A jobs report that could shape the debt limit fight

May 05, 2023

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WHITE HOUSE SHUFFLE — NEERA TANDEN will replace SUSAN RICE as director of the Domestic Policy Council, President JOE BIDEN announced today. Tanden, of course, is the veteran Democratic hand whose nomination to be OMB director was torpedoed early in the Biden administration. STEF FELDMAN will move into Tanden’s current role of staff secretary, and ZAYN SIDDIQUE will become principal deputy of the DPC. More from Axios’ Alex Thompson and Hans Nichols

END OF AN ERA — CDC Director ROCHELLE WALENSKY is leaving her position at the end of next month, the White House announced today, as the Biden administration prepares to move into the next phase of its pandemic management. More on that below

President Joe Biden speaks during a meeting with his

President Joe Biden now has more room to argue that the economy is staying healthy under his stewardship. | Evan Vucci/AP Photo

HIRE GROUND — The economy continues to surprise: This morning’s jobs report showed a rip-roaring 253,000 jobs added in April, well ahead of economists’ expectations, as unemployment tied for a more-than-half-a-century low of 3.4%. This is also the first jobs report that fully captures the period after March’s midsize banking crisis — financial turmoil that many observers thought would damage hiring.

It’s yet another month in which an ultra-resilient labor market belies signs of a slowdown elsewhere in the economy, complicating our view of its overall health and policymakers’ decision-making. Just this week, the Fed signaled that its aggressive campaign of interest rate hikes may be ending as it tries to avoid exacerbating the trouble at regional banks and tipping the U.S. into recession. And now here comes the jobs report to upend expectations, with wages — a driver of inflation — rising at their fastest clip since last July. Details from the AP

Among the bright spots: Black unemployment dropped to 4.7%, an all-time low since the government began recording it. (The white/Black unemployment rate gap also shrank to a record margin.) As WaPo’s Heather Long flags, the labor force participation rate for 25- to 54-year-olds has finally returned to pre-Great Recession levels after 15 years.

But, but, but: Revisions to the data from February and March decreased those months’ job gains by nearly 150,000 total, tempering some of the April strength. And part of the lower unemployment rate owed to tens of thousands of people leaving the labor market. That paints an overall picture of hiring indeed cooling down — “just a much more gradual slowdown than most people were expecting,” notes NYT’s Ben Casselman.

Threats to the economy loom elsewhere: Just this week, regional bank instability spooked markets and spurred pleas for help from Washington, as Sam Sutton and Victoria Guida report, though stocks rebounded somewhat after the jobs report. The next big indicator to watch: next week’s Senior Loan Officer Survey from the Fed, which will capture tightening credit.

The big political question is how the robust report, which could be the last before the default “X date,” might affect Washington’s debt limit standoff. Biden now has more room to argue that the economy is staying healthy under his stewardship — and that Republicans would be the ones damaging it through spending cuts (or default in the worst-case scenario).

Indeed, a new statement from White House assistant press secretary ROBYN PATTERSON, shared exclusively with Playbook, blames the GOP for putting jobs at risk with a default or even near-default: “Republicans have put a gun to the head of the American economy, and they’re threatening to pull the trigger unless they get to cut veterans benefits, defund law enforcement, and protect tax giveaways to Big Oil and Big Pharma.” The full statement

But if the White House wants to reap political benefits from this stalemate, it has some distance yet to travel: A fascinating new ABC/WaPo poll reveals that Americans think they agree with Biden’s position much less than they actually do. In the abstract, by a 58% to 26% margin, survey respondents say that paying debts and cutting spending should be separate matters — i.e. the clean debt ceiling hike that Democrats are adamant about. But asked who they’d blame for default, the country is roughly split: Thirty-nine percent would fault congressional Republicans, compared to 36% for Biden. (Independents would blame the GOP 37% to 29%.)

Happy Friday afternoon. Thanks for reading Playbook PM. Drop me a line at eokun@politico.com.

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POLICY CORNER

POWER PLAY — A major new EPA proposal coming next week will roll out historically stringent restrictions on power plant pollution, one of the Biden administration’s most significant climate regulations yet, Jean Chemnick, Pamela King and Robin Bravender report. The capstone policy could be decisive in whether the U.S. meets its carbon emission reduction goals to avert the worst of climate change — and it could transform parts of the economy by phasing coal out more rapidly.

But there are threats to the policy from multiple directions: The conservative Supreme Court could side with inevitable legal challenges. Anticipating those, the EPA has constructed the policy to be less vulnerable in court — but it’s had to make tradeoffs in the process, opening up the regulation to criticism from the left as well. In particular, the dirtiest natural gas plants — often affecting the most disadvantaged nearby communities — might be exempt from some limits.

THE NEXT PHASE OF THE PANDEMIC — In a symbolically momentous move, the World Health Organization today declared the global emergency phase of the Covid-19 pandemic over (though the broader pandemic is not), AP’s Maria Cheng and Jamey Keaten report with a Geneva dateline. Though new variants could yet emerge, the WHO said that more than a year of improvement justified downgrading its highest alert level.

But the Biden administration is not so ready for what comes next in one crucial respect, Adam Cancryn reports: They still haven’t picked a director to run the Office of Pandemic Preparedness and Response. That command center is standing up as Biden ends the official U.S. public health emergency next week. But the search for a leader “has been hindered by concerns over whether it will have the influence within the administration and the financial resources needed to fulfill its broad mission.” Those worries have led some contenders to turn down the role, including HILARY MARSTON, and raised fears of a vacuum. Among the current possibilities: TOM INGLESBY, DAWN O’CONNELL and maybe DEMETRE DASKALAKIS.

From 30,000 feet: “The Covid–19 Crisis is Officially Over. Everything Changed,” by WSJ’s Stephanie Stamm and Danny Dougherty: “The reshaping of American life is among the lingering side effects.”

DON’T MISS THE POLITICO ENERGY SUMMIT: A new world energy order is emerging and America’s place in it is at a critical juncture. Join POLITICO on Thursday, May 18 for our first-ever energy summit to explore how the U.S. is positioning itself in a complicated energy future. We’ll explore progress on infrastructure and climate funding dedicated to building a renewable energy economy, Biden’s environmental justice proposals, and so much more. REGISTER HERE.

BEYOND THE BELTWAY

WEAPONIZING THE STATE — “How Gov. Ron DeSantis deploys state police to enforce political agenda,” by WaPo’s Beth Reinhard: Gov. RON “DeSANTIS has increasingly deployed [the Florida Department of Law Enforcement] outside its traditional portfolio and in support of his own political agenda … FDLE members surveilled buses traveling through Florida with unaccompanied migrant children as the governor bashed President Biden’s immigration policies. They rounded up felons alleged to have voted illegally as DeSantis touted a new election crimes office popular with the right wing. And they were asked to scrutinize the crime-fighting record of a Democratic prosecutor who had repeatedly clashed with the governor.

“Inside FDLE, many members balked at these directives from the governor’s office, which they viewed as political stunts orchestrated to raise DeSantis’s national profile … and some who openly resisted the governor’s priorities were pushed out.”

Related: “Florida Republicans increase budget for Ron DeSantis’ election police effort,” by NBC’s Adam Edelman and Matt Dixon … “‘A Target on My Back’: GOP Bill Aims to Force Georgia Prosecutors’ Hands,” by Bolts’ Daniel Nichanian

THE WHITE HOUSE

TV TONIGHT — Biden is sitting down for an interview with MSNBC’s Stephanie Ruhle that will air tonight at 10 p.m., on a two-hour special edition of “The 11th Hour.” It’s his first one-on-one since officially jumping into the 2024 race.

HUNTER GATHERING — “Inside Hunter Biden’s clash with the White House,” by Axios’ Alex Thompson: “Top aides to President Biden have clashed with HUNTER BIDEN’s team over strategies for dealing with the legal battles and Republican attacks that surround the president’s son. … The tensions led Hunter — without involving the president’s top aides — to hire prominent lawyer ABBE LOWELL in December, as part of a plan to take a more combative approach … Hunter’s team also is moving toward creating a legal defense fund, and hiring ethics advisers for it. High-level Democrats and others are worried about the idea of the president's son soliciting money to pay for his legal troubles.”

JUDICIARY SQUARE

SCOTUS FALLOUT — After the latest bombshell WaPo reporting about LEONARD LEO arranging for KELLYANNE CONWAY to secretly pay Justice CLARENCE THOMAS’ wife, VIRGINIA, Conway was on Fox News this morning to respond. She didn’t deny the reporting — “Ginni Thomas was one of my contractors,” Conway explained briefly — but focused instead on a lot of deflection. She turned a harsh spotlight back, in quick succession, on WaPo’s reporting methods, the man who plotted to assassinate Justice BRETT KAVANAUGH, Justice SONIA SOTOMAYOR’s book deals, Sen. DIANNE FEINSTEIN’s (D-Calif.) comments about Justice AMY CONEY BARRETT and Congress’ failure to ban members from trading stocks.

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2024 WATCH

WISHFUL THINKING — “‘Draft Kemp’ chatter begins as Trump dominates GOP field,” by The Atlanta Journal-Constitution’s Patricia Murphy, Greg Bluestein and Tia Mitchell: “Gov. BRIAN KEMP has ruled out a run for president, but key Republicans are nudging him to be open to a draft movement.”

PAGING RONNA McDANIEL — NBC’s Vaughn Hillyard and Jonathan Allen clock a striking dynamic at play in DONALD TRUMP’s third consecutive run for the presidency: Having just remade the Republican Party in his image, he barely mentions it anymore. It’s part of his broader approach to reclaim his 2016 mantle as an anti-establishment outsider who’d rather frame the campaign as “us vs. them” than as “Republican vs. Democrat.” And Trump’s team wants to position his movement as bigger than just the GOP.

WHAT JULIE CHÁVEZ RODRÍGUEZ IS READING — “Can Trump exhaustion lead to Biden enthusiasm? One Michigan county will provide a test,” by CNN’s Jeff Zeleny in Grand Rapids: “A tone of respectful reluctance toward Biden comes alive in interviews with many voters here, but [voters] expressing some points of skepticism said they had little hesitation at the notion of supporting the ticket again.”

TURNING AND TURNING IN THE WIDENING GYRE — “Lieberman: No Labels trying to ‘make sure’ Trump not reelected,” by Roll Call’s Niels Lesniewski: JOE “LIEBERMAN suggested the real decision point will be in April 2024, with No Labels planning to hold a convention in Dallas on April 14, after roughly half the states will have held their presidential primaries.”

MORE POLITICS

SURVEY SAYS — A new WaPo/KFF poll has good news for Republicans pushing anti-transgender policies — and worrisome results for trans people and their advocates, Laura Meckler and Scott Clement report. Most potently, a majority of Americans don’t even believe that transgender people exist: Fifty-seven percent say a person’s gender can’t differ from the sex assigned at birth. (That’s contrary to many public health agencies and scientists, who maintain that gender is a social construct.) Forty-three percent say they know a trans person.

It’s clear from the poll that many Americans have uncertain, nuanced or warring feelings about trans-related policies. There’s broad support for anti-discrimination measures. But overall, the GOP has public opinion on its side. A majority of Americans oppose allowing puberty blockers or hormone treatments for minors, allowing trans girls and women to participate in female sports and allowing elementary or middle school teachers to discuss trans identity.

DEMOCRACY WATCH — “Arizona voters were told the election went fine. Records show a county director saw glaring errors, cashed out, then fled,” by VoteBeat’s Jen Fifield: “Pinal County elections chief VIRGINIA ROSS had proof of inaccuracies that she didn’t flag before county supervisors certified the November election results, a Votebeat investigation found. Instead, she told them she stood by the numbers — and then collected a $25,000 bonus.”

CONGRESS

WHAT’S IN A NAME — Rep. SHRI THANEDAR (D-Mich.) and Sen. DEBBIE STABENOW (D-Mich.) are battling over who should be the namesake of a Detroit federal building: JOHN CONYERS JR. or ROSA PARKS, respectively, The Detroit News’ Melissa Nann Burke reports. “It’s relatively unusual for colleagues from the same party and state to have dueling bills, particularly about naming a local landmark.”

WAR IN UKRAINE

DUCT TAPE AND A PRAYER — “U.S., Allies Patch Together Ukraine’s Defenses Against Russian Warplanes, Missiles,” by WSJ’s Michael Gordon, Brett Forrest and Gordon Lubold: “[T]he success of Ukraine’s forthcoming counteroffensive depends on its ability to keep Russia’s warplanes from pummeling its troops and infrastructure. … U.S. officials say they have bought more time by delivering older American-made systems, scrounging up Soviet-era missiles and coaching the Ukrainians on how to fire their missiles more selectively.”

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