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MORNING REPORT

PRESENTED BY STARBUCKS

Wednesday, March 29

by Alexis Simendinger & Kristina Karisch

Lawmakers circle big issues

Senators and House members this week are asking tough questions about budget policy, failed banks and continued help to Ukraine amid partisan rifts that threaten economic and national security repercussions.

Speaker Kevin McCarthy (R-Calif.), responding to President Biden's public invitation to reveal a GOP budget blueprint and proposed spending cuts, asked the president by letter when they can begin budget talks. Republicans say they won't raise the nation's authority to borrow to pay its bills without Biden's agreement to shrink spending and deficits (The Hill).

McCarthy, who is trying to pinpoint GOP budget unanimity amid the politics of divided government, warned Biden he's "on the clock."

"It's time to drop the partisanship, roll up our sleeves, and find common ground on this urgent challenge," he wrote while describing a thumbnail GOP wish list. "Please have your team reach out to mine by the end of this week to set a date for our next meeting" (The Hill).

Biden responded, also in writing, asking the Speaker to present a detailed GOP budget plan early in April so they can confer "in-depth" after Congress returns from its Easter recess. The president repeated his insistence that Congress must swiftly lift the debt ceiling to avert default as a separate priority from budget talks (The Hill).

During a Senate Banking Committee hearing, meanwhile, Sen. Jon Tester (D-Mont.), who is running for reelection in a conservative state, was among those who asked federal banking regulators on Tuesday how risk-taking and poor management inside Silicon Valley Bank (SVB) were apparent to California banking supervisors in 2021, but not corrected before the bank collapsed this month (The Hill).

It looks like regulators knew the problem, but no one dropped the hammer," Tester said.

When will Congress glean what went wrong that permitted vulnerabilities inside SVB and Signature Bank to fester for years? Federal Reserve Vice Chairman for Supervision Michael Barr said a central bank report will answer those questions by May 1.

"The bank failed because its management failed to appropriately address clear interest rate risk and liquidity risk," Barr said, blaming executives at SVB and describing the situation as a "textbook case of bank mismanagement."

"They were quite vulnerable to risk, to shocks and they didn't take the actions necessary to meet that," he added (ABC News).

Barr and other federal witnesses will today reprise their testimony before the GOP-led House Financial Services Committee.

The Wall Street Journal: As interest rates rose, some of the nation's largest banks kept billions of dollars of losses from piling up on their books by declaring they intended to hold on to large portions of their money-losing bonds.

Simultaneously, House Foreign Affairs Committee Chairman Michael McCaul (R-Texas) convenes the first oversight hearing under the new GOP majority to probe U.S. commitments of military and humanitarian aid to Ukraine. What began in Congress as united backing for Ukraine when Russia invaded its democratic neighbor is now a harder sell for some House conservatives. As U.S. commitments climb above $113 billion, Russian President Vladimir Putin shows no sign of backing down, and Biden pledges U.S. assistance to Ukraine's defense "for as long as it takes."

McCaul led a GOP delegation to Ukraine last month and met with Ukrainian President Volodymyr Zelensky a day after Biden paid a surprise visit to Kyiv (Fox News). McCaul's committee also plans to hold a hearing this spring about Russian war crimes.

In February, Rep. Matt Gaetz (R-Fla.) introduced a "Ukraine Fatigue" resolution signed by 11 other lawmakers urging a peace settlement between Ukraine and Russia and calling on the Biden administration to halt all military and financial assistance to Kyiv.

The questions Gaetz and GOP colleagues posed:

"How much more for Ukraine? Is there any limit? Which billionth dollar really kicks in the door? Look around your house. How much stuff is made in Ukraine, or even Russia, for that matter?" he said last month.

The Hill: House GOP subpoenas Secretary of State Antony Blinken to obtain a diplomatic cable about the U.S. withdrawal of troops from Afghanistan in 2021.
The Hill: Sen. Tommy Tuberville (R-Ala.) has rankled colleagues on the right and the left — and also the defense secretary — for blocking some promotions for military officers and commanders as a way to object to the Pentagon's abortion services policy for service members.
The Hill: Senate Judiciary Committee Democrats on Tuesday pushed back against the GOP's linkage of immigration and fentanyl trafficking during a hearing with embattled Department of Homeland Security Secretary Alejandro Mayorkas.
The Hill: A bipartisan bill introduced on Tuesday would crack down on "tranq," the illegal use of a veterinary tranquilizer increasingly found in fentanyl and other drugs.
The Wall Street Journal: Taiwan President Tsai Ing-wen is visiting the U.S. and Central America beginning this week. She is expected to meet with Speaker McCarthy in California (Financial Times).

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Leading the Day

➤ POLITICS

Former Vice President Mike Pence must testify before a grand jury investigating former President Trump and efforts to overturn the 2020 election, after a top federal judge ruled that executive privilege could not entirely shield him from answering questions.

Federal District Court Judge James Boasberg largely rejected an effort by Trump to assert executive privilege over Pence's testimony. But Boasberg agreed, at least in part, with the former vice president's legal team that Pence can claim immunity from testifying about certain topics due to his role as president of the Senate on Jan. 6, 2021. In an unsuccessful effort to fight a subpoena from special counsel Jack Smith, Pence's team had planned to roll out an unusual argument in the case, saying testimony would violate the "speech and debate" clause of the Constitution, which shields legislators from being "questioned in any other place" beyond legislative chambers.

Pence previously suggested he would be willing to take such a battle to the Supreme Court if necessary (The Hill and Politico).

The Hill: Pence on ruling he must testify in Jan. 6 probe: "I have nothing to hide."

A growing number of Republicans are coming to terms with the fact that Trump may very well be their nominee for the White House in 2024, worrying some who had hoped to move on from the controversial former president. As The Hill's Max Greenwood reports, despite fielding a slew of controversies, the GOP's conservative base has largely stood by the former president, and there are signs that his support in the emerging primary may be solidifying after earlier indications of trouble.

Recent polls show Trump expanding his lead in the race, while his chief potential rival within the GOP, Florida Gov. Ron DeSantis, has found himself playing defense, raising questions about whether he's up to the task of taking on Trump in 2024. The recent Trump bump has served as a reminder for some Republicans of just how difficult it may be to actually do away with him next year.

The Washington Post: Sean Hannity's attempt to coach Trump backfires — again.
The Jerusalem Post: DeSantis announces Israel visit.
Yahoo News: Veterans of Sen. Ted Cruz's (R-Texas) 2016 campaign sign up to help DeSantis beat Trump.
National Review: Republican presidential candidate Nikki Haley: "Ending the fentanyl crisis starts by securing the border." Haley will travel to the U.S.-Mexico border next week, where she will appear with Rep. Tony Gonzales (R-Texas).
WMUR: Haley focuses on border security in New Hampshire visit.

Former New Jersey Gov. Chris Christie is sharpening his attacks on his erstwhile friend and ally Trump as he considers challenging the former president for the 2024 GOP nomination, write The Hill's Brett Samuels and Julia Manchester. Christie, famous for his acerbic remarks, is comfortable going on television with ready-made sound bites about Trump that he knows will make headlines. On Monday, he said the GOP field needed a candidate who would go after Trump and do what Christie in 2016 did to Sen. Marco Rubio (R-Fla.). A week earlier, Christie made news describing the endless "circus" surrounding Trump as the former president predicted his own arrest.

"You have to be fearless because he will come right back at you," Christie said about a successful challenge to Trump (USA Today). "So you need to think about who's got the skill to do that and who's got the guts to do that because it's not going to end nicely. No matter what, his end will not be calm and quiet."

The White House is blaming Republicans in Congress for the lack of action on guns, punting the issue of increased gun violence in America to lawmakers. The Hill's Alex Gangitano and Mike Lillis report that Biden is focusing his anger over the deadly school shooting in Nashville this week on Republicans, with the White House calling for lawmakers to show courage and saying Congress has to answer to families that have lost loved ones through gun violence. House Democrats, meanwhile, are pushing to force votes on tougher gun laws in the wake of Monday's deadly shooting, eyeing a procedural gambit that would bring the legislation to the floor despite the opposition of Republican leaders.

💡 California and Arizona might one day get solar power from Mexico, but the question is who pays for it? (The Hill).

Politico: California takes on oil companies again with law that could cap profits in state.

➤ ADMINISTRATION

New attacks on U.S. forces by Iranian-backed militias are pulling Washington's attention back to the Middle East even as it seeks to shift its focus and resources toward Russia and China. The Hill's Ellen Mitchell reports that with militants carrying out a series of attacks on U.S. forces in Syria late last week — one drone strike killed an American contractor — the Biden administration is grappling anew with a region it has slowly been trying to extract itself from. The latest round of attacks also comes as talks have broken down over a nuclear deal with Iran, raising fears that Tehran could soon be able to create its own nuclear weapons.

The New York Times: Biden officials hold off on more airstrikes in Syria, for now.
Business Insider: Biden still has ways to make a deal with Iran over nuclear development.

Biden on Tuesday touted his national economic agenda in North Carolina, touring the Durham campus of the semiconductor chip manufacturer Wolfspeed. The visit marked Biden's inaugural stop on his administration's three-week "Investing in America" tour, highlighting domestic manufacturing across the country (The News & Observer and Roll Call).

"Right here in America, here in North Carolina, we're making chips that go into electric vehicles," he said. "These vehicles are powered by batteries and critical minerals that we're making here in North Carolina. We're making electric vehicles here in North Carolina. That's what invest means."

The president today will speak at the second White House-led Summit for Democracy, which Blinken kicked off on Tuesday. The three-day, in-person and virtual event comes as Biden has proclaimed, on multiple occasions, that since he became president "democracies have become stronger, not weaker. Autocracies have grown weaker, not stronger."

But recent developments in Israel — where a proposed judicial reform has led to country-wide demonstrations — as well as Mexico, which has moved to gut its election oversight body and India, where a top opposition political leader was disqualified last week from holding a parliamentary post, are overshadowing the White House's championing of democracy (The New York Times).

The Hill: Biden to announce funding to bolster democracy globally at second US-led summit.

Vice President Harris, meanwhile, is on a three-country African tour that will take her from Tanzania tonight and then to Zambia. On Tuesday in Ghana, she spoke to thousands of young people in Accra about women's empowerment and toured a coastal building that was the last stop for Africans sold into the transatlantic slave trade (Reuters). Harris's announcement of U.S. support globally from the government and the private sector toward the economic empowerment of women totals more than $1 billion, according to the White House.

ABC News: Harris, in Africa, confronts the painful past, envisions the future.

In Focus / Sharp Takes

➤ INTERNATIONAL

The White House on Tuesday walked back comments from U.S. Ambassador to Israel Tom Nides, who said Israeli Prime Minister Benjamin Netanyahu would soon be invited to visit. Principal deputy press secretary Olivia Dalton later in the day told reporters that the United States has no immediate plans for Netanyahu to visit, as mass protests continue in Israel over his plans for a judicial overhaul.

After two days of protest, the prime minister on Monday announced a delay in the plan, stating that he wanted to find a compromise with his political opponents. White House officials on Monday said they welcomed Netanyahu's announcement as an "opportunity to create additional time and space for compromise" (Politico and Reuters).

A U.S. official told The Times of Israel that the Biden administration wants to first see Israelis and Palestinians make it through the spring religious holidays peacefully before focusing on a White House visit, speculating the trip would not take place for "at least another month or two."

On Tuesday, his government and the opposition in Parliament began the first direct negotiations between them to reach a compromise since the plan was introduced nearly three months ago (The New York Times). Meanwhile, unrest on Israel's streets had abated somewhat after protests hit a high point following Netanyahu's firing of Yoav Gallant, the country's defense minister. A former general tasked with overseeing Israel's security, Gallant had called for his own coalition to pause its attempted overhaul of the Israeli judicial system, arguing that division around the plan was undermining national cohesion.

But although his dismissal provided the spark for Israel's extraordinary explosion of civil dissent, the tinder had been building for months (The Atlantic). On Tuesday, aides said Gallant would be staying in office until further notice, suggesting government indecision on how to proceed (Reuters).

The Hill: Biden on Israel's proposed judicial reforms: "They cannot continue going down this road."
The Hill: Netanyahu hits back after Biden expresses alarm over judicial overhaul.
The New York Times: Behind protesters' fury in Israel, fear of a quiet slide from democracy.
The Wall Street Journal: How Israel's citizen soldiers forced Netanyahu to retreat on judicial overhaul.
The Jerusalem Post: Ten takes on Israel's democracy showdown on judicial reform — analysis.

At least 38 people have died after a fire broke out at a Mexican migrant detention facility just south of the U.S. border, marking one of the deadliest tragedies in years involving foreigners apprehended while trying to reach the United States. Mexico's National Migration Institute said the fire started just before 10 p.m. Monday in the Ciudad Juárez facility just south of El Paso. Most of the dead were Central Americans, although some were from Venezuela, said President Andrés Manuel López Obrador. It appeared that the fire was sparked during a protest by migrants who had learned they were going to be deported, López Obrador said at a morning news conference (The New York Times and The Washington Post).

"In the door of the shelter they put some mattresses and set them on fire," he said. "They never imagined that would cause this tragedy."

The Washington Post: France battered by protests over pension plans as President Emmanuel Macron holds firm.

Russian forces are still edging forward in the eastern Ukrainian city of Bakhmut, a Moscow-installed official said on Tuesday, but British intelligence said a Russian tank division had taken heavy losses in a nearby town. The battle for Bakhmut has been the focus of Moscow's war in Ukraine for months, with both sides describing the fighting there as a "meat grinder" (Reuters).

Putin is upping the ante in his game of nuclear blackmail with the West by moving to put missiles in Belarus, writes The Hill's Brad Dress. The plan is intended to raise fears of escalation as the U.S. and NATO allies consider arming Kyiv with fighter jets and battle tanks. It's unclear whether moving nukes to Belarus will change the course of the war dramatically, but it shows that Putin wants to keep the nuclear threat in the minds of Western leaders.

The Hill: Takeaways from the Associated Press interview with Zelensky, who warned Tuesday that unless his nation wins a drawn-out battle in a key eastern city, Russia could begin building international support for a deal that could require Ukraine to make unacceptable compromises. He also invited the leader of China, long aligned with Russia, to visit Ukraine.
The Hill: Ukraine's Zelensky: Any Russian victory could be perilous.
The New York Times: The former director of Europe's largest nuclear facility describes abuse of Ukrainian workers and careless practices by the Russians who took control of the plant.
Reuters: Facial recognition is helping Putin curb dissent with the aid of U.S. tech.
The Wall Street Journal: Russia's economy is starting to come undone.

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Opinion

Trump and DeSantis say they just want peace in Ukraine. Don't fall for it, by David Atkins, contributor, Washington Monthly. https://bit.ly/3TU5qNF
Republicans: Attacks on diversity are attacks on a full and thriving economy, Donna Brazile, opinion contributor, The Hill. https://bit.ly/3lGOspu

Where and When

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

The House will convene at 10 a.m. The House Financial Services Committee at 10 a.m. will question federal regulators about recent bank failures. The House Foreign Affairs Committee holds a 10 a.m. oversight hearing to examine U.S. assistance to Ukraine during the ongoing war with Russia.

The Senate meets at 10 a.m. The Senate Health, Education, Labor and Pensions Committee will question former Starbucks CEO Howard Schultz about the company's labor practices.

The president will receive the President's Daily Brief at 8:30 a.m. Biden will participate at 11:20 a.m. in a virtual plenary gathering of leaders for a Summit for Democracy and announce funding designed to bolster democracy globally (The Hill). The president will hold a bilateral meeting in the Oval Office with President Alberto Fernández of Argentina at 2:45 p.m. Biden will host a 5 p.m. reception in the East Room to celebrate Greek Independence Day.

The vice president and second gentleman Doug Emhoff begin the day in Ghana. Harris will convene a roundtable of women entrepreneurs to discuss economic empowerment, inclusion and leadership. Emhoff has his own schedule: He'll meet with the co-owner of '57 Chocolate, an African women-owned chocolate brand founded to commemorate Ghanaian independence. He'll join a roundtable discussion with alumni of the U.S. Young African Leaders Initiative. Harris and Emhoff will depart Accra bound for Dar es Salaam, Tanzania, where they will participate in an official welcoming ceremony tonight.

Secretary Blinken participates at 9:10 a.m. in the virtual plenary session on "Democracy Delivering Strong Institutions," hosted by President Hakainde Hichilema of Zambia as part of the Summit for Democracy in Washington. The secretary at 11:20 a.m. will join Biden at the virtual plenary session on "Democracy Delivering on Global Challenges." The secretary at 2:45 p.m. joins Biden and Fernández for their bilateral meeting in the Oval Office.

Treasury Secretary Janet Yellen will testify at 10 a.m. to the House State, Foreign Operations and Related Programs Subcommittee about the budget and other issues. She will speak at 1:30 p.m. about the health of the insurance industry at a public meeting of the Federal Advisory Committee on Insurance. In the afternoon, the secretary will join Biden during the president's meeting with Fernández, the president of Argentina.

The White House daily press briefing is scheduled at 1 p.m.

The Federal Energy Regulatory Commission (FERC) will convene a commissioner-led in-person and webcasted roundtable at 9:30 a.m. to discuss environmental justice and equity in its infrastructure permitting processes. Information and registration are HERE.

Elsewhere

➤ HEALTH & PANDEMIC

Navigating the tumultuous teenage years has never been easy, but the unique cultural context young Americans find themselves in today can make this transition period especially hard, writes The Hill's Gianna Melillo. A recent snapshot of data collected over the last decade paints a bleak picture of just how poorly teenage girls, specifically, are faring.

"Our teen girls, they're in crisis. And for every one that reported or endorsed that they're in crisis, there's probably more who didn't," said Laurie McGarry Klose, a school psychologist and the owner and CEO of RespectED, a consulting firm that provides services to schools and families.

Although the exact reasons behind these trends are unclear, the confluence of societal changes brought on by the COVID-19 pandemic and racial unrest, coupled with the ubiquitous nature of social media and rising rates of sexual violence, might all play a role.

The New York Times: Hospitalizations for pediatric suicidal behavior increased by 163 percent over an 11-year period, an analysis of millions of hospital admissions in the United States found.

IQ scores rose steadily throughout the last century, to the point that the average IQ in 2000 would have been termed "gifted" a century earlier. But The Hill's Daniel de Visé reports that now, IQs are falling, according to a study by Northwestern University researchers, a finding echoed by other recent research. Theories abound, but the smart money says our cognitive gains plateaued at the end of the century, whereupon a technologically induced intellectual lethargy set in. If you want to ascribe blame, look no further than this screen.

The Atlantic: My 6-year-old son died. Then the anti-vaxxers found out. Opponents of COVID-19 vaccines terrorize grieving families on social media.
U.S. News: World Health Organization vaccine advisory group endorses COVID-19 booster shots every six months for some.
The Hill: A Food and Drug Administration panel will discuss over the counter birth control pills in May.
The New York Times: The FDA is expected this week to allow the overdose-reversal medication Narcan to be sold without a prescription, a step toward making it a common emergency tool.

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

Current U.S. COVID-19 deaths are 2,060 for the most recent week, according to the Centers for Disease Control and Prevention. (Data is reported on Fridays.)

The Closer

And finally … 🦍 It's a baby… western lowland gorilla!

Zookeepers at the National Zoo in Washington, D.C., are ecstatic after discovering Calaya, a 20-year-old western lowland gorilla, is expecting her second baby. Due between late May and early July, Calaya and 30-year-old Baraka, a male silverback western lowland gorilla, successfully mated in September. The new gorilla will make soon-to-be 5-year-old Moke, Cayala's first baby, a big brother.

"We're absolutely excited about it," Becky Malinsky, the primate curator at the Smithsonian's National Zoo and Conservation Biology Institute, told The Washington Post. "Gorillas in the wild are critically endangered, so every birth is incredibly important, whether in the wild or in human care."

Native to African forests, western lowland gorillas are critically endangered in the wild because of poaching, habitat loss and disease. In the last two decades, the number of western lowland gorillas in the wild has dropped by 60 percent, according to experts.