The peak of the Atlantic hurricane season is approaching, and the National Weather Service predicts hurricane activity to be more active this year, above the long-term average, as it has for the seventh year in a row. Climate change is making storms stronger and more frequent, putting people, property and the environment at higher risk for damage from increasing floods and erosion.
To address this urgent challenge, Congress needs to modernize and expand the Coastal Barrier Resources Act — a little-known but powerful law that protects coastal communities, wildlife and the federal taxpayer from damage caused by storms and sea-level rise.
For 40 years, this bipartisan law has protected millions of acres of pristine, undeveloped beaches and wetlands across much of the United States. Using a conservative, market-based approach, the Coastal Barrier Resources Act (CBRA) discourages development in hazard-prone areas by removing federal spending, such as flood insurance, disaster recovery grants and other programs funded by the federal taxpayer. This policy has been highly effective, with less than 5 percent of the areas protected by CBRA developed, compared to more than 25 percent of the land outside the CBRA system. By preventing wasteful federal spending in these sensitive coastal areas, it has saved taxpayers nearly $10 billion, while at the same time providing birds a safe habitat and nearby communities a buffer against storms and sea-level rise.
To build on this success, the U.S. Fish and Wildlife Service recently recommended that Congress add over 277,000 acres to the CBRA’s system of protected areas along nine states that were most impacted by Hurricane Sandy nearly 10 years ago. Coastal wetlands prevented more than $625 million in property damages during Hurricane Sandy. Adding new wetland areas to the CBRA system would extend this protection to more communities along the East Coast. This proposal is awaiting action in the U.S. Senate and House.
In June, the Senate Committee on Environment and Public Works held a hearing on draft legislation called the Strengthening Coastal Communities Act, which would add this new acreage to the CBRA system, along with a subset of areas on the Atlantic and Gulf Coasts. The draft bill would also authorize a pilot project to identify ways to extend CBRA protections to upland areas where wetlands could migrate as sea levels rise, as well as expand the definition of an undeveloped coastal barrier to include areas not yet included in the CBRA system.
In a joint letter to the Senate, more than 30 organizations including ours, Audubon and the R Street Institute, expressed support for the Strengthening Coastal Communities Act, bringing together fiscal conservatives, insurance groups, state floodplain managers, hunters and anglers, zoos and aquariums, as well as several national and state conservation groups. However, the Strengthening Coastal Communities Act has yet to be formally introduced in Congress.
Lives and livelihoods are at stake if this legislation stalls out in Congress. Coastal storms have caused almost $950 billion in economic losses in the U.S. since 1980, and sea-level rise alone threatens properties nationwide worth more than $1 trillion. By removing taxpayer-funded subsidies for development in hazardous coastal areas, CBRA promotes public safety. Nationwide, coastal wetlands provide $23 billion in storm protection services each year, reducing recovery costs for communities and taxpayers. The wetlands and inlets protected by the CBRA system support recreational and commercial fisheries that are essential to our economy and coastal heritage. Additionally, birds like Piping Plovers rely on the undeveloped beaches and islands of the CBRA system to nest and fuel up for their long migrations.
Lawmakers in the U.S. Senate and House must introduce and pass the Strengthening Coastal Communities Act. This legislation is critical to save lives, protect coastal wildlife and their habitats, as well as reduce wasteful federal spending.
Portia Mastin, J.D., is the policy manager for coastal conservation at the National Audubon Society. Her work focuses primarily on federal laws and policies pertaining to coastal wetland and estuarine conservation and restoration, as well as promoting nature-based solutions to flood and storm management for coastal community and ecosystem resilience. Mastin previously worked at the Tulane Institute on Water Resources Law and Policy, where she conducted legal policy research on coastal, marine and freshwater issues.
Jerry Theodorouis the director of the finance, insurance and trade policy program at the R Street Institute. Jerry develops and advances effective free market public policy solutions to complex issues where federal and state governments have intervened. He was previously a director in insurance research at Conning in Hartford, CT. Prior to Conning, Theodorou worked for the global insurance giant American International Group (AIG) in a variety of global underwriting, operations and strategy roles, including close to a decade of expatriate managerial assignments in Europe and the Middle East.
The Biden administration is leaning on strong job growth and healthy consumer spending ahead of a highly anticipated economic report this week that will signal how close the U.S. is to a recession.
Recession fears are looming ahead of Thursday’s gross domestic product (GDP) release measuring how much the economy grew from April to June.
But White House Council of Economic Advisers (CEA) Director Brian Deese tweeted on Sunday the GDP data is “backward looking” and stressed that “hiring, spending, and production data look solid.”
Deese also shared a link to a CEA report that discusses how economists look more broadly at various economic factors to determine whether the economy has hit a recession, including payrolls, industrial production, real income and spending.
Despite a 40-year high inflation rate, a graph chart shows the National Bureau of Economic Research is not indicating a recession — or a significant downturn in the economy that usually lasts at least a few months — because spending, payroll, real income and production have all grown.
“Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession,” CEA wrote in the analysis.
“Recession probabilities are never zero, but trends in the data through the first half of this year used to determine a recession are not indicating a downturn,” the report added.
The Biden administration has repeatedly tamped down recession fears by arguing analysts should take a broader look at the economy.
Still, the stock market declined to hit a bear market last month, and other top economic analysts have forecasted the second-quarter GDP report will show the economy barely grew from April to June, which, along with a negative first-quarter report, would indicate a recession is just around the corner.
“You don’t see any of the signs. Now, a recession is a broad-based contraction that affects many sectors of the economy,” Yellen said. ” We just don’t have that.”
With President Biden’s poll numbers continuing to weigh down progressive candidates across the country, Wisconsin Gov. Tony Evers appears to be facing significant headwinds in one of the most closely watched gubernatorial contests this election cycle — in one of the most critical of swing states. Until April, the Republican primary was a relatively quiet affair; then Tim Michels blew the contest wide open. As has been the case since 2010, when former Gov. Scott Walker led a conservative revolution in the state, Wisconsin once again may find itself at the epicenter of the political world with key contests for governor and U.S. senator. Michels, a business executive and former Army Ranger, may be the pivotal figure within this epicenter.
Until April 25, many viewed the race for the Republican gubernatorial nomination as a two-person contest. Former Lt. Gov. Rebecca Kleefisch and retired Marine Kevin Nicholson had been campaigning (unofficially) for the better part of the past three years. Kleefisch loyally served as Walker’s lieutenant and is rightly viewed as a conservative champion who fought through her own four-way primary in 2010 (beating out the establishment’s preferred choice) and helped Walker pass his historic Act 10 reform. This courage earned her the privilege of then facing and surviving a recall attempt by those incensed with Act 10’s requirement that public sector employees contribute to their pension and health care benefits.
Nicholson also had a courageous story to tell, having served in Iraq and Afghanistan, ultimately earning a Bronze Star for his leadership of a counter-improvised explosive device (IED) team in Afghanistan. After earning degrees from Harvard and Dartmouth universities, he took on the role of a management consultant for one of the world’s largest consulting firms.
Despite their impressive resumes, neither candidate was without weaknesses. Following Walker’s 2018 loss, and in a year where being an outsider likely will be viewed as an advantage, Kleefisch may struggle to convince voters to see her as a fresh alternative to the incumbent. Nicholson had the opposite problem. Due to the largesse of a single Illinois benefactor, Nicholson exploded onto the scene in 2018, only to lose to former state Sen. Leah Vukmir in the Republican primary for U.S. Senate. As the former National Chairman of the College Democrats and a speaker at the 2000 Democratic National Convention, Nicholson clearly needed time to win over Wisconsin voters — time he didn’t have. After failing to break 10 percent in two polls, Nicholson recently suspended his campaign.
Tim Michels entered amid this uncertainty.
Prior to Michels’ campaign, Kleefisch enjoyed a relatively comfortable lead over Nicholson. Polls in February and April by Marquette University showed her with a 22-point lead. Last month’s poll, the first since Michels entered the race, showed the upstart candidate with a 1-point lead over Kleefisch. While the margin of error is a relatively large 6.3 percent, Michels’ explosive entrance into the race underscores its volatility. Internal polling released by his campaign shows Michels with a 9-point lead over Kleefisch before Nicholson exited the race. With a similar business and military background, many believe Michels is well positioned to pick up many of Nicholson’s supporters.
Michels ran for the Senate in 2004, losing to then-Sen. Russ Feingold. He since has built a family business with his brothers, growing the Michels Corporation from a few hundred employees to more than 8,000. While some have fled Milwaukee, the Michels construction firm has invested in the city, building its headquarters in one of the previously neglected downtown harbors. An Army Ranger for 12 years, Michels has described serving as commander of the Honor Guard at the Tomb of the Unknown Soldier as the “duty of which I am most proud.”
Yet Michels is not without weaknesses as a candidate. He has been forced to swat back claims that he hasn’t lived in Wisconsin over the last 10 years while managing a construction project in New York; he did maintain his Wisconsin residence. In addition, some have questioned his reported opposition to conservative efforts to reform project labor agreements and right-to-work and the state’s prevailing wage law that was repealed. Michels has been accused of advocating for an increase in the state’s gas tax, but denies that. It’s worth noting that conservatives largely have been successful in these reform efforts and would be unlikely to consider watering down the reforms if Michels becomes governor.
With roughly two weeks until the August primary, some wonder if Michels is the candidate better positioned to catch the red wave that appears to be forming ahead of this fall’s elections. He presents a strong contrast to a feeble, largely ineffective incumbent. While he doesn’t claim to have started the Michels Corporation, he does point out how the company has grown under his leadership. With inflation raging and workforce participation remaining stagnant, Wisconsin Republicans may gravitate to a businessman who has made tough decisions.
In addition to the economy, Michels’ advertisements have focused on the governor’s lockdown decisions and his lack of response to the 2020 violence in Kenosha and general malice that has beset the state’s largest city. Here too, Wisconsin Republicans may decide that a former Army Ranger is the type of servant leader the state needs.
External events also have impacted Wisconsin’s primary. In May, delegates to the state convention decided by a slim margin to refrain from officially endorsing — Kleefisch nearly secured the 60 percent required to receive the official party nod. And following the nomination deadline, the Michels campaign defeated an attempt by the Democratic Party to keep him off the ballot. And, with all things Republican politics, the 800-pound gorilla in the room is Donald Trump, who has endorsed Michels.
Wisconsin remains at the crossroads of American politics. A durably purple state, Wisconsin has almost a quarter-century of razor-thin margins in most major political contests, beginning with President Bush’s 2000 loss by only 0.22 percent (5,708 votes) through President Trump’s 2016 win by 0.77 percent (22,748 votes) and his 2020 loss by 0.63 percent (20,682 votes). Next month, Wisconsin Republicans will decide who will take on the progressive incumbent governor this fall.
Jake Curtis is a Milwaukee lawyer and officer in the Wisconsin Air National Guard who formerly served as a department chief legal counsel in the Walker administration and as an associate counsel at the Wisconsin Institute for Law & Liberty.
Washington remains scorching hot, but the city took a mini breather over the weekend as questions surround the Jan. 6 committee’s plans including possibly issuing a subpoena to Ginni Thomas and interviewing former Cabinet secretaries as part of the probe.
The select committee, days after capping off its summer hearings, is laying the groundwork for its fall season as it plans for a new set starting in September. Rep. Liz Cheney (R-Wyo.), the panel’s vice chairwoman, said on Sunday that a subpoena directed at Thomas, a conservative activist and the wife of Justice Clarence Thomas, is not out of the question.
“We certainly hope that she will agree to come in voluntarily,”Cheney said of Ginni Thomas, whom investigators sent a letter to in mid-June seeking an interview.“But the committee is fully prepared to contemplate a subpoena if she does not. … It’s very important for us to speak with her.”
Thomas is known to have had communication with individuals in former President Trump’s universe ahead of Jan. 6 and on the day of the Capitol attack.
▪ The Wall Street Journal: Jan. 6 committee plans to pursue new witnesses, angles for probe, lawmakers say.
▪ The Hill: The House Jan. 6 panel shows few signs of slowing down despite midterm risks.
▪ The New York Times: In Jan. 6 hearings, gender divide has been strong undercurrent.
In addition, the panel is seeking interviews with former Cabinet members who were in place on Jan. 6, including some who resigned due to Trump’s actions (or lack thereof) that day. Former Education Secretary Betsy DeVos and former Transportation Secretary Elaine Chao both stepped down due to the events, with DeVos having said publicly that she brought up possibly invoking the 25th Amendment with former Vice President Mike Pence.
Other possible interview targets are former Secretary of State Mike Pompeo and former Treasury Secretary Steven Mnuchin as both former top Trump allies also reportedly discussed invoking the 25th Amendment (The Associated Press).
“The floodgates have opened,” Rep. Elaine Luria (D-Va.), a member of the panel, told “Meet The Press.”
On top of former Cabinet members, Cheney added that investigators are hopeful to talk with other members of Trump’s campaign and the Secret Service.
▪ The Hill: Rep. Adam Kinzinger (R-Ill.) on Stephen Bannon conviction: “You’ll pay the price” for ignoring congressional subpoena.
The final days of July are also shining a spotlight on the Democratic effort to pass a budget reconciliation bill — anyreconciliation bill — that will likely focus on lowering prescription drug prices and tacking on a two-year extension of Affordable Care Act subsidies.
However, as The Hill’s Alexander Bolton writes, Democrats are also hopeful to add other smaller priorities to the bill. For example, Senate Health, Education, Labor and Pensions Committee Chairwoman Patty Murray (D-Wash.) is pushing for at least $10 billion to fund COVID-19 vaccines and therapies, while other members are seeking monies to deal with international COVID-19 vaccination efforts, affordable housing and elder care.
Senate Majority Leader Charles Schumer (D-N.Y.) is hoping to pass the bill by early August in order to kneecap increasing health care premiums, which is slated to begin shortly after.
Related Articles
▪ The Hill: Democrats rev up high-stakes final push to lower drug prices.
▪ Politico: Inside the Pentagon slugfest over the future of the fleet.
▪ The Hill: Permanent daylight saving time hits a brick wall in the House.
LEADING THE DAY
➤ ECONOMY & ADMINISTRATION
With some suspense, financial market analysts and economists await Wednesday’s Federal Reserve rate hike. The consensus bet is that the Fed’s Board of Governors will raise the benchmark rate another three-quarters of a percentage point to continue tamping down inflation. It would be the fourth rate hike in five months and mirror the Fed’s action in June.
Treasury Secretary Janet Yellen, interviewed on NBC’s “Meet the Press” on Sunday, said the U.S. economy shows no signs of being in recession. “A recession is a broad-based contraction that affects many sectors of the economy. We just don’t have that,” she added, while acknowledging painfully high prices for many goods and services. She expressed confidence in the Fed and said U.S. fiscal policies are focused on reducing energy, food and health care costs, as well as the long-term deficit.
▪ The Washington Post: Five economic forces behind the Fed’s next rate hike decision.
▪ Bloomberg News: The Fed’s downshift may come after July.
▪ The Washington Post: Big Tech is bracing for a possible recession, spooking other industries.
🏠 Rising interest rates and economic headwinds are making it harder for the United States to fix a severe shortage in affordable housing. Home sales and new construction have fallen as the Federal Reserve hikes interest rates. The Fed’s actions are intended to curb inflation but could also prolong the country’s critical shortfall of housing stock that most Americans can afford to rent or buy (The Hill and The Associated Press). … The housing shortage isn’t just a coastal crisis anymore (check out the map) (The New York Times).
As costs rise for average consumers, cheaper beer, discount cigarettes and private label store brands for food items gain favor (The Wall Street Journal).
Biden over the weekend was “doing just fine” as he recovers from his Thursday diagnosis of COVID-19, which over the weekend presented mild symptoms including an upper respiratory infection (but without any serious breathing complications), according to White House coronavirus coordinator Ashish Jha, who appeared on CBS’s “Face the Nation” (The Hill). … The White House on Saturday released a letter from Biden’s physician saying the president likely contracted the highly infectious BA.5 cousin of omicron, a variant of COVID-19. … The White House canceled planned presidential trips to Pennsylvania and Florida, two key battlegrounds, while awaiting Biden’s full recovery (The Hill).
Vice President Harris has a staffing problem that involves a lack of in-house institutional knowledge about her track record — a career-long issue for her, reports The Hill’s Amie Parnes. “Just like every politician, she wants to tout her accomplishments, but the operation has a short-term memory again,” one former Harris aide said.
During Biden’s recent trip to the Middle East, he vowed to expand cyber cooperation with Israel and Saudi Arabia, a move experts see as a direct response to the rising digital threat from Iran. The U.S. and Saudi Arabia signed bilateral agreements to strengthen their cybersecurity partnership and share information related to cyber threats and malicious actors, while Israel and the U.S. pledged to ramp up collaboration to combat cybercrime (The Hill).
IN FOCUS/SHARP TAKES
➤ POLITICS
In the Senate, Republicans would much prefer to focus on a midterm narrative about high prices and administration foibles than get pulled into a debate about gay marriage. As The Hill’s Alexander Bolton reports, Justice Thomas’s recent Supreme Court opinion and a swift move by House Democrats to protect same-sex and interracial marriage could give some GOP lawmakers political heartburn. A bill last week to repeal the 1996 Defense of Marriage Act and require states to recognize same-sex marriages passed the House with support from 47 GOP lawmakers, signaling bipartisan momentum that could sway senators.
“The country has changed on it and unlike abortion there’s no ongoing political movement at the grassroots in opposition to same-sex marriage as there was for 50 years in opposition to abortion on-demand,” former Rep. Vin Weber (R-Minn.), a GOP strategist, told The Hill.
Politico: Sen. Tammy Baldwin (D-Wis.), a Midwestern pioneer, lobbies Republicans on same-sex marriage.
Republicans are eager to investigate Anthony Fauci and the Biden administration’s response to the pandemic if they control either chamber next year. “One way or another, if we are in the majority, we will subpoena his records and he will testify in the Senate under oath,” said Sen. Rand Paul (R-Ky.), who has clashed with Fauci numerous times since 2021. Paul is in line to become the chairman of the Senate Health, Education, Labor and Pensions Committee if Republicans win the majority, and Fauci, 81, has announced plans to retire near the end of Biden’s term after a long career as director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. The White House and Democrats on Capitol Hill are ready to don some armor ahead of GOP oversight investigations next year, should their party lose control of one or both chambers (The Hill).
Liberals complain that centrists who work with Republicans in Washington make it more difficult to mount an effective, unified assault against the GOP ahead of the midterm contests in November — and they point to Biden.”
Establishment Democrats are Republicans’ best friends. If they would just get out of the way, progressives would love to kick Republican ass,” said Cenk Uygur, host of the left-wing program, “The Young Turks.” “There’s no way that Joe Biden, who has been in love with Republicans his whole life, is ever going to aggressively fight back against them,” Uygur said. “He would rather hug a Republican than fight one” (The Hill).
Niall Stanage, The Memo: A pair of recent controversies involving Democrats and the Latino community renewed questions about the party’s political outreach when it comes to a culturally diverse and politically important segment of the electorate. First lady Jill Biden made an ill-advised remark likening Hispanic people to “tacos” during a speech in San Antonio — a misstep for which she later apologized. Last week, Rep. Vicente Gonzalez (D-Texas) became embroiled in a controversy when a blogger he hired repeatedly attacked Rep. Mayra Flores (R-Texas) in racist terms. The blogger referred to Flores, the first Mexican-born congresswoman, as “Miss Frijoles.”
The Hill: The Atlanta-area district attorney who is conducting a criminal investigation into Trump’s efforts to overturn his 2020 electoral defeat in Georgia poses a significant political threat to the former president.
The Hill: Maryland Gov. Larry Hogan (R) blames “collusion” between Trump and Democrats for conservative Dan Cox’s GOPprimary victory this month over Hogan’s preferred candidate. The popular and term-limited governor on Sunday called Cox a “QAnon whack job.”
The New York Times: The race this year for Texas governor could be the tightest since the 1990s and one of the most expensive. Republican Gov. Greg Abbott is being challenged by former Rep. Beto O’Rourke (D).
The Hill: Democrats helped these GOP candidates during recent primaries.
Trump is scheduled to appear on Tuesday to address a conference of the America First Policy Institute in Washington, joining a think tank that’s doing some transition planning for a potential second Trump presidency as well as publicizing its own 10-point policy agenda for conservative midterm candidates, beginning with “the greatest economy in the world,” and ending with “draining the swamp” to combat “government corruption.”
■ Build back a better Joe Manchin, by Matthew Yglesias, columnist, Bloomberg Opinion. https://bloom.bg/3J0cVNE
■ Why Trump is weakening, by Ross Douthat, columnist, The New York Times. https://nyti.ms/3BaTXSn
WHERE AND WHEN
The House will meet at noon on Tuesday.
TheSenate convenes at 3 p.m. to resume consideration of the CHIPS-Plus Act.
The president will virtually receive the President’s Daily Brief at 9:30 a.m. He will deliver virtual remarks to the National Organization of Black Law Enforcement Executives conference at 12:30 p.m. He is working in isolation at the White House after testing positive on Thursday for COVID-19.
The vice president will travel to Indianapolis, where she will address state legislators about reproductive rights at 11:30 a.m.
The White House daily briefing is scheduled at 3:10 p.m. Jha will join White House press secretary Karine Jean-Pierre at the podium.
In Ukraine, a House delegation led by Rep. Adam Smith (D-Wash.) visited Kyiv on Saturday. Ukrainian President Volodymyr Zelensky told the group: “We appreciate the help of the United States in defending our territory,” and he stressed the importance of U.S. security assistance to Ukraine. They also discussed plans for postwar reconstruction (The Washington Post). … A grain deal reached last week between Ukraine and Russia to allow exports through Ukrainian ports to move through the Black Sea appeared vulnerable following the firing of four Russian Kalibr missiles at the port of Odessa on Saturday (The Associated Press). Ukraine is working today on resuming its exports (Reuters). …Ukraine is struggling to identify Russians suspected of war crimes (The Wall Street Journal). … An estimated majority of Ukrainians who evacuated from the Donetsk region are returning to risk the hazards of war and death because they can’t find jobs elsewhere and “the money is gone” (The Associated Press).
In Myanmar, the ruling military junta said Monday it executed four democracy activists accused of helping to carry out “terror acts,” sparking widespread condemnation of the Southeast Asian nation. The killings were the first executions in decades and many more similarly accused democracy activists remain on death row (Reuters).
Congo this month plans to auction environmentally vulnerable land, including rainforests and peatlands, to oil companies for drilling, arguing that its aim is to reduce the country’s poverty, “not to save the planet” (The New York Times). Global petroleum prices are up, and the country’s leaders have taken notice. Eight months ago, President Félix Tshisekedi endorsed along with other world leaders at a climate summit in Glasgow a 10-year agreement to protect its rainforest, part of the vast Congo Basin, which is second in size only to the Amazon.
➤ POX, PANDEMIC & MENTAL HEALTH
Congressional leaders are pushing the Biden administration to outline a comprehensive federal plan to respond to monkeypox in the U.S. as confirmed cases rise, vaccine doses are in short supply and treatments are not always easily accessible (The Hill). … The White House said this weekend that the World Health Organization’s declaration on Saturday that monkeypox is an international public health emergency amounts to a “call to action” to stop the spread of the disease, which has been confirmed in at least 16 countries as of late June (The Hill). … The Department of Health and Human Services is considering whether to declare monkeypox a public health emergency if current management tactics don’t get the virus under control, Jha said on Sunday (The Hill). U.S. health officials have reported more than 2,800 cases of monkeypox in this country as of Friday, including eight women and two children (The Associated Press). … Anyone can contract monkeypox, but the majority of cases have been reported among men who have sex with men. The virus can also spread through contact with infected bedding, towels and clothing.
▪ CNN: This week, Los Angeles County officials said they might reimpose an indoor mask mandate because of rising COVID-19 infections but would pause those plans if case numbers drop.
▪ The Hill interviewedBenjamin Miller, president of Well Being Trust, about the U.S. mental health system and Americans’ growing anxieties about everything from rising prices to predictions of recession.
As of today, 77.8 percent of the U.S. population has received at least one dose of a COVID-19 vaccine and 66.4 percent is “fully vaccinated,” according to the Bloomberg News global vaccine tracker and the government’s definition. The percentage of Americans who have received third or booster doses is 31.8 percent.
And finally … Are you feeling lucky? Tuesday brings the next drawing in the Mega Millions lottery with a grand prize worth up to $790 million — the nation’s fourth largest jackpot. For months, there has been no winner who had all six numbers. Mega Millions is played in 45 states as well as Washington, D.C., and the U.S. Virgin Islands. The game is overseen by state lottery officials (The Associated Press).
💰The highlighted pre-tax $790 million prize is the annuity option, paid out in 30 annual payments. Most winning players choose the cash option, which would be $464.4 million.
The Supreme Court is just another playground for politics.
And at the root of this American decline is a “vicious animal who has poisoned our democracy.”
That’s a Republican, former Sen. Alan Simpson of Wyoming, tying declining trust in American institutions directly to Trump.
The 90-year-old, a lifelong conservative, added that his party refuses to acknowledge the rot caused by Trump.
“We’re not really talking about common sense or even politics anymore in my party,” he said in an interview for a new book by Mark Leibovich. ”This is not a Republican Party anymore. It’s a cult.”
The logic connecting Trump to rising public despair with American institutions — and democracy itself — gained ground last week.
First, there was news that the Secret Service deleted messages dating back to the Jan. 6, 2021 attack on the Capitol by violent Trump supporters.
Diminished confidence in the integrity of the Secret Service can be traced to Trump’s decision, in mob boss style, to appoint one agent, Tony Ornato, as deputy White House chief of Staff.
As a White House correspondent for the Washington Post, I held the Secret Service in high regard. These agents were willing to take a bullet to defend the president and a constitutional government.
Now the deletion of the text messages is leaving the Secret Service facing questions about whether it placed loyalty to Trump over loyalty to country.
“I smell a rat,” said Rep. Jamie Raskin (D-Md.), a member of the Jan. 6 committee. “That seems like an awfully strange coincidence for those text messages to be banished into oblivion on two days where there was also the most violent insurrection against the union in our history, after the Civil War.”
Here’s another reason to tie Trump to fading trust in institutions.
Polls show the Supreme Court, with three justices nominated by Trump, is now also experiencing a sharp decline in public confidence. Over the last year, according to Gallup, confidence in the Court fell 11 percentage points to just 25 percent.
That fall in support for the Court, to the lowest level in almost 50 years of Gallup surveys, began before the Trump justices ended constitutional protection for abortion rights.
In the latest Gallup report, confidence in the Court among Democrats and independents is “down by double digits,” the polling organization noted.
Last week, there was also news that the military, still one of the most trusted institutions, is losing support.
Similarly, confidence in the police has now “fallen below the majority level for only the second time,” according to Gallup. The previous low came in 2020 after police knelt on George Floyd’s neck, killing him.
The declining confidence in the military, an institution central to patriotism, is unsettling. But perhaps it should not be so surprising.
Back in 2020, Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, apologized for creating “a perception of the military involved in domestic politics.”
He had walked, in uniform, with Trump through a Lafayette Square protest against the brutal police tactics that led to Floyd’s death. He appeared to sacrifice his pledge to defend the Constitution, instead signaling servitude to Trump’s political desire to suppress free speech.
That act added to the poison of Trump-inspired racial division.
Just last week, a former Trump aide reportedly called the House probe into the violent attack on the Capitol an “anti-White campaign” in the tradition of Russian Bolsheviks.
The CEO of the Anti-Defamation League (ADL), Jonathan Greenblatt, noted on Twitter that accusations of Bolshevism are “often used as a code for Jews.”
In 2019, white supremacy was described by the FBI as a “pervasive” threat. In 2020, USA Today reported that “incidents of white supremacist propaganda hit an all-time high,” citing a report by the ADL’s Center on Extremism.
New York University historian Ruth Ben-Ghiat tweeted this month: “Like Fascists, Donald Trump provided shelter and validation to all kinds of extremists. Neo-Nazis, militia members, Oath Keepers, Proud Boys… they are the paramilitary wing of a radicalized GOP.”
Perhaps the most depressing part of the Trump contamination is how it has poisoned the GOP.
The vast majority of the 147 Republicans in Congress who voted against certifying the last presidential election are likely to be reelected and join the new Congress, possibly as part of controlling majorities.
Stephen Ayres gave a sobering reminder of the damage, the human cost of Trump’s poison.
Going to the Capitol on Jan. 6 cost him his job and now he is facing prison time.
He testified earlier this month that he “felt like I had, like, horse blinders on” when he was listening to Trump.
“The biggest thing to me is, take the blinders off. Make sure you step back and see what’s going on. Before it’s too late,” he added.
It is time for all Americans to listen to former Senator Simpson and Mr. Ayres.
Fellow Americans, don’t let Trump tear apart our faith in each other. Don’t let him tear down our trust in institutions. Don’t swallow his poison.
Juan Williams is an author, and a political analyst for Fox News Channel.
There’s been a running theme for years in Kamala Harris’s world.
When she was senator very few people in her office had the institutional knowledge of her time as attorney general in California. And when she was attorney general, there was some overlap but only a small cadre of staffers could contextualize her time as district attorney in San Francisco.
Now, as the vice president’s domestic policy adviser Rohini Kosoglu, one of her closest and longest serving staff members, leaves her office, Harris is facing that problem yet again.
More than 13 high-profile aides have left the vice president’s office, including her director of speechwriting Meghan Groob just last week.
The revolving door has made headlines during Harris’s tenure, creating a narrative of instability in the vice president’s office. But some Democrats worry about larger implications, particularly if President Biden chooses not to run for re-election.
Kosoglu’s exit earlier this month was particularly significant because she was one of the few aides who personally knew Harris’s preferences, style and policy expertise.
The Democrats voicing private concerns say they are worried die-hard Harris loyalists — the kind of advisers and strategists who stick to their principal through the ups and downs — are virtually non-existent.
“It’s always been a problem,” said one former Harris aide. “You have to have your people around you.”
A White House official said Harris’s network is large and includes many aides from Harris’s previous roles.
“There are people who have worked for her who are very willing and able to talk to staffers whenever they have questions on her history,” the White House official said.
Those in Harris’s orbit point to Brian Nelson, who advised Harris when she was attorney general and is now the under secretary for terrorism and financial intelligence at the Department of Treasury. Other long-serving aides include Sean Clegg, a strategist on her presidential campaign, and Julie Chavez Rodriguez, who serves as a newly tapped senior adviser to Biden, worked in Harris’s Senate office before serving as her traveling chief of staff on her presidential campaign.
Kosoglu—who left the office on good terms in order to spend time with her family— also is expected to continue to offer institutional knowledge, according to sources familiar with her departure.
“The vice president has a vast network of friends from a long history in politics and that network is always available to her and has been helpful to her along the way,” said one source close to Harris.
The vice president has sought to steady the ship in recent months, bringing in big-name party veterans including Jamal Simmons, as her communications director, and Lorraine Voles, her new chief of staff who served as a communications director to Vice President Al Gore and then as an adviser to Hillary Clinton.
Kirsten Allen, who served as deputy national press secretary on Harris’s presidential campaign was also brought in to be her spokesperson earlier this year after a stint at the Department of Health and Human Services.
Since the shake-up, Internal palace intrigue has simmered. And the vice president has earned positive reviews for some of her policy engagement including on abortion rights, where she has quickly become the face of the White House’s fight on the issue.
Harris has also been hitting the road more frequently, traveling to five states in less than two weeks, while making the rounds more on television, doing morning shows, appearing on CBS’s “Face the Nation” and sitting down for one-on-one cable interviews. That’s expected to continue in the coming months when she will play a role in helping Democrats in the midterm elections. As the midterm elections inch closer, White House aides say she will play an active role in playing up the contrast between Democrats and Republicans.
Still, the lack of consistency with her staff could hamper the vice president’s political prospects, political observers say.
“A loyal and competent staff can make or break a political career,” said Katherine Jellison, a professor of history at Ohio University, who pointed to John F. Kennedy’s so-called “Irish mafia” who followed him from his days on Capitol Hill to the White House. “I agree that the vice president would be standing on firmer ground for the future if she had longtime staffers she could count on for sound advice and necessary action.”
Julian Zelizer, a professor of history and public affairs at Princeton University added that “new presidents often depend on teams of advisers who have been with them, often in their home state, for long periods of time.”
“They know the candidate, they understand their weaknesses and strengths, and they have a kind of personal connection that other professionals lack,” Zelizer said. “It could be that Harris lacks that sort of counsel and as a result this weakens her politically.”
When Harris became vice president, she brought a small group of staffers with her from the Senate including Kosoglu, who served as chief of staff, and Josh Hsu, who served as her deputy chief of staff and Michelle Solomon, her director of scheduling.
But she mostly surrounded herself with outsiders. Tina Flournoy, who served as former President Bill Clinton’s longtime chief of staff, came over to the White House to become Harris’s top aide. Symone Sanders, a communications adviser for President Biden during his 2020 presidential campaign, became her chief spokesperson. Opal Vadhan, who worked for Hillary Clinton, became her personal aide.
When Biden became president, he brought in advisers who have known him for much of his political career. Former President Obama also packed his White House with staffers who worked for him in the Senate and on his 2008 presidential campaign. And when Hillary Clinton became Secretary of State, one of her “conditions” in taking the job was that she would bring her own advisers with her, instead of surrounding herself with Obama’s aides.
“The reason they were able to mount successful campaigns was that they had the people and the necessary infrastructure needed to run a presidential campaign because they had relationships with people that went back years, if not decades,” said a second former aide to Harris. “She’s had to hire other people’s people.”
If Harris does end up running for president and becomes the Democratic nominee, strategists say party operatives would help her win. But if she is involved in a primary, they predict it would be tough for her to clear the field.
“Politics is about relationships and the relationships with the people around you,” the second former staffer said. “I think there’s a lot of improvement needed there.
“And it’s a tough problem to fix because the only solution is time.”
Congressional Republicans are eagerly floating investigations into Anthony Fauci and the Biden administration’s response to the coronavirus pandemic if they win back control of the House or Senate in the midterm elections.
“One way or another, if we are in the majority, we will subpoena his records and he will testify in the Senate under oath,” said Sen. Rand Paul (R-Ky.), who is in line to become the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee if Republicans win the majority with the panel’s current ranking member, Sen. Richard Burr (R-N.C.), retiring.
Republicans have not been shy about launching probes into the U.S. response to the coronavirus pandemic, focusing on the origins of the virus and whether the federal government — and by extension, Fauci — helped fund controversial research that might have played a role in its creation.
While Republicans have been in the minority, those investigations have not gained much momentum. But with the majority, the GOP would have the authority to lob subpoenas at the administration to force it to hand over documents.
“If we win in November, if I’m chairman of a committee, if I have subpoena power, we’ll go after every one of [Fauci’s] records,” Paul said earlier this year.
Public health experts said a hard look needs to be taken at the totality of the U.S. response to the pandemic across both the Trump and Biden administrations, but without getting into partisan finger-pointing.
“If you want to have a hearing, you need it to be a credible one. And that has to have a purpose. Other than going out to an 81 year old man,” said Georges Benjamin, executive director of the American Public Health Association.
Benjamin has been among health advocates pushing for an independent commission modeled on the 9/11 Commission to be formed to examine the pandemic response.
“It should be designed to actually get to the right answers. Until they do that, you know, they’re gonna continue to politicize it,” Benjamin said.
Fauci is a career government official who has become a political lightning rod and a villain in the eyes of many on the right. Conservative media has painted him as a scapegoat for many of the nation’s missteps over the pandemic.
Paul, a libertarian ophthalmologist, has repeatedly antagonized the nation’s top infectious diseases doctor over the benefits of masks, vaccinations and the origins of COVID-19.
In March, Paul tried to attach to the pandemic relief bill a proposal eliminating Fauci’s job and dividing it into three positions.
In the House, Rep. Jim Jordan (R-Ohio), who is in line to chair the Judiciary Committee if Republicans win the majority, told The Hill that he sees no limits to what he wants to investigate about Fauci and the pandemic.
Like Paul, Jordan has pressed Fauci to answer questions about whether his agency, the National Institute of Allergy and Infectious Disease, funded “gain of function” research in China.
Jordan and Paul have long pushed the idea that COVID-19 escaped from a lab in Wuhan, China, either because of an accident or because it was deliberately released, and that U.S.-funded research helped supercharge it into a much more dangerous and deadly version of the coronavirus.
Speaking to right-wing news outlet Just The News earlier this year, Jordan said he envisions that the investigation would aim to untangle “all the lies [and] the misinformation, the disinformation” allegedly spread by Fauci.
“That is because they knew from the get-go [coronavirus] came from the lab, likely came from a lab, gain-of-function likely done, and our tax dollars were used,” Jordan said.
The U.S. intelligence community has ruled out the possibility that COVID-19 was a bioweapon developed by China, but beyond that the origins of the virus are unclear.
Some scientists have said the idea that it escaped from a lab needs further investigation, but acknowledge that won’t happen without China’s help. Many others think that it spilled into the human population from animals sold in a Wuhan market.
Still, there is little evidence to suggest it was created in a lab or with funding help from the National Institutes of Health (NIH) or Fauci.
Rupali Limaye, a health communication scholar at the Johns Hopkins Bloomberg School of Public Health, said a nakedly partisan investigation of Fauci would do even more damage to the fraying public trust in health officials.
“I do think that public officials should be held responsible, you should be able to question and think critically about the recommendations that they have made, but it’s also a slippery slope,” Limaye said.
“Going down this slippery slope of continuing to have investigation after investigation after investigation is not in the best interest for anyone,” Limaye said.
More than four months after the Senate unanimously passed a bill to make daylight saving time permanent in the U.S., the measure has hit a brick wall in the House.
The main impediments dimming the legislation’s chances of passing appear to be fundamental disagreements over its language and a general consensus that other matter take precedence as the House grapples with high inflation, gun massacres and fending off judicial threats on issues such as abortion and marriage equality.
“I can’t say it’s a priority,” Rep. Frank Pallone (D-N.J.), the chairman of the House Energy and Commerce Committee, told The Hill recently.
“We have so many other priorities, but it doesn’t mean because it’s not a priority that we’re not trying to work on it. We are,” he said, adding “if we can accomplish anything it wouldn’t be until the fall.”
The Senate created a buzz in March when it approved the Sunshine Protection Act — which would make daylight saving time permanent — through unanimous consent, drawing widespread headlines. The legislation, which would not take effect until November 2023, calls for abandoning the process of changing clocks twice a year, a practice intended to give Americans an extra hour of daylight during the fall and winter.
But to do that, U.S. residents would lose an hour of daylight in the morning from November through February.
For instance, with the law currently in place, the sun is scheduled to rise in New York at 7:16 a.m. on Dec. 21, the shortest day of the year. But if the Sunshine Protection Act takes effect, residents in the Empire State would have to wait until 8:16 a.m. to see the sun rise on the Winter Solstice.
It is a similar situation in the afternoon — the sun will set in New York at 4:31 p.m. the day of the winter solstice, but with the Sunshine Protection Act, that would be pushed to 5:31 p.m.
The legislation received a warm welcome from some House members immediately after it passed the Senate — Speaker Nancy Pelosi (D-Calif.) said she supported making daylight saving time permanent — but others noted that there were far more pressing issues to address.
Days after Senate passage, some House members started asking for additional research into and discussion regarding the bill, signaling potential headwinds.
And now, Pallone is saying that while a number of lawmakers agree that “spring forward” and “fall back” clock changes should be done away with, they are at odds over what the permanent time should be — daylight saving or standard.
“We continue to try to come up with a consensus but so far, it’s eluded us,” Pallone said.
“The problem is that a lot of people say to me, ‘Oh, we should just have, you know, we shouldn’t switch back and forth, we should just have standard or daylight saving,’ but then they disagree over which one to enact. And so that’s the problem. We need a consensus that if we’re gonna have one time, what is it? And I haven’t been able to get a consensus on that,” he added.
The Energy and Commerce chairman emphasized that the disagreements are based on geographical location and not party affiliation.
Lawmakers in tourism areas, for example, are generally in favor of daylight saving time because they want visitors to stay out later, according to Pallone. But in rural locations that have large farmer communities, an extra hour in the morning is optimal.
“It’s not at all partisan,” Pallone said. “It’s totally, you know, regional and depends on your district.”
These are also some religious concerns. According to a Democratic aide, at least one lawmaker has received pushback to the measure from Yeshivas, who are worried that the new time system will conflict with morning prayers.
“I know that there were some concerns raised that I felt like we needed to take some time to address, so I’m gonna keep working on it,” Rep. Cathy McMorris Rodgers (R-Wash.), ranking member of the House Energy and Commerce Committee, told The Hill this week.
Some lawmakers, however, have not spoken highly of the measure. House Majority Leader Steny Hoyer (D-Md.) told The Hill last month that he was “somewhat unimpressed with this effort,” and Minority Leader Kevin McCarthy (R-Calif.) said, “I don’t think it’s a good bill.”
While the swift Senate passage of the Sunshine Protection Act caught some lawmakers and private citizens off-guard, the push to make daylight saving time the law of the land has been a decades-long effort backed by a number of business groups, especially golf organizations, that view an extra hour of daylight as beneficial for the bottom line.
Then-President Nixon signed a bill in 1974 to make daylight saving time permanent for two years as a way to address the nationwide gas shortage. But that timely experiment quickly failed, with President Ford signing legislation only nine months later to reinstate the bi-annual switching of the clocks after public approval of the change plummeted.
Public opinion, however, now appears to be up. A Monmouth University poll conducted in March found that 61 percent want to ditch the twice-yearly changing of the clocks, compared to 35 percent who want to keep the status quo.
Similarly, 59 percent of adults surveyed by YouGov said they would like to see daylight saving time made permanent, compared to 19 percent who would not.
Rep. Jan Schakowsky (D-Ill.), the chair of the Energy and Commerce Subcommittee on Consumer Protection and Commerce, told The Hill last month that a “disproportionate amount” of her constituents were discussing the matter after it cleared the Senate, noting that “almost” all the feedback was positive.
But some lawmakers, including Schakowsky, say that now is just not the right time to take up the legislation.
“It just does not seem as the kind of urgent priority right now. That’s all,” she said last week. “So, you know, how much focus is on it, how much attention, little.”
Rep. Vern Buchanan (R-Fla.), who sponsored the companion bill in the House, said the chamber has been “preoccupied” with a number of other matters, and Rep. Greg Pence (R-Ind.) said it is “not at all” a priority.
Asked about the bill, House Minority Whip Steve Scalise (R-La.), who sits on the Energy and Commerce Committee, told The Hill that he had not “heard anything about it lately,” adding “there was some talk months ago but it’s fallen by the wayside I think with so many of the other issues that are out there.”
But according to one Democratic aide, the ideal timeframe for approving the bill has passed, and there are slim odds that another will come along before the end of the year.
“If this bill was gonna move this Congress, like, we would’ve had to move it right after the Senate passed it,” the aide said. “I think that was kind of like our shot, and since it didn’t happen then, like it’s now kind of fallen off as a priority.”
The aide characterized the circumstances as a “strike while the iron is hot” situation, noting that the momentum following Senate passage quickly died down.
“There was like this big momentum to push it, and that kind of fell apart. And I think that’s really, kind of, hard to regain that momentum,” the aide said.
Senate Democrats are making a high-stakes final push to get legislation to lower prescription drug prices over the goal line.
While much of President Biden’s original economic package, from climate measures to higher taxes on the rich, has been stripped out by Sen. Joe Manchin (D-W.Va.), the party is trying to salvage a major measure to lower the cost of prescription drugs that Manchin said he would back.
The bill, which could get a Senate vote in the next two weeks, would allow Medicare to negotiate lower prices for some prescription drugs for the first time, a goal Democrats have been pushing for years.
It appears that Democrats have the votes to pass the measure without any GOP support, but a range of obstacles loom in the final stretch. Republicans and the powerful pharmaceutical industry are fiercely opposed to the measure. With a razor thin margin in a 50-50 Senate, the absence of any Democratic senators due to COVID-19 or other reasons could throw off the party’s plans.
Still, the possibility of passing Medicare drug price negotiation is giving Democrats something to point to after much of their sweeping agenda has fallen overboard.
“Let me say this: We are excited about doing prescription drugs,” Senate Majority Leader Charles Schumer (D-N.Y.) said Tuesday. “This is something we’ve waited for for a very long time and is going to be a major, major accomplishment to help people, bring down inflation.”
The issue polls extremely well with voters, which could give Democrats a much-needed jolt ahead of the midterms, amid Biden’s lagging approval ratings and concerns about inflation.
A Kaiser Family Foundation poll in October found that 83 percent of the public supports allowing Medicare to negotiate lower drug prices, including 71 percent of Republicans.
The core of the bill would allow Medicare to negotiate lower prices for 10 drugs per year starting in 2026 and 20 starting in 2029.
The measure is significantly scaled back from earlier drug pricing proposals, though, after Democratic leaders struck a deal with a group of moderate Democrats including Sen. Kyrsten Sinema (D-Ariz.) and Rep. Scott Peters (D-Calif.).
Under that deal, Medicare negotiation can only apply after a drug has been on the market for a certain period of time: nine years for many drugs and 13 years for complex “biologic” drugs.
The bill would impose a steep tax of up to 95 percent on drug companies that refused to come to the table and would also impose a ceiling that the negotiated price could not rise above, features that critics have used to argue that the bill is really just “price controls” rather than “negotiation.”
Other provisions would prevent drug companies from raising prices faster than the rate of inflation beginning this year and cap out of pocket drug costs for seniors on Medicare at $2,000 per year starting in 2025.
Asked if there is a political risk in opposing provisions to lower drug prices, Senate Minority Leader Mitch McConnell (R-Ky.), said Tuesday: “Well, I think everybody can make the decision for themselves,” but outlined his opposition to the measure, warning it would lead to less innovation and fewer new cures.
“My own view is socialist price controls are not the way to get a healthy pharmaceutical industry,” he said. “They produced a modern medical miracle with three highly effective vaccines in less than one year. This is a remarkable American success story, our pharmaceutical industry.”
In addition to the drug pricing provisions, the bill would also extend increased financial assistance to help people afford their health insurance premiums under the Affordable Care Act.
The extension of the extra help is likely to be for two years, though sources say there is some discussion of increasing it to three years. Adding the extra year would avoid setting up a cliff right before the 2024 presidential election. Without any action, the enhanced subsidies would expire at the end of this year.
The Congressional Budget Office (CBO) finds the drug pricing provisions would save about $288 billion over 10 years, while extending the increased ACA subsidies for two years would cost about $40 billion.
There would be a modest reduction in new drugs being developed due to the legislation, the CBO projected: 15 fewer drugs out of 1,300 expected to be approved over the next 30 years.
Further changes to the legislation could come if the Senate parliamentarian blows holes in any aspects of the drug pricing measure during a review to see if it complies with the chamber’s complex rules for reconciliation bills, which allow Democrats to bypass a GOP filibuster.
David Mitchell, founder of the advocacy group Patients for Affordable Drugs Now, said the bill is “historic without question,” despite the trims and negotiations needed to pass it.
“Is it everything that we would hope for if we could write the legislation ourselves? No, but that’s not the way things work here,” he said. “When you’re trying to alter policy that involves as many well-heeled and powerful players as this does, it takes time. We’re going to achieve breakthroughs this year that can be built upon for years to come.”
Rising interest rates and economic headwinds are making it harder for the U.S. to fill a severe shortage of affordable housing, and the problem is likely going to get worse.
The Federal Reserve has been working for months to stanch the sting of inflation by raising rates and slowing the housing market. Home sales and construction have fallen off a cliff this summer as a result.
Sales of new and existing homes have also fallen for months on end after the Fed drove up mortgage rates. But experts say that these rate hikes, coupled with supply shortages and a historically low inventory will only exacerbate the shortage.
“With mortgage rates up, it’s really just put a lot of buyers on the fence and into the rental market because they simply can’t afford mortgage payments,” said Daryl Fairweather, chief economist at Redfin, in a Thursday interview.
Fairweather said the mortgage payment on a medium-price home is up almost 50 percent from last year.
“A lot of buyers just can’t stomach that. They’re either cutting their budgets for housing or going into the rental market,” she said.
Sales of existing homes have fallen for five straight months, according to data released this week from the National Association of Realtors, and are down 14.2 percent over the past 12 months. While prices have started to fall in some of the country’s hottest local housing markets, the median home price still rose to $416,000 in June, up 13.4 percent from last year.
“We are seeing more and more people being priced out of the housing market as these rates continue to either climb or just stay at this higher level than we’ve seen over the last couple of years,” said Yelena Maleyev, economist at KPMG, in a Thursday interview.
The Fed, perhaps counterintuitively, is making homes more expensive to buy now with the hopes of eventually making them cheaper. The bank has hiked interest rates aggressively since March, which drove the average fixed 30-year mortgage interest rate up to 5.5 percent in June, according to Freddie Mac.
Fed interest rate hikes are meant to slow the pace of home sales by making mortgages more expensive. With fewer buyers able to afford higher rates, sellers will eventually be forced to lower their prices.
Maleyev said the decline in home sales will eventually force home prices down, one of several of the Fed’s goals with higher rates. The Fed is also hoping to curb the economic activity that comes with home sales and prompt homeowners to spend less money as the value of their house declines. Those factors combined should help reduce pressure on prices throughout the economy, bringing inflation down.
Higher rates are meant to bring home prices down after more than a decade of steady annual increases. The COVID-19 pandemic also unleashed a surge of demand for housing while federal stimulus efforts — including ultra-low interest rates — fueled a rapid increase in both sales and prices.
The number of new American households exploded in 2021 as COVID-19 vaccines unlocked a rapid recovery, rising 2.3 million above pre-pandemic levels, according to a report from ApartmentList.com
But higher interest rates are likely to keep homebuilders from constructing enough homes to meet those needs. The pandemic itself froze home construction for months, then created a series of supply and labor shortages, delays, backlogs and obstacles to completing homes on budget and schedule.
“Builders are now thinking demand is going to start to cool, especially because of these unsustainable prices,” Maleyev explained.
“At the same time, they’re still facing the same hurdles they faced before — long lead times, supply chain bottlenecks, inflation in their inputs, lack of labor, lack of land,” she continued.
Next week, the Fed is poised to hike interest rates by another 0.75 percentage points, the second increase of that size in two months. The move from the central bank will, as a result, push mortgage rates higher.
The bank has already boosted rates by 1.5 percentage points since March and will likely hike by another 1 percentage point at least by the end of the year.
Maleyev and Fairweather said it can be difficult for federal policymakers to boost the housing supply because housing markets are usually shaped by state and local regulations, many of which make it hard to build affordable homes.
President Biden’s quashed Build Back Better plan included more than $200 billion meant to boost the supply of affordable homes and unwind restrictive zoning laws, but the provisions will likely die with the rest of the package at the end of the year.
A bill to reverse the steep decline in U.S. immigration, which could help fill the home construction labor shortage, is also unlikely to pass into law given deep partisan divides on the issue.
“People exited the construction industry and never came back [after the 2008 recession], which contributed to the lack of labor,” Fairweather said.
“Now we’re in a position where housing has gotten so expensive and land has gotten so expensive that it’s just really expensive to build.”
