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Biden’s post-midterm honeymoon shows signs of ending

The post-midterm honeymoon President Biden experienced in recent months could be coming to an end. 

Biden experienced a boost following the midterm elections with a better-than-expected outcome that had Democrats holding their Senate majority and losing the House — but keeping their losses down.

The president has also been bolstered by record-high jobs numbers and a slowdown in inflation, boosting his confidence ahead of his reelection year. 

But as he prepares to speak to the nation during his State of the Union address on Tuesday night, polls show a shift in public sentiment following a rocky start to the new year.

News of the discovery of classified documents at the president’s former office in Washington, D.C., and Wilmington, Del., home dominated the headlines during January. Gas prices have ticked upward again. And last week, Republicans blasted Biden for his handling of a Chinese spy balloon, saying the surveillance device should have been shot down immediately and calling the President “weak.”

As Biden prepares to announce his reelection bid in the coming weeks, a survey out on Monday from the AP-NORC Center for Public Affairs Research shows that 37 percent of Democrats say they want Biden to run again for reelection, a significant slip from the fall when 52 percent said they wanted Biden to seek a second term. 

A Washington Post-ABC News poll out this week also showed that 62 percent of Americans say Biden has not achieved much during his first two years in office. 

“President Biden should be gravely concerned about his shaky position in the polls,” said Democratic strategist Brad Bannon. 

Another strategist said Biden has to acknowledge these polls on some level and seek to get on offense before the campaign cycle begins. 

“There are clearly some things that are concerning to Democrats and independents as Biden prepares to run for reelection,” said one Democratic strategist who asked for anonymity to discuss the situation facing the president.

“Things have gotten better, inflation continues to slowdown, but I think all these waves of layoffs and talk of recession spooks a lot of voters. The economy seems like it’s on shaky ground and that’s a concern to voters.” 

The Washington Post-ABC poll also indicated that in a hypothetical 2024 matchup, former President Donald Trump leads Biden by a slim margin, 48 percent to 45 percent.  

For the last two years, Biden has told supporters that he’s the only Democrat who can beat Trump, pointing to his victory in 2020 and saying he’ll be able to deliver the same result in 2024.

But on Monday, Julian Castro, the former mayor of San Antonio who served as the Secretary of Housing and Urban Development under President Obama said that the poll “undermines Biden’s central argument for re-nomination.”

“Two years is forever and it’s just one poll, but if he’s faring this poorly after a string of wins, that should be worrisome,” Castro wrote in a post on Twitter.

Democrats also remain uncertain if Biden —who will turn 81 later this year —will be a formidable candidate against someone like Florida Gov. Ron DeSantis, should he choose to enter the race as many expect.

“I think his age remains the biggest factor,” the strategist said. 

Another Democratic strategist said there’s no reason for concern at this point. 

“There’s never been over-the-top enthusiasm for the Biden presidency, outside of the first six months post inauguration,” the strategist said. “And yet, there’s even less enthusiasm for someone else. Part of that is because Biden—and Democrats in general — allow there to be disagreements within the family on policy and will still come home to him.

“It’s hard to be enthusiastic when we just through a pandemic, and people are still skittish about the economy,” the strategist added. “Plus, we have right-wing media telling us every day how terrible things are.”

Biden aides and allies have sought to hammer home the idea that the administration has achieved more during this administration than any modern-day president. 

“The proof is in the pudding,” the first strategist said. “He’s had huge legislative victories and he’s had even bigger economic victories.”

The strategist and other allies said they don’t put much stock in polls. 

“He’s been underestimated since the last campaign and he’s always come out on top,” the strategist said. 

As he prepares to run for reelection, Biden will hit the road in the coming weeks to tout his legislative achievements, seeking to convince voters he’s done more than they realize. He’ll focus on the stimulus plan approved a few months into his term in the midst of the pandemic, as well as the climate, healthcare and tax measure known as the Inflation Reduction Act and legislation to help the nation’s semiconductor industry.

Bannon said the State of the Union address and the subsequent travel will be an opportunity for Biden to “make a compelling case for reelection” and change the narrative around his accomplishments. 

“Starting Tuesday, the president needs to be much more aggressive selling his successes,” he said. “It’s a tragedy that a president who has done much to reboot the economy has failed to impress Americans with his efforts. 

Bannon pointed out that the Washington Post- ABC poll “comes at the same time the economy added a half million new jobs in January.”

“The president, his administration and staff must do a much better job getting the good word out or Biden and his party will pay the price in 2024,” he said.  

Source: TEST FEED1

Allies defend Harris after critical New York Times piece

Vice President Harris’s allies rallied around her on Monday in response to a New York Times story in which Democratic officials, many anonymously, questioned her work in office thus far and whether she could be the standard-bearer for the party moving forward. 

The Times reported that “dozens of Democrats in the White House, on Capitol Hill and around the nation — including some who helped put her on the party’s 2020 ticket — said she had not risen to the challenge of proving herself as a future leader of the party, much less the country.”

The piece included an on-the-record quote from John Morgan, a Democratic fundraiser, in which he suggested Harris’s readiness to serve as president would be a major attack line against President Biden in the 2024 election cycle.

“There’s no shortage of people willing to throw shade anonymously and seemingly no shortage of publications willing to write it up and recycle beltway gossip,” tweeted Kirsten Allen, Harris’s press secretary, in response to the article.

“Those still questioning the VP’s role and impact are choosing not to see what is right in front of them,” she added.

Allen went on to link to roughly a dozen news articles highlighting Harris’s work in the administration over the past year, showing how the vice president has led outreach over abortion access after the fall of Roe v. Wade, spoken about efforts to replace lead pipes in water systems, promoted the Biden agenda around the country and abroad, and most recently spoken at the funeral of Tyre Nichols, who died after being beaten by Memphis police last month.

Symone Sanders, who previously served as Harris’s press secretary and now hosts a show on MSNBC, suggested Harris is facing a fresh set of challenges because she is a “historic 1st” with “historic outside expectations, but works within the reality of the vice presidency.”

Sanders argued it was “laughable” for political sources to suggest they were unaware of Harris’s work.

“I think people should just be honest and say they have chosen not to follow her work closely,” she wrote on Twitter.

Rep. Robert Garcia (D-Calif.), a longtime Harris ally, added that he was “tired of the BS” criticizing Harris and offered to vouch for her for future stories.

Harris has been dogged by similar news stories throughout her first two years as vice president, with reports focusing on her frequent staff turnover, dysfunction within her office and her difficulties handling complex issues like voting rights and migration from Central America, a matter for which she has been tasked with leading the administration’s response.

A new book by Chris Whipple titled “The Fight of His Life” about the Biden White House further detailed tensions between the president’s staff and the vice president’s team.

Harris’s defenders argue some of those stories have been elevated because she is the first woman and first woman of color to serve in the role, and that the criticisms are rooted in sexism and racism.

But Harris holds a prominent place in Democratic politics as the potential heir apparent to Biden, who was the oldest president to be sworn into office in 2021 and would be 82 at the start of a potential second term. Biden is expected to run again, but it is unclear if Harris would clear the field of challengers if he ultimately decides not to.

Democratic National Committee chairman Jaime Harrison came to Harris’s defense on Monday.

“I am proud of our Vice President, and my friend, @KamalaHarris. She has worked tirelessly to deliver for the American people in the Senate, across the country, & overseas,” he tweeted. “She is always there when we need her!”

Source: TEST FEED1

Rough seas complicate US efforts to recover suspected China spy balloon

Navy vessels were off the coast of South Carolina on Monday to recover pieces of the suspected Chinese surveillance balloon shot down this past weekend, though rough waters initially complicated the effort, according to the head of U.S. Northern Command.   

A Navy dock landing ship, the USS Carter Hall, is in the vicinity of where the balloon splashed down after President Biden on Saturday ordered the U.S. military to shoot down the aerial object that had spent days floating over the country, Gen. Glen VanHerck told reporters.  

The ship is currently collecting and categorizing debris while an oceanographic survey ship, USNS Pathfinder, is mapping out the balloon’s debris field, predicted at about 1,500 meters by 1,500 meters, or “more than 15 football fields by 15 football fields,” he said.  

As the military is worried that material on the balloon could contain explosives or be hazardous, an explosive ordnance disposal team was on site Monday morning. The forces deployed unmanned underwater vehicles with side-scan sonar to further locate sunken debris, VanHerck noted.  

Federal Bureau of Investigation and Naval Criminal Investigative Service agents are also working with U.S. forces on the salvage operations, though VanHerck couldn’t say where the debris is going to go for a final analysis. 

He added that rough seas on Sunday curtailed some recovery operations such as underwater surveillance, and that due to ocean currents it’s possible that some debris may float to shore. Should that happen, he asked the public to avoid contact with any debris and to contact local law enforcement if they find it.  

Earlier on Monday, national security adviser Jake Sullivan told reporters  that recovering the balloon will take time but “we can then exploit what we recover and learn even more than we have learned.” 

The salvage operation concludes a bizarre series of days in which the suspected Chinese balloon floated through U.S. airspace. At some points it was visible to those on the ground, and was first spotted over Montana. Defense officials said was a clear effort to spy on sensitive sites, though officials held off on shooting it down until it was over water over fears falling debris could harm civilians. 

President Biden has since faced intense criticism from Republicans, who said he acted too slowly to shoot down the balloon. News has also emerged of previous cases of Chinese surveillance balloons crossing over the U.S. at least three times during the Trump administration. 

VanHerck acknowledged that a “domain awareness gap” led to U.S. officials being unaware of the several previous surveillance balloons that flew over the country at that time.  

In this case, the North American Aerospace Defense Command (NORAD), which VanHerck also oversees, first detected the balloon north of the Aleutian Islands in Alaska.  

The U.S. military did not shoot it down then as “it wasn’t time.”  

“It was my assessment that this balloon did not present a physical military threat to North America . . . and therefore, I could not take immediate action because it was not demonstrating hostile act or hostile intent,” he said.  

NORAD kept U.S. and Canadian officials in the loop on the balloon’s location as it floated further south and inland, with the militaries collecting information on the object before shooting it down.  

He described the balloon as up to 200 feet tall and carrying a device that was roughly the size of a regional jet that likely weighed about 1,000 pounds. That payload made shooting down the balloon complicated, he said. 

“From a safety standpoint, picture yourself with large debris weighing hundreds if not thousands of pounds falling out of the sky,” he explained.   

Before downing the balloon, the Pentagon worked with NASA to assess what a debris field might look like, with the agency predicting six or seven miles of wreckage. Officials also ensured that there was no air traffic nearby at the time of the operation.  

Source: TEST FEED1

Arizona water chief predicts feds will step in on Colorado River conflict

The federal government will likely end up putting its foot down in a state-to-state squabble over cuts in Colorado River consumption, Arizona’s water chief told The Hill.

“We will continue to try to get an agreement,” said Tom Buschatzke, director of the Arizona Department of Water Resources. “The path we’re on seems like the federal government’s going to step in.”

Negotiations among the seven states that rely on this key Western waterway have been taking place for months, with the goal of significantly reducing usage of an over-allocated resource.

The states had agreed to a rough deadline of Jan. 31, aware that the Federal Bureau of Reclamation had threatened to impose cuts itself if an agreement failed to materialize.

What did materialize were two opposing proposals — a joint deal from six out of the seven states last Monday and a competing offer from the outlier, California, on Tuesday.

The details of the plans are so incompatible that the government will likely intervene, either with a unilateral solution or a combination of imposed and voluntary measures, according to Buschatzke, who has served as Arizona’s chief negotiator.

“Differences between the six-state proposal and California’s proposal just further cements in my mind that that’s the path we’re on,” Buschatzke said.

Some 40 million people across seven U.S. states and Mexico rely on the Colorado River for drinking water, agriculture and hydroelectric power. But this lifeblood of the West is governed by a century-old agreement that allotted river users with more water than was actually available. 

The Colorado River Compact of 1922 divided the U.S. states into two sections that would each receive 7.5 million acre-feet of water per year. Upper Basin states are Colorado, New Mexico, Utah and Wyoming, while the Lower Basin includes Arizona, California and Nevada.

Two decades after the domestic compact, a cross-border agreement — the Mexican Water Treaty of 1944 — earmarked an additional 1.5 million acre-feet each year to Mexico, where the river historically met its endpoint in the Sea of Cortez.

A single acre-foot of water today can meet the annual needs of between one and three U.S. West households, depending on the precise location.

One major focus of the six-state plan, negotiated by Buschatzke and his colleagues, involves sharing the burden for water losses that occur during evaporation and transit.

The plan calls for combined reductions of 250,000 acre-feet — 93,000 acre-feet for Arizona, 10,000 for Nevada and 147,000 for California — when the water level of the Lake Mead reservoir reaches an elevation of 1,030 feet and below.

Additional collective cutbacks of 200,000 acre-feet would apply to these states if Lake Meads elevation plunged to 1,020 feet and below.

Today, Lake Mead sits at 1,046.97 feet, according to the Bureau of Reclamation.

California’s competing proposal, on the other hand, adheres to the basin’s traditional water “priority” system determined in the 1922 compact. That system granted the largest Colorado River allocation to California, despite its location at the end of the waterway.

The proposal builds on previous agency commitments through which the Golden State would conserve an additional 400,000 acre-feet of water each year through 2026. Also included in the plan are voluntary cuts of 560,000 acre-feet from Arizona and 40,000 acre-feet from Nevada.

Additional reductions would occur if the elevations of Lake Mead and of Lake Powell — a second key reservoir — drop further.

A statement from California’s Colorado River Board, which represents local water agencies, described the proposal as a “realistic and implementable” solution that upholds an “existing body of laws.”

Stressing that the six-state proposal “directly conflicts” with the historic water rights system, the agency also criticized the opposing plan for its focus on “evaporative losses.” The California solution, on the other hand, would “minimize the risk of legal challenge,” according to the board.

Buschatzke said he does not view this type of language as a serious legal threat, as Western states all recognize the benefit of collaborative solutions over lengthy litigation.

“I don’t see it as a threat so much as them staking out their position publicly about their view that the priority system should be strictly adhered to,” he said.

“There are many interpretations of what that priority system requires, not just California’s interpretation,” Buschatzke added, noting that this system contains certain “inequities.”

California’s plan, according to Buschatzke, would lead to Arizona shouldering an outsized proportion of the necessary cutbacks. He also expressed concern over the uncertain nature of the proposal, which predominantly relies on voluntary action.

“We’re not in a position to have that uncertainty hanging over our heads,” Buschatzke said. “Reservoirs are too low and we’re too close to the edge to be able to afford an outcome in which an uncertain voluntary program might create the volume of water we need.”

Asked when he thinks the federal government will officially step in, Buschatzke said that although there is no “hard and fast deadline,” he believes this will occur by the end of March.

By that point, the Bureau of Reclamation is expected to publish a draft environmental impact statement probing several alternatives to the current Colorado River operating guidelines.

Those alternatives were supposed to include a “consensus-based” proposal from the seven states — to be submitted by Jan. 31 — as well as an in-house plan “applicable under federal law,” according to a fall announcement from the Interior Department.

The Bureau of Reclamation at the time issued a notice of intent that it was “initiating an expedited, supplemental process” to protect Lakes Powell and Mead — with an expected first draft released in “Spring 2023” and a end date of “late Summer 2023.”

Finishing up by summer would allow the outcome to be integrated into a hydrological report that “sets the operating criteria for the water year and the calendar year,” Buschatzke explained.

But to get there, the agency must meet milestones required by the National Environmental Policy Act — such as public comment periods — at set time intervals, according to Buschatzke.

The Hill has reached out to the Interior Department about whether there is a firm deadline as to when the government will step in and publish the draft.

While the government has yet to divulge its in-house alternative, Buschatzke said that one possible solution could combine mandatory cutbacks and voluntary compensation measures.

The Biden administration launched a similar such program this fall, allowing select Colorado River users to receive federal funds in return for conserving water.

Buschatzke stressed, however, that Bureau of Reclamation officials “have in their own minds their own federal alternative that they’re going to address” and that he is not privy to the details.

Regardless of whether the federal government does step in, the Arizona water chief said that it is “incumbent upon us to do everything we can to try to get a collaborative outcome.”

“If we’re not talking, we’re not getting to any agreement,” he continued. “That doesn’t mean that because we are talking, we will. But I know if we don’t talk, we’re not getting to one.”

“So we’re going to continue to get in a room and there will be some continued difficult conversations,” Buschatzke added.

Source: TEST FEED1

Greene calls for probe into why Trump was unaware of previous Chinese balloons

Rep. Marjorie Taylor Greene (R-Ga.) on Monday called for a probe into why former President Trump was apparently not informed of previous Chinese surveillance balloons that Biden officials are saying crossed over the U.S. at least three times during the previous administration.

“If it’s true the Pentagon purposely did NOT tell President Trump of Chinese Spy Balloons during his administration then we had a serious breach in command during the Trump admin,” Greene said on Twitter. 

“The POTUS is the Commander in Chief. We must investigate and hold accountable those who broke rank,” the longtime Trump ally said. 

President Biden ordered the U.S. military on Saturday to shoot down a suspected Chinese surveillance balloon that had spent days floating over the country in what defense officials later said was a clear effort to spy on sensitive sites. 

A Pentagon official revealed on Sunday that similar aircraft had been spotted at least three additional times under Trump, but the former president swiftly denied that balloons had entered U.S. airspace on his watch. 

Former Trump national security adviser John Bolton said he was not aware of any such incidents during his tenure — and other Trump administration officials have chimed in with the same. 

Bloomberg reported Sunday, citing a senior administration official, that the U.S. didn’t learn about the previous balloon flights until after Biden had replaced Trump in the Oval Office — though it remains unclear how the Biden officials eventually learned about the past instances.

The defense official noted that previous flights — including an additional sighting at the beginning of the Biden administration — had not transited U.S. airspace for as long as the balloon recently shot down. 

It was downed off the coast of the Carolinas, and the administration is working to recover its parts.

National security adviser Jake Sullivan told reporters on Monday that recovering the balloon will take time but “we can then exploit what we recover and learn even more than we have learned.”

Rep. Jim Himes (Conn.), the top Democrat on the House Intelligence Committee, agreed on Monday that the U.S. will “learn a lot” about China’s surveillance operations from the recovered materials.

Source: TEST FEED1

White House wants to ‘exploit’ what it can recover from China balloon

White House national security officials on Monday said the Biden administration is working to recover the suspected Chinese surveillance balloon shot down over the Atlantic Ocean on Saturday.

National security adviser Jake Sullivan said recovering the balloon will take time but be beneficial “so that we can then exploit what we recover and learn even more than we have learned.”

He offered the remarks during an appearance as part of a panel at the U.S. Global Leadership Coalition summit.

Sullivan said the U.S. has been able to learn a good amount already because they monitored the balloon when it traversed the U.S. before it was shot down. National security spokesman John Kirby echoed those comments in a briefing on Monday, noting how valuable it will be to surveil the balloon.

“Our efforts to surveil this balloon and what we’re going to learn from the recovery will prove to be valuable,” he said.

“The time that we had to study this balloon over the course of a few days last week, we believe, was important and will give us a lot more clarity not only on the capabilities that these balloons have but what China is trying to do with them,” Kirby added.

He also said he would not discuss assessments of whether Chinese President Xi Jinping was aware of the balloon before it was revealed by the U.S. 

“As you know, we are still in recovery mode on the balloon remnants itself both on the surface and under sea. And we expect we’ll learn more through that recovery effort,” he said.

The U.S military shot down the balloon on Saturday off the coast of South Carolina, days after it floated through U.S. airspace.

Biden faced a rash of criticism over the weekend, mostly from Republicans, who said he acted too slowly to shoot down the balloon. Reports separately have surfaced that at least three similar spy aircraft were spotted over the U.S. during former President Trump’s time in office.

Sullivan said on Monday’s panel that the Biden administration has come to understand that during the Trump administration there were “multiple instances” of surveillance balloons.

He defended taking time to shoot down the balloon, saying the White House was waiting until it was over water to prevent any injuries or destruction of property. But he also sought to contrast the Biden decision to shoot down the balloon with how the previous administration had handled the surveillance craft.

“The first time any American president ordered a shoot down of any of these balloons was on Saturday when Joe Biden did it,” Sullivan said.

Kirby said the administration has reached out to former Trump administration officials to brief them on the situation. 

“I can tell you that we have reached out to key officials from the previous administration and offered them briefings on the forensics that we did and expressed our willingness to walk them through what we learned. And I think that’s kind of where I need to leave that one,” the spokesman said.

Source: TEST FEED1

Most in new poll say Biden hasn’t achieved much in first two years 

Sixty-two percent of Americans say President Biden has not achieved much during his first two years in office, a new Washington Post-ABC News poll shows, despite efforts by Democratic leaders to frame that time as the most productive in Washington since Lyndon Baines Johnson’s “Great Society” agenda.  

Only 36 percent of Americans surveyed said they thought Biden had accomplished “a great deal” or “a good amount.”

The survey revealed big disparities in how Americans view Biden among Democrats, independents and Republicans.  

Seventy-seven percent of Democrats said Biden has accomplished a great deal or a good amount while 32 percent of independents said so and only 7 percent of Republicans did.  

Ninety-three percent of Republicans said Biden has accomplished “not much” or “little or nothing.” That view was shared by 66 percent of Independents and only 22 percent of Democrats.  

The poll shows the challenge Biden and Democrats in Congress face in selling their accomplishments to voters before the 2024 presidential election. 

The Democratic Congress passed a $1.7 billion COVID-19 relief package, a $1 trillion infrastructure package, and the Inflation Reduction Act, which included prescription drug reform and $370 billion for clean energy programs.  

Biden will have a chance to change the narrative and give those accomplishments more visibility when he addresses the nation and a joint session of Congress during his second State of the Union speech Tuesday. 

It will also be an opportunity to put pressure on Republicans to raise the nation’s debt ceiling without also cutting hundreds of billions of dollars in federal spending, which conservative lawmakers are insisting be part of any debt ceiling bill.  

The survey found that 65 percent of Americans think the issues of debt payment and federal spending should be handled separately while only 26 percent said Congress should raise the debt ceiling only if Congress agrees to cut spending.  

On this question, independents sided more with Democrats than Republicans. Eighty-three percent of Democrats and 74 percent of independents said debt payments and federal spending should be handled separately while only 41 percent of Republicans said the two issues shouldn’t be linked.  

People gave Biden and Democrats little credit for two of their biggest accomplishments in the last Congress, the bipartisan Infrastructure Investment and Jobs Act and Inflation Reduction Act, which included prescription drug reform.  

Thirty-two percent of Americans said Biden has made progress improving roads and bridges in their community and 30 percent said Biden made progress lowing prescription drug costs. Sixty-percent of respondents said Biden hasn’t made much progress improving roads and bridges and 47 percent said he hasn’t made much of a dent in prescription drug prices.  

Americans had similarly glum views of Biden’s record creating more jobs and making electric vehicles more affordable.  

Only 34 percent of respondents said Biden has made progress creating good jobs and 26 percent said he has made progress making electric vehicles more affordable.  

The polling results are disappointing for the president who on Friday touted the creation of 12 million jobs since he took office in January of 2021, including 517,000 new jobs created last month.  

Americans surveyed by the Post/ABC News poll expressed little confidence that Biden, lawmakers in Congress or Speaker Kevin McCarthy (R-Calif.) would make the right decisions for the country’s future.  

Only 31 percent of Americans said they have a great deal or good amount of confidence that Biden would make wise decisions.  

That, however, was still more confidence than people expressed in Congress or McCarthy.  

Twenty-eight percent of the survey’s respondents said they had a great deal or a good amount of confidence in Democrats in Congress while 25 percent said they felt confident about Republicans in Congress making wise decisions and only 19 percent said they felt confident McCarthy would make the right decisions for the country.  

The Washington Post-ABC poll was conducted from Jan. 27 to Feb. 1 and surveyed 1,003 adults nationwide. It has a margin of error of plus or minus 3.5 percentage points.

Source: TEST FEED1

The Hill's Morning Report — What now for US-China relations?

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.

China on Sunday condemned the U.S. destruction of its suspected spy balloon as an “overreaction,” saying it reserved the right to use necessary means to deal with “similar situations,” without elaborating. 

Analysts interviewed by Reuters said they expect Beijing to carefully calibrate any actual “serious repercussions” at a time when each country has sought to repair relations.

Chinese President Xi Jinping, who began a third five-year term as party leader in October, has tried to ease tensions with Western countries — including the United States, Australia and European powers — worried that they are coalescing into a firmer alliance committed to containing Chinese power (The New York Times).

Some analysts said it was significant that China did not claim violations of international law following the U.S. missile’s downing of China’s dirigible near the coast of South Carolina on Saturday. 

“They need to think about their own rights in case the U.S. starts sending balloons or drones into China,” Julian Ku, a Hofstra University law professor who studies China’s role in international law, told the Times. “If they push too hard here, it would undermine a future legal argument they might need to make.”

NBC News: China’s statements on Sunday described the balloon as a “civilian unmanned airship.” Beijing had previously said the orb was used for research and “meteorological purposes.”

All senators will receive a briefing on Feb. 15, Senate Majority Leader Charles Schumer (D-N.Y.) announced. The top leaders of both parties from the House and Senate are expected to receive a briefing on Tuesday (NBC News). 

Hours before an F-22 fighter jet let the air out of the perceived threat, Speaker Kevin McCarthy (R-Calif.) accused President Biden of failing to act. “First Biden refused to defend our borders. Now he won’t defend our skies,” he tweeted.

His criticism, echoed by other Republican lawmakers, indicated confusion about why the government allowed the mysterious orb to travel without intervention from the Pacific to the Atlantic Ocean. The Defense Department also accused China of having similar high-altitude equipment over Latin America, an assertion confirmed by Colombia (Reuters). The president said he privately ordered the balloon to be shot down a day after he was initially briefed last week. 

His decision on Wednesday was four days before Secretary of State Antony Blinken was to arrive in Beijing to meet with Xi, a high-level discussion Blinken canceled after the balloon appeared over Montana. Four days passed between the president’s order to bring down the Chinese balloon and the U.S. missile strike over open ocean, which left a debris field seven miles long on Saturday. Bloomberg News reports that the administration wants to get Blinken’s China trip back on the calendar soon.

“Let’s wait till the safest place to do it,” the president said he was advised.

Senate Intelligence Committee ranking member Marco Rubio (R-Fla.), a Biden critic who did not wait for briefings before discussing what he “imagines” China may have been up to, said the U.S. government may not glean much intelligence from the balloon debris (The Hill). 

“I don’t believe this is the last time we’re gonna see this sort of thing happen,” Rubio told ABC’s “This Week.” “I don’t think this is coincidental. I think they did this on purpose to send a message to the world.”

▪ The Hill: Why the U.S. waited to shoot down the Chinese spy balloon.

▪ The New York Times: The Navy and the Coast Guard will need days to retrieve the remains of China’s deflated balloon apparatus from the Atlantic Ocean.

▪ The Hill: Balloons similar to the one causing such a stir have flown over the U.S. at least three times during the Trump administration and once earlier during Biden’s term, according to a senior U.S. defense official. (Former President Trump, however, accused the Pentagon of “fake disinformation.”)

▪ Politico: Reacting to GOP critiques and Trump’s pushback, Biden administration officials offered to brief former Trump administration officials about past Chinese spy balloon incursions.

Related Articles

▪ Army University Press: When the balloon goes up: High-altitude for U.S. military application (2019). 

▪ The Hill: Bipartisan opposition in Congress is mounting against the use in this country of TikTok, owned by Chinese company ByteDance, based on national security and privacy concerns. 

▪ The Hill: Sen. Cory Booker (D-N.J.) on Sunday told CBS’s “Face the Nation” that TikTok is working “with U.S. intelligence folks to try to make sure that the proper precautions are taken so the Chinese cannot get access and use it for spying.” 

▪ Forbes: TikTok’s CEO is scheduled to testify March 23 about the company’s security during a House Energy and Commerce Committee hearing. 

LEADING THE DAY

➤ POLITICS

In the most overt and coordinated effort from within conservative circles to stop Trump from winning the GOP nomination for a third straight presidential election, the network of donors and activist groups led by conservative billionaire Charles Koch announced on Sunday it will oppose Trump for the 2024 Republican nomination (The Washington Post). The Koch network sat out the past two presidential primaries, and it is unclear how impactful its opposition can become heading into 2024. Trump’s brand of economic nationalism has clashed with the free-trade inclinations of the Kochs and their allies.

“The Republican Party is nominating bad candidates who are advocating for things that go against core American principles. And the American people are rejecting them,” Emily Seidel, chief executive of the network’s flagship group, Americans for Prosperity, wrote in a memo released publicly on Sunday. “If we want better candidates, we’ve got to get involved in elections earlier and in more primaries.”

The decision by the powerful network to challenge Trump marks an escalation of a long-simmering feud over the Republican Party’s core policy commitments. Comprising an array of political and advocacy groups that have been backed by hundreds of ultrawealthy conservatives, the Koch network has been among the most influential forces in American politics over the past 15 years, spending nearly $500 million supporting GOP candidates and conservative policies in the 2020 election cycle alone — but never before in presidential primaries (The Hill and The New York Times).

While Biden and Trump may have each drawn a record number of votes in 2020, at this early stage in the 2024 election cycle, Americans are showing little enthusiasm for a rematch between the two leaders, a new Washington Post-ABC poll shows.

Neither candidate generates broad excitement within his own party, and 62 percent of Americans say they would be dissatisfied or angry if either wins in 2024. Biden, who has yet to formally announce his reelection bid, has no current opposition for his party’s nomination, whereas Trump is likely to face a broad field of challengers.

Among Democrats and Democratic-leaning independents, 58 percent said they would prefer someone other than Biden as their nominee in 2024, the poll found — almost double the 31 percent who support Biden. Meanwhile, 49 percent of Republicans and Republican-leaning independents said they prefer someone other than Trump as their nominee in 2024, compared with 44 percent who favor the former president. 

But neither the midterm elections — where the predicted Republican “red wave” failed to materialize — nor the classified documents investigations into both Biden and Trump significantly changed the public’s overall perceptions of the candidates, according to the poll. 

▪ The Hill: Prospects rise for N.Y. charges against Trump in Stormy Daniels case. 

▪ Business Insider: New Hampshire Gov. Chris Sununu (R) says Trump can’t beat Biden in 2024 because he’s going to be “seen as a very extreme candidate.”

Republican lawmakers across the country, meanwhile, are targeting education policies, none more so than Florida Gov. Ron DeSantis, who has made headlines opposing College Board courses and overhauling the board of New College of Florida. 

After DeSantis targeted advanced placement African American studies in Florida high schools, Afro-Latino educators pushed back on Saturday. DeSantis’s crusade on diversity and race comes in a state that was colonized by the Spanish, where the intersections of Black, Latino and Indigenous culture and history abound. The first Generation Z member of Congress, Rep. Maxwell Frost, is a Florida Democrat who identifies as Afro-Cuban. 

Educator and community activist Ted Victor told NBC News he was outraged when he learned DeSantis said the course his daughter planned to take “significantly lacks educational value.”

“No educational value, like something you can discard, something you can just throw away, something that says you are not as important as other people,” said Victor, who is Afro-Latino and has taught for 25 years at the middle school, high school and college levels.

After what he describes as the “liberation” of New College of Florida, on whose board of trustees he now sits, DeSantis ally and think tank activist Christopher Rufo is taking aim at Florida State University, targeting its diversity, equity and inclusion instruction (Tallahassee Democrat).

DeSantis wants to mandate a “core curriculum” in Florida’s public universities, grounded in Western civilization, writes The Hill’s Daniel de Visé, but to the nation’s higher education leaders, that idea is kryptonite. In theory, every student should emerge from college with a core of human knowledge: Shakespeare and Dante, Newton and Curie, the length of a Senate term and a rough definition of pi. But college faculties have struggled mightily to decide what a core curriculum should include. As a result, students can graduate from Amherst or Brown, Harvard or Johns Hopkins without ever taking a course in science or history. A few elite universities (Columbia, the University of Chicago) maintain ancient core curricula. 

But creating a new one? Best of luck, academics say.  

▪ The Hill: What to know about education savings accounts, the school-choice measure making waves in states, including in Florida, where they’re called “empowerment savings accounts” and will have a prominent place in the spring legislative session.

▪ The Chronicle of Higher Education: “This is how censorship happens.” How vague laws and heightened fears are creating a repressive climate on campus.

▪ Fox News: As “woke” curriculum increases, classical education booms: Hillsdale College sees 53 percent increase in applications.

IN FOCUS/SHARP TAKES

➤ STATE OF THE UNION & ECONOMY

Biden on Tuesday night will use a ritualized primetime address and real-world examples to tell listeners that the economy is strong, that the country remains a beacon of hope around the world and that, while his policies give working families “breathing room,” GOP proposals are putting progress at risk.

His examples of work left to do: voting and reproductive rights, gun safety and policing reforms, immigration laws, and responsible tax and spending commitments.

The State of the Union speech, in the minds of the president’s advisers, is a seamless conversation Biden has been having with voters since his candidacy in 2020 and throughout the pandemic, corporate uncertainties, Russia’s war with Ukraine, inflation and home-grown threats to democracy.

The president’s recent victory swing through states and communities is expected to morph into a reelection bid. He will be 81 in November. The contest next year could become a rematch with Trump, a notion that polls show does not sit well with voters of either party. Whether Trump is challenged in the primary by one or up to a dozen possible aspirants remains to be seen. For the time being, Biden’s contrasts are with the “ultra MAGA” Republican Party that he says Trump and McCarthy encourage.

The economy, as always, is top of mind, but even economists can’t agree on where things are headed. Soft landing? Recession? Something truly unanticipated? Last week’s official report that more than half a million jobs were created in January left analysts and experts pulling their jaws off the floor. Biden, however, was smiling.

“I’m happy to report that the state of the Union and the state of our economy is strong,” he said Friday.

▪ The Hill: What we learned about the U.S. economy last week.

▪ CBS News poll: Americans’ positive views of the United States economy remain well below half but ticked up slightly over the past week.

Biden this month will continue to champion changes he’s signed into law and mandated through executive action in the past two years, even as some of his most controversial policies have been blocked or overturned in the courts. He says he’s delivering historic, bipartisan rewards for workers, U.S. companies, consumers, college students, veterans — and hundreds of millions of families who are trying to raise children in a fast-moving, diverse world. Republicans, in turn, say Democrats’ penchant for trillions of dollars in new spending worsened inflation, wasted taxpayer resources and compounded Uncle Sam’s projected red ink as far as the eye can see.

▪ The Hill: Five things Biden is likely to say and not say in the State of the Union speech.

▪ The Hill: Five ways U.S. default could impact Americans.

▪ The New York Times, guest essay: How to turn a boring speech into something Americans will want to watch.

▪ The White House: Here’s where to watch on Tuesday night.

▪ The Hill: The inflation-fighting Federal Reserve in 2023 is haunted by the ghost of the central bank in the 1980s.

▪ CBS News “60 Minutes”: “Our advice to the Fed is to stay the course until core inflation starts turning down,” International Monetary Fund Managing Director Kristalina Georgieva told Leslie Stahl during an interview broadcast on Sunday. “The Fed has to be very careful not to start easing financial conditions prematurely.”

▪ The Hill: GOP critic dials up pressure on Senate Minority Leader Mitch McConnell (R-Ky.): “Tired of caving.” 

➤ INTERNATIONAL

As of this newsletter writing, Turkey and Syria are reporting more than 1,300 people killed and thousands wounded after a 7.8 magnitude earthquake — one of the most powerful ever recorded in the region. Those numbers are rising by the hour today because of the extent of destruction; many buildings collapsed with large numbers of people buried under rubble (Reuters and Financial Times).

The White House on Sunday night said Biden directed the U.S. Agency for International Development and other federal partners to ready response options to help those affected in the earthquake region. The United States is poised to “provide any and all needed assistance” in coordination with the Turkish government, national security adviser Jake Sullivan said in a statement. In a televised address, Turkish President Recep Tayyip Erdoğan said offers of aid had poured in from more than 45 nations.

Turkish Interior Minister Suleyman Soylu announced a Level 4 alert, which includes a call for international aid. The earthquake, raising the specter of a humanitarian crisis in the region, was felt in neighboring Lebanon and Israel (The New York Times).

“We were shaken like a cradle,” a woman with a broken arm and wounds on her face told Reuters in Diyarbakir, in southeast Turkey. “There were nine of us at home. Two sons of mine are still in the rubble, I’m waiting for them.”

Thousands of computer servers around the world, including in the United States, have been targeted by a ransomware hacking attack, Italy’s National Cybersecurity Agency (ACN) said on Sunday, warning organizations to take action to protect their systems (Reuters). U.S. cybersecurity officials said on Sunday they were assessing the impact of the reported incidents and officials in Italy planned to meet today. The hacking on a massive scale sought to exploit a software weakness, ACN Director General Roberto Baldoni said. Italy’s ANSA news agency, citing the ACN, reported that servers had been compromised in other European countries such as France and Finland as well as the United States and Canada.

The hack exploits a vulnerability for which a patch has been available for two years. France’s Computer Emergency Response Team said applying patches now won’t be enough because hackers may have taken advantage and “dropped malicious code” (Bloomberg News).

Meanwhile, Russian forces are putting pressure on Ukraine along a growing portion of the front line, with attacks coming in the Luhansk and Zaporizhzhia regions in recent weeks, in addition to fierce fighting in the Donetsk region around Bakhmut. Bakhmut, in eastern Ukraine, is increasingly being cut off from other Ukrainian-held territory as Moscow continues to make progress in its efforts to encircle the city. Ukrainian President Volodymyr Zelensky said the situation at the front is “getting tougher” (The Wall Street Journal). 

“The occupier throws more and more of its forces to break our defenses,” Zelensky said in his nightly video address on Saturday. “It is very difficult in Bakhmut.”

▪ The New York Times: “Here, it’s like paradise”: Ukraine’s ski resorts offer a respite from the war.

▪ The Guardian: Talk of resignation and retreat swirls in Ukraine as Bakhmut enters an end game.

As NATO prepares for its July summit in Lithuania — where the organization is preparing to admit longtime holdouts Finland and Sweden — Erdoğan is threatening to throw a wrench into the plans. Erdoğan is raising new objections to the admission of Finland, and especially Sweden, over what Turkey perceives as the latter’s lax policies toward Kurdistan Workers Party and other groups that Turkey deems terrorist organizations. And since all NATO members must approve new ones, Erdoğan’s opposition is effectively a veto (Vox).

A bipartisan group of senators on Thursday said Biden should make clear to Erdoğan that Congress is unlikely to approve fighter jet upgrades for Ankara if it fails to advance Sweden’s and Finland’s bids to join NATO (The Hill).

▪ Vox: The labor strikes in Britain are years in the making.

▪ The Atlantic: The French are in a panic over “le wokisme.”

OPINION

■ Two years, 10 Metrics: Assessing Biden’s presidency, by Bloomberg Opinion contributors. https://bloom.bg/3x3Ul1H 

■ The institutional arsonist turns on his own party, by Peter Wehner, contributor, The Atlantic. https://bit.ly/3I1cK5W

WHERE AND WHEN

📲 Ask 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 noon.

The Senate meets on Tuesday at 3 p.m. to resume consideration of the nomination of DeAndrea Benjamin to be a United States circuit judge for the 4th Circuit.

The president will return to the White House from Camp David at noon.  

Vice President Harris at 2 p.m. will host a meeting with U.S. government leaders and private sector representatives to discuss migration from northern Central America.

The White House daily press briefing is scheduled at 2:15 p.m. and will include outgoing director of the National Economic Council Brian Deese.

ELSEWHERE

➤ PANDEMIC & HEALTH

🦠 This winter’s COVID-19 surge in the U.S. appears to be fading without hitting nearly as hard as many had feared. Experts had predicted a milder wave of infection compared to the last two winters, but with both the flu and respiratory syncytial virus roaring back in the fall, there were fears of overwhelmed hospital systems and a surge in cases of all three viruses. That’s not what happened. Infection and case numbers have been dropping now for weeks, according to the latest data from the Centers for Disease Control and Prevention (CDC), leading experts to conclude that multiple factors — including better immunity and vaccination rates — slowed the spread.

“We have what I would call now a better immunity barrier,” Carlos Del Rio, an infectious disease specialist at Emory University who heads the Infectious Disease Society of America, told NPR. “Between vaccinations and prior infection I think all of us are in a different place than we were before. All of us, if not totally protected … are somewhat better protected. And that immunologic wall is real.”

The New York Times, opinion: Why are so many Americans dying right now?

💉 America can’t shake the feeling that vaccination rates are about to plummet, The Atlantic reports, but the facts say otherwise. National immunization surveys have not shown substantial drops in coverage for 2020 and 2021, said Robert Bednarczyk, an epidemiologist at Emory University, “but there is a large caveat to this. These surveys have a lag time.” And some early uptake data already provide signs of a “vaccine-hesitancy spillover effect” happening in reverse, driving more enthusiasm, not less, for getting different kinds of shots.

▪ The Washington Post: To curb drug deaths, communities turn to Reddit, texts and wastewater.

▪ The New York Times: Why Apple Watches keep calling 911.

▪ The Hill: Changes to expect in your child’s school lunches under new USDA nutrition standards. 

Information about the availability of COVID-19 vaccine and booster shots can be found at Vaccines.gov.

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,111,495. Current U.S. COVID-19 deaths are 3,452 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

And finally … 🦅 For the first time in years, there’s an occupant in the White House who has a stake in the outcome of the Super Bowl — and it’s not the commander in chief. First lady Jill Biden is a die-hard Philadelphia Eagles fan, which means she’s unabashedly proud (an understatement) of the 16-3 season that led her team to the Super Bowl, their second visit in five years. As The Hill’s Amie Parnes reports, last weekend, after arriving at the Delaware Air National Guard base from Camp David, the first lady was spotted on the tarmac in an Eagles shirt. Hours later, she was taking in the NFC championship game in a suite at Lincoln Financial Field in Philadelphia alongside Roger Goodell, the NFL commissioner. Now, just like her team, she too is heading back to the Super Bowl, something the president let slip during a fundraiser in — where else? — Philadelphia on Friday. 

“I’m Jill Biden’s husband,” he announced, adding “She’s a Philly girl so the first thing I’m going to say is go Eagles, fly, Eagles fly.”

The Eagles face off against the Kansas City Chiefs in Arizona on Sunday.

🎙️ The first lady is definitely nabbing some fun assignments. While in California during the weekend for official events tied to military families and support for cancer patients, she stopped in Los Angeles to hobnob with some of music’s finest. At the Grammy Awards on Sunday night, the first lady honored Iranian singer Shervin Hajipour with the inaugural special merit award for “Song for Social Change.” Appearing on stage, Jill Biden said the singer’s hit song “Baraye” became “the anthem of the Mahsa Amini protests, a powerful and poetic poem for freedom and women’s rights” (The Hollywood Reporter).

CNN: Beyoncé officially has the most Grammys of any artist.

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!

Unabashed Jill Biden is Philadelphia Eagles fan-in-chief

For the first time in years, there’s an occupant in the White House who has hometown bragging rights on the line in next week’s Super Bowl between the Kansas City Chiefs and the Philadelphia Eagles. 

And it’s not President Biden. 

First lady Jill Biden is a die-hard Eagles fan, which means she’s unabashed and insufferable (an understatement some might say) about her team and their 16-3 season. Their win over the San Francisco 49ers during the NFC Championship game last week led them to the Super Bowl, their second visit in five years. 

Now, just like her team, she too is heading back to the Super Bowl, something the president let slip during a fundraiser — in where else? — Philadelphia on Friday. He said security and logistical issues would make it too difficult for him to travel to Arizona alongside the first lady. 

At a stop in the city earlier that day, President Biden announced, “I’m Jill Biden’s husband, she’s a Philly girl so the first thing I’m going to say is Go Eagles, Fly Eagles Fly.” 

“Now the good news is, I happen to mean it. But even if I didn’t, I’d say it. You know why? Otherwise, I’d be sleeping alone,” Biden continued to laughter.

On the way to the Keystone State Friday, White House press secretary Karine Jean-Pierre also quipped, “As you know we are en route to the home of the future Super Bowl Champions, Philadelphia Eagles. As the first lady would say, ‘Go Birds.'”

The first lady’s love for her ‘birds’ has been on full display in recent days.

Last weekend, after arriving at the Delaware Air National Guard base from Camp David, she was spotted on the tarmac sporting an Eagles shirt. Hours later, sitting inside a suite at Lincoln Financial Field alongside NFL commissioner Roger Goodell, she reveled in another Eagles win. 

Both the president and first lady grew up in Eagles territory: he in Scranton, Pa., and later in Wilmington, Del., and she in Willow Grove, Pa., a suburb of Philadelphia.

President Biden has supported the Philly teams for years, but it seems to pale in comparison to his wife’s unbridled passion for all teams-Brotherly Love. 

Those who know the first couple say it’s Jill Biden who can claim the ‘First Fan’ title.

It is she, after all, who is the Eagles, Phillies, Flyers and 76ers fanatic in the family, they say. She also roots for Villanova, where she got one of her master’s degrees.

“The First Lady is a proud Philly girl and devoted sports fan, and is excited to cheer on her hometown team for the Super Bowl,” Vanessa Valdivia, her press secretary said. 

In the fall, amid a dizzying schedule on the campaign trail for the midterms, the first lady took to Twitter to cheer on her favorite baseball team. She posted a photo of herself watching the game on a flight. 

“You got this @Phillies. I’m watching the game on my way to Orlando,” she wrote on the social media platform, adding the hashtag #ringthebell, a recent tradition started by right fielder Bryce Harper to mark home runs with his teammates.  

And then there she was at Game 4 of the World Series, rooting for the Phillies at Citizens Bank Park. The next night, donning an Eagles shirt and a blazer, she appeared on the field for the coin toss at “The Linc” and then sang “Fly Eagles Fly” the Philadelphia fight song, along with a group of cancer survivors. 

The Bidens both attended Super Bowl LII in 2018, when the Eagles defeated the New England Patriots 41-33. But it was Jill Biden who was seen jumping up and down with her hands in the air, clapping and screaming “we won!” at the top of her lungs.  

Biden later posted the moment on Twitter, writing “Video speaks for itself.” 

President Biden’s approval rating has hovered around 41 percent in recent months and the nation remains more divided than ever on cultural and economic issues. 

Sports can be a unifier, said Anita McBride, who served as chief of staff to former first lady Laura Bush and wrote the upcoming book “U.S. First Ladies: Making History and Leaving Legacies.” 

“At the end of the day, Americans love sports,” McBride said.  “It always helps when we have a distraction from the rough and tumble of politics and the excitement around a championship game.” 

It also humanizes the first couple who have made great strides to keep their lives normal even inside the bubble of the White House. 

“Having a sports fan in the White House, whether it’s the president or the spouse, does make members of the first family relatable to the average American,” said Katherine Jellison, “It does makes them seem like the average Joe or Jane.”  

From time to time, as he did at the event in Philadelphia on Friday, President Biden has ribbed his wife about her rabid Philly fandom.

“She is one self-assured Philly fan,” Biden said, while delivering remarks at an area water treatment plant. “We went to a Flyers game a couple of years ago…and…a fight breaks out. And my wife, who hates violence, goes ‘Hit him! Hit him!’ Jumping up.” 

In 2021, Biden also needled his wife and fans like her when he stopped by a Washington restaurant for lunch. 

“Philadelphia fans are the most informed, most obnoxious fans in the world. They know everything, you know what I mean?” Biden said while speaking to one of the restaurant’s workers who hails from the area. 

When a Philadelphia reporter asked the first lady’s then-press secretary Michael LaRosa if she had a response to her husband’s comments, he posted her response on Twitter: “He knows me well.” 

Source: TEST FEED1

Why the 1980s recession haunts the Fed

The ghost of the early 1980s recession is haunting the Federal Reserve.

With inflation still near 40-year highs and the U.S. economy slowing, the Fed’s aggressive rate hikes have fueled concerns of a central bank-induced recession akin to the one triggered by former Fed Chairman Paul Volcker during the 1980s. While Volcker’s rate shock ended two decades of rising inflation, it did so at the cost of a severe recession.

Fed Chairman Jerome Powell has frequently praised Volcker’s refusal to back down and channeled that persistence into his own battle with inflation. But most economists believe Powell can wage a far less costly war against rising prices, given major shifts in the economy — and Fed policy — since the days of Volcker.

“Inflation looks like it has already peaked and never got near the 14.5 percent peak reached in 1980, so the Fed will not have to raise rates as high as it did back then,” said Eric Swanson, an economics professor at the University of California, Irvine.

“We also benefit today from the experience that we gained back then: Everyone knows that inflation was high and was successfully brought down with high interest rates, so we know the Fed can do it again,” he said.

‘The Fed made a big mistake’

The Fed has spent much of the past year attempting to course-correct from its earlier misjudgments of how high inflation would climb.

Fed officials resisted raising interest rates from near-zero levels for much of 2021, even as prices began rising at faster rates. Powell and key Fed leaders expressed confidence that high inflation would come back down toward the bank’s 2 percent annual target once the U.S. quashed COVID-19 for good and the world economy recovered from a serious shock.

But inflation surged deeper into the year as a series of pandemic-related supply chain snarls, COVID-19 outbreaks and a persistent labor shortage drove prices higher than Fed officials expected. Powell acknowledged in December 2021 that the Fed should have begun raising rates sooner, laying the groundwork for a record-breaking span of rate hikes in 2022.

“I think [Volcker] would agree that the Fed made a big mistake by not starting to raise interest rates sooner in late 2021 and early 2022, but that the overall pace of rate increases in 2022 was appropriate and that the Fed’s current plan to bring inflation down is the right one,” Swanson said.

The Fed has raised interest rates a whopping 4.5 percentage points since March 2021 through eight rate hikes in as many meetings. The bank issued four straight increases of 0.75 percentage points beginning in June — when annual inflation peaked at 9.1 percent, according to the Labor Department’s consumer price index — boosting borrowing costs at a historically quick pace.

Inflation has since fallen to an annual rate of 6.5 percent as of December. The Fed’s preferred inflation gauge, the personal consumption expenditures price index, dropped to an annual increase of 5 percent after peaking at 7 percent in June.

Milton Ezrati, chief economist at Vested, said the Fed’s swift pivot and aggressive rate hikes mark a key difference between the Powell era and the surge of inflation that preceded Volcker.

“In the 1980s, inflation and inflation expectations had over 10 years to build and embed themselves into economic thinking at every level,” Ezrati said.

The Fed waffled on tackling inflation throughout much of the 1960s and ‘70s, holding off on rate hikes under immense political pressure from presidents unwilling to allow higher unemployment on their watch. The bank’s refusal to act prompted workers to keep asking for ever higher wages, which pushed businesses to keep raising prices to compensate.

The unemployment rate soared to a peak of 10.8 percent in November 1982 after three years of excruciating rate hikes under Volcker. The Fed’s baseline interest rate peaked at nearly 22 percent, more than five times higher than the bank’s current level. And the recession was particularly devastating for the U.S. manufacturing sector and communities that depended heavily on goods production.

“If the Fed continues as it finally set out to do last March, the economy can avoid the pressure that had built back then and so resolve the matter faster than in the 1980s.”

‘Very difficult to manage the risk’

The ‘80s wage-price spiral and the recession left in its wake scarred generations of policymakers, including Powell, who has effusively praised Volcker’s willingness to defeat inflation at any cost.

Without quashing inflation now, Powell argued Wednesday, price growth could run beyond the Fed’s control and only come down with a crushing recession.

“It’s very difficult to manage the risk of doing too little and finding out in six or 12 months that we actually were close but didn’t get the job done, inflation springs back and we have to go back in,” Powell said Wednesday after the Fed boosted rates by 0.25 percentage points and hinted toward more to come this year.

“We have no incentive and no desire to overtighten,” Powell said, referring to risk of the Fed raising rate high enough to cause a recession.

 “But … if we feel like we’ve gone too far and inflation is coming down faster than we expect, then we have tools that would work on that,” he continued. 

As inflation falls and the job market holds strong, most economists are confident the Fed won’t need to derail the economy for years to bring prices down. The unemployment rate dropped to 3.4 percent in January, according to the Labor Department’s monthly jobs report, all while wage growth continued to drop and relieve some pressure on inflation.

The steady decline of inflation from June’s peak may prove that the U.S. can avoid a debilitating recession driven by double-digit Fed interest rates.

“Last year, some senior economists like Larry Summers were saying that these drastic measures were necessary,” said Dan Altman, chief economist at gig economy site Instawork.

“But now, we’ve had inflation declining without a corresponding increase in unemployment. The economy may not have to go into recession to bring inflation under control,” he added.

Some experts, however, fear the Powell Fed may be driving the U.S. into a needless recession with more rate hikes, even if it won’t be as bad as the one induced by Volcker. Fed rate hikes are notoriously slow to trickle through the economy, and even bank officials acknowledge that the full slowing impact of higher borrowing costs has not yet been felt.

If the Fed has already boosted rates enough to slow the economy toward its 2 percent annual inflation target but keeps increasing them anyway, the steady job market could falter and throw the economy into a downturn.

“Don’t be fooled by Powell’s words of optimism about bringing down inflation without damage to the labor market,” wrote Skanda Amarnath, executive director of research group Employ America, in a Wednesday analysis.

“Even if the unemployment rate starts ticking up and recession risks snowball, the Fed’s current stance is that they will stay idle and only consider easing after it is too late. Not great,” he added.

Source: TEST FEED1