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Presented by PhRMA: POLITICO's must-read briefing on what's driving the afternoon in Washington. | | | | |  | | By Garrett Ross | | | SIREN, from Bank of America analysts: “We now forecast a mild recession this year and expect 4Q/4Q real GDP to decline by 1.4%, followed by a 1.0% increase in 2023.” More from Bloomberg Despite previous projections that surging prices could be ebbing, a brand new report out today showed a familiar headline: Inflation figures are spiking at historic levels. Here’s what the latest report looks like by the numbers:
- “The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate,” per CNBC. For context: That is the sharpest inflation pace since December 1981.
- “Excluding the volatile food and energy categories, so-called core prices rose 0.7% from May to June, the biggest such increase in a year,” per the AP.
- “Driving the stunning jump was the energy index, which rose 7.5 percent compared with May, and contributed nearly half of the overall increase in inflation,” per WaPo.
If making sense of the numbers isn’t your thing, here’s the big picture takeaway, via CNBC: “Taken together, the numbers seemed to counter the narrative that inflation may be peaking, as the gains were based across a variety of categories.”
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| The White House spin: “While today’s headline inflation reading is unacceptably high, it is also out-of-date,” President JOE BIDEN said in a statement. “Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June.” More inflation-related headlines for your reading: — Explainer: “The inflation numbers are bad — but how bad are they?” by Vox’s Madeleine Ngo — The immediate impact: “Wall Street opens lower after another hot inflation report,” AP — What comes next: “Inflation Report Likely to Seal Case for Fed’s 0.75-Point Rate Rise in July,” by WSJ’s Nick Timiraos — What the recession fears look like: “Most U.S. small businesses worry recession is coming,” Reuters — Good news for the workforce: “Pay raises are getting smaller. That could be a good thing for workers,” by Victoria Guida: “Slower wage growth could help bring down prices and ultimately mean less sting for the average worker.” — The uneven effects: “Cost-of-living crisis to hit women hardest, report says,” AP MEANWHILE, on the world stage, via NYT’s Eshe Nelson: “Take a look: €1 = $1. With a war on the eurozone’s border, an uncertain energy supply from Russia and a growing risk of recession, the pressures bearing down on the euro finally grew so strong that on Wednesday it dipped to parity with the U.S. dollar — a one-to-one exchange rate. It’s a sight unseen since December 2002, in the early years of the currency’s existence.”
| | | | A message from PhRMA: Inflation is causing pain for people across the country. As policymakers search for ways to help provide relief, some are erroneously tying inflation to prescription medicines. To make matters worse, this false premise is being used to build support for harmful policies.
It’s important to make medicines affordable for patients, but let’s get a few facts straight – starting with the fact that prescription drugs are not fueling inflation. | | | POTUS ABROAD — Biden is in Israel. AP’s Josh Boak, Josef Federman and Aamer Madhani have the report from his arrival : “Joe Biden opened his first visit to the Mideast as president on Wednesday by declaring a ‘bone deep’ bond between the United States and Israel and pledging to strengthen economic connections between the two countries going forward. He did not mention one of the larger goals of his visit: assuring uneasy Israeli and Saudi Arabian officials that he is committed to preventing Iran from becoming a nuclear power.” What Biden said: “We have a full agenda over the next few days, because the relationship between Israel and the United States covers every issue that matters to our mutual future.”
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President Joe Biden fist-bumps Israeli PM Yair Lapid as he stands next to Israeli President Isaac Herzog in Tel Aviv on Wednesday, July 13. | Evan Vucci/AP Photo | — WaPo’s Steve Hendrix and Tyler Pager have a nice stepback on the moment that Biden finds himself in as he visits the Middle East: “Joe Biden and Israel go way back. As he began his 10th trip to the Holy Land, he can look back on visits — as a senator and vice president — spanning almost five decades and nearly a dozen prime ministers.” — CNN’s Jeremy Diamond and Natasha Bertrand write that Biden is also finding some common ground with his predecessor: “While much of his foreign travel in his first 18 months in office has focused on reversing the foreign policy of former President DONALD TRUMP and shoring up battered alliances, Biden on his first trip to the Middle East will embrace the Trump-era Abraham Accords that normalized relations between Israel and several Arab countries and pursue an expansion of growing Arab-Israeli security and economic ties.” — For your radar: “A member of the U.S. Secret Service returned to the United States from Israel on Monday after he was allegedly involved in a ‘physical encounter’ in Jerusalem and briefly detained by Israeli police, the agency said,” per CBS’ Bo Erickson, Nicole Sganga and Michal Ben-Gal. IRRECONCILABLE DIFFERENCES — Burgess Everett ( @burgessev): Sen. JOE MANCHIN (D-W.Va.) “laying down marker: ‘we know what we can pass is basically the drug pricing on Medicare. We know that one. Is there anymore we can do? I don’t know. I am very very cautious.’ Also says ‘everything’ needs to be scrubbed if it might inflame inflation.” Good Wednesday afternoon. JAN. 6 AND ITS AFTERMATH TURNING UP THE HEAT — As the Jan. 6 committee’s work heats up, “[m]embers of Trump’s legal team are actively planning certain strategies around [ MARK] MEADOWS’ downfall — including possible criminal charges,” Rolling Stone’s Asawin Suebsaeng and Adam Rawnsley report. “Trump has himself begun the process of distancing himself from some of his onetime senior aide’s alleged actions around Jan. 6,” they write. “Meadows’ already bleak legal prospects could get even worse. Rolling Stone has learned that the Jan. 6 committee has been quietly probing his financial dealings, and any new revelations would add to an already long list of unethical and potential illegal actions he’s accused of taking on behalf of Donald Trump.”
| | | | HAVE QUESTIONS ABOUT ROE BEING OVERTURNED? JOIN WOMEN RULE ON 7/21: Now that the Supreme Court has overturned Roe v. Wade , abortion policy is in the hands of the states and, ultimately, voters. Join POLITICO national political correspondent Elena Schneider for a Women Rule “ask me anything” conversation featuring a panel of reporters from our politics and health care teams who will answer your questions about how the court’s decision could play out in different states, its impact on the midterms and what it means for reproductive rights in the U.S. going forward. SUBMIT YOUR QUESTIONS AND REGISTER HERE. | | | | | ALL POLITICS POLL POSITION — NYT’s Nate Cohn is out with the first NYT/Siena College polling of the midterm cycle. The topline takeaway: “Democrats and Republicans begin the campaign in a surprisingly close race for control of Congress.” The most interesting datapoints:
- Dems’ demographic tipping point: “For the first time in a Times/Siena national survey, Democrats had a larger share of support among white college graduates than among nonwhite voters — a striking indication of the shifting balance of political energy in the Democratic coalition.”
- The battle for Congress: “Overall among registered voters, 41 percent said they preferred Democrats to control Congress compared with 40 percent who preferred Republican control. Among likely voters, Republicans led by one percentage point, 44 percent to 43 percent, reflecting the tendency for the party out of power to enjoy a turnout advantage in midterms.”
- The trend: “[T]he confluence of economic problems and resurgent cultural issues has helped turn the emerging class divide in the Democratic coalition into a chasm, as Republicans appear to be making new inroads among nonwhite and working-class voters — perhaps especially Hispanic voters — who remain more concerned about the economy and inflation than abortion rights and guns.”
- GOP calling cards: “Some of the hot-button cultural issues thought to work to the advantage of Republicans at the beginning of the cycle, like critical race theory, have faded from the spotlight. Only 4 percent of voters combined said education, crime or immigration was the most important issue facing the country.”
- Big Dem winners: “Voters who said issues related to abortion, guns or threats to democracy were the biggest problem facing the country backed Democrats by a wide margin, 66 percent to 14 percent.”
FETTERMAN SLOWLY REEMERGES — Since JOHN FETTERMAN has been released from the hospital following a stroke, he has “walked as far as 4 miles on local trails, taken family trips to area vacation spots and handled errands such as dropping off his children at day camp,” WSJ’s Aaron Zitner writes . But he has been largely absent from the campaign trail and “has yet to show the extent of his recovery,” which is perhaps the biggest question hanging over his race with MEHMET OZ for the Pennsylvania Senate seat. “Oz, meanwhile, has attended more than 40 campaign events since the primary season ended, according to his campaign’s tally.” LARRY CEISLER , a Democrat and public affairs consultant: “He needs to show, obviously, the cognitive and physical capabilities to participate in a rigorous campaign and take on a very difficult position in the Senate. … We won’t know that until he gets to interact with people.”
| | | | A message from PhRMA:   What’s fueling inflation? Not prescription drugs. The administration’s own economic data proves it. | | | ABORTION FALLOUT HEADS UP — “Arrest made in rape of Ohio girl that led to Indiana abortion drawing international attention,” by The Columbus Dispatch’s Bethany Bruner and Monroe Trombly WHAT BLUE CITIES ARE DOING — In blue cities situated in red states, officials are trying to find ways around restrictive abortion bans. “Dozens of big-city prosecutors, mostly in the South and Midwest, have said they will not file charges against medical workers who conduct abortions or their patients,” WaPo’s Scott Wilson reports from New Orleans . “Taken together, the steps do not amount to an affirmative right, but they could make the penalties for abortion more hypothetical than Republicans running the prosecutors’ states would prefer as they invoke bans on the procedure. … The movement is spreading, even as its chief proponents acknowledge limits to what they can accomplish.” CONGRESS ONE WAY TO AVOID A SUBPOENA — The dance between Washington Commanders owner DAN SNYDER and the House Oversight Committee continues as the panel continues to investigate workplace issues within the franchise. “The House Oversight and Reform Committee told Snyder’s lawyer Tuesday that it would allow Snyder to testify over Zoom on July 28, from anywhere. But there’s a major catch. The committee wants him to appear under the force of a subpoena, essentially compelling him to answer their questions while under oath,” WSJ’s Andrew Beaton and Louise Radnofsky report. “Snyder, however, is reluctant to do that, and he has been using an extraordinary tactic to avoid it: parking the boat. He has spent recent weeks overseas, often on his yacht — where it appears that he can’t actually be served with a subpoena.” THE WHITE HOUSE NEWSOM IN THE WHITE HOUSE — Christopher Cadelago (@ccadelago): “California Gov. GAVIN NEWSOM, in town to accept an education award and give a speech a few blocks from the White House, met privately this morning with First Lady JILL BIDEN , a White House aide confirms.” VEEP FILES — VP KAMALA HARRIS “assured Pacific island leaders of more U.S. engagement after acknowledging Wednesday the United States may not have previously provided the diplomatic attention the region deserved,” per the AP.
| | | | 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. | | | | | THE PANDEMIC WHO’S WARNING — The World Health Organization is warning that the Covid pandemic is “nowhere near over” as multiple countries face the latest surges of caseloads. WHO chief TEDROS ADHANOM GHEBREYESUS “appealed to governments Tuesday to pour efforts back into testing and improving vaccine deployment and said rising cases were straining medical systems already stretched by the pandemic,” writes WaPo’s Ellen Francis. FOR THOSE KEEPING TRACK — “PPP program was awash in fraud. Now, one lender may finally face a legal reckoning,” by McClatchy’s Ben Wieder WAR IN UKRAINE — “Russian and Ukrainian negotiators were meeting Wednesday in Istanbul, in the increasingly desperate effort to release huge amounts of grain from Ukraine’s ports and ship it to a world facing rising hunger,” NYT’s Matina Stevis-Gridneff reports. — “Ukrainian forces struck an air-defense system in Russian-occupied territory in the east of the country late Tuesday, in the latest sign of how long-range artillery sent by the West is shifting the war’s calculus,” WSJ’s Isabel Coles and Evan Gershkovich report. — “With thousands of sanctions already imposed on Russia to flatten its economy, the U.S. and its allies are working on new measures to starve the Russian war machine while also stopping the price of oil and gasoline from soaring to levels that could crush the global economy,” writes AP’s Fatima Hussein. PLAYBOOKERS MEDIA MOVE — Richard Hudock is now VP of comms for NBC News and MSNBC. He previously was senior director of comms. TRANSITIONS — Yasmin Radjy is now executive director of Swing Left. She previously was senior adviser for recovery program outreach at the Treasury Department. More from Zach Montellaro … David Marchick will be dean of American University’s Kogod School of Business. He previously was COO and senior Biden appointee at the United States International Development Finance Corporation. The announcement … … Kelley Hudak and Tristan Breaux have joined the federal affairs team at Tyson Foods as directors of government affairs. Hudak most recently was VP at Cassidy & Associates, and Breaux previously was a principal at Cozen O'Connor Public Strategies.
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