POLITICO Playbook: This week, it really is the economy, stupid- POLITICO – POLITICO

Posted By on July 25, 2022

With help from Eli Okun and Garrett Ross

The Biden administration is bracing for bad GDP figures ahead of a what's expected to be a a busy week of economic news. | Scott Eisen/Getty Images

THE WEEK Today: The America First Agenda Summit convenes in Washington (heres the schedule). The Senate holds a cloture vote on the CHIPS Act, setting up a possible final vote on Tuesday or Wednesday. MIKE PENCEspeaks at the Heritage Foundation, laying out an agenda for a possible 2024 run. Tuesday: The Conference Board releases new consumer confidence numbers. At 3 p.m., DONALD TRUMP gives the keynote at the America First Agenda Summit, his first appearance in D.C. since leaving office. Wednesday: The Fed meets to decide whether to raise interest rates, and JEROME POWELL holds a presser. Thursday: New Q2 GDP numbers are announced. The annual Congressional Baseball Game is scheduled for Nats Park at 7:05 p.m. Friday: New inflation numbers released.

WHY TRUMP IS IN D.C. TOMORROW These former Trump advisers are trying to do the impossible: Make Trumpism about the future, by Meridith McGraw

THIS WEEKS BIG STORYLINE IN WASHINGTON If theres one thing the White House, economists and basically everyone who thinks about money can agree on, its that this is going to be a big week for economic news.

On Tuesday, we get new consumer confidence numbers, a measure which has fallen for two consecutive months. Last months report showed the Consumer Confidence Index at its lowest level since February 2021 and the Expectations Index consumers short-term outlook for income, business, and labor market conditions, per the Conference Board at its lowest level since 2013.

On Wednesday, the Fed will meet and make a decision on just how much to raise interest rates. After the most recent inflation numbers, most observers expect a hike of .75 percentage points. That would be the fourth rate increase this year.

Federal Reserve chief Jerome Powell has vowed to follow the data in deciding how high to crank up interest rates to crush the worst inflation surge in four decades, Victoria Guida writes this morning. But Powell and other Fed policymakers are making that crucial decision based on data that lately has been so confusing and contradictory that its hard for them to know where the economy actually stands.

Case in point: Economic growth is projected by some analysts to have been negative in the second quarter of the year, but hiring is strong and the jobless rate sits near historic lows. Consumers say theyre unhappy about the economy but are still spending even amid the aggressive price spikes. Supply chains are improving, but manufacturing output is slowing. And Covid cases are skyrocketing again even as America fully reopens for business.

The high stakes: Whatever the Feds decision, it'll be made without a clear line of sight at their target. That uncertainty heightens the risk that theyll either do too much triggering a severe recession or too little, prolonging red-hot inflation and making it harder to conquer.

On Thursday, the GDP numbers for the second quarter will drop, and economists expect theyll show a decline of 1% to 2%. It would be the second straight quarter of decline which is often seen as signaling a recession.

The Biden administration is prebutting the expected bad GDP news.

I do want to emphasize: What a recession really means is a broad-based contraction in the economy, Treasury Secretary JANET YELLEN said on NBCs Meet the Press on Sunday. And even if that [Q2 GDP] number is negative, we are not in a recession now. And I would, you know, warn that we should [not be] characterizing that as a recession. Most of the data that [the National Bureau of Economic Research] look[s] at right now continues to be strong.

Sounding a similar note: The economy created 1.1 million jobs in Q2, BRIAN DEESE, head of the National Economic Council, wrote in a Sunday afternoon Twitter thread. That's simply not consistent w/ a recession, where historically the economy is consistently LOSING jobs. Looking ahead, the global economy faces significant challenges. But with a strong labor market and household finances, the U.S. can transition without giving up all the econ gains of the past 18 [months].

On Friday, consumer price inflation numbers will drop, via the Personal Consumption Expenditure index which, as Ben White notes, happens to be the Feds favorite gauge of prices.


1. Senate Dems hope to keep the reconciliation train on the rails. As soon as today, the Senate parliamentarian could give guidance on whether Dems plan to allow Medicare to negotiate drug prices is permissible via reconciliation.

2. The pending same-sex marriage bill vote in the Senate. An aide to CHUCK SCHUMER says the majority leader is working closely with Sens. TAMMY BALDWIN (D-Wis.) and KYRSTEN SINEMA (D-Ariz.) the chambers only two out LGBTQ lawmakers to win enough Republican votes to pass a bill to codify same-sex marriage and interracial marriage into law. (The House passed the measure last week.) Schumer is expected to bring the bill to the floor as soon as they get to 60 yes votes.

How theyre getting there: Dems are focusing on those Republicans who have LGBTQ friends, family or staff and might be convinced to support the straightforward legislation based on their personal connections, Burgess Everett reports this morning.

Baldwin, who in 2012 became the first openly LGBTQ person elected to the Senate, tells Burgess that shes hopeful about finding enough support, but is blunt about this moment in time: I had not expected to be fighting to protect a right thats already been won in court.

Good Monday morning. Thanks for reading Playbook. Drop us a line: Rachael Bade, Eugene Daniels, Ryan Lizza.

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HARRIS TO THE RESCUE? VP KAMALA HARRIS and her team are planning to hit the road in support of Democratic state legislators and governors on the front lines of the fight for abortion rights, Eugene reports this morning.

Its something the strategists behind the DLCC and DGA have wanted for a long time attention from national leaders and marks an aggressive push by the second highest Democrat in the land to get involved in races often overlooked by the national party.

We need to make it a goal that were out in America three days a week, Harris told her staff recently as they worked to figure out how much overall travel she should take through the November elections, a source familiar with the conversations told Eugene.

TOP-ED Jeffrey Frank in the NYT: Kamala Harris Is Stuck

THE PLAYBOOK BOOK CLUB Q&A Our colleague and POLITICOs White House Bureau Chief Jonathan Lemires book The Big Lie comes out tomorrow. In it, he traces what he considers the root of Trumps political career: his relationship with lying.

Lemire tells Eugene he wanted to do something a little different with the book. Instead of trying to tell the entirety of the arc of the Trump presidency, I wanted to take a focused angle on his lies and how everything about his lies led to January 6 and has shaped our politics beyond that.

Trumps use of lies from the racist birther lie that accompanied his entry into national politics, to his lie that the 2016 Iowa GOP caucuses were rigged, to his lie that the 2020 election was stolen from him presents a challenge to the media as he gears up for a likely 2024 run, says Lemire.

It's not just [the] lessons learned during his presidency about needing to supply appropriate context to fact-checks, [or] not just carrying him live because you can't trust what he'd say would be true. More than that: How do we frame him? Do we frame him as an insurrectionist presidential candidate? We're going to be in a new place. There has not been a test like this for the country since the Civil War in terms of how we'd have to approach that race and how we'd have to cover someone who had such, in many ways, radical beliefs about our democracy.

Mini-excerpt from the book on the Biden teams preparations for lawsuits about the 2020 election and its ultimate failure of imagination over how far Trump would take his fight: [Biden legal adviser BOB] BAUER created a team of former solicitors general to fight the legal battles ahead. And internally, strategy sessions were held, with tabletop exercises to game out what could happen during the campaign and its aftermath. Led by ANITA DUNN and RON KLAIN, they tried to project scenarios both mundane and far-fetched. What if Trump refused to leave office? What if Trump considered calling in the military? The ideas were rejected as absurd and unrealistic.

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9:30 a.m.: The president will receive the Presidents Daily Brief.

12:30 p.m.: Biden will speak virtually to the National Organization of Black Law Enforcement Executives Conference.

Press secretary KARINE JEAN-PIERRE will brief at 3:10 p.m. with ASHISH JHA.


8:45 a.m.: The VP will leave D.C. for Indianapolis.

11:30 a.m.: Harris will convene Indiana state legislators to talk abortion, as Adam Wren scooped last week, with opening remarks at the Indiana State Library.

3:20 p.m.: Harris will leave Indiana to return to Washington.

THE SENATE will meet at 3 p.m. to take up the House message to accompany the legislative vehicle for the Promise to Address Comprehensive Toxics Act. At 5:30 p.m., the Senate will have a cloture vote teeing up the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.

THE HOUSE is out.


From left, Rebecca Kleefisch, Tim Michels and Timothy Ramthun participate in a televised Wisconsin Republican gubernatorial debate Sunday, in Milwaukee. | Morry Gash/AP Photo


WHEN THE CHIPS ARE DOWN The major semiconductor manufacturing/China competitiveness legislation is on its way to a final Senate vote this week before heading back to the House, WaPos Jeanne Whalen previews. Semiconductor companies and universities are already jockeying for slices of the funding, in an early sign of whats likely to be a heated competition, should the bill become law.

But opposition is significant, too, coming from both the likes of Sen. BERNIE SANDERS (I-Vt.) and a wide range of conservative lawmakers, think tanks and media outlets, who lambast the bill as corporate welfare, reports APs Kevin Freking. That means a bipartisan coalition will have to support the legislation to pass it in either chamber.

In addition to chips, same-sex marriage and reconciliation, some Senate Dems are pushing for a vote this week on Finland and Sweden joining NATO, per WSJs Siobhan Hughes.

Sen. TODD YOUNG (R-Ind.) on the chips package: Were very close to landing the plane.


DEMOCRACY DIGEST The New Yorkers Dan Kaufman is out today with a dispatch from Wisconsin, where conspiracy theories have remade the political landscape and made election administration the central issue in the governors race. Republicans who dominate the state legislature are mainly divided over whether to restrict voting or to alter the fundamental nature of elections, he writes. And many in the state see the stakes for democracy as existential.

STILL THE JUGGERNAUT Seventy-nine percent of young conservative activists at the Turning Point USA Student Action Summit backed Trump in a 2024 straw poll Sunday, Fox News Brooke Singman and Tyler Olson scoop from Tampa. Florida Gov. RON DESANTIS pulled in 19%; nobody else topped 1%.

Some other fascinating results:

FOLLOWING THE MONEY One of the key aspects of the Texas GOPs lurch to the right in the past few years is money from the billionaires TIM DUNN and FARRIS WILKS, whose collective $29 million in recent donations have quietly bankrolled some of Texas most far-right political candidates helping reshape the states Republican Party in their worldview, CNNs Casey Tolan, Matthew Reynard, Will Simon and Ed Lavandera report in a big new investigation.

Republican state Sen. KEL SELIGER: It is a Russian-style oligarchy, pure and simple. Really, really wealthy people who are willing to spend a lot of money to get policy made the way they want it and they get it.

BORN TO BE IN IT Could BETO OROURKE really mount a serious challenge to Texas Gov. GREG ABBOTT in a difficult year for Democrats? NYTs David Goodman reports from Sugar Land that hes pulling closer: The unrelenting succession of death and difficulty facing Texans over the last two months has soured them on the direction of the state. Texas Dems have seen their dreams turn into nightmares for several cycles now, but in recent weeks there has been a perceptible shift in Texas, spurred by news about guns, abortion, immigration and the electrical grid.

THE NEW GOP "QAnon Candidates Arent Thriving, but Some of Their Ideas Are, by NYTs Stuart Thompson

THE AIPAC ANGLE The American Israel Public Affairs Committee has spent more than any other group in Democratic primaries this year, splashing more than $22 million across nine races to attack more progressive candidates, Elena Schneider reports from Royal Oak, Mich. Nowhere is the dynamic coming to a head more than in Michigan, where AIPAC is boosting Rep. HALEY STEVENS in her race against Rep. ANDY LEVIN, who hails from a famous Jewish political family. AIPAC has long been an influential force in Washington, traditionally bundling direct donations to candidates in both parties, but the super PAC is a new innovation for the group this year, after decades of making much smaller donations.

TREND WATCH One thing voters agree on: Fresh voices needed in politics, AP

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EASTMAN FALLOUT Though the Claremont Institute grew in influence and stature during the Trump administration, its facing fresh challenges over the role of JOHN EASTMAN in trying to overturn the 2020 election, WaPos Marc Fisher and Isaac Stanley-Becker report in a big story from California. Eastmans actions and the think tanks response have divided its followers over the question: How far should scholars go to put their ideas into action?


SPORTS BLINK Ahead of a 9/11 victims families protest over the Saudi-backed golf event Trump is hosting, a Trump aide reached out to the group to try to smooth things over, Meridith McGraw reports. But the call didnt go so well: The recipient asked why Trump didnt call himself if he really cared.


GRIPPING READ NYTs Michael Schwirtz goes long on Ukrainian fighters final, 80-day resistance of the Russian onslaught at the Azovstal steel plant in Mariupol. The apocalyptic siege that became Ukraines version of the Alamo is already the stuff of lore in the country. Soldiers and civilians cohabitating made life and armed defense more difficult. Starvation, death, escape and finally surrender: Azovstal became a horror show. Inside the field hospital at Azovstal, the wounded soldiers looked pale and deathlike. Crammed into a dark and dust-filled bunker, most were lying on the concrete floor. Their injuries were leaking and bloody, and where gangrene had set in, the flesh looked green and rotted.


THE LATEST WAVE As the nation staggers through another Covid-19 surge, hospital staff shortages are worrying the medical community about their ability to respond to a potential increase in hospitalizations, Krista Mahr reports. The current wave is also putting fresh stress on facilities as federal funding for the pandemic response is running out, leaving some with less flexibility to hire more staff if they need to.

Marco Rubio fired back at Pete Buttigieg over the same-sex marriage bill: Im not going to focus on the agenda dictated by a bunch of affluent, elite liberals and a bunch of Marxist misfits.

Wendy Sherman and Caroline Kennedy are heading to the Solomon Islands, where both their fathers fought in World War II, per Reuters.

IN MEMORIAM Former NY Conservative Party leader Michael Long dead at 82, by the N.Y. Posts Carl Campanile: [A] powerful force in New York politics who was instrumental in getting Republican George Pataki elected governor The Brooklyn-born political operative headed the Conservative Party for more than 30 years, from 1988 to 2019.

OUT AND ABOUT SPOTTED celebrating David Brocks 60th birthday in the Hamptons, which included an iPhone video birthday message displayed on a big screen from Hillary Clinton: James Carville and Mary Matalin, Paul Begala, Sidney Blumenthal, Joe Conason, Kelly Craighead, Michael LaRosa, Bradley Beychok, Mary Pat Bonner, Ilyse Hogue and John Neffinger, Melissa Moss, Jesse Rodriguez, Louise Gunn, Rob McKay and Susie Tompkins Buell.

TRANSITIONS Alison Markovitz is now COO at the Carnegie Endowment for International Peace. She most recently was a senior operations executive for Fermilab. Tim Daniels is joining the federal affairs team at Tyson Foods as senior manager of government affairs. He most recently was deputy chief of staff and counsel to House Agriculture Appropriations Subcommittee ranking member Andy Harris (R-Md.).

Lt. Col. Chris Mitchell has returned to the National Guard Bureau, where he will become chief of public affairs plans and policy. He most recently was a spokesman at the Defense Department, where he was principal press lead for issues related to homeland defense, the U.S. Northern Command, and counter-WMD. Lt. Col. Devin Robinson has replaced Mitchell to handle his portfolio. He was previously with the Air National Guards public affairs office and is a member of the Maine Air National Guard.

WEEKEND WEDDING Dominic Pierotti, a senior consultant at Deloitte Consulting, and Elise Rhodes, SVP at RightForge, got married this weekend in Lewes Beach, Del. Michael Brown officiated. The couple first met 13 years ago, and just left D.C. for a new adventure in Florida. Pic Another pic SPOTTED: Anthony Pierotti, Colleen Pierotti, John Rhodes, Janice Rhodes, Ryan Rhodes, Ximena Barreto, Jon Harrison, Luke Mahoney, Christopher and Katherinn Garcia, Margaret and Jim Ellis, and Alisa Troccia.

WELCOME TO THE WORLD Scott Detrow, co-host of the NPR Politics Podcast and White House correspondent, and Laura Olson, comms manager for the Capital Area Foodbank, welcomed Natalie Joan Detrow to the family. Scott says Natalies older brother decided months ago her name would be Banana and is very determined to make that stick.

Jon Romano, senior adviser to Helena Foulkes Rhode Island gubernatorial campaign and partner and co-founder of Department of Here, and Jennifer (Paolino) Romano, VP of corporate initiatives and strategic partnerships at Paolino Properties, welcomed Rosie Grace Romano on July 10. The parents are both Obama administration alums. Rosie joins big brother Leo. Pic

HAPPYBIRTHDAY: Rep. Jared Golden (D-Maine) Alex Nguyen of Senate Majority Leader Chuck Schumers office ... Andrew Feldman of Feldman Strategies Kirsten Sutton USAIDs Alison Harding Christine Quinn of Win Judy Keen Sarah Benzing Fox News Kelly Laco and Katy Ricalde TLC Politicals Christian Hulen ... Bloombergs Mike Nizza The Atlantics Anne Applebaum and Caroline Black Fanning Liz Brown of the Childrens Hospital Association ... Clio Grillakis of the Ex-Im Bank Robert Zoellick ... Brad Karp Amy Holmes ... Mark McLaughlin ... Rebecca Gale POLITICOs Maren Rincon and Taylor Cottle WSJs Elise Dean NBCs Jesselyn Cook Ella Gunn Katie Martin Alex Pfeiffer

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