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MORNING REPORT

Wednesday, May 17

by Alexis Simendinger & Kristina Karisch

© Associated Press / Evan Vucci | Speaker Kevin McCarthy (R-Calif.) and Senate Republican Leader Mitch McConnell (Ky.) at the White House after meeting with President Biden Tuesday to discuss the debt limit.

No deal in sight

Any legislative deal in Washington needs leaders with the power to say yes, the ability to do the math and deliver votes, and the skill to sell a compromise as the best available victory, or the skilled avoidance of disaster.

The nation's fiscal stewards at both ends of Pennsylvania Avenue may finally be getting somewhere after months of debt-limit grandstanding.

On Tuesday, President Biden, Speaker Kevin McCarthy (R-Calif.) and other congressional leaders met again. There will be more daily meetings and phone calls, and McCarthy said he was pleased that Biden chose to put his White House team together with the Speaker's team to "change the scope" of an unwieldy process that included dozens of players (The Hill).  

Office of Management and Budget Director Shalanda Young, an experienced former legislative aide, will lead talks for the White House along with top Biden policy and political adviser Steve Ricchetti, a veteran of past West Wing budget compromises during the Clinton and Obama years.

It is possible to get a deal by the end of the week. It's not that difficult to get to an agreement," McCarthy told reporters. He did not say how challenging a potential compromise would be for his conservative conference to bless.

Biden, according to the White House, reminded lawmakers that "neither side will get everything it wants."

Upshot: A smidgen of progress. Lots of "difficult issues" ahead. Only days left to lift the nation's borrowing authority and move those and other fiscal solutions through the House and Senate and into law before any economic meltdown.

Reuters: Treasury Secretary Janet Yellen on Tuesday warned that default could trigger a recession.
Politico: Among Senate Democrats, there's an underlying worry that not much improved Tuesday about the trajectory of debt ceiling discussions. "I think we're heading toward a decision on the 14th Amendment," said Sen. Peter Welch (D-Vt.), a former eight-term House member.

The president, facing high stakes and little time, will hurry back on Sunday from what had been planned as a multi-nation trip but now is limited to participation at the Group of Seven summit in Hiroshima, Japan (The Associated Press).

Senate Majority Leader Chuck Schumer (D-N.Y.), who has largely been on the sidelines publicly during the talks, commended an emerging bipartisan consensus on "what a disaster" a default would be and described "honest and real discussions."

Biden wants Republicans to abandon attempts to make Democrats roll back legacy provisions of the Inflation Reduction Act, enacted by his party, Politico reported Tuesday. He wants the GOP to take its opposition to student debt forgiveness, which Biden has proposed and is now pending in court, off the table. The White House wants to limit to two years any budget spending caps sought by Republicans, plus a hike Democrats seek in the debt ceiling of at least two years, or through the 2024 elections, rather than until March, Politico added.

Biden is willing to consider discretionary spending caps through the remainder of his term. He's signaled that the GOP's insistence on reprogramming unspent pandemic assistance funds is on the table. Tighter work requirements and restrictions proposed by Republicans for low-income benefit programs, including food assistance, are at a standstill in the talks (USA Today and Reuters).

Bloomberg News: Wall Street bosses warn that U.S. debt talks are already doing damage before a possible default.
Politico and Axios: Centrist Democrats are plotting a save-McCarthy strategy for the debt fight.
The Wall Street Journal: House Democrats today will gather signatures to launch a discharge petition, aiming to bypass GOP leadership and force a debt ceiling vote.

The Associated Press: Job cuts, no Social Security checks: How consumers could be pinched by a U.S. government default.
Vox: The overlooked Republican faction that could decide debt ceiling negotiations are the backbench conservatives who don't want to risk default but don't want to risk a primary challenge either. 
The Washington Post: In ongoing debt ceiling talks, why are Biden's liberal allies worried?

Leading the Day

➤ MORE CONGRESS

New York Republican Rep. George Santos faces Democratic efforts to force his expulsion from the House by Thursday following his indictment last week on 13 felony charges. Santos says he is not guilty of fraud, will not resign and will fight the charges. Democratic Rep. Robert Garcia of California on Tuesday moved to force a House vote on a resolution to remove Santos, which means the Speaker must act on it within two legislative days, either by calling a motion to table (or refer the resolution to the Ethics Committee) — both of which would require a simple majority vote — or bring the expulsion resolution to the floor, which needs support from two-thirds to pass. The effort almost certainly lacks votes needed to pass, despite bipartisan support for Santos's ouster (The Hill).  

Sen. Elizabeth Warren (D-Mass.) on Tuesday used a Senate Banking Committee hearing to blame the collapse of Silicon Valley Bank and Signature Bank on mismanagement by the institutions' respective CEOs who testified. 

The chief executives sought to deflect findings by the Federal Deposit Insurance Corporation (FDIC) that they failed to address irregularities identified by the federal government as factors that put them at risk. Senators also blamed lax regulation and regulatory failures for what happened. More than two hours into the hearing, after he was pressed on what he could have done differently, Greg Becker said: "I was the CEO of Silicon Valley Bank. I take responsibility for what ultimately happened." 

Warren asked Becker whether he would donate his salary and bonuses to help plug the $20 billion hole in the FDIC's insurance fund. The regulator used that money to protect SVB depositors and will replenish it with new fees on banks. 

"How much of the $40 million that you earned from loading up SVB with risk are you planning to return to the FDIC?" Warren asked. "Are you planning to return a single nickel to what you cost the fund?"

"Senator, I know there's going to be a process review of compensation, and I will…" Becker responded.

"I'll take that as a no," Warren said (Axios and The Hill).

Senators on both sides of the aisle questioned Sam Altman, the CEO of OpenAI, the company behind the popular ChatGPT tool, on Tuesday about the risks of artificial intelligence (AI) technology. The Senate Judiciary subcommittee hearing, the first in a series of expected AI hearings, showcased a degree of bipartisan unity as lawmakers begin mulling regulation. Altman pledged to work alongside the government and the rest of the industry to move forward with a path that maximizes the benefits of the tech and minimizes the wide-ranging risks.

Senators on the panel largely focused their questions on the risks from the technology across the board — especially to jobs (The Hill and Bloomberg News). 

"My worst fears are that we — the field, the technology, the industry — cause significant harm to the world. I think that can happen in a lot of different ways," Altman said. "I think if this technology goes wrong, it can go quite wrong, and we want to be vocal about that. We want to work with the government to prevent that from happening."

Altman embraced government regulation and suggested options to members of the committee. After first banning the use of ChatGPT for political purposes, OpenAI adjusted its policy, which bans "generating high volumes of campaign materials." Those policies will be put to the test as the 2024 election heats up. (NBC News).

CNN: Pressure to impeach Homeland Security Secretary Alejandro Mayorkas builds inside the House GOP.
The Hill: Bipartisan group calls for investigation into House Oversight Committee Chairman James Comer's (R-Ky.) remarks about a missing whistleblower.
The Hill: John Durham's FBI-Trump report fuels House GOP "weaponization" attacks.

➤ POLITICS

In just a few years, Gov. Ron DeSantis has experienced a remarkable political rise that has transformed him into one of the most powerful Florida governors in decades and propelled him to the top rungs of Republican politics nationally. Now a likely contender for the 2024 GOP nomination, The Hill's Max Greenwood and Amie Parnes break down his ascent in a third dispatch about the Sunshine State, chronicling how his rise to power is the result of and a driving force for a rightward march that has been underway in Florida for years — but accelerated sharply under DeSantis's leadership.

"Ron DeSantis understands a counterintuitive principle in politics, which is that it's more important to be decisive in your decision-making than to have the decision be popular," Justin Sayfie, a veteran Florida Republican consultant who served as a spokesperson and top adviser for former Florida Gov. Jeb Bush, told The Hill. "People will respect a governor who is decisive more so than a governor who puts his or her finger in the wind to figure out where they're going next."

NBC News: DeSantis is sending Florida law enforcement and National Guard members to the Texas border.
The Hill: 61 percent of GOP primary voters back former President Trump, according to a Morning Consult poll.

A sweeping Texas bill stripping authority from cities passed the state Senate Tuesday and is now headed to the governor's desk, where it will likely gain a signature, The Hill's Saul Elbein reports. House Bill 2127 takes large domains of municipal governing — from payday lending laws to regulations on rest breaks for construction workers to laws determining whether women can experience discrimination based on their hair — out of the hands of the state's largely Democratic-run cities and shifts them to its Republican-controlled legislature.

A bill that a Texas lawyer called "the death star" is supported by Gov. Greg Abbott (R) and statewide Republican leaders and represents a new phase in the campaign by conservative state legislatures to curtail the power of blue-leaning cities. 

Tuesday primary roundup: Trump-backed State Attorney General Daniel Cameron (R) is projected to win Kentucky's GOP gubernatorial primary (Courier-Journal). … In Florida, Democrats are projected to flip control of the mayor's office in Jacksonville, the largest city in the country with a GOP leader, after Democrat Donna Deegan defeated Republican Daniel Davis to succeed Mayor Lenny Curry (R), who is term-limited (The Hill). … In Philadelphia, Cherelle Parker, a former state representative and City Council member who campaigned on hiring more police, won the Democratic nomination for mayor. If she wins in November, which is all but assured in the heavily-Democratic city, Parker will become the city's 100th mayor, and the first woman to hold the job (The New York Times). … And Democrat candidate Daniel McCaffery is projected to win the Democratic primary in the Pennsylvania Supreme Court race. If he wins a seat on the court, Democrats would secure a clear liberal majority on the bench (The Hill). 

The Hill's Caroline Vakil has the key takeaways from Tuesday's primaries.

The Hill: With his pen, Montana Gov. Greg Gianforte (R) on Tuesday banned abortions after 15 weeks of pregnancy. Planned Parenthood of Montana asked a state judge to temporarily block the new law. 
The Hill and Axios: In North Carolina on Tuesday, a ban on abortions after 12 weeks of pregnancy heads for new statute on July 1 after Republican state legislators decisively overturned Democratic Gov. Roy Cooper's Saturday veto. The White House in a statement said the new law is "out of touch" with the majority of North Carolinians: "President Biden and Vice President Harris will continue to work alongside Governor Cooper, state legislators, and Americans who are fighting to protect access to reproductive health care in the face of relentless attacks, and will continue to call on Congress to restore the protections of Roe for all people in every state."
The 19th: New abortion bans could further erode access to medical care.
The Hill: Missouri transgender care for minors and some adults ended on Tuesday.

In Focus / Sharp Takes

➤ ADMINISTRATION

The arguments about the future availability of the widely used abortion pill mifepristone will be back in a court today, The Hill's Zach Schonfeld and Nathaniel Weixel report, where the Biden administration will argue that the pill is safe and that a lower court overstepped its authority by ruling that its decades-old approval was invalid. 

But the case will be heard by what is considered the most conservative appeals court in the country — a panel of three judges with hostile views on abortion.

The Washington Post: Two weeks ago, an unidentified intruder entered the Washington home of Biden national security adviser Jake Sullivan at 3 a.m. His Secret Service agents outside had no idea about the entry, during which Sullivan was not harmed, until the adviser alerted the agents.
The Hill: Biden administration starts process to refill emergency oil reserve.
The Hill: The IRS will launch a test run of a free online tax-filing system.

➤ INTERNATIONAL

Ukrainian air defenses stopped an intense Russian air missile barrage on Kyiv early Tuesday, shooting down all 18 weapons aimed at the capital, officials said. If confirmed, it would be the first time Ukraine thwarted a weapon Russia has touted as a next-generation hypersonic missile that was all but unstoppable (Reuters and The Wall Street Journal). The attack came as European leaders sought new ways to punish Moscow for the war and a Chinese envoy sought traction for Beijing's peace proposal, which so far appears to have made little impression (The Associated Press). 

Serhii Popko, the head of the Kyiv military administration, said the overnight attack was "exceptional in its density — the maximum number of attacking missiles in the shortest period of time."

Ukraine denied on Wednesday that a Russian hypersonic missile had destroyed a U.S.-made Patriot missile defense system during an air strike on Kyiv (Reuters).

Meanwhile, Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky have agreed to separate meetings with a delegation of leaders from six African countries to discuss a possible plan to end the war, South African President Cyril Ramaphosa said Tuesday (The Globe and Mail).

The Washington Post: Zelensky toured Europe seeking new weapons. Here's what he brought home.
The New York Times: As the Ukrainian counteroffensive looms, Putin faces setbacks and disunity in the Russian forces.
Politico EU: Ukraine Supreme Court chief held in corruption probe.
The Associated Press: Council of Europe summit in Iceland seeks to hold Russia to account for Ukraine war.
In the Room with Peter Bergen, a new Audible podcast with host and veteran national security journalist and author, launched with Tuesday's "Will Vladimir Putin get away with war crimes?" (plus two other episodes).

After heading into last weekend's elections with high hopes, Turkey's political opposition is struggling to fight off despair and plot a course to give their candidate a fighting chance against the incumbent, Recep Tayyip Erdoğan, in a runoff May 28. 

While Erdoğan, who is seeking a third five-year presidential term to extend his increasingly authoritarian rule, failed to win a simple majority, he still led the opposition by a margin of about 5 percentage points, pointing to a win for him in the second round. His challenger, Kemal Kılıçdaroğlu, who heads a six-party coalition that came together with the goals of unseating the incumbent and restoring Turkish democracy, faces an uphill battle in the next two weeks (The New York Times). 

Politico EU: How Turkey's Erdoğan uses social media to cling onto power.
Al Jazeera analysis: In Turkey's elections, nationalism is the real winner.
The Guardian: Turkey's economic crisis expected to deepen after Erdoğan tops poll.

South Korea and Japan are using this week's G-7 meetings to push for an improvement in ties between their nations, which have long been marked by animosity that culminated in the Japanese colonization of the Korean Peninsula. Among the reasons for the recent shift in tone is China's growing aggressiveness in the region and the threat of North Korea developing nuclear missiles. 

With Washington providing some diplomatic nudging, and a concern about the influence of Russia's invasion of Ukraine, Tokyo and Seoul "understand that their survival, both nationally and politically, depends on subordinating themselves to the U.S. President Joe Biden administration's global and regional priorities," Daniel Sneider, an East Asia lecturer at Stanford University, told The Associated Press.

The Associated Press: G7 leaders likely to focus on the war in Ukraine and tensions in Asia at summit in Hiroshima.
The Washington Post: Germany convicts five men for Dresden jewel heist worth over $100 million.
The New York Times: Cambodia disqualifies its main opposition party ahead of elections.

Opinion

The U.S. needs a moonshot to prevent extremism from metastasizing, by Marek N. Posard and K. Jack Riley, opinion contributors, The Hill. https://bit.ly/42AdIOd
I'm a breast cancer surgeon. Here's what I think of the new screening guidelines (starting at age 40 rather than 50), by Mehr Golshan, guest essayist, The New York Times. https://nyti.ms/3M8QJCL

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 meet at 10 a.m.

The Senate will convene at 10 a.m.

The president will depart for the Group of Seven summit in Hiroshima, Japan, and return Sunday. He's canceling plans to visit Papua New Guinea and Australia next week because of ongoing debt and budget talks in Washington.

The vice president is in Washington and has no public events.

Secretary of State Antony Blinken will accompany the president to Japan.

First lady Jill Biden and second gentleman Doug Emhoff will attend a Congressional Club luncheon at noon. The first lady will travel to Bethel, Alaska, to describe federal efforts to expand broadband to include Native American communities, including Alaska Native communities in Alaska's Yukon-Kuskokwim Delta. She will be joined by Interior Secretary Deb Haaland and Rep. Mary Sattler Peltola (D-Alaska) for remarks at 6:50 p.m. Biden is scheduled to join the president at the G7 summit in Japan from May 19-21.

Elsewhere

➤ HEALTH & WELLBEING

Pregnant patients have received care different from what they would have received before the Supreme Court overturned Roe v. Wade, according to a report by University of California San Francisco researchers (The Hill). Patients "are being harmed in significant ways because care is being denied or delayed," Daniel Grossman, a professor at UCSF and the lead author, told The Washington Post. "These laws are having a broader impact beyond people who are seeking abortion because they have an undesired pregnancy."

The Associated Press: More companies help with fertility care, but it is still out of reach for many.
The Hill: Soft contact lenses may contain toxic "forever chemicals," research finds.
The New York Times: Does therapy really work? Let's unpack that.

The National Institutes of Health is enrolling participants to test an experimental universal influenza vaccine using mRNA technology. The shots use the same mRNA technology that's in the COVID-19 Pfizer and Moderna vaccines, but scientists first started on these experiments in 2017, years before the start of the pandemic (CNN).

"A universal influenza vaccine would be a major public health achievement and could eliminate the need for both annual development of seasonal influenza vaccines, as well as the need for patients to get a flu shot each year," acting National Institute of Allergy and Infectious Diseases Director Hugh Auchincloss said in a news release. "Moreover, some strains of influenza virus have significant pandemic potential. A universal flu vaccine could serve as an important line of defense against the spread of a future flu pandemic."

Reuters: The World Health Organization warns against bias and misinformation in using artificial intelligence in healthcare.
The Washington Post: Black communities endured a waves of excess deaths in the past two decades, studies find.

The Closer

© Associated Press / Mary Altaffer | Brainard Memorial Window for Methodist Church, Waterville, N.Y., circa 1901, seen in 2012 during a New York exhibit titled "Louis C. Tiffany and the Art of Devotion."

And finally … ⛪ Ever dreamed of a thrift store "find" or valuable antiques jettisoned by clueless sellers? A pair of circa 1905 Tiffany Studios stained glass church windows will be auctioned in Philadelphia Thursday after being saved from the wrecking ball by an antiques collector who saw the large rarities on Facebook Marketplace last year and had a hunch. He paid $6,000 for the lovely pair before their scheduled demolition. Their value is estimated at close to half a million dollars (Artnet News).

Freeman's auction house showcases the "twin roses of St. Paul's" in photos, video and provenance HERE.