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MORNING REPORT

PRESENTED BY AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS

Friday, May 12

by Alexis Simendinger & Kristina Karisch

Debt limit talks postponed

The clock is ticking on the debt ceiling, and there's no clear way out in sight.

The projected June 1 X-date, as laid out by Treasury Secretary Janet Yellen, is creeping closer, and the White House and Congress are still working to find a solution to prevent the country from defaulting on its $31.4 trillion debt — which would likely result in economic turmoil across the globe.

President Biden and congressional leaders on Thursday afternoon postponed a second meeting to discuss the debt ceiling from today to next week as staff members work behind-the-scenes to bring the parties closer to a resolution (The Hill). Congressional and White House staff plan to meet again today, when both the House and Senate are scheduled to be out of session (Politico).

There have been very good discussions over the last few days at the staff level. And I think the decision was collectively made, led by the White House, to allow those staff conversations to continue," House Minority Leader Hakeem Jeffries (D-N.Y.) said Thursday.

Biden is scheduled to leave for the G-7 summit in Japan on Wednesday, so a meeting would likely need to happen in the coming days.

Speaker Kevin McCarthy (R-Calif.) was less optimistic about the state of negotiations and said he expected the leaders to meet next week.

"The White House didn't cancel the meeting; all of the leaders decided it's probably in the best of our interest to let the staff meet again before we get back together," he said. "I don't think there's enough progress for the leaders to get back together."

Several House Republicans said Thursday they were encouraged by the White House's engagement in the talks so far, adding potential areas of compromise in a broader budget deal include energy permitting reforms and rescinding unspent COVID-19 aid.

The Hill: Here are the top four areas of debt ceiling compromise the GOP is eyeing.

White House officials, meanwhile, are insisting they must preserve Biden's signature climate legislation that passed along party lines last year.

The White House has for months maintained its position that Congress has an obligation to raise the debt ceiling without conditions and that any discussions about government spending should be handled separately from a vote to avoid default. House Republicans, on the other hand, have passed legislation — considered dead-on-arrival in the Senate — that would raise the debt ceiling and cap government funding at fiscal 2022 levels to curb spending and roll back several Biden administration actions (Reuters).

The New York Times: How Wall Street is preparing for a debt ceiling showdown.
USA Today: "I'm much more scared now": Veterans of 2011 debt ceiling crisis say this year's fight is different.
CBS News: What happens to Social Security checks if the U.S. breaches the debt ceiling?
CNBC: As lawmakers warn of a Social Security "shutdown," here's how the debt ceiling may affect benefits.

The ongoing debt ceiling drama is also jeopardizing one of the Senate's more precious institutions every holiday: recess. As The Hill's Al Weaver reports, senators this week have expressed alarm that they might have to nix their Memorial Day recess, which is slated to run from May 19 through May 29.

"I'm not making any solid plans until the debt ceiling is taken care of," Senate Majority Whip Dick Durbin (D-Ill.) told The Hill about the upcoming planned break. "I'm not planning to be here, but I'm not planning on leaving. I've been in the Senate long enough I can say that and it makes sense."

Senate Republicans are disavowing former President Trump's call during a CNN town hall to let the federal government default on its debts unless Biden agrees to "massive" spending cuts, dismissing Trump's suggestion as something far too risky to seriously consider, writes The Hill's Alexander Bolton.

The cold reception Trump's bold statement got from Republican senators is the latest sign of the widening rift between Trump and his party's establishment in Washington. While Trump maintains strong influence in the House, where he helped McCarthy nail down enough votes to get elected Speaker, it's a different story in the Senate.

"I don't think anybody suggesting that we 'we have to do a default' is wise policy, wise strategy for this country," said Sen. Lisa Murkowski (R-Alaska), who added that Trump's comment "certainly doesn't impact" her view.

The Hill: Democrats, GOP clash over definition of "woke" in budget hearing.

On Thursday, House Republicans passed their long-promised border crackdown, voting to finish Trump's border wall and severely restrict access to asylum the same day Biden is set to lift the use of Title 42 — a pandemic-era policy that allowed for the expulsion of migrants at the southern border. The bill, which faces little chance of passage in the Senate, was approved with a 219-213 vote. In addition to building the wall, the legislation greatly increases the hiring of border agents and seeks to bar them from doing any "processing" of migrants, language Democrats said would prevent officers from doing basic tasks (The Hill).

Politico: Rep. James Comer (R-Ky.) releases Biden family probe update without showing a link to president. The Oversight panel chairman revealed that Biden family members, business associates or related companies received more than $10 million from companies run by foreign nationals.
Vox: The House GOP's investigations are flopping. The conference is still looking for the next Benghazi. But their investigations are unpopular.
The Hill: Senate passes two resolutions overturning Biden endangered species protections.
The Hill: Florida Democrat asks for a field hearing in Parkland on red flag laws.
The Associated Press: Banning gun sales to young American adults under 21 is unconstitutional, Virginia federal judge rules.

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Leading the Day

➤ ADMINISTRATION

The Biden administration concedes painful facts about the situation at the U.S. southern border as federal restrictions on asylum-seekers, known as Title 42, ended Thursday.

A federal judge in Florida on Thursday night blocked the Department of Homeland Security from implementing a new policy that would release some migrants into the U.S. without court dates or the ability to track them. The order is in place for 14 days ahead of a court hearing (NBC News). Separately, the American Civil Liberties Union filed a lawsuit in U.S. District Court for Northern California less than an hour after Title 42 expired and argued the government's updated immigration policy mirrors two Trump-era policies that were previously blocked by the courts (NBC News).

Migrants making the trek this week are aware the old policy gave way to something new, but they are deeply confused about the new restrictions. Second, they are determined to cross into the United States by the tens of thousands each day, desperate to enter and unsure what happens if they make it. Third, the surge is straining every U.S. resource at the border, as well as state and local networks that accept migrants that are bused or flown north to New York City, Chicago and Washington, D.C., by Republican governors in Texas, Arizona and Florida.

The replacement policies crack down on illegal crossings while arranging legal pathways for migrants to apply online, seek sponsors and undergo background checks. If successful, the reforms could fundamentally alter how migrants arrive at the U.S.-Mexico border. Migrants seeking asylum must first ask for protection in a country they passed through before the United States. Beginning today, migrants could be barred from entering the U.S. for five years and face possible criminal prosecution if they make repeated illegal attempts at entry (The Associated Press).

Homeland Security officials initially expected 10,000 migrants per day would try to cross into the U.S. during this transition phase. The numbers surpassed that, with 11,000 apprehended Tuesday and Wednesday (NBC News). Facilities that are meant to temporarily hold the crowds of migrants along the border are beyond capacity, and Border Patrol agents were told to begin releasing some migrants with instructions to appear at a U.S. immigration office within 60 days, a U.S. official told AP.

DHS Secretary Alejandro Mayorkas said Thursday that the Biden restrictions, prepared over the past two years, will take time to implement and initially will appear chaotic (Fox News).

Although the president has repeatedly called on Congress to write bipartisan immigration reforms into law, that plea over decades has come to naught on Capitol Hill. The political potency of immigration and border security issues ahead of the 2024 elections continue to block compromise.

The White House commended House Democrats on Thursday for reintroducing immigration legislation that the majority opposes while criticizing conservatives in a statement from press secretary Karine Jean-Pierre: "House Republicans are playing politics and engaging in stunts that would fail to solve the challenges at our border, while also pushing deep spending cuts that would fire over 2,000 border patrol agents and decrease our border security."

Rep. Pete Sessions (R-Texas), appearing on NewsNation's "The Hill" on Thursday, criticized the Biden administration and the president's party. "It's 100 percent exactly what the Democratic Party wants to do. They all want to overrun every single town in this country, and they want death," he said.

Reuters: Migrant detentions at the U.S.-Mexico border hit record highs as Title 42 ends.
The New York Times: Who gets in? A guide to America's chaotic border rules.

Meanwhile, the Federal Deposit Insurance Commission on Thursday proposed that the nation's largest banks pay a "special assessment" to cover the costs of bailing out uninsured depositors during the failures of Silicon Valley Bank and Signature Bank (Axios).

The Hill, by Rachel Frazin: Six things to know about Biden's proposed crackdown on power plant emissions.
The Wall Street Journal: Army Gen. Paul Nakasone, the director of the National Security Agency, will resign by August or September, he told colleagues.

➤ POLITICS

Is Iowa big enough in May for both Trump and Florida Gov. Ron DeSantis (R), who has given every sign that he's crossing some T's before competing for the 2024 GOP presidential nomination?

On Saturday, Trump, who leads early polls to become the GOP nominee, plans to headline a rally in Des Moines while trying to capitalize on his high-profile and fact-challenged performance during CNN's town hall by turning it into a fundraising bonanza. Attendees at events in Sioux Center and Cedar Rapids will see DeSantis, also on Saturday (The Des Moines Register).

Ahead of the governor's visit, two Iowa Republicans, state Senate President Amy Sinclair and state House Majority Leader Matt Windschitl, endorsed DeSantis's potential presidential bid (Des Moines Register).

Trump's advice to DeSantis during Thursday's town hall event in New Hampshire: "Relax and take it easy and think about the future."

Yahoo News: New Yahoo News/YouGov poll of U.S. adults: Is DeSantis's war on "woke" Disney falling flat?
The Hill: Pro-DeSantis group says Wednesday's CNN town hall showed that Trump is "stuck in the past."
The Hill: Trump on Thursday appealed a sexual abuse and defamation civil court verdict won by E. Jean Carroll against him. The former president was ordered to pay Carroll $5 million in damages.

Sen. Todd Young (R-Ind.), whose relationship with Trump frayed after the Jan. 6 Capitol attack, told reporters Thursday that he won't support the former president's bid to return to the White House. When asked his reason for walking away from Trump, who has a commanding lead in GOP primary polls, Young replied, "Where do I begin?"

At a key moment for the news network, CNN this week was widely criticized, especially from the left, for its handling of Trump, his shameless reliance on disinformation and his theatrical command of television during questioning by 31-year-old moderator Kaitlan Collins and an audience of New Hampshire Republicans and independents (The Hill).

The Atlantic: Trump: Entirely unrepentant.
The Daily Mail and The Wall Street Journal: Twitter owner Elon Musk said he hired a female CEO for the company to start in June but did not name her on Thursday. The Journal reports that Musk is in talks with veteran NBC Universal Chairman of Global Advertising and Partnerships Linda Yaccarino to be CEO.
Politico: The Biden reelection campaign remains irate about New York City Democratic Mayor Eric Adam's decision to blast the president in addition to Republicans over immigration. "It is not about the asylum-seekers and migrants, all of us came from somewhere to pursue the American Dream," Adams said last week. "It is the irresponsibility of the Republican Party in Washington for refusing to do real immigration reform, and it's the irresponsibility of the White House for not addressing this problem," the mayor added. Adams's name did not appear this week on a Biden campaign list of 50 national surrogates.

In Focus / Sharp Takes

➤ INTERNATIONAL

While Ukraine made further gains against Russian forces in the eastern city of Bakhmut on Thursday, President Volodymyr Zelensky said the military needs more time — and weapons — before it can launch its much-anticipated major counteroffensive (The Wall Street Journal).

"With what we have we can go forward," Zelensky said in an interview with the BBC, "and I think we can be successful. But we will lose a great many people. I think that's impossible. So we need to wait. We need some more time."

Meanwhile, Trump is digging in on his pledge to end Russia's war in Ukraine within 24 hours of taking office if he wins in 2024, but he is refusing to say whether he wants Kyiv to win the war. As Trump solidifies his front-runner status in the Republican presidential primary race, The Hill's Brad Dress reports, his views on the Russia-Ukraine war paint an increasingly stark contrast with GOP leaders in Congress.

Financial leaders of the Group of Seven are discussing ways to support Ukraine and pressure Russia to end the war. Yellen said Thursday the G-7 nations "will stand with Ukraine for as long as it takes" to end the conflict. The leaders will be mulling ways to prevent Russia and others from circumventing sanctions, according to Japanese Finance Minister Shunichi Suzuki (The Associated Press).

"We have taken a wave of actions in the past few months to crack down on evasion," Yellen said at the meeting in Niigata, Japan. "And my team has traveled around the world to intensify this work."

Reuters: G-7 finance heads face tricky trade-off in debating steps to counter China.
The Washington Post: Ukraine's cultural counteroffensive: The rush to erase Russia's imprint.
CNN: The United Kingdom has delivered long-range "Storm Shadow" cruise missiles to Ukraine ahead of expected counteroffensive, sources say.
Politico EU: Ukraine says it pushed Russia back in Bakhmut.
Reuters: In Bakhmut's ruins, Ukraine says the intensity of Wagner Group attacks is growing.

The Israeli military and Islamic Jihad, a Palestinian militant group in Gaza, traded fire Thursday amid mounting tensions in the region. Israel in recent days has stepped up its campaign of targeted assassinations of Islamic Jihad commanders. While Egypt and other regional powers have tried to convince the two sides to agree to a cease-fire, Israeli forces struck against what they said were military targets linked to the group in Gaza, as Islamic Jihad fired rockets and mortar rounds into Israel (The New York Times).

The Washington Post: The Israeli-Palestinian conflict: A chronology.

Turkish opposition candidate Muharrem İnce on Thursday said he was pulling out of the presidential race just three days before the election, after a sex tape allegedly showing İnce surfaced on social media. The country is set to hold elections this weekend, and President Recep Tayyip Erdoğan — whose economic policies have come under stark criticism as inflation rises and the country recovers from earthquakes earlier this year — is currently neck and neck with the main opposition candidate, Kemal Kılıçdaroğlu. İnce's withdrawal is set to benefit Kılıçdaroğlu, and he could even claim outright victory in the first round of voting (Politico EU).

The Washington Post: Will Turkey's elections be free and fair? Here's what to know.
The Associated Press: Kyriakos Mitsotakis hopes for better relations with Turkey if reelected as Greek premier.
The Wall Street Journal: Pakistan's top court rules former Prime Minister Imran Khan's arrest unlawful.
The Associated Press: War, natural disasters left record 71 million people internally displaced in 2022, report says.

👉 White House national security adviser Jake Sullivan met with top Chinese official Wang Yi in Vienna. It's the highest level U.S.-China engagement since the spy balloon incident and official statements from both countries point to continued strains in the relationship (CNN and The Wall Street Journal).

Opinion

All the debt ceiling needs is a deal, by Jonathan Bernstein, columnist, Bloomberg Opinion. https://bloom.bg/44R5Fy6
Democratic backsliding in Turkey and Poland is a threat to all of NATO, by Nathan Kohlenberg, opinion contributor, The Hill. https://bit.ly/3pwnT7N

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 noon on Monday.

The Senate will meet Monday at 3 p.m. and will resume consideration of the nomination of Bradley Garcia to be a U.S. Circuit Court of Appeals judge for the District of Columbia Circuit.

The president will receive the President's Daily Brief at 10 a.m. Biden will meet with President Pedro Sanchez of Spain at 2 p.m.

Vice President Harris will travel to Atlanta for a Democratic National Committee finance event at 3:20 p.m. In the evening, she will address the Democratic Party of Georgia's Spring Soiree at Flourish Atlanta at 6:10 p.m. The vice president will return to Washington tonight.

Secretary of State Antony Blinken will join the president at the White House for the meeting with Spain's Sanchez.

Secretary Yellen is in Niigata, Japan, for the Group of Seven meeting of finance ministers and central bank governors. She has met today with German Minister of Finance Christian Lindner and will attend Friday's two sessions of the summit and join a group photo of attendees.

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

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Elsewhere

➤ HEALTH & WELLBEING

Thursday marked the end of the COVID-19 public health emergency, three years after it was first declared. The ending signifies significant changes that could impact testing and treatment, vaccines, data reporting, health coverage, and telemedicine. The Hill's Nathaniel Weixel breaks down what the announcement means for you.

The New York Times: Families of those lost to COVID-19 wrestle with mixed emotions as emergency ends.
CNBC: The U.S. COVID-19 public health emergency ends, leaving behind a battered health system.
The New York Times: A look at COVID-19's U.S. death toll as the formal emergency ends.

New York City reported two cases of a highly contagious and drug-resistant ringworm, the first such cases reported in the United States, according to the Centers for Disease Control and Prevention. The fungus, Trichophyton indotineae, had been spreading rapidly in Asia before arriving in the U.S. and had been previously found in Canada and Europe (NBC News).

The Food and Drug Administration said Thursday that it finalized a new rule that will allow more gay and bisexual men to donate blood. Under the latest guidelines, all potential donors would need to complete an individualized risk assessment regardless of gender or sexual orientation. People who have had anal sex with a new partner, or more than one partner, in the last three months would be asked to wait to donate blood (NBC News).

The Washington Post: Bacteria linked to tainted infant formula may soon be reportable pathogen.

The Closer

And finally … 👏👏👏 Congratulations to this week's Morning Report Quiz winners! We asked puzzlers for trivia about presidents and planes, and readers delivered.

Here's who smoothly landed after guessing or Googling (and snagged extra points): *William Grieshober, *Pam Manges, *Richard Baznik, *Harry Strulovici, *Patrick Kavanagh, *Mary Anne McEnery, *Paul Harris, *Catherine Hicks, *Robert Bradley, *Luther Berg, *Jaina Mehta and *Steve James.

They knew Dwight D. Eisenhower (Army general with a pilot's license), George H.W. Bush (Navy) and George W. Bush (Texas Air National Guard) were presidents who had experience as pilots. The answer we looked for was "all of the above."

President Theodore Roosevelt is credited with making the first airplane flight of an American president (video HERE). (He actually climbed in with the pilot 19 months after leaving office. Answers that included either TR or FDR were great.)

Franklin D. Roosevelt was first to use an airplane to travel on official presidential business (in 1943). *Bonus point: He traveled to meet Winston Churchill.

Yes, Dwight D. Eisenhower was the first president to use helicopters as air transport (in 1957). Morning Report asked why that transition occurred. Answer: The Secret Service relented on safety concerns during a period of Soviet nuclear threats in deference to anxieties about potential evacuations by road.