What to Know in Washington: Inflation, Virus, Russia Snag Biden

The Biden administration is off to a rocky start in 2022 on fronts both domestic and foreign as inflation and Covid-19 surge, and the prospects for passing his signature economic package and a voting rights overhaul fall, all while Russia threatens an invasion of ally Ukraine.

Here’s what Bloomberg Government is tracking for Tuesday.

Congressional Agenda:

Biden’s Schedule:

  • Biden will receive his daily briefing at 10:15 a.m. and his weekly economic briefing at 11:15 a.m.
  • White House Press Secretary Jen Psaki will hold a briefing at noon with White House Infrastructure Implementation Coordinator Mitch Landrieu.

Biden’s Bad Winter Gets Worse With Inflation, Virus, Russia

President Joe Biden entered the New Year with his signature economic legislation stalled, inflation at 40-year highs and Russia threatening an invasion of Ukraine. And things have only gotten worse.

A series of recent setbacks further clouds the fate of Biden’s policy agenda and the trajectory of his presidency. Fresh data on inflation showed prices rising 7% last year, the most since 1982. A voting rights speech didn’t persuade many Democrats and was snubbed by Georgia governor candidate Stacey Abrams. Talks with Russia and Iran yielded no–46–breakthroughs. Covid-19 cases hit records, while the Supreme Court gutted Biden’s signature effort to goose vaccinations, blocking a rule that would have required businesses to mandate shots or weekly testing for employees.

Biden’s attempted pivot to voting rights—with a heralded speech in Atlanta, hometown of civil rights legends Martin Luther King Jr. and former Rep. John Lewis (D-Ga.)—is headed for a dead end, after Sen. Kyrsten Sinema (D-Ariz.) declared she would not support changing Senate rules to pass legislation expanding access to the ballot over a Republican filibuster.

The president’s voting rights focus was intended as a signal to disaffected progressives and Black voters, whom his party badly needs to turn out for midterm elections in November. But his domestic troubles risk rippling overseas, emboldening adversaries poised to exploit a weakened U.S. president. Democrats are increasingly concerned that voters are poised to hand control of the House, Senate or both to Republicans.

A Quinnipiac University survey this week found one-third of Americans approve of Biden’s performance, while half disapprove. Another poll published this week by the Economist and YouGov found that 52% of Americans say the economy is getting worse, while just 15% say it’s improving. Biden’s political fortunes could improve in coming months if Covid-19 recedes and the rate of inflation returns to normal levels.

On Friday, Biden attempted to regroup, touting a clear victory—his bipartisan infrastructure law, now three months behind him—with an announcement of billions in funding for bridge construction. “There’s a lot of talk about disappointments in things we haven’t gotten done — we’re going get a lot of them done, I might add,” Biden said. “But this is something we did get done. And it’s of enormous consequence to the country.” Read more from Josh Wingrove.

  • The sudden collapse of voting-rights legislation last week is emerging as a final straw for Black voters with Biden, which threatens to drive down turnout from a key Democratic bloc in November elections with the party’s control of Congress at stake. That loss follows Democrats’ failure to pass police overhaul legislation and Biden’s economic agenda, which he billed as aid to low-income and minority voters with cradle-to-grave social spending. Biden carried 87% of the Black vote in 2020, but his approval among that bloc has plummeted from 78% to 57%, a Jan. 12 Quinnipiac poll found. Mario Parker has more.
  • A majority of Americans fault Biden’s handling of inflation and the economy, according to a CBS News poll, which also found that people increasingly find government guidance on Covid-19 confusing. The poll suggests that inflation, which has reached its highest level in 40 years, is the biggest challenge, with 65% saying the White House isn’t focused enough on the burden of accelerating prices. More than half said it also isn’t focused enough on the economy. “Few think Biden and fellow Democrats are focused on the right things, overall, either,” CBS said in a summary of the poll. Tony Czuczka has more.

The Coronavirus Pandemic

The White House has assembled a group that will prepare new countermeasures for the emergence of a future Covid-19 variant and other pandemic threats after the arrival of the omicron strain created tumult in the U.S. economy and health-care system. The Pandemic Innovation Task Force, formed by the White House Office of Science and Technology Policy, will focus on developing vaccines, treatments, diagnostic testing and other tools, said officials familiar with the matter.

That will help prepare the country in case new versions of the virus surface, and for future biological threats beyond Covid-19, they said. While some officials stressed the group wasn’t created specifically as a response to omicron, it starts its work as the strain fuels unprecedented case counts and hospitalizations in the U.S. Health officials have warned that new strains may pop around and once again shift the understanding of, and threat from, the virus. Read more from Riley Griffin.

Health officials urged wider use of medical-grade face masks in the general public. The Centers for Disease Control and Prevention revised earlier guidelines that discouraged the use of gold-standard N95s in new guidance published Friday. The agency had earlier suggested reserving those masks for medical personnel. Health officials are looking for ways to limit the spread of omicron, which has spread at least twice as quickly as delta. But though N95s aren’t in shortage at most facilities, supplies are fragile, said a spokesman for Premier, a top hospital supplier. Fiona Rutherford has more.

Anthony Fauci, Biden’s chief medical adviser, said it’s too soon to say whether the omicron variant will herald a shift in the pandemic to endemic. “It’s an open question as to whether or not omicron is going to be the live virus vaccination everyone is hoping for,” Fauci said yesterday at a World Economic Forum virtual conference. Other scientists and top government officials have expressed optimism that omicron’s fast spread and milder outcomes signals a shift to learning to live with Covid, as with the seasonal flu. Andy Hoffman and Corrine Gretler have more.

The Biden administration is appealing a federal court’s pause on the health-worker vaccine mandate in Texas, the only state that doesn’t have to comply with the rule after the U.S. Supreme Court said it could move forward in the rest of the country. The Health and Human Services Department on Friday filed a notice to appeal the preliminary injunction granted Dec. 15 by the U.S. District Court for the Northern District of Texas. HHS also requested a stay of the injunction pending its appeal to the Fifth Circuit. Read more from Alexis Kramer.

  • Meanwhile, the number of new Americans getting vaccinated is at one of the lowest points since the rollout started, according to a review of the latest federal government data. Though millions of doses are being administered each week, the majority of those are now booster shots for people who have already gotten their first round of injections. Vaccination rates are high across cities, but remain low in other parts of the country—with little sign of rising. And the administration’s most potent tool has been wiped out by the Supreme Court. Drew Armstrong has more.

Around the Administration

The U.S. is currently working to determine who carried out a cyberattack on Ukrainian government websites and it wouldn’t be surprising if Russia was behind it, Biden’s national security adviser Jake Sullivan said. Ukrainian officials say that “all evidence” points to Russia, while the Kremlin denies it was behind the attacks. It’s the latest source of tension after President Vladimir Putin massed 100,000 troops on the Ukraine border for what the U.S. fears is a possible invasion. “We’re working hard on attribution,” Sullivan told CBS. “It would not surprise me one bit if it ended being attributed to Russia.” Read more from Tony Czuczka.

  • This week’s inconclusive diplomacy by the U.S. and Europe to head off a possible Russian military move against Ukraine was a “disturbing” outcome, Kremlin spokesman Dmitry Peskov told CNN. While saying “we’re not speaking about military action” in the sense of setting an ultimatum, Peskov reiterated Russia’s call for NATO to guarantee it’ll never admit Ukraine because otherwise “legally it will be possible” for Ukraine to join. Read more from Czuczka.
  • Separately, the White House praised Moscow for detaining members of a notorious ransomware gang at the request of the U.S. in a sweeping operation across Russia. Law enforcement raided the homes of 14 members of the gang “REvil” and seized currencies worth nearly $7 million, cryptowallets and 20 luxury cars, a statement by Russia’s Federal Security Service said. U.S. authorities were informed that the group was shut down, it said. Jake Rudnitsky and William Turton have more.

The White House is working on a bill that would keep the climate measures of the Build Back Better agenda, according to Reuters, Kasia Klimasinska reports. The plan would pare down or cut the child tax credit and paid family leave proposals, Reuters says, citing two people working on the plan. The new measure would probably cost more than $1 trillion.

Chairman of the Joint Chiefs of Staff Gen. Mark A. Milley is working remotely and isolating himself after he tested positive Sunday for Covid-19 test, Joint Staff Spokesperson Col. Dave Butler said in a statement. He is experiencing very minor symptoms and can perform all of his duties from the remote location. Meanwhile, all other Joint Chiefs of Staff except for one tested negative. Read more from Tom Schoenberg.

The U.S. Census Bureau postponed planned changes to its population survey, which economists said would have jeopardized their ability to dig below the main employment data to track more detailed wage and job figures. The agency planned to publish fewer details from its Current Population Survey, which polls households each month to generate the Labor Department’s labor-force participation rates—to protect the respondents’ confidentiality. The bureau decided to “defer the introduction of updated confidentiality protections,” given “historical circumstances presented by the Covid-19 pandemic,” it said, Cecile Daurat reports.

The Interior Department has revoked a Trump administration order that lifted a pause on coal leasing, so a lawsuit by states and environmental groups challenging the order is moot, the government told a Montana federal court. The groups’ argument to the contrary depends on a “misunderstanding of the agency action at issue,” according to the filing in the U.S. District Court for the District of Montana. The lawsuit challenged an order by former Interior Secretary Ryan Zinke that ordered the Bureau of Land Management to resume processing coal lease applications. Read more from Maya Earls.

Treasury Secretary Janet Yellen marked Martin Luther King Day by declaring that the U.S. economy has “never worked fairly for Black Americans—or really for any American of color.” In a speech prepared to be delivered to a breakfast hosted by the National Action Network, Yellen said the Biden administration had taken steps to change that, including by taking equity into account when crafting pandemic relief programs and by making the Treasury Department more inclusive. “There is still much more work Treasury needs to do to narrow the racial wealth divide,” Yellen said. Read more from Simon Kennedy.

North Korea said it tested two tactical guided missiles on Monday, as it ratchets up pressure on the Biden administration with its biggest string of missile launches since August 2019. “The test-fire was aimed to selectively evaluate tactical guided missiles being produced and deployed and to verify the accuracy of the weapon system,” the state’s official Korean Central News Agency said Tuesday of the launch that took place about a day earlier. Read more from Jon Herskovitz.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com