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MORNING REPORT

PRESENTED BY PHILIP MORRIS INTERNATIONAL

Friday, November 11

by Alexis Simendinger & Kristina Karisch

All eyes on Georgia, Nevada and Arizona

Three days after the midterm elections, control has yet to be determined in both the House and the Senate and while the upper chamber remains a toss-up, Republicans hold a slight edge to win the House.

Nevada and Arizona ballots are still being counted this morning and Georgia is braced for a hard-fought December runoff to determine Senate results, writes The Hill's Julia Manchester. In the House, many toss-up races have not been called and the official victors in some gubernatorial races are still up in the air.

In Georgia, Republicans and Democrats are gearing up for a showdown to decide which party will control the Senate next year, The Hill's Alexander Bolton reports. Some Republicans are already calling on former President Trump to postpone his planned 2024 presidential announcement, worried he could hurt their chances in the runoff.

Many Republicans blamed Trump for the loss of both Georgia seats in the January 2021 runoff and fear a reprise if he tries to make the race about himself and election fraud.

The Senate Democrats' campaign arm is already investing $7 million for field organizing efforts ahead of next month's runoff to support Sen. Raphael Warnock (D) against Republican challenger Herschel Walker (The Hill). Walker is getting support from the National Republican Senatorial Committee (NSRC), after its head, Sen. Rick Scott (Fla.) pledged Wednesday to raise whatever money he can and begin an advertising blitz for the candidate.

Scott won't comment on whether he thinks Trump should stay out of the Dec. 6 runoff, an opinion voiced on Thursday by some fellow Republicans.

That'll be a decision between Herschel and Trump. I know that Trump wants to be helpful to make Herschel win," Scott told NBC News. "That's an issue for the campaign. I don't get to participate in those decisions."

Scott said his focus will be to raise "every dime" possible for Walker after the NRSC injected $14 million into the race (NBC News).

Trump, meanwhile, is still considering a likely presidential campaign announcement on Nov. 15. The former president may well face off in the Republican primaries against Florida Gov. Ron DeSantis, who looks to be a frontrunner after winning reelection by a double-digit margin on Tuesday night (The Hill). Trump on Thursday attacked DeSantis and conservative media — which blamed him for GOP losses in key races — saying "Ron DeSanctimonious is playing games!" (Bloomberg News).

"The Fake News asks him if he's going to run if President Trump runs, and he says, 'I'm only focused on the Governor's race, I'm not looking into the future,'" Trump said in a statement. "Well, in terms of loyalty and class, that's really not the right answer."

Politico: Trump goes to war against DeSantis.
Politico: Scott was prepared to take on McConnell — until Tuesday.

While the Georgia seat is critical, both parties are also keeping close watch on Arizona and Nevada, where ballots are still being counted in the states' respective Senate races. CNN estimated about 540,000 votes in Arizona and 95,000 in Nevada are left to be counted as of Thursday evening.

In Nevada, Sen. Catherine Cortez Masto (D) is trailing behind Republican challenger Adam Laxalt by 9,000 votes, but both parties are expressing optimism that they'll prevail in the race, writes The Hill's Caroline Vakil. Democrats feared that a favorable political environment for Republicans, coupled with the ever-present issue of inflation in the tourism-dominated economy, would thwart Cortez Masto's chances of reelection.

But their mood has shifted as ballots counted in Clark County appear poised to help the senator close the gap with Laxalt. Republicans, meanwhile, remain bullish that Laxalt will eke out a win. Both parties are now playing the waiting game after Clark County election officials said counting will continue for several days, with the possibility that most ballots could be recorded by Friday.

The Hill: Key Nevada county expects to count most remaining ballots by Saturday.

Meanwhile, Sen. Mark Kelly (D) has a comfortable 115,000 vote lead in Arizona over Republican challenger Blake Masters, where the wait for results is expected to continue into next week. Election workers in Maricopa County today will begin wading through a massive tranche of 290,000 early ballots that were handed in on Election Day that have created chaos and lengthened the time until races can be called (The Hill).

Time: Why Arizona's governor's race may end up in a courtroom.

Over in the House, Morning Report is tracking a few featured races.

In Montana, former Interior Secretary under Trump, Ryan Zinke (R), who resigned under a cloud in 2018, won a House seat by a narrow margin (The Washington Post).

Votes are still being counted in Colorado in a surprisingly razor-tight race between Rep. Lauren Boebert (R) and Democrat Adam Frisch. Boebert, a far-right Republican with deep ties to Trump who was widely expected to win the race, at one point trailed Frisch by a double-digit vote margin. As of this morning, Boebert leads by 1,112 with 99 percent of the vote tallied (CBS News).

NBC News: The margin in Boebert's race is so close, it "smells like recount territory."

Meanwhile in New York, Rep. Sean Patrick Maloney (D), who lost his own reelection bid after serving as the House leader tasked to help Democrats hold the chamber's majority, on Thursday said of the GOP, "we are not going to let them steal a single seat."

Maloney, a five-term member of Congress, lost in a newly mapped district in a stunning defeat to Mike Lawler, a Republican in the State Assembly. The outcome provided a rare instance in which the Democrats' recent brush with fatalism almost seemed justified, as Maloney became the first chair of either party's congressional campaign arm to lose a reelection in roughly 30 years (The New York Times).

The Washington Post: Maloney is a tale of two nights: The best of times, the worst of times.
KXAN: New York emerges as an exception to a strong election for Democrats.

The Hill: Hispanic voters largely stuck to historical partisan trends in 2022, despite a narrative of a rightward shift among Latinos. The partisan split and the influence of Latino voters on a series of key elections underscored the importance of a Hispanic electorate once derided as a "sleeping giant."
The Hill: The midterms suggest early voting is here to stay, with 47 million voters casting ballots before election day.
The Washington Post: Where voter turnout exceeded 2018 highs.
NPR: Turnout among young voters was the second highest for a midterm in the past 30 years.
The Washington Post: Key election deniers concede defeat after disputing Trump's 2020 loss.

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Leading the Day

➤ ADMINISTRATION

👉 A federal judge in Texas on Thursday ruled the administration's controversial student loan debt forgiveness program is unlawful.

The Justice Department immediately filed an appeal, according to the White House. "We strongly disagree with the District Court's ruling," Biden press secretary Karine Jean-Pierre said in a statement Thursday night.

"For the 26 million borrowers who have already given the Department of Education the necessary information to be considered for debt relief —16 million of whom have already been approved for relief — the Department will hold onto their information so it can quickly process their relief once we prevail in court," she wrote.

U.S. District Judge Mark Pittman, appointed by Trump, on Thursday ruled in response to a lawsuit filed in October by the Job Creators Network Foundation, a conservative advocacy group, which represented one borrower who is ineligible for the relief program and another who is not eligible for the largest possible benefit of $20,000. In late October, a federal appeals court temporarily put the program on hold following a challenge from six Republican-led states. However, the appeals court ruling blocked the program while the states' appeal played out and did not strike down the program (The Hill). The Supreme Court has turned down two requests to block the administration's debt forgiveness initiative.

Biden on Monday will meet Chinese President Xi Jinping, now in his third term as leader of the Chinese Communist Party, on the sidelines of a Group of 20 summit taking place in Bali, Indonesia. It will be their first in-person meeting during Biden's term, and the two leaders are expected to discuss Taiwan's security, human rights concerns and what the U.S. considers China's "harmful economic practices" (The Hill).

Biden will speak in Egypt today during the COP27 United Nations climate change summit and describe a $375 billion U.S. commitment to fight climate change that he hopes will provide leverage as he works to persuade other countries to step up their own efforts to reduce greenhouse gas emissions, all with the goal of limiting global warming to 1.5 degrees Celsius (CNN).

In his speech, Biden will call on nations to "really keep their eyes on the ball when it comes to accelerating ambitious action to reduce emissions," one U.S. official told reporters. And the president will highlight his administration's intent to propose a rule this week requiring large federal contractors to develop carbon reduction targets and disclose their greenhouse gas emissions, leveraging the federal government's purchasing power to combat climate change in the private sector and bolster vulnerable supply chains.

The president will be on the ground in Egypt today for about three hours and then fly to Cambodia to participate this weekend in the Association of Southeast Asian Nations (ASEAN) summit this weekend, after which he will travel next week to Bali, Indonesia, for a global summit of leaders from the 20 largest economies.

The Hill's Rachel Frazin reports that the U.S. enactment this year of the Inflation Reduction Act offered Biden a concrete achievement meant to showcase measures to reduce greenhouse gasses and reliance on fossil fuels. But it's also a time of intense global pressure to secure ample energy supplies at affordable prices, exacerbating reliance on carbon-producing energy sources.

The Hill: International human rights activists, including in Egypt, worry that the host government during COP27 seeks to launder its criticized record on human rights using the implicit approval of the United States and other nations participating this week in Sharm el-Sheikh.

The Hill: White House chief of staff Ron Klain told CNN during an interview on Wednesday that the administration is ready for investigations Republicans may launch if they hold House or Senate majorities next year.

Reuters and The New York Times: The administration and the House Ways and Means Committee on Thursday urged the Supreme Court to reject Trump's bid to avoid complying with the panel's request for his tax returns.

➤ CONGRESS

Ballots are still being counted nationwide as House Minority Leader Kevin McCarthy (R-Calif.) formally launched his bid on Thursday to be elected Speaker later this month (NPR, The Washington Post and NBC News).

McCarthy had envisioned that his party might see a "red wave" majority of perhaps 25 or more seats, which would have helped him make a muscular case to his Republican colleagues, particularly members of the Freedom Caucus. If Republicans gain the majority, as many expect, the margin may be smaller than GOP leaders anticipated, making the challenge of managing the fractious House Republican caucus that much larger (The Hill).

The Hill: House conservatives withhold support for McCarthy, press for delay to their leadership election.

Politico: Control of Congress is in limbo because of unresolved midterm races.
The Hill: Ongoing fight for Senate control threatens the fate of a key bipartisan bill targeting tech giants.
The Hill: Speaker Nancy Pelosi (D-Calif.) has extended remote House voting through Dec. 25.
The Hill: Senate Banking Committee leaders on Thursday called for new crypto rules after the collapse of FTX.

Florida's Board of Governors on Wednesday officially named Sen. Ben Sasse (R-Neb.) as president-elect of the University of Florida. His base salary will be $1 million per year for a contracted term through 2028, amounting to a $140,000 per year increase compared with his predecessor's 2014 contract.

Once Sasse resigns, Nebraska's governor will appoint a successor. The current governor, Pete Ricketts (R), confirmed Wednesday that Sasse's resignation will not come until January, meaning the decision to appoint his replacement will fall to Jim Pillen, a Republican livestock producer and veterinarian who decisively won Tuesday's race for governor. Ricketts is rumored to be a top candidate for the Senate appointment and he declined to comment when asked. Pillen's appointee will have to stand for election in 2024 to serve out the remaining two years of Sasse's current six-year Senate term (Omaha World-Herald).

In Focus / Sharp Takes

➤ INTERNATIONAL

Ukrainian President Volodymyr Zelensky expressed caution after Russia announced on Wednesday it was retreating from the key strategic city of Kherson.

"No one just gets away if they don't feel the strength," Zelensky said in his nightly address. "The enemy does not bring us gifts, does not make 'gestures of goodwill.' We fight our way up. And when you are fighting, you must understand that every step is always resistance from the enemy, it is always the loss of the lives of our heroes."

Russia increasingly showed signs of surrendering Kherson city in recent days, including lowering a Russian flag over the main administrative building and the withdrawal of some military resources, but Kyiv has expressed skepticism that Moscow would swiftly withdraw from the city (The Hill).

The Biden administration for the first time will send Ukraine four Avenger air defense systems as part of its latest $400 million weapons package, the Pentagon announced Thursday. The most recent lethal aid tranche comes less than a week after the Defense Department on Nov. 4 announced a $400 million military assistance package (The Hill).

At least 636 representatives of the fossil fuel industry have registered to attend the ongoing United Nations COP27 climate summit, marking a sharp increase over the industry's already large presence last year. The industry's presence once again tops the number of representatives from any single national delegation, except that of the United Arab Emirates — a major fossil fuel producer that is set to host next year's conference. The UAE registered 1,070 delegates, 70 of whom were classified as industry representatives.

The report, released by advocacy groups Corporate Accountability, Corporate Europe Observatory and Global Witness, showed that industry influence at the top climate summit is growing (The Washington Post).

"Tobacco lobbyists wouldn't be welcome at health conferences, arms dealers can't promote their trade at peace conventions," they said in a statement. "Those perpetuating the world's fossil fuel addiction should not be allowed through the doors of a climate conference."

The New York Times: Brazil counted all its votes in hours. It still faces fraud claims.
Reuters: Britain has frozen 18 billion pounds worth of Russian assets.
The New York Times: A Vatican auditor is suing for wrongful dismissal after he said he found cardinals siphoning off funds. The Vatican has hit him with a criminal investigation of its own.

➤ ECONOMY

The government on Thursday reported that inflation in October was 7.7 percent year over year, signaling both good and bad news. Inflation eased beyond economists' expectations but not by enough in a single month to persuade the Federal Reserve to downshift on interest rates.

Inflation finally offered some relief, but there's a long way to go (Bloomberg News).

MarketWatch: Egg prices are up 43 percent in the last year. Butter prices rose 26.7 percent during the 12 months that ended in October. What's going on?

Investors and traders swooned on Thursday over the consumer price index report with the biggest one-day rallies since 2020. The Dow Jones Industrial Average jumped more than 1,200 points. The S&P rose 5.5 percent and the Nasdaq Composite surged about 7.4 percent (CNBC).

The Hill's Sylvan Lane unpacks the data to focus on price relief seen for used cars, household supplies, clothing, gas for heating and even some food costs.

About 7,000 more Americans filed for unemployment benefits in the week ending on Nov. 5 than in the previous week, according to a government report on Thursday (ClickonDetroit). The U.S. jobs market continues to be strong.

The Hill: Home prices increased in most U.S. metropolitan areas in the last quarter despite rapidly rising mortgage rates that are hovering near 7 percent, according to data released Thursday by the National Association of Realtors.

➤ TECH

Twitter continues to chart a rocky path two weeks after new CEO Elon Musk took the helm of the social media platform. In his first company wide emails, sent Thursday, Musk painted a bleak financial picture and spoke to a series of changes for employees.

"Sorry that this is my first email to the company, but there is no way to sugarcoat the message," Musk wrote in one email. "The economic picture ahead is dire."

In addition to saying Twitter is too dependent on advertising and must focus on subscriptions, Musk said he plans to end the company's remote work policy and urged employees to focus on generating revenue and fighting spam (The New York Times and The Hill).

He warned that "bankruptcy isn't out of the question" for the platform, after advertisers continue to leave in droves following an increase in misinformation and hate speech, as well as ever-shifting changes to the company's verification policies (Axios). Several key executives announced they were leaving the company Thursday, including the heads of content moderation and cybersecurity (The Washington Post and Bloomberg News).

The Verge: Musk is putting Twitter at risk of billions in fines, warns a company lawyer.
CNBC: The Federal Trade Commission says it is tracking developments at Twitter with "deep concern" after key security departures.
CNN: Twitter is dealing with a wave of impersonators after launching a new paid verification system.

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Opinion

Biden is no sure thing for 2024. What about Buttigieg? Harris? Even Whitmer? by Frank Bruni, contributor, The New York Times. https://nyti.ms/3UKzN8y
It's the women, stupid, by Lauren Leader, opinion contributor, The Hill. https://bit.ly/3A6rQlZ

Where and When

🇺🇸 Happy Veterans Day!

👉 YOU'RE INVITED: Share a news query tied to an expert journalist's insights: The Hill has launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.

The House meets at 2 p.m. on Monday.

The Senate meets Monday at 3 p.m. to resume consideration of the nomination of María del R. Antongiorgi-Jordán to be a U.S. District Court judge for the District of Puerto Rico.

The president is in Egypt at COP27, the United Nations climate change conference. Biden will meet with Egyptian President Abdel Fattah al-Sisi at 3:55 p.m. local time. He will give a speech at 5:15 p.m. local time during the climate conference and then depart for Phnom Penh, Cambodia, at 6:20 p.m. to participate on Saturday during the annual U.S.-ASEAN summit and the East Asia Summit.

Vice President Harris will attend a White House Veterans Day breakfast at 8 a.m. along with second gentleman Doug Emhoff. The vice president will speak at 11:15 a.m. at the National Veterans Day Observance and wreath-laying ceremony at Arlington National Cemetery while Biden is out of the country.

Treasury Secretary Janet Yellen is in New Delhi, India, for the U.S.-India Economic and Financial Partnership. She will meet with U.S. and Indian business leaders and tour the Microsoft India Development Center and deliver remarks this morning, local time. The secretary will meet with Indian Minister of Finance and Minister of Corporate Affairs Nirmala Sitharaman and join the U.S.-India Economic and Financial Partnership dialogue. Yellen and Sitharaman will speak to the news media. The secretary will join Sitharaman in the afternoon for a discussion with executives from major Indian and U.S. companies operating in India. Yellen will depart New Delhi in the evening for Bali, Indonesia, where she will join the president at the G20 summit.

First lady Jill Biden hosts an 8 a.m. Veterans Day breakfast at the White House. She will join Harris and Emhoff at 11 a.m. at Arlington National Cemetery for the National Veterans Day Observance.

Elsewhere

➤ COURTS

Infowars host Alex Jones on Thursday was ordered to pay an additional $472 million in punitive damages and attorneys' fees on top of the nearly $1 billion verdict a Connecticut jury imposed on him for spreading lies about the Sandy Hook school massacre. Jones baselessly told audiences that the shootings were staged and that the families and first responders were "crisis actors."

Connecticut Superior Court Judge Barbara Bellis ruled that Jones's conduct merited his payment of punitive as well as the compensatory damages to the families of the victims of the 2012 school shooting, which claimed the lives of 20 first graders and six educators. She awarded $150 million in punitive damages as well as $321.7 million in legal fees that Jones must pay the victims' lawyers under a one-third contingency-fee arrangement (Bloomberg News).

Bellis on Thursday temporarily barred Jones from transferring or spending assets other than for ordinary living expenses. Jones is appealing a judgment to be paid to the Sandy Hook families and denies he has the resources (Bloomberg News and CNN).

➤ PANDEMIC & HEALTH

New research details a so-called natural experiment that occurred when all but two school districts in the greater Boston area lifted COVID-19 masking requirements in the spring. Researchers took the opportunity to make a direct comparison of the spread of COVID-19 in masking and nonmasking schools in the region. They found that masking mandates were linked with significantly reduced numbers of COVID-19 cases in schools.

Infection rates were lower among masked students — even in the city's public schools, where many buildings are old and lack good ventilation, classrooms are full and students more often come from at-risk communities — compared to unmasked students attending newer schools in wealthier communities. Julia Raifman, an assistant professor at the Boston University School of Public Health and an author of an editorial accompanying the study, said the data should help stop misinformation about the effectiveness of masking requirements in stopping virus transmission in schools (The New York Times).

"Even as recently as this summer, people were saying, 'Oh, COVID doesn't spread in schools,' and there was a misconception that kids don't get COVID," Raifman told the Times. "But what we see in the study is that COVID does spread in schools, and it spreads back home, and it spreads to teachers."

Time: Getting COVID-19 multiple times is risky for your health.
CNBC: Unvaccinated infants were hospitalized with COVID-19 more this summer than most age groups, the Centers for Disease Control and Prevention say.

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

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,074,485. Current U.S. COVID-19 deaths are 2,344 for the week, according to the Centers for Disease Control and Prevention (CDC). (The CDC shifted its tally of available data from daily to weekly, now reported on Fridays.)

➤ TOYS

We think news from the National Toy Hall of Fame is playful fodder for a Friday ahead of the holidays. We were unaware that a new class of toys gets inducted annually during a ceremony at the Strong National Museum of Play in Rochester, where the Toy Hall of Fame is housed. The aim of the museum is to herald toys that fostered "creative play and enjoyed popularity over a sustained period."

Three honorees selected this year from a dozen finalists are a top, one of mankind's earliest known toys; Masters of the Universe action figures, which launched in 1979 at Mattel; and Lite-Brite, originally marketed as an artistic toy in 1967.

The museum includes other nostalgic reminders of youthful escapes, including Scrabble, Risk and LIFE board games, American Girl dolls and G.I. Joe, chess and jacks, Big Wheels and Hot Wheels, Atari's 2600 game system and Nintendo Game Boy, Tonka trucks marketed after World War II, Lincoln Logs and Erector Set, the Hula Hoop and the Easy-Bake Oven (from which an edible facsimile of a miniature cake was baked with the heat of a lightbulb).

Hybrid Event Invitation: Gen Z– Writing Their Own Rules; Wednesday, Nov. 16 at 5 p.m. ET/2 p.m. PT

COVID-19 may be the defining experience for Generation Z, shaping its outlook for decades to come. "Zoomers," those 70 million young Americans born between 1997 and 2012, missed out on experiences, friendships, and milestones over the past two years – changing their outlook and expectations on social issues, education, mental health, jobs and the economy? Join The Hill to examine the experience of America's youth, where their common ground lies, and their impact on the future. Join The Hill in-person in Washington or streaming nationally with "The Gen Z Historian" Kahlil Greene, author and pollster John Della Volpe, WH Director of Digital Strategy Rob Flaherty, Zlfuence founder Ava McDonald and more. RSVP today.

The Closer

And finally … 👏👏👏 Kudos to this week's Morning Report Quiz winners! They correctly guessed or Googled information about historical barrier-breakers in Congress.

Here are the puzzle masters who went 4/4 with trivia about congressional firsts: Patrick Kavanagh, Paul Harris, Richard Baznik, Amanda Fisher, Pam Manges, Lou Tisler, "Bruce," Randall Patrick, Stan Wasser, Mary Anne McEnery, Terry Pflaumer, Luther Berg, Len Jones and Robert Bradley.

They knew women were first permitted to wear trousers on the Senate floor in 1993 after then-Sen. Carol Moseley Braun (D-Ill.) wore a pantsuit in the chamber, prompting a rule change.

They knew African Americans were first elected to Congress during Reconstruction, the historic period in which the United States grappled with the question of how to integrate millions of newly freed African Americans into social, political and labor systems.

They correctly guessed that Margaret Chase Smith, Republican from Maine, was the first woman to serve in both chambers of Congress. She served in the House of Representatives from 1940 to 1949 and in the Senate from 1949 to 1973.

And finally, they knew the first member of the House of Representatives to serve as president was James Madison, who was the nation's fourth commander in chief, from 1809 to 1817.