The Hill’s Morning Report — Biden economic troubles mount

The economic woes surrounding President Biden cropped up once again on Thursday as the U.S. economy shrank during the first three months of 2022 for the first time since the start of the COVID-19 pandemic, marking a sharp decline from the end of last year.

U.S. gross domestic product dipped at a 1.4 percent annual rate, the Bureau of Economic Analysis said Thursday, creating yet another headache for a Biden administration that has been consumed with rising inflation and supply chain issues ahead of what is expected to be a tough midterm election cycle for the party in power (The Wall Street Journal).

“We need to keep making progress — cutting costs for working families, making more in America, and creating good-paying jobs you can raise a middle-class family on,” Biden said in a statement responding to the news, taking a whack at a plan laid out by National Republican Senatorial Committee Chairman Rick Scott (R-Fla.) in the process. 

“Congressional Republicans, led by Sen. Scott, believe the way to fight these global challenges is by raising taxes on middle class families, including half of small business owners. I have a different approach,” Biden continued (The Hill).

Economists chalked the GDP downturn up to a spike in imports and a decline in exports, arguing there was more to the troublesome number, but it still does little to help a White House that has struggled to turn around Biden’s lagging approval ratings. According to the latest RealClearPolitics average of polls, only 41.4 percent of Americans approve of Biden’s work in office. 

As The Hill’s Sylvan Lane writes, the GDP figure also plays into the hands of Republicans, who were anxious to bludgeon Democrats for the downturn as inflation hits a four-decade record, and are arguing that the situation can still get worse. 

“Accelerating inflation, a worker crisis, and the growing risk of a significant recession are the signature economic failures of the Biden Administration — and will likely get worse,” Rep. Kevin Brady (R-Texas), ranking member on the House Ways and Means Committee, said in a statement.

Biden told reporters during a Thursday news conference that he is not concerned about a possible recession, pointing to the 3.6 percent unemployment rate and rising consumer spending. 

■ The Wall Street Journal: The GDP mirage.

■ The Washington Post: The White House tries to adjust to changing economy.

On top of the economic troubles, Biden on Thursday asked Congress for $33 billion in supplemental aid in the form of weapons and humanitarian support for Ukraine amid the nation’s continued fighting with Russia, especially in the eastern part of the country. Included in Biden’s pitch is $20 billion in weapons and ammunition, $8.5 billion for economic aid and $3 billion for humanitarian purposes (NPR). 

Biden also re-upped his push for $22.5 billion in COVID-19 funding as chatter on Capitol Hill surrounds whether the two packages will be attached. Republicans have been adamant that they should be separate as they continue their fight against ending the Title 42 policy (more on that below).

Finally, the president also previewed his plan to forgive student loan debt, saying that the total he is looking at does not reach $50,000, a total sought by progressives. 

“I am considering dealing with some debt reduction,” Biden said, adding he is “taking a hard look” at what he can do. (He has been weighing options since his 2020 campaign).

“I’ll have an answer on that in the next couple of weeks,” he added, having extended the COVID-19-imposed pandemic moratorium on federal student loan payments through August earlier this month (The Hill).

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■  CNN: President Volodymyr Zelensky, in his daily video message on Thursday, said: “Today, immediately after the end of our talks [with the U.N.’s António Guterres] in Kyiv, Russian missiles flew into the city. Five missiles. This says a lot about Russia’s true attitude to global institutions, about the Russian leadership’s efforts to humiliate the UN and everything that the organization represents. And therefore requires an appropriate, powerful response.”

■ The Associated Press: Explosions rock Kyiv again as Russians rain fire on Ukraine.

■ The Associated Press: New gas pipeline boosts Europe’s bid to ease Russian supply.

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LEADING THE DAY

➤  CONGRESS 

Democrats facing voters this fall have repeatedly urged the Biden administration to reveal in detail the federal planning for an anticipated surge of migrants at the U.S. southern border whenever Title 42, the restrictive immigration policy adopted by the Trump administration, ends next month, pending court delays. On Thursday, Democrats heard more about those plans. Some voiced unease and were not shy about their misgivings and critiques (Politico).

“My district, if you go talk to mayors, county judges, sheriffs, police on the border, they’re all saying, don’t lift it [Title 42]. Because we’re right there,” said Rep. Henry Cuellar (D-Texas), who faces a runoff election against a progressive challenger next month. “Maybe one of the courts will give [Biden] a way out of this.”

The Hill: With November elections as a political backdrop, Republicans on Thursday at a brawling House hearing accused Homeland Security Secretary Alejandro Mayorkas of being a “traitor” who “allowed” opioids into the United States. “It is so profoundly offensive, on so many different levels, in so many different regards. I won’t ask you for an apology,” said Mayorkas, describing his career service as a federal prosecutor and Homeland Security official.

■  The New York Times: Republicans during hearings this week blamed Mayorkas for a spike in migration in a preview of election-year attacks on administration policy.

■  The Wall Street Journal: About 200 Ukrainians were turned back at the U.S. border in Mexico this week, after U.S. authorities closed a border checkpoint near San Diego that has processed thousands of refugees since Russia’s invasion of Ukraine. They must wait for processing under a new refugee-sponsorship program while housed at a Tijuana shelter.

Almost time to show their hand. House Democrats on Thursday announced a series of eight new hearings through June that they say will lay out an evidence-based narrative about events before, during and after the Jan. 6, 2021, insurrection at the Capitol (CNN). 

Newsweek Jan. 6 timeline: From Trump’s first tweet, speech to Biden’s certification. 

The select committee must conclude its investigation this year and unveil its findings, possibly to include referrals to the Justice Department of possible crimes tied to former President Trump, former government officials and some in Trump’s circle of outside advisers. They falsely told Americans that Trump won and Biden lost the 2020 presidential contest while also weighing alternatives to conceding power.

Trump received 7 million fewer votes than Biden and lost the electoral college 306-232 but maintained he “won” until he conceded during an Atlantic interview that he “didn’t win the election.” Trump, impeached twice and acquitted both times by the Senate, has assailed the House Jan. 6 investigation as partisan. He continues to suggest to his supporters that he will be a presidential candidate in 2024.

The Hill’s Jordain Carney reports that last year’s Democratic Senate strategy to bypass Republicans has boomeranged back to searching for GOP help to try to enact various policy changes with 60 votes. The latest examples: spending plans, election reforms, climate change and energy provisions, and even immigration changes. One gigantic caveat: It’s an election year in which Republican candidates believe they will be rewarded by voters for opposing Biden and Democrats, not collaborating with them.

The Hill: Sen. Joe Manchin (D-W.Va.) leaves Democrats doubting their agenda will pass. 

IN FOCUS/SHARP TAKES

➤  ADMINISTRATION 

Elon Musk’s approximately$44 billionbid to buy Twitter, accepted by the company’s board, is under a Federal Trade Commission microscope, according to reporting by The Information. Musk’s Twitter takeover is unlikely to raise antitrust concerns, the outlet reports. But the commission recently opened an inquiry into whether Musk failed to comply with antitrust requirements regarding disclosure of his initial 9 percent stake in the company. After the purchase, Musk also agreed to sell roughly $4 billion in Tesla stock (The Wall Street Journal).

TechCrunch: Twitter says fluctuations observed in follower counts after announcement of the Musk-Twitter deal were “organic” (meaning the result of user deactivations and signups rather than bots).

The Associated Press: The Food and Drug Administration, as expected, announced on Thursday that it will ban menthol in cigarettes and cigars as a way to deter addiction to smoking. 

© Associated Press / Gregory Bull |Twitter splash page appears on Monday.

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➤  POLITICS 

When Trump takes the stage at his latest rally in Greenwood, Neb., tonight, he will be joined by Charles Herbster, who is running for the state’s GOP gubernatorial nomination. 

The situation is more than the run-of-the-mill candidate appearing at the rally, as Herbster was recently accused of sexually assaulting eight women, including a Nebraska GOP state senator who went on the record to level the allegations. 

Julie Slama told the Nebraska Examiner that Herbster reached up her skirt and touched her inappropriately during an event in 2019. Days after the initial report, two more people corroborated Slama’s account, saying they witnessed it or heard about it from Slama immediately after it occurred. 

Herbster has denied the allegations. He is part of a large primary field to replace outgoing Gov. Pete Ricketts (R), who has called on him to drop out of the race and “seek help.” The primary is set for May 10 (The Washington Post). 

■ The Associated Press: Oklahoma House sends Texas-style abortion ban to governor.

■ Punchbowl News: Rep. Kai Kahele (D-Hawaii) leaving Congress to run for Hawaii governorship. 

■ The Washington Post: Disney’s special tax district pushes back against law that would dissolve it.

■ The New York Times: How Florida Gov. Ron DeSantis (R) transformed the Sunshine State’s political identity.

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📝 Introducing NotedDC, The Hill’s curated commentary on the beat of the Beltway. Click here to subscribe to our latest newsletter. 

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OPINION

■  French lessons: What Emmanuel Macron tells us about winning when people don’t like you, by John F. Harris, founding editor, Politico. https://politi.co/39qoL5Z 

Space here if possible.

■  Biden should resist canceling student debt. Here’s a better policy, by The Washington Post editorial board. https://wapo.st/3vqQsUJ

WHERE AND WHEN

The House meets at 10:30 a.m. Speaker Nancy Pelosi (D-Calif.) will hold her weekly press conference at 10:45 a.m.

The Senate convenes Monday at 3 p.m. and resumes consideration of the nomination of Joshua Frost to be an assistant secretary of the Treasury.

The president receives the President’s Daily Brief at 10:15 a.m. Biden will speak by phone at 1 p.m. from the Oval Office with Mexican President Andrés Manuel López Obrador. The president will voice his support for the work of independent federal inspectors general at 3:15 p.m. during a meeting with them in the State Dining Room.

Vice President Harris is in isolation at her official Naval Observatory residence in Washington after testing positive for COVID-19 on Tuesday.

Economic indicator: ​​The Bureau of Economic Analysis will release a report at 8:30 a.m. about personal income and outlays in March. 

The White House daily press briefing is scheduled at 2 p.m.

Saturday 🐕🐈 =  National Adopt a Shelter Pet Day: Animal lovers can check out what that means (The Washington Post).

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🖥  Hill.TV’s “Rising” program features news and interviews at http://digital-release.thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.

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ELSEWHERE  

➤  CORONAVIRUS 

Young children are still not eligible for COVID-19 vaccine doses in the United States. Moderna said on Thursday that it has asked the Food and Drug Administration to authorize its coronavirus vaccine for children 6 and younger, making it the first manufacturer to do so. A top official said the firm would finish submitting data to regulators by May 9. Many parents of roughly 18 million young children have questioned why the government can’t move faster to approve such jabs (The New York Times).

Need a COVID-19 test or fast access to antiviral treatment, such as Pfizer’s Paxlovid pills? A federal locator tool that uses your zip code can help HERE.

The Associated Press: Racial split on COVID-19 endures as restrictions ease in U.S.

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University: 993,164. Current average U.S. COVID-19 daily deaths are 334, according to the Centers for Disease Control and Prevention.

© Associated Press / Nam Y. Huh |Illinois middle school, 2021.

➤  TECH 

Amazon on Thursday reported a nearly $4 billion loss in the quarter ending March 31, news that sent the company’s stock plunging. The company attributed the situation, not foreshadowed by analysts, largely to a $7.6 billion loss from its investment in electric automaker Rivian Automotive (CNN). … The Department of Justice on Thursday urged a Washington, D.C., superior court to reconsider its dismissal of an antitrust case against Amazon that was brought by D.C. Attorney General Karl Racine (D). The lawsuit alleges the company has used anti-competitive practices by keeping third-party sellers from offering lower prices for products elsewhere (The Hill).

THE CLOSER

And finally …  👏👏👏 Bravo to Morning Report Quiz Masters who knew some trivia about headline-grabbing Tesla CEO and pending Twitter owner Elon Musk.

Here’s the fabulous winner’s circle (readers who snagged an extra point for translating a bit of Latin are marked with, what else, a star): Richard E. Basnik, ⭑Pam Manges, ⭑John Donato, ⭑Candi Cee, Terry Pflaumer, ⭑Mary Anne McEnery, Daniel Bachhuber, ⭑Patrick Kavanagh, ⭑Stan Wasser, ⭑Randall S. Patrick, ⭑Robert Bradley, ⭑Lori Benso, Luther Berg, ⭑Harry Strulovici, Len Jones, ⭑Lesa Davis and ⭑Steve James.

Musk on Twitter in 2021 tangled with Sen. Elizabeth Warren (D-Mass.) over billionaire tax benefits. In a series of tweets, he called her “Senator Karen.” 

At age 12, Musk taught himself coding and created a computer game he called  “Blastar,” which he sold for $500.

Musk’s auto company is named after an electrical engineer (Nikola Tesla) who was born in 1856.

In Musk’s world, Ad Astra is his children’s school. (Bonus point: Ad Astra in Latin means “to the stars.”)

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