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MORNING REPORT

Wednesday, May 3

by Alexis Simendinger & Kristina Karisch

Democrats, GOP locked in a debt ceiling stalemate

The debt limit battle is turning into a high-stakes game of chicken.

After Treasury Secretary Janet Yellen on Monday sent an urgent letter to congressional leaders warning the country could default on its $31.4 trillion debt as early as June 1, President Biden broke a months-long stalemate and invited Speaker Kevin McCarthy (R-Calif.) and other congressional leaders to the White House next week. But despite a May 9 meeting on the books, there is little movement from either side on the horizon. Biden is still demanding a "clean" debt ceiling increase without any spending cuts attached, while Republicans continue to press for deep cuts to Democratic priorities in their bill (The Hill).

Biden and Congress have little time ahead of potential default. Scheduling conflicts and gridlock raise the possibility of a short-term debt limit increase to buy time to keep negotiating, but that could prove difficult among House Republicans and is not embraced by some Senate Democrats. Financial-market turmoil and economic repercussions nearing June 1 could nudge progress (Bloomberg News).

Sen. Dick Durbin (D-Ill.) told reporters on Tuesday he is not in favor of a short-term clean increase, saying he doesn't want to "play this movie over and over again" (The Hill).

House Democrats, led by Minority Leader Hakeem Jeffries (D-N.Y.), pitched a workaround Tuesday that would force a vote on a debt limit hike over the objections of Republican leaders. But the arcane procedural maneuver would require Republican support to jam McCarthy into voting on a "clean" hike to the nation's borrowing limit (The Hill and Politico).

The New York Times: Here's how House Democrats imagine their discharge petition strategy could be a fallback.

At the same time, Biden is trying to draw Senate Republican Leader Mitch McConnell (R-Ky.) into the debt limit talks in an apparent effort to undercut McCarthy, but McConnell, who will attend next week's Oval Office meeting, says negotiations should be between the president and the Speaker (The Hill).

There are likely two options left for McCarthy," Senate Majority Leader Chuck Schumer (D-N.Y.) told reporters on Tuesday. "Either Republicans cause a first-ever default on the national debt, or go for their awful bill. There's a better alternative. We pass a bipartisan clean bill to protect the full faith and credit of the U.S."

NBC News: Senate Republicans dismiss the possibility of a short-term debt limit increase.
Politico: The GOP's best pals in debt talks: Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (I-Ariz.).
The New Republic: Will the House Freedom Caucus destroy the economy?

As congressional leaders search for a debt ceiling solution, some administration officials are debating alternative solutions if there's no deal by the so-called X-date in June, including one option that previous administrations deemed unthinkable. As The New York Times reports, it would effectively amount to a constitutional challenge to the debt limit; under the theory, the 14th Amendment would compel the government to continue issuing new debt to pay certain bills, even if Congress fails to lift the limit before the debt ceiling is hit. While economic and legal officials at the White House, the Treasury Department and the Justice Department have made that theory a subject of intense and unresolved debate in recent months, it's unclear whether Biden would support it.

NBC News: White House digs in on debt strategy after House Republicans pass their plan.
Politico: How McCarthy could pick off centrist Democrats with four debt-limit ideas.
CNBC: Democrats harden their message on the debt ceiling while quietly paving the way for a deal.
PBS NewsHour: Five things to know about the debt ceiling crunch.

Meanwhile, Republicans are aggressively hitting back against claims that veterans services will be impacted by their budget proposal, instead accusing Democrats of outright lying and using veterans as "pawns" in the fight over the debt ceiling. As The Hill's Brad Dress reports, the fight over potential budget cuts to veteran care has devolved into finger-pointing and accusations of lying as the debt limit battle heats up.

The Hill: Supreme Court Chief Justice John Roberts's refusal to appear before the Senate Judiciary Committee on Tuesday left Democrats pulling no punches as they asserted that the justices cannot be trusted to police their own ethics.
The Hill: Schumer's written talking points on Tuesday, as spied by journalists, said he's "hopeful" long-absent Sen. Dianne Feinstein (D-Calif.), 89, will return to work in the Capitol next week.
Bloomberg Law: Former Justice John Paul Stevens' papers provide a window into Supreme Court relationships.
The Hill: Congress is turning its attention to reining in health costs, as lawmakers in both chambers look to harness enthusiasm for bringing down drug prices and turn it into bipartisan legislation.
The Hill: A recent battle over ethanol exemplifies the influence that regional issues could exert over Republican bills given the party's small House majority.

Leading the Day

➤ POLITICS

A day after Biden huddles next week at the White House with congressional leaders in search of a deal to avert default, former President Trump, the leading GOP candidate for his party's presidential nomination next year, will face a CNN moderator and a New Hampshire town hall audience on May 10 to try to revive a strategy he all but abandoned.

It's clear why CNN wants Trump on stage for the evening — to try to bury the network's 2020-Trump-bashing reputation while attracting a large viewership. What's less clear is why the former president — with his allergy to this summer's planned GOP debates, a well-worn script about CNN being "fake news," and his fondness for the warm embrace of Fox News hosts — decided to accept the invitation to join Kaitlan Collins, a respected former White House reporter who once covered him and is now an anchor on "CNN This Morning."

Here are two clues: The first is that Trump will engage on live TV with New Hampshire Republicans and undecided voters well ahead of February's primary, in which he triumphed twice before. The second is Florida Republican Gov. Ron DeSantis, who is expected to announce his presidential campaign sometime between next week and mid-June. When he does, the media coverage focused on Trump's leading rival will surge.

The former president and his campaign advisers want to remind voters of the "outsider" candidate Trump was when he entered politics while contrasting his presentational skills with DeSantis, who is less experienced with the national news media. On Tuesday, for instance, Trump told supporters in an email that he was interviewed by conservative media personality and former White House adviser Steve Bannon and proclaimed, "I'm a political outsider."

"Going outside the traditional Republican 'comfort zone' was a key to President Trump's success in 2016," an adviser to the former president told The Hill. "Some other candidates are too afraid to take this step in their quest to defeat Joe Biden and are afraid to do anything other than Fox News."

In effect, Trump's aim is to appear cunning and bold to face New Hampshire voters and CNN despite multiple investigations probing his actions, his indictment and arrest in Manhattan (which filled his campaign coffers) and polls that suggest a majority of Americans do not want Trump to run again.

CNN's decision to give the ex-president a stage sparked debate about how news outlets ahead of 2024 will or should cover a candidate who is famous for punching below the belt, promoting lies about his 2020 defeat, was impeached twice, once for insurrection, and likes to rewire media coverage to seize control.

On the other hand, Trump is a compelling newsmaker and will remain so, no matter what happens with his legal entanglements. He's ahead in early primary surveys, has the fervent support of tens of millions of Americans and, right now, looks to have a roughly 50-50 chance of becoming the next president, The Hill's Niall Stanage writes in his Memo.

More 2024 watch: Former Maryland Gov. Larry Hogan (R) told NewsNation on "The Hill" program Tuesday that he has no interest in being a senator, disappointing Republicans who hoped the popular centrist might give the party a leg up in a blue state. Hogan was responding to questions about whether he'd seek the seat held by retiring Sen. Ben Cardin (D-Md.). "The Senate is an entirely different job," Hogan said. "You're one of 100 people arguing all day. Not a lot gets done in the Senate, and most former governors that I know that go into the Senate aren't thrilled with the job."

Politics roundup: In Utah on Tuesday, a district court blocked implementation of a state law that bans abortion clinics (The Hill). … Texas Republican Gov. Greg Abbott apologized on Monday for calling shooting victims in a rural Texas town close to Houston "illegal immigrants," a remark that attracted harsh criticism and was factually inaccurate (CBS Austin). Suspect Francisco Oropesa, 38, was arrested hiding at a relative's home nearby after authorities received a tip on Tuesday. He will be charged with five counts of murder and is being held on a $5 million bond (NBC News). … CNN reports how political campaigns and the Republican National Committee have used artificial intelligence in ads, and why we should be concerned about use of computer-generated imagery aimed at influencing voters. … The conservative Heritage Foundation in Washington hired John McEntee, who formerly directed the White House Presidential Personnel Office for Trump, to help identify staff members for the next GOP administration through a $22 million transition plan (RealClearPolitics). … In last year's midterm elections, participation by Black voters dropped 10 percentage points compared with 2018, the Census Bureau reported. Turnout also fell among younger voters and those who are college graduates (The Washington Post). … The nonprofit College Board wants to move past months of political controversy over its advanced placement African American Studies course but instead confronts calls for an independent investigation (The Hill).

In Focus / Sharp Takes

➤ ECONOMY

The Federal Reserve today is widely expected to raise interest rates another quarter-point to squeeze inflation but then signal a pause to take stock of a slowing economy and perhaps the rippling stress in some banks (USA Today and Bloomberg News).

Those banking jitters on Tuesday rattled investors, combined with evidence of a slowing economic output and predictions among analysts and many economists of a recession later this year or early next.

Markets took a dive Tuesday as more banks were rumored to be vulnerable days after the seizure of First Republic Bank, now part of JPMorgan Chase. Shares in Pacific Western Bank stock fell more than 20 percent and Western Alliance Bank took a market hit (CNBC), among others.

Will the ongoing banking troubles affect the Fed's rate decision tomorrow? Analysts say no, even if some argue the central bank should hold back (The New York Times).

A group of lawmakers, including Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.), again urged the Fed to halt its interest rate hikes, urging Chairman Jerome Powell to "avoid engineering a recession that destroys jobs and crushes small businesses" (CNBC).

➤ ADMINISTRATION

The Biden administration will send active-duty troops to the southern border as it prepares for what is expected to be a surge in migration after the lifting of Title 42 COVID-19 restrictions next week. The Defense Department is expected to provide a temporary increase of 1,500 military personnel for 90 days to augment the 2,500 military personnel currently providing support at the border at the request of the Department of Homeland Security, the department said in a statement.

The troops would be active-duty, not National Guard, and would not be armed. They would not use force or make arrests but would support border patrol as needed, in compliance with the Posse Comitatus Act, which prevents the military from enforcing law within U.S. borders.

"DoD personnel will be performing non-law enforcement duties such as ground based detection and monitoring, data entry, and warehouse support. DoD personnel have never, and will not, perform law enforcement activities or interact with migrants or other individuals in DHS custody," DHS said in a statement (The Hill and CNN).

Senate Foreign Relations Committee Chairman Bob Menendez (D-N.J.) called the president's "militarization" of the border "unacceptable," in a sharply worded statement Tuesday. "There is already a humanitarian crisis in the Western Hemisphere, and deploying military personnel only signals that migrants are a threat that require our nation's troops to contain. Nothing could be further from the truth," he said. The senator fumed that the administration had "largely ignored" his proposed plan to end the Trump-era Title 42 policy.

New York City Mayor Eric Adams (D) blamed Biden and House Republicans Tuesday for "irresponsibility" and lack of progress on immigration reforms, leaving his city and New York state with what he has complained are strained resources amid surges of migrants transported northward by Republican-led border states and Florida (The Hill).

The Hill and CNBC: Attorney General Merrick Garland on Tuesday announced 288 arrests in an international operation targeting the trafficking of fentanyl and opioids on the dark web, with a crackdown on criminal cryptocurrency.

The United States and Philippines are putting on a united front in the face of an aggressive China, a partnership that was not fully expected when the island nation's president took office in June. But The Hill's Ellen Mitchell reports that Biden appeared to go out of his way to play nice with the new leader, in a private meeting asking President Ferdiand Marcos Jr. how the administration could "fulfill your dreams and hopes" to improve relations between the two, according to The Associated Press.

The niceties are a turnaround for the two countries, which have had a sometimes rocky past, most recently over former President Rodrigo Duterte's close ties with China. But a renewed friendship could prove valuable to Washington and Manila, which are both struggling with increased Chinese harassment of vessels in the South China Sea and toward Taiwan.

The New York Times: Marcos, back in the arms of the U.S., is making his own name in foreign policy.
Time magazine: The U.S. military's legacy in the Philippines: Thousands of children left behind.
Axios: U.S. allies could play key roles in a U.S.-China war over Taiwan.

EVENT INVITE:

Expanding Access to Alzheimer's Care & Treatment, May 11, 2 p.m. ET

About 1 in 9 Americans over 65 suffers from Alzheimer's disease. Unfortunately, treatment options are still limited. Why is CMS declining coverage, and where are we in terms of new treatments on the horizon? The Hill brings together Sens. Ed Markey (D-Mass.), Shelley Moore Capito (R-W.Va.); Reps. Anna Eshoo (D-Calif.), Darin LaHood (R-Ill.) and Nanette Barragan (D-Calif.); along with researchers, doctors, caregivers and patients to explore the latest treatments and roadblocks and discuss what more needs to be done.

Click Here to Register

Opinion

The latest stench in the Supreme Court, by James D. Zirin, opinion contributor, The Hill. https://bit.ly/3Nu0LAV
Does America realize that Sudan is too big to fail? by Lydia Polgreen, columnist, The New York Times. https://nyti.ms/42m27C1

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 11 a.m. Friday. Members are scheduled to return from a district work period on May 9.

The Senate meets at 10 a.m. to resume consideration of the nomination of Orelia Merchant to be a U.S. district judge for the Eastern District of New York.

The president will receive the President's Daily Brief at 11:45 a.m. Vice President Harris will attend in the Oval Office before the two have lunch at 12:45 p.m. Biden and first lady Jill Biden will host a reception and dinner at 6:30 p.m. in the State Dining Room for the Defense Department's combatant commanders.

The vice president, in addition to joining Biden at the White House, will participate in a moderated conversation at 5:15 p.m. at the White House Asian American and Native Hawaiian and Pacific Islander Forum, to be held at George Washington University in Washington.

Secretary of State Antony Blinken will participate in a moderated conversation on the state of press freedom worldwide with The Washington Post at 10 a.m.

The first lady at 1:45 p.m., along with Supreme Court Associate Justice Sonia Sotomayor, will visit the Bronx Children's Museum in New York City to mark the recent opening of a multicultural education program aimed at the local community. (Sotomayor grew up in Puerto Rican communities in the South Bronx and East Bronx.)

Second gentleman Doug Emhoff will travel to Minneapolis to mark National Small Business Week during events accompanying Isabel Guzman, administrator of the Small Business Administration. They will hold a roundtable at Adama Restaurant and Awash Bakery; visit Afro Deli and Grill to meet with Abdirahman Kahin, the National Small Business Person of the Year; speak during an awards ceremony at the Landmark Event Center; meet with small business owners at Asia Mall; meet with staff of Sciencix Inc., named the National Exporter of the Year, to tour the facility.

The Federal Reserve at 2 p.m. will conclude a two-day meeting with a statement about central bank policy, and the economy and Chairman Jerome Powell will respond to news media questions at 2:30 p.m.

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

Elsewhere

➤ INTERNATIONAL

The two rival generals fighting in Sudan agreed to a seven-day truce starting Thursday and will name representatives to peace talks, said the foreign ministry of South Sudan, which has been working with other neighboring countries to negotiate an end to a conflict that has sent more than 100,000 refugees pouring across their borders in a few weeks. Still, there was no immediate public confirmation that an agreement had been reached from either side in the conflict between the Sudanese Army, led by Gen. Abdel Fattah al-Burhan, and the paramilitary Rapid Support Forces, led by Lt. Gen. Mohamed Hamdan (The New York Times).

No date has been set yet for negotiations to begin. Fighting has gripped the country for the past two weeks, and the United Nations estimates 800,000 refugees could flee Sudan, triggering a regional crisis. So far, more than 500 people have died and more than 4,000 have been injured, according to the World Health Organization (The Washington Post).

The Wall Street Journal: Ugandan lawmakers amend anti-LGBT bill criticized by U.S.
The Washington Post: The U.N. is struggling to strike a balance in Afghanistan amid the humanitarian crisis.

Russia's defense chief on Tuesday urged a state company to double its missile output, as a possible Ukrainian counteroffensive looms and both sides in the 14-month war have reportedly experienced an ammunition shortage (The Associated Press). The announcement comes as Russia continues to throw more of its soldiers into the grinding battle in Bakhmut, in Ukraine's Donetsk region, in a desperate bid for something to tout during next week's Victory Day parade in Moscow — an annual May 9 celebration of Soviet victory over Nazi Germany in World War II (Politico EU).

The Washington Post: Ukrainian President Volodymyr Zelensky said the White House told him nothing about the Discord intelligence leaks.
The Wall Street Journal: Ukraine seeks to bolster air defenses after Russian missile barrages.
Reuters: Huge fires at oil depots in Russia and Ukraine as sides press drone war.

➤ HEALTH & WELLBEING

Loneliness presents a profound public health threat akin to smoking and obesity, U.S. Surgeon General Vivek Murthy warned Tuesday in an advisory that aims to encourage Americans to spend more time with each other in an increasingly divided and digital society. Murthy said half of U.S. adults experience loneliness, which has consequences for mental and physical health, including a greater risk of anxiety and depression — and more surprisingly, heart disease, stroke and dementia.

Time spent with friends declined 20 hours a month between 2003 and 2020, according to research cited in the advisory, while time spent alone increased by 24 hours a month in that period. Much of that time spent alone was likely exacerbated by the COVID-19 pandemic. As a remedy, Murthy is calling for a collective effort to "mend the social fabric of our nation," including talking more to relatives, friends and co-workers; teaching children how to build healthy relationships; and spending less time online if it comes at the expense of in-person interactions (The Washington Post and The Hill).

The Atlantic: Beware the Ozempic burp resulting from medication used for weight loss and diabetes.
The Hill: Hundreds of Democrats urge appeals court to reverse abortion pill ruling.
The Associated Press: Oklahoma governor signs a ban on gender-affirming care for anyone under age 18.

Johnson & Johnson, Pfizer and other pharmaceutical companies are scaling back programs that cover the co-payments of patients or provide free drugs, The Wall Street Journal reports. The programs have been costing drugmakers billions of dollars a year and have been increasing as health plans seeking to control their own spending have tried to take advantage of the assistance.

The Closer

And finally … 🌌 The end is coming… but it's still about 100 billion years away.

At some point in the future, somewhere in the now 14-billion-year-old universe, there will live a last sentient being, who will have a final thought. If dark energy prevails, distant galaxies will eventually be speeding away so fast that telescopes can't see them anymore. The stars will die and not be reborn. It will be like living inside an inside-out black hole that sucks matter, energy and information over the horizon, never to return.

Feeling existential yet? The New York Times has laid out a timeline for the universe's eventual — if still very far-off — decline, which we humans can keep contemplating for years and years to come.