Soaring prices are hurting Americans. The cure is going to hurt, too. It may take a recession to stamp out inflation — and it’s likely to happen on President Joe Biden’s watch.
A downturn by the start of 2024, barely even on the radar just a few months ago, is now close to a three-in-four probability, according to the latest estimates by Bloomberg Economics.
On Wednesday the Fed delivered its biggest interest-rate hike in almost three decades, as it takes the fight against inflation into overdrive. When central bankers try this hard to slow the economy down, they often end up tipping it into outright reverse.
All of this, it’s worth pointing out, is happening at a time when US consumers are still flush with cash and jobless rates are near historic lows. Fed Chair Jerome Powell said Wednesday there’s “no sign” of a broader slowdown. The Fed’s own projections, and others highlighted by the administration, suggest a recession remains unlikely. Read more from Nancy Cook, Reade Pickert, Gregory Korte and Anna Wong.
Biden met with Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) to discuss “their shared agenda of tackling inflation and lowering prices and transitioning from a historic economic recovery to stable, steady growth,” according to White House statement, Chelsea Mes reports.
Treasury Secretary Janet Yellen will meet with the CEO members of the Bank Policy Institute Thursday to discuss global economic outlook, and Biden administration’s efforts to address inflation, according to Treasury’s daily guidance, Chelsea Mes reports.
Key GOP Senator Says Gun-Safety Talks Hit ‘Bumps’
The lead GOP negotiator on bipartisan gun safety legislation said talks among 20 senators are hitting “bumps in the road” that risk plans to debate legislation on the Senate floor next week.
John Cornyn (R-Texas) said he’s hopeful negotiations can be completed soon. But still unresolved, he said Wednesday, are specifics surrounding a provision on red flag laws as well as language that would close what’s been described as a boyfriend loophole.
“I’m eager to wrap up our negotiations, but we’re not going to cut corners or capitulate for the sole purpose of passing something,” Cornyn said.
The two parties have disagreed over whether only states that enact red flag laws, which allow courts to remove guns from potentially dangerous owners, would have access to some new grants. Cornyn said states should not be required to create such laws, and that those that don’t enact them should be able to tap funds for crisis intervention efforts.
Cornyn also said the bill can’t be “overly broad” in defining dating relationships when it comes to closing the boyfriend loophole. Federal law currently doesn’t bar abusive dating partners from having guns the same way domestic abusers are restricted if they are married to, have lived with or have a child with the victim.
“We need to define this in a very crystal clear way,” Cornyn said. “It can’t be overly broad or open to interpretation.” Read more from Laura Litvan.
Happening on the Hill
- The Senate convenes at 10 a.m. and plans to vote on a bill to expand benefits to veterans exposed to toxic substances.
- House members meet at 9 a.m. to consider legislation that aims to lower food and fuel prices.
House lawmakers are squaring off over legislation that would ramp up industry oversight of meat markets, as Democrats and Republicans disagree over whether it would bring down skyrocketing food costs. The bill is set for a floor vote Thursday and would establish an Agriculture Department office to investigate competition matters in meat and poultry markets. Read more from Maeve Sheehey.
The House committee investigating the 2021 insurrection of the US Capitol will focus Thursday on Donald Trump’s efforts to pressure then-Vice President Mike Pence into using his role as the Senate’s presiding officer to block congressional certification of Biden’s presidential election win.
The 1 p.m. hearing is expected to present evidence Trump was repeatedly warned his plans to block election certification were illegal and may include testimony from Trump aides on how the president responded when he learned rioters invading the Capitol on Jan. 6 were calling for Pence’s lynching. Mike Dorning previews the hearing.
The US House passed legislation by a vote of 215 to 207 that would require financial institutions and federal banking regulators to disclose their diversity practices and take additional steps to foster equity and inclusion, Alisa Parenti reports.
Anthony Fauci, the chief medical adviser to Biden who has been at the forefront of the US pandemic response, tested positive for Covid-19 and asked to appear remotely Thursday morning for his scheduled testimony to the Senate Committee on Health, Education, Labor and Pensions, according to a Democratic aide familiar with the situation, Madison Muller reports.
A revised plan to scrap some current federal tax credits for children in favor of a monthly cash benefit was rolled out Wednesday by Sen. Mitt Romney (R-Utah). Families would receive up to $350 per month for children under six and $250 a month for children 6-17, with phaseout thresholds for higher earners. Romney had been in talks with Sen. Michael Bennet (D-Colo.) to craft bipartisan legislation with a similar aim, Colin Wilhelm reports.
Universal paid leave and affordable child care and housing would ease the pandemic’s economic strain and bring more women back into the workforce, a panel of working-class women told the House Ways and Means Committee Wednesday. While the Family and Medical Leave Act requires employers to give their workers up to 12 weeks of unpaid leave, the current legislation falls short of helping working families that still must pay their bills and feed their families during a crisis, they said, Jalen Brown reports.
Congressional leaders would appoint a new commission to investigate civilian casualties at the hands of the US military under a draft proposal the House Armed Services Committee included in its annual defense policy legislation. The push for such a commission—included in the chairman’s mark for the fiscal 2023 defense authorization bill—comes after revelations of civilian fatalities during US military operations in Afghanistan and Syria, Roxana Tiron reports.
Amazon, Uber, Meta, and other corporations are calling on Congress to pass permanent protections for more than 600,000 undocumented immigrants known as dreamers, who were brought to the US as children. Wednesday’s letter comes as advocates mark the 10th anniversary of the Deferred Action for Childhood Arrivals program, Andrew Kreighbaum reports.
Tech critics and advocates alike are pouring money into advertising campaigns in hopes of swaying undecided lawmakers before a floor vote expected this summer on a bill aimed at curbing the power of technology giants. Alicia Diaz and Leah Nylen have the story.
The House Oversight and Reform Economic and Consumer Policy Subcommittee Wednesday examined the risks of the Seresto flea and tick collar, which may be linked to more than 2,500 pet deaths. Republican members and the minority witness redirected the conversation to other economic issues such as inflation, with Rep. Andrew Clyde (R-Ga.) calling the hearing’s topic “a colossal waste of time,” Mia McCarthy reports.
Elections & Politics
Hispanic Democrats in Congress are warning that a lack of investment in outreach to Hispanic voters will cost the party more seats after Republicans flipped a Texas border district in a special election Tuesday. Republican activist Mayra Flores defeated Democrat Dan Sanchez in a district that was open after Democrat Filemon Vela resigned from Congress in March. Read more from Emily Wilkins and Mia McCarthy.
Texas Governor Greg Abbott’s lead over Democratic challenger Beto O’Rourke has narrowed in the three weeks since the Uvalde elementary-school massacre. Abbott, a Republican seeking a third term in November, has a lead of five percentage points over O’Rourke, according to a Quinnipiac University poll published Wednesday. In a December poll by the same institution, the incumbent had a 15-point lead, Shelly Hagan reports.
Around the Administration
- Biden at 3:10 p.m. plans to sign bipartisan legislation aimed at driving down costs of shipping goods overseas — a measure his administration has touted as a weapon in its fight against historic inflation, Jordan Fabian reports.
Exxon responded to Biden’s call on US oil refiners to boost capacity by saying it’s been doing precisely that. The biggest US oil company said Wednesday it invested through the previous market downturn to raise refining capacity to process US light crude by about 250,000 barrels a day, Christine Buurma reports.
- The White House is willing to use the emergency wartime Defense Production Act to boost the nation’s supply of gasoline, White House Press Secretary Karine Jean-Pierre said Wednesday, Ari Natter and Jenny Leonard report.
- Earlier: Biden Tells US Oil Refiners Record Profits ‘Not Acceptable’
Covid vaccines for infants and toddlers from Moderna and Pfizer won support from a panel of US regulatory advisers. The committee advising the Food and Drug Administration voted unanimously in favor of clearance for Pfizer’s three-dose vaccine for youngsters ages six months through 4 years as well as Moderna’s two-dose for children six months through 5 years, Fiona Rutherford reports.
The number of Ukrainians attempting to enter the US via the southern border dropped as a new humanitarian program gains steam. US Customs and Border Protection’s report Wednesday represents the first full month of data after the Biden administration launched the Uniting for Ukraine humanitarian parole program in late April, Ellen M. Gilmer reports.
- Meanwhile, US authorities are sailing the $325 million superyacht they seized last week that’s linked to Russian billionaire Suleiman Kerimov toward Hawaii — a big win as the US looks to confiscate Russian assets and punish oligarchs for their country’s invasion of Ukraine. Read more from K. Oanh Ha.
Ending the constitutional right to an abortion may hurt women’s labor force participation, college attainment and other economic gains achieved since the landmark 1973 Roe v. Wade decision, Cecilia Rouse, chair of the Council of Economic Advisers said Wednesday. Michael Sasso reports.
The Federal Trade Commission is investigating Microsoft’s proposed purchase of Activision Blizzard and how it might impact workers, chair Lina Khan told lawmakers. In a June 9 letter to Sen. Elizabeth Warren (D-Mass.), Khan confirmed the agency is looking into the proposed deal, noting that the companies previously disclosed the FTC’s merger review. Leah Nylen has the story.
The White House is set to launch a task force to combat online harassment and abuse Thursday, according to senior administration officials, Jenny Leonard reports. The task force will issue recommendations within six months, with focus on increasing support for survivors, expanding research and improving prevention efforts.
A new FAA proposal calls for fuel efficiency requirements for commercial planes beginning in 2028, as part of the US Aviation Climate Action Plan released last year, Caitlin Fichtel reports.
Biden’s infrastructure czar Mitch Landrieu carrying out the roughly $1 trillion infrastructure law defended the administration’s emphasis on fixing before taking on new expansion as congressional Republicans criticized the policy. Lillianna Byington has more.
Regional NLRB officials can throw out petitions to oust existing unions if they find merit to alleged labor law violations that would taint such requests or related votes to decertify a union, the board ruled. Read more from Robert Iafolla.
With assistance from Brandon Lee
To contact the reporter on this story: Michaela Ross in Washington at firstname.lastname@example.org