| | | | |  | | By Eugene Daniels and Eli Okun | | | | 
The White House thinks a bit of a cooldown is an important part of the transition to a more stable economy after periods of intense recovery. | Susan Walsh/AP Photo | After today's economic news, it's going to be more difficult for the Biden administration to convince the American people that we aren't in a recession. — The numbers: The Bureau of Economic Analysis released estimates today showing that in the second quarter of 2022, GDP fell at an annualized rate of 0.9%. That marks the second consecutive quarter of negative GDP growth (though GDP decreased less in Q2 than Q1, when it shrunk at an annualized rate of 1.6%). That means that the economy now meets the most basic definition of a recession. — What happened: "The report on second-quarter growth, subject to a first revision next month, showed decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending and nonresidential fixed investment," our Ben White reports . — The spin: For weeks, the Biden administration has argued both publicly and privately that two consecutive quarters of GDP decline don't necessarily mean we're in a recession — especially given otherwise strong economic figures, like low unemployment, a large number of job openings and pretty strong consumer spending. Technically speaking, they're not wrong, as Ben notes: " Many economists agree that this post-pandemic period doesn't meet many criteria for recession, a politically charged word with no precise definition. Recessions are generally only declared — often after the decline is over — by the National Bureau of Economic Research, a private research group." Some observers say that a slowdown might not be the worst news , even if that sounds counterintuitive. The Fed has been working to cool off the economy to slow inflation, and the White House has agreed that a bit of a cooldown is an important part of the transition to a more stable economy after periods of intense recovery. That was the heart of President JOE BIDEN's statement after the news came out. "Coming off of last year's historic economic growth … it's no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation. But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure," Biden said before going on to tout the overall strength of the economy and call on Congress to pass the CHIPS+ and reconciliation bills. None of that is going to stop Republicans from knocking the administration while using the long-accepted definition of a recession and accusing Democrats of trying to spin their way out of it. The argument the administration is making is very technical, which could make it a tough sell for voters heading into the midterms — especially as voters already have a sour view of the current economy. (In the most recent POLITICO/Morning Consult poll, conducted July 22-24, 65% of voters said that they believe the economy is already in a recession.) XI SAID — We're still waiting on a White House readout of Biden's call this morning with Chinese President XI JINPING, which lasted 2 hours and 17 minutes. But China quoted Xi as having told Biden, "Those who play with fire will only get burnt," regarding Speaker NANCY PELOSI's planned visit to Taiwan. More from Reuters Good Thursday afternoon.
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Learn how Meta is helping build the metaverse. | | | RECONCILABLE DIFFERENCES — Sen. JOE MANCHIN (D-W.Va.) spoke out more this morning about the surprise reconciliation bill he and Senate Majority Leader CHUCK SCHUMER unveiled Wednesday. Manchin adamantly defended the bill's provisions to raise taxes on corporations: "They're paying for the ability to be in this country with a defense that we have, protections we have, and opportunities — and they don't want to participate? I want them to come forward. Tell me who you are." — Manchin stood firm on carried interest tax reform , which has been a sticking point for key vote KYRSTEN SINEMA (D-Ariz.) in the past. He said he hasn't spoken to her about the bill. At Senate Democrats' meeting this morning, many members were relieved to have a deal in hand, but Sinema did not attend, per ABC's Rachel Scott . Sinema's office says she's still reviewing the text. — "I've never walked away from anything in my life," Manchin said of the up-and-down negotiations. — What comes next: The bill will have to go through the complex behind-the-scenes process of passing muster with the Senate parliamentarian, which could take lots of time and remove some pieces of the legislation, Marianne LeVine and Anthony Adragna report . Dems are still eyeing an ambitious timeline of trying to pass the bill by next week. Republicans plan to fight it tooth and nail. — The stakes for the climate are huge: If congressional Democrats pass the bill, it would be "the most ambitious action ever taken by the United States to try to stop the planet from catastrophically overheating," write NYT's Lisa Friedman and Brad Plumer . Ironically, even though the news was delivered by one of Democrats' biggest climate moderates, it "almost instantly reset the role of the United States in the global effort to fight climate change." CHIPS LATEST — Pelosi told reporters this morning that she has the votes to pass the CHIPS+ bill on the House floor today. — Notably, House Foreign Affairs ranking member MICHAEL MCCAUL (R-Texas) said he'll support the bill, despite top Republicans urging members to vote no. "Guess who came out today, strongly opposed to the CHIPS bill? The Chinese Communist Party," McCaul said, per NBC's Scott Wong . JAN. 6 AND ITS AFTERMATH LOOK WHO'S TALKING — The House Jan. 6 committee has interviewed former Treasury Secretary STEVEN MNUCHIN as it probes deeper into Trump's Cabinet and the discussions that took place about invoking the 25th Amendment to remove Trump from office, ABC's Katherine Faulders, John Santucci and Luke Barr scooped . The committee is also negotiating with former DNI JOHN RATCLIFFE and former acting DHS Secretary CHAD WOLF for testimony, and may be interested in speaking with former national security adviser ROBERT O'BRIEN, former Transportation Secretary ELAINE CHAO and former Education Secretary BETSY DEVOS. THE PARALLEL INVESTIGATIONS — The question of evidence-sharing has loomed over the twin Jan. 6 probes by the House committee and the Justice Department. Now Chair BENNIE THOMPSON (D-Miss.) tells Kyle Cheney that the committee has created a mechanism to share transcripts and evidence with DOJ ."Thompson said the select committee is entering an intense period of closed-door work to handle 'housekeeping' matters — such as how to handle the five GOP members of Congress the panel subpoenaed but who have refused to comply." It's also still deliberating whether to ask Trump or former VP MIKE PENCE to testify.
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today . | | | | | CONGRESS PARADIGM SCHIFFT — Rep. ADAM SCHIFF (D-Calif.) is unexpectedly considering a late bid to lead House Democrats if Speaker NANCY PELOSI retires after the midterms, WaPo's Marianna Sotomayor and Leigh Ann Caldwell report . That could throw a wrench into a shadow race that has mostly centered on names like Democratic Caucus Chair HAKEEM JEFFRIES (D-N.Y.), Majority Leader STENY HOYER and Majority Whip JIM CLYBURN (D-S.C.). Schiff is focusing first on trying to build support among fellow Californians, but he might face a tough path, especially as many bristle at the thought of an increasingly diverse caucus being led by a white man. "Schiff's trial balloon has been met with surprise and skepticism that he could earn enough support to win." ANOTHER ONE — Senate Majority Whip DICK DURBIN (D-Ill.) has mild Covid-19 and will work remotely , another setback for Democrats' efforts to pass bills with tight margins in the Senate. COVID AID — Senate Democrats are unveiling an effort to secure $21 billion in emergency funding for response to the coronavirus and other outbreaks (perhaps like monkeypox), part of the government funding bills for the next fiscal year, WaPo's Tony Romm reports . Sen. PATRICK LEAHY (D-Vt.) is leading the effort, which includes $5 billion for global response funding. The White House has been urging Congress to pass more aid or risk the country having to pare back its efforts, but previous attempts got bogged down in congressional stalemates earlier this year. INTERESTING ANGLE — "Senate GOP splinters, allowing Dem wins as GOP deputies angle for future," by WaPo's Paul Kane: "With 'Three Johns' aspiring to succeed McConnell, Republicans keep tabs on how their caucus splits on big votes." SPORTS BLINK — Tonight's Congressional Baseball Game is a toss-up, as the once-dominant Democrats have lost star player CEDRIC RICHMOND and the MVPs are split evenly between the parties, per FiveThirtyEight's Nathaniel Rakich . Watch the game on C-SPAN starting at 7 p.m.
| | | | A message from Meta:   | | | ALL POLITICS BATTLE FOR THE HOUSE — Sabato's Crystal Ball today made 10 changes in their House race ratings, with nine of them favoring the GOP. That includes Rep. FRANK MRVAN's (D-Ind.) district shifting into toss-up territory and two open seats in Colorado and North Carolina moving out of toss-up toward Republicans. The overturning of Roe v. Wade has affected the landscape "likely only at the margins," Kyle Kondik writes, as their overall prediction of a net Republican gain "somewhere in the 20s" remains unchanged. AGAINST THE GRAIN — You might expect House Democrats in tough reelection races to keep their distance from a president with approval ratings underwater. But many of them are actually open to his help on the campaign trail, "banking on his assets outweighing his unpopularity," Bloomberg Government's Zach Cohen and Emily Wilkins report . The fundraising and attention boosts from Biden's bully pulpit can be valuable, especially as some Dems focus more on turnout than persuasion. Rep. CINDY AXNE (D-Iowa): "Joe Biden needs to be on the ground talking to folks, because when he is, they love him … I hope he gets out because America needs to see the real Joe Biden, not the one that's stuck here all the time." MEDIAWATCH OUT OF THE METAVERSE — As Meta deprioritizes news, media outlets will no longer get payments from Meta to have their content appear in Facebook's News Tab, Axios' Sara Fischer reports . That marks the end of deals signed in 2019 that totaled more than $100 million, with big portions going to the NYT, the WSJ and others. TRUMP CARDS THE KUSHNER-MBS BROMANCE — New details from JARED KUSHNER's forthcoming book, "Breaking History," via WSJ's Dion Nissenbaum , shine a light on his relationship with Saudi Crown Prince MOHAMMED BIN SALMAN, whose assertion that he didn't know about the murder of JAMAL KHASHOGGI Kushner says he accepted. "Kushner provides a carefully framed defense of his relationship with Prince Mohammed. Mr. Kushner said he viewed Prince Mohammed as a historic figure who brought once-unimaginable social reforms to Saudi Arabia and steered the kingdom toward a warming relationship with Israel."
| | | | INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY . | | | | | ABORTION FALLOUT POLL POSITION — Georgia Republicans' new abortion ban is not popular in the state, per a new Atlanta Journal-Constitution poll : Fifty-five percent of voters oppose the restrictions, compared to 36% in support. And a 42% plurality of voters said they were more likely to back political candidates who support abortion rights. SHOE LEATHER — The incendiary story of the 10-year-old Ohio girl who got an abortion after being raped was broken open by local news reporters at the Indianapolis Star and Columbus Dispatch even as politicians and national media talking heads doubted its veracity, WaPo's Elahe Izadi reports . "Reporters methodically tracked down the facts while tuning out the national noise," she writes in her account of how they gradually homed in on the truth even as local outlets have faced cutback after cutback. PLAYBOOKERS OUT AND ABOUT — POLITICO threw a "Summer Soiree," hosted by CEO Goli Sheikholeslami, editor-in-chief Matt Kaminski, SVP Cally Baute and executive editor Dafna Linzer at the Viceroy Hotel. The event was Hamptons-themed and featured a 10-foot raw bar boat filled with oysters, crab legs and shrimp, and guests relied on an Aperol Spritz or two to keep cool in the sweltering D.C. heat. SPOTTED: Michael Chertoff, Jill Zuckman, Doug Thornell, David Castagnetti, Sam Feist, Karan Bhatia, Sidney and Jacqueline Blumenthal, Ned Price, Scott Mulhauser, Niki Christoff, Ron Bonjean, Rodell Mollineau, Kristen Hawn, Alex and Caitlin Conant, Belgian Ambassador Jean-Arthur Regibeau, Alex Thompson, Khanya Brann, Paul Kane, Mike DeBonis, Josh Dawsey, Carl Hulse, Eli Yokley, Olivia Peterson, Alayna Treene, Olivia Beavers, Fin Gómez, Liz Johnson, Burgess Everett, Nate Evans, Ryan Heath, Jeff Mason, Meridith McGraw, Luisana Pérez Fernández, Heidi Przybyla and Joe Maloney. — Members of Congress and nonprofit leaders attended a Home Runs for Horton's Kids event at Nationals Park on Thursday night supporting children and families of southeast D.C. Attendees ran bases and tried out their swings. SPOTTED: Assistant Secretary of Education Gwen Graham, Rep. Mikie Sherrill (D-N.J.), Matt Gelman and Allison Remson. STAFFING UP — Biden has nominated Lt. Gen. Chance Saltzman to lead the Space Force, per SpaceNews' Sandra Erwin . MEDIA MOVE — Victoria Knight will be a health care policy reporter at Axios. She currently is a reporter at Kaiser Health News. WHITE HOUSE ARRIVAL LOUNGE — Joshua Schenk is now an associate staff secretary at the White House. He recently graduated from Yale Law. TRANSITION — Erica Chabot is now majority staff director for the Senate Agriculture Committee. She previously was legislative director and deputy chief of staff for Sen. Patrick Leahy (D-Vt.).
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