The Hill’s Morning Report — With a spring in his step, Biden heads for vacation

President Biden got another sliver of positive news on Wednesday as inflation dipped to 8.5 percent in July after hitting a 40-year high of 9.1 percent in June, highlighted by falling gas prices that finally is giving consumers some relief.

The Associated Press: U.S. inflation slips from 40-year peak but remains high.

The news was welcome given that Dow Jones economists had been expecting an uptick of 0.2 percent in inflation from June to July. In addition, the consumer price index was unchanged on a monthly basis, according to the Department of Labor (The Hill).

July core inflation, which includes all goods sans food and energy, stayed even at 5.9 percent. The totality of the news was also reflected on Wall Street where stocks jumped across the board (CNBC).

The easing of inflation is continuing a trend for Biden, who is reveling in recent good news, including narrow passage by the Senate on Sunday of a $740 billion measure focused on prescription drug pricing, health care costs and climate change. In total, the news has helped flip the script for Biden and allowed him the rare chance to go on offense with less than three months until the midterm elections.

Political observers tell The Hill’s Amie Parnes that the president has one card that needs to be played: talking about the robust jobs market in the country.

“It’s truly the greatest jobs market in the history of our country.” said Tony Fratto, an economic policy consultant who served as White house deputy press secretary under the former President George W. Bush. “They cannot win on inflation because it’s there and people are upset about it so if you can’t win the argument, change the subject.”

“It’s communications 101…. And this isn’t that hard to do. These are alley-oop dunks,” he added.

Veterans: Biden kept up that good news on Wednesday as he signed into law a bill expanding benefits for millions of veterans who were exposed to toxins during war and are suffering illnesses. The PACT Act expands presumption of service connections for a number of conditions related to toxic exposure — meaning veterans don’t have to prove their illness was service-connected.

“This is the most significant law our nation has ever passed to help millions of veterans who are exposed to toxic substances during the military services,” Biden said in emotional remarks from the East Room (The Hill and The Associated Press).

The new law is also personal for the president, whose elder son Beau Biden died of brain cancer in 2015, years after deploying to Iraq in 2008. The president, who made the hazards of military base burn pits and resulting illnesses a priority during his State of the Union address in March, linked his son’s cancer to military deployment with the Delaware National Guard (The Associated Press).

“I was going to get this done, come hell or high water,” Biden said.

Lost pay: U.S. workers without paid sick leave during the first two years of the coronavirus pandemic lost an estimated $28 billion in wages, according to a report released on Wednesday by the Urban Institute with support from the Robert Wood Johnson Foundation. It found that work absences due to illness, child care or other family matters increased by 50 percent when compared to the previous two years. Most absences were due to a worker’s personal illness. Women were 40 percent more likely to miss work without pay, while they were also among several groups — including self-employed, Black and Hispanic workers — who experienced the biggest increase in missed days (The Hill).

Trade: The administration is rethinking whether to scrap some tariffs on Chinese goods or potentially impose others in the wake of Beijing’s Taiwan response, putting aside options for now, Reuters reports. Biden has not reached a decision.

Related Articles

▪ CNBC: High inflation points to a possible 9.6 percent Social Security cost-of-living adjustment in 2023, or an extra $158.98 per month for the average retiree benefit of $1,656, according to an estimate based on data released Wednesday. 

▪ The Wall Street Journal: The Federal Reserve is likely to want further evidence of an inflation slowdown.

▪ The Wall Street Journal: Gas prices dip to $4 a gallon for the first time since March.

▪ NewsNation: Former White House national security adviser John Bolton said in an interview that he is “not surprised” about an Iranian man allegedly plotted to kill him. 

▪ CNN: Multiple current and former U.S. officials have protective security after Iran plotted to assassinate Bolton and others, including former Secretary of State Mike Pompeo, on U.S. soil. “I was not aware of the specifics,” Bolton told CNN.

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LEADING THE DAY

➤ INVESTIGATIONS & COURTS

Former President Trump revealed that he invoked his Fifth Amendment rights during a deposition with the New York attorney general’s office on Wednesday as part of its probe into his business and financial dealings.

“I once asked, ‘If you’re innocent, why are you taking the Fifth Amendment?’ Now I know the answer to that question,” Trump said in a statement “When your family, your company, and all the people in your orbit have become the targets of an unfounded, politically motivated Witch Hunt supported by lawyers, prosecutors, and the Fake News Media, you have no choice.”

Trump took part in the deposition after he failed a number of times to block the probe and the calls to testify. Trump said that he declined to respond to questioning under the advice of his legal team.

“The United States Constitution exists for this very purpose, and I will utilize it to the fullest extent to defend myself against this malicious attack by this administration, this Attorney General’s Office, and all other attacks on my family, my business, and our Country,” he wrote in the statement.

The probe is being led by New York Attorney General Letitia James (D), who Trump derided as a “renegade and out-of-control prosecutor.” She is investigating whether the ex-president misled investors and tax authorities by inflating the Trump Organization’s property value for the benefit of investments and, subsequently, deflating them to win tax and loan benefits. The probe could lead to a lawsuit seeking financial penalties from Trump and his family (The Hill).

“They asked a lot of questions about valuations and golf clubs and all that stuff,” Ronald Fischetti, Trump’s lawyer, told The New York Times, adding that Trump repeated “same answer” from 9:30 a.m. until the deposition concluded at 3 p.m. He added that Trump shortly before the meeting had to be convinced to invoke the Fifth Amendment.

“He absolutely wanted to testify, and it took some very strong persuasion by me and some others to convince him,” Fischetti said.

▪ Politico: What Trump’s pleading the Fifth means for New York’s Letitia James.

▪ Peter Baker, The New York Times: Trump claims he’s a victim of tactics he once deployed.

© Associated Press / Julia Nikhinson | Former President Trump attends a deposition in a civil investigation with the New York attorney general’s office on Wednesday.

The decision also came two days after the FBI’s search of his Mar-a-Lago resort for classified documents the former president is accused of taking with him after departing the White House early last year. Notably, the FBI’s move has inspired a fierce backlash among Trump’s most ardent supporters, fueling concern among experts about the escalating risk of political violence.

As The Hill’s John Kruzel and Rebecca Klar write, the rhetoric has ranged from divisive to incendiary, with the former president himself likening it to the Watergate break-in. However, some of his supporters have gone multiple steps further and consider it an act of civil war.

The search was conducted after investigators concluded there was probable cause that evidence of crime was being housed at Mar-a-Lago, and only after a judge approved a search warrant. However, that has not quelled the anger among some GOP leaders, who have amplified the idea that the probe was not an application of the rule of law, but rather an outgrowth of partisan politics designed to damage Biden’s main rival.

FBI Director Christopher Wray on Wednesday became the first official at either the bureau or the Department of Justice to answer questions about the search. While he declined to comment about the investigation itself, he issued a defense of FBI agents and law enforcement officials who have received threats in its aftermath.

“I will say that I’m always concerned about violence and threats of violence against law enforcement. … Any threats made against law enforcement, including the men and women of the FBI, as with any law enforcement agency, are deplorable and dangerous,” Wray said during an appearance in Omaha, Neb. (The Associated Press).

The FBI chief glanced at notes while delivering his answer, indicating he was prepared for the question.

▪ The Hill: How the GOP came to distrust the FBI.

▪ The Associated Press: Trump’s bond with GOP deepens after primary wins, FBI search.

▪ The Wall Street Journal: FBI quest for Trump documents started with breezy chats, tour of a crowded closet.

▪ Niall Stanage: The Memo: Legal storms engulf Trump.

▪ The Hill: GOP scrambles to unify as ‘red wave’ hits obstacles.

© Associated Press / Charlie Neibergall | FBI Director Christopher Wray in Omaha, Neb., on Wednesday.

IN FOCUS/SHARP TAKES

➤ CONGRESS

The House took the first procedural steps on Wednesday to pave the way for the Senate-passed, $740 billion Inflation Reduction Act to reach the floor on Friday. With expected passage later this week, the Democrats’ emblem of “getting things done” for voters would become law more than two months before the midterm elections.

Speaker Nancy Pelosi (D-Calif.) has just four votes to spare in the House as Republicans argue that the bill would worsen families’ finances, add to inflation and eventually expand the deficit (The Washington Post). The legislation will pass and possibly with a unanimous Democratic vote, as was the case in the Senate.

Democrats on Capitol Hill, who veered from glum to gleeful this month, want to ask voters to enlarge the party’s majorities to take another run at the policy and spending ideas left on the cutting room floor. That was the message Wednesday from Sen. Bernie Sanders (I-Vt.).

“Unfortunately, we have two corporate Democrats who are preventing us from doing what has to be done,” he told CNN’s Anderson Cooper on Wednesday, referring to Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, and his own push to expand Medicare. “So, to my mind, what this election is about is the need to get three or four more progressive Democrats into the United States Senate so we can finally do what the American people want.”

The Senate battlefield in November is taking shape, giving Democrats some reason to hope, CNN reports.

The Hill: The House punted on a pending series of gun and policing bills that for weeks have stirred Democratic infighting. Action on the package had been postponed in late July to work toward an elusive compromise. “Conversations continue on finding a consensus for a robust public safety package,” Pelosi wrote to colleagues on Wednesday.

The Hill: Historic debt relief program for farmers of color takes a hit after discrimination suits.

The Hill: Indiana Gov. Eric Holcomb (R) on Tuesday scheduled a special election to replace Rep. Jackie Walorski (R), who died in a car crash last week, that will coincide with November’s midterm elections. The winner of the special election is expected to take office quickly after Nov. 8 but will only serve for a matter of weeks until the end of Walorski’s term, which concludes on Jan. 3, 2023.

The Hill’s Hanna Trudo caught up with progressive Rep. Ro Khanna (D-Calif.) who sees the newly enacted CHIPS Act to benefit U.S. semiconductor manufacturers as among several legislative accomplishments that could help Democratic candidates win in November. In an interview, Khanna discussed progress on climate change, centrist Sen. Joe Manchin (D-W.Va.) and his party’s political strategy.

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OPINION

■ Trump’s primary winning streak shows he’s still king of the GOP, by Henry Olsen, columnist, The Washington Post. https://wapo.st/3BTm9tu

■ America’s new monkeypox strategy rests on a single study, by Katherine J. Wu, staff writer, The Atlantic. https://bit.ly/3didMxk

WHERE AND WHEN

The House will meet on Friday at 9 a.m. and will vote on the Senate-passed Inflation Reduction Act.

The Senate convenes on Friday at 9 a.m. for a pro forma session during its summer recess, which ends Sept. 6.

The president and first lady Jill Biden are vacationing in South Carolina. Biden has no public events scheduled.

Vice President Harris is in California where she will participate at 1:25 p.m. PDT in a call with the news media about investments in tribal broadband. Harris will host a roundtable discussion at the Fairmont San Francisco hotel at 2:05 p.m. PDT with California state legislators and advocates to discuss reproductive health care.

Secretary of State Antony Blinken is in Kigali, Rwanda, where he met this morning with President Paul Kagame and Foreign Minister Vincent Biruta, then held a joint press conference with Biruta (The Associated Press). At midday, Blinken visited the Kigali Genocide Memorial and meets in the afternoon with civil society representatives. The secretary later meets with employees and families from the U.S. Embassy.

Economic indicators: The Labor Department at 8:30 a.m. will report filings for jobless claims in the week ending Aug. 6. The Bureau of Labor Statistics at 8:30 a.m. will report on the producer price index for July.

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ELSEWHERE  

➤ INTERNATIONAL

China appears to wind down its threatening war games near Taiwan, whose foreign minister warned Tuesday that the Chinese military drills reflect ambitions to control large swaths of the western Pacific, while Taipei conducted its own exercises to underscore its readiness to defend itself. Beijing’s strategy would include controlling the East and South China seas via the Taiwan Strait and imposing a blockade to prevent the U.S. and its allies from aiding Taiwan in the event of an attack, Joseph Wu said during a news conference in Taipei (The Associated Press).

In Ukraine, President Volodymyr Zelensky vowed Wednesday to liberate Crimea, one day after several explosions hit a Russian airbase on the annexed peninsula and killed at least one person. Ukrainian officials have not claimed responsibility for the attack (CNBC). But satellite images show eight Russian warplanes damaged or destroyed in Crimea (CNBC).

Zelensky told The Washington Post that the only way to stop Russia from annexing any more of Ukraine’s territory is for Western countries to ban all Russian citizens.

Russia is struggling to replenish its troops in Ukraine, according to The Associated Press. The Kremlin is using a covert recruitment effort that includes using prisoners to make up the country’s manpower shortage amid reports that hundreds of Russian soldiers are refusing to fight and trying to quit the military.

➤ POX & PANDEMIC

David Quammen, science writer and author of the forthcoming book “Breathless: The Scientific Race to Defeat a Deadly Virus,” writes for The New York Times opinion section that unless humans and human ingenuity can adapt faster than the coronavirus, mankind faces “a long, doleful future of continued suffering.”

🦠Stacey Abrams, the Georgia Democratic nominee for governor, announced on Wednesday that she tested positive for COVID-19. Her spokesman, Michael Holloman, said she tested positive hours after a Tuesday speech in front of some of her closest allies in Atlanta. He said she had tested negative for the virus before Tuesday’s event (The Atlanta Journal-Constitution and The Hill).

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,035,549. Current average U.S. COVID-19 daily deaths are 395, according to the Centers for Disease Control and Prevention.

➤ ENVIRONMENT 

Lake Mead, in Nevada and Arizona, and Lake Powell, in Utah and Arizona, are at the epicenter of the biggest Western drought in history, reports The Hill’s Zack Budryk.

Lake Mead, the largest reservoir in the United States in terms of water capacity, is formed by the Hoover Dam on the Colorado River about 24 miles east of Las Vegas. In 1935, it was at least 700 feet deep. Today, it is at least 200 feet shallower and is so dry in spots that four sets of unidentified human remains have been discovered since May. One body was stuffed inside a barrel (New York magazine).

The Hill: The West’s parched condition can be explained with seven statistics.

NASA images show the staggering effects of drought on Lake Mead HERE. If the lake becomes a dead zone without sufficient replenished water and oxygen to support life, scientists argue it would be a “catastrophe” and one that could be averted.

© Associated Press / John Locher | Lake Mead at a spot near Boulder City, Nev., May 9.

➤ TECH

Facebook has profited from searches and ads for white supremacist groups on its platform, a report by the Tech Transparency Project said on Wednesday. The investigation found ads monetizing search results for some white supremacist groups, of which there are more than 80 using Facebook. While the ads weren’t for the hate groups themselves, they generated revenue for the social media giant when they appeared in searches. The platform has subsequently corrected the issue, a company spokesperson said on Wednesday (The Hill).

THE CLOSER

© Associated Press / Kristy McDonald | Jerry Garcia, the lead vocalist and songwriter for the Grateful Dead, 1992.

Take our Morning Report Quiz

And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by this week’s 27th anniversary of Jerry Garcia’s death, we’re eager for some smart guesses about the Grateful Dead.

Email your responses to asimendinger@thehill.com and/or aweaver@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

The Grateful Dead is known as one of the most prolific touring bands in history. How many shows did the band play between 1965 and Garcia’s death in 1995?

1. 1,724

2. 1,998

3. 2,314

4. 2,578

Garcia’s ashes were spread in two locations — San Francisco and ______?

1. India

2. New York City

3. Lithuania

4. None of the above

What was the first known written history of the term “Dead Heads”?   

1. One of the band’s concert posters

2. San Francisco Chronicle

3. Rolling Stone magazine

4. On a Grateful Dead album

How many keyboardists were part of the Grateful Dead (or toured with the band) throughout its 30-year history?

1. Two

2. Four

3. Six

4. Eight

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