the water they put in before it moves on.  

Despite the many challenges unique to collecting different types of water at different times, through different means and in different areas, “there’s a lot of opportunity to implement [managed aquifer recharge] depending upon what water source you’re talking about, what ultimate use you’re talking about,” said Megdal.  

“People are recognizing that we have to look at all sources of water and opportunities to make wise use of them,” added Megdal.  

Not only can increased water storage help with water security in the future, but higher groundwater levels can also reconnect with streams, improving conditions for fish and vegetation along the stream’s corridor.  

“We have and will continue to have too much water when we don’t want it and not enough when we do, and so storage is the key,” said Kiparsky.  

“The fact that we’ve created this massive space underground holds the key to that problem,” added Kiparsky. 

Source: TEST FEED1

Zients to replace Klain as White House chief of staff

Jeff Zients, the former White House coronavirus response coordinator, is expected to replace Ron Klain as White House chief of staff, two sources familiar with the plans told The Hill.

Zients left his role as Biden’s first COVID-19 czar in April 2022 after advising the pandemic response effort and was replaced by Ashish Jha. He returned this fall ahead of the midterm elections to assist Klain with preparations for staff turnover, as well as other projects.

The White House declined to comment.

Zients was director of the National Economic Council under President Obama and before that was acting director of the Office of Management and Budget. Between the Obama and Biden administrations, he was chief executive officer of an investment firm, Cranemere, and was on the board of directors of Facebook.

Klain will likely leave following President Biden’s State of the Union address on Feb. 7, The New York Times first reported. Klain, who has been in the role for longer than any other Democratic president’s chief of staff, is expected to remain in his current role for some time to help his successor acclimate.

Prior to government, Zients was a management consultant for Mercer Management Consulting, which is now Oliver Wyman, and Bain & Company. He also was CEO and chairman of the Advisory Board Company alongside David Bradley, the former owner of The Atlantic. Zients, who is a D.C. native, formed a group with Colin Powell and others in 2005 to purchase the Washington Nationals.

Zients would enter the role as Biden readies for a possible reelection bid. The president is on track to signal that he will seek another term around the time of the State of the Union.

Klain’s exit is expected to precede broader staff changes as some in the White House transition out to work on a 2024 re-election campaign. Klain, a longtime Biden adviser, has told colleagues since the midterm elections in November that he is preparing to leave.

The news of a chief of staff turnover comes as Biden’s approval dropped to 40 percent, which is nearing his record low, this week after the discovery of classified documents from his time as vice president.

Source: TEST FEED1

‘I’m not the Speaker’: McCaul sidesteps questions on Marjorie Taylor Greene committee posts

Rep. Michael McCaul (R-Texas) deflected questions about Rep. Marjorie Greene’s (R-Ga.) committee posts on Sunday, saying that it’s not up to him to decide panel assignments.

Greene was selected to sit on the House Homeland Security Committee and House Oversight and Accountability Committee on Tuesday after being stripped of her committee assignments by Democrats in 2021. When asked on Sunday if he would prefer to see someone else on these committees, McCaul declined to answer directly.

“I’m not the chair of that committee, and I’m not the Speaker either,” he told Martha Raddatz on ABC’s “This Week.”

McCaul said that, despite Greene’s past comments about conspiracy theories, including questioning the Sept. 11 attacks, the Georgia Republican has “matured.” He added that the senior members of Congress should educate her on how some of the conspiracy theories that she has spread are “not accurate.”

“I will tell you she has matured,” McCaul said. “I think she realizes she doesn’t know everything. And she wants to learn and become I think more of a team player.”

“I think it’s incumbent upon more senior members to try to — she’s a member of Congress — bring her in and try to educate her that these theories that she has are not accurate,” he added.

Source: TEST FEED1

How economic headwinds are posing a challenge to Biden

Economic headwinds are posing a challenge to President Biden as he readies a possible reelection bid during which jobs and the economy are likely to take center stage.

The White House has sought to highlight the resilience of the U.S. economy in the face of high inflation, rising interest rates and mounting layoffs across the technology, real estate and media sectors in making arguments for Biden’s economic stewardship.

Inflation had been expected to be a serious headwind for Democrats in last November’s midterms, but instead the party exceeded expectations by gaining a Senate seat while keeping its House losses to a minimum.

New threats are now on the horizon even as the White House hopes for a soft economic landing from Federal Reserve efforts to lower inflation and prevent a recession.

Here are some of the economic challenges confronting Biden.

Big Tech layoffs 

Mounting layoffs at big technology companies — many of which drastically expanded operations throughout the pandemic — have prompted a parade of worrying headlines and concerns among some investors.

Major tech companies have laid off more than 200,000 workers over the past four months, the majority of which are for high-paying, white-collar jobs. Amazon, Microsoft and Google in particular announced tens of thousands of layoffs this week.

The White House said this week that Biden is monitoring the layoffs and is aware of the impact it has on workers and their families.

They also argued that the layoffs overall are at a low level, pushing back on the idea that the decisions by Microsoft and Google represent a major concern for the economy or workers in other industries.

“The U.S. economy continues to grow … and the unemployment is a 50-year low. So leading analysts have publicly stated that they do not believe the recent layoffs in the tech industry are indicative of trends in the broader economy,” press secretary Karine Jean-Pierre said on Friday. 

Only about 190,000 Americans filed new first-time claims for unemployment insurance in the week ending Jan. 14, according to Labor Department data. Layoffs on the whole remain well below average levels from 2019, when new weekly jobless claims regularly topped 200,000 or more.

Robert Frick, corporate economist at Navy Federal Credit Union, said the high demand for workers in other sectors has helped those laid off from big tech firms and other hard-hit sectors find work quickly. 

“The labor market is still so tight that many tech workers, and workers with other skills, are snapped up well before they need to collect an unemployment check,” Frick explained in a Thursday analysis.

Debt ceiling fight

The White House is standing firm that it will not negotiate with Republicans in Congress who are demanding spending cuts in exchange for raising the nation’s debt ceiling.

The White House has pointed to numerous clean debt ceiling hikes in recent years, including when Donald Trump was president and Republicans controlled Congress, as precedent for why House Republicans shouldn’t demand conditions.

Negotiations may be inevitable given the GOP’s control of the House and the fact that Democrats need Republican votes in the Senate to get past procedural obstacles.

The stakes are high, with experts warning that a default would cause deep pain to the economy.

The Treasury Department has already enacted “extraordinary measures” that will allow the U.S. to avoid a default over the next few months, but some kind of deal is likely to be needed in June.

Inflation and the Fed

The Fed’s rapid interest rate hikes have helped bring inflation down from a 9.1 percent annual rate in June to 6.5 percent in December, according to Labor Department data released last week. 

The steady decline of inflation and the slowing of the U.S. economy have pushed the Fed to slow down its interest rate hikes. The Fed is expected to hike its baseline interest rate range by 0.25 percentage points on Feb 1., which would be its smallest rate hike since March 2022.

Some experts and investors think the Fed has already done enough to keep annual inflation moving down to its target of 2 percent and should be careful about weighing down the economy with even higher rates.

“I think there is all the room in the world for the Fed to really reduce its pace of interest rate increases. Honestly, I’d go to zero,” said Josh Bivens, research director at the Economic Policy Institute, a left-leaning think tank.

But Fed leaders have made clear that they are not yet done hiking rates and would rather risk driving the economy into a recession than losing control of inflation.

“You just can’t declare victory too soon, right? If you back off … while inflation is still elevated, it’ll come back ever higher the next time, meaning you have got to do even more damage to take control of it,” said Tom Barkin, president of the Federal Reserve Bank of Richmond, in a Tuesday interview on Fox Business Network.

Consumer spending is slowing

Many Americans are finally reaching their breaking points after two years of high inflation. 

Retail sales fell in both November and December, according to data released Wednesday by the Census Bureau, even amid the traditionally busy holiday shopping season. Factory output has fallen as stores struggle to clear out growing inventories, and the nearly yearlong slump in home sales is also sapping momentum from the economy.

While lower consumer demand is essential to bringing inflation down, a steady decline in spending could keep slowing the economy toward a recession. Roughly two-thirds of U.S. economic activity is driven by consumer spending, but many American households have now burnt through pandemic savings and are leaning on credit cards to keep pace.

“We are seeing some of the imbalances in supply and demand of the past two years that led to high inflation start to unwind. Declines in retail sales, after years of outsized gains in both prices and goods, are a good sign for getting back to normal,” wrote Claudia Sahm, a former Fed research director, in a Friday analysis.

“And it’s a sign of how we are walking a tightrope of lower inflation, keeping jobs, and avoiding a recession,” she wrote

Source: TEST FEED1

Biden calls on Congress to protect abortion on Roe anniversary

President Biden is calling on Congress to codify protections for abortion in federal law, pressuring lawmakers on the 50th anniversary of the Supreme Court’s Roe v. Wade decision that was struck down last year.

“Today, instead of commemorating the 50^th anniversary of the Supreme Court’s decision in Roe v. Wade, we are acknowledging that last year, the Supreme Court took away a constitutional right from the American people,” Biden said in a statement early Sunday.

Ever since the Supreme Court, with a majority of conservative justices, struck down the constitutional protection for abortion, Democrats have pushed for legislative action to protect abortion with federal law. But with slim majorities in the last Congress, Democrats were unable to pass such legislation. And with Republicans now in control of the House, the fight to codify abortion access at the federal level is more steep than before.

But that hasn’t stopped Biden from using the powers of the Oval Office to provide further protections for access to abortion. He is expected to issue a presidential memorandum that will ensure that doctors can prescribe and dispense abortion medication across the U.S.

Vice President Harris is expected to announce the move in a speech in Florida on Sunday afternoon marking the 50th anniversary of the Roe v. Wade decision.

Biden on Sunday also took aim at Republicans who have worked to further restrict abortion access in the wake of the Supreme Court’s decision to overturn the constitutional protections. Republicans in legislatures in a number of states have passed laws to restrict or outlaw abortion completely.

“Republicans in Congress and across the country continue to push for a national abortion ban, to criminalize doctors and nurses, and to make contraception harder to access,” the president said. “It’s dangerous, extreme, and out of touch.”

The GOP has made addressing abortion one of the main priorities in their new House majority. Republicans passed a bill in the House that would require that all infants born after an attempted abortion receive medical care, one of the first bills to reach the floor in the new session.

Source: TEST FEED1