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BY JOHN BRESNAHAN, ANNA PALMER, JAKE SHERMAN AND HEATHER CAYGLE
WITH MAX COHEN AND CHRISTIAN HALL
Happy Tuesday morning.
Two things are happening today:
→ The Bureau of Labor Statistics will release the March report on the Consumer Price Index, giving us some fresh inflation numbers. The White House is already saying publicly the numbers will be bad, driven by a spike in oil prices.
→ The Biden administration announced this morning that it is going to allow gas stations to sell E15 gasoline this summer. E15 is gasoline blended with 15% ethanol. Senior administration officials told reporters that E-15 is 10 cents cheaper per gallon than typical automobile fuel. This waiver, issued by the EPA, will last until the oil crisis ends. E15 typically cannot be sold during the summer driving season due to pollution concerns.
Here’s a fact sheet the administration sent out last night that provides more context. The administration pointedly declined to say how much they expect this move will save families.
With Congress on recess, the White House is using the week trying to address some of President Joe Biden’s biggest political weaknesses. Monday was guns and crime. Today is inflation and gas prices. On Thursday, Biden will head to Greensboro, N.C., to talk about boosting U.S. manufacturing and how it can lower prices for consumers.
Biden will travel to a biofuel plan in Menlo, Iowa, today to talk about lowering gas prices. Expanding the use of ethanol – made from corn – is a huge issue there. E15 use is banned in summer months due to pollution concerns, but Iowa lawmakers in both parties have been pressing Biden and Agriculture Secretary Tom Vilsack to provide a waiver.
“We get that pocketbook prices are too high for Americans, and we’re showing every day that addressing those is a top priority of the President and his entire Administration,” an administration official told us Monday night.
Rising gas prices are a huge factor in the overall inflation picture, and today’s inflation report won’t be pretty for Biden and Democrats – at least based on analysts’ estimates. You can see what they’re saying here, here, here and here.
There’s a lot of discussion of whether March could be “peak inflation,” although that’s just a guess at this point. What is clear is that inflation and economic concerns are hammering Biden and Democrats right now. Biden is deep underwater on the No. 1 one issue on voters’ minds.
White House Press Secretary Jen Psaki conceded from the podium Monday that top inflation will be “extraordinarily elevated due to Putin’s price hike.” Yes, that’s the White House’s top communicator preparing the American public for bad news.
Overall, there are a lot of negative factors facing world financial markets – the war in Ukraine, the Federal Reserve’s push to raise interest rates to counter inflation, slumping auto sales, Covid-related lockdowns in Shanghai and other major cities further stressing already stressed-out supply chains. A potential recession looms later this year or in 2023.
You should expect a hair-on-fire private reaction from Democrats, who are fighting to hold onto their majorities amid record-high inflation. And Republicans are going to gloat that Biden simply doesn’t get it and has no plan to get huge price spikes under control. Biden has a bit of a reprieve today because this shadowboxing will happen through press releases, as Congress is out of session for two weeks.
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THE BUSINESS OF WASHINGTON
Hawaii Democrat Kahele is a working commercial pilot. Huh?
The Honolulu Civil Beat had a fascinating story that we featured in the Midday edition yesterday about Rep. Kai Kahele (D-Hawaii). Kahele hasn’t been to Washington much this year. Instead, he’s voted by proxy since January.
Buried in that story was an interesting nugget: Kahele, a commercial pilot, is still working for Hawaiian Airlines. Kahele is licensed to fly the Airbus A330, Boeing 767 and Boeing 757, according to the FAA – all long-haul aircraft. Hawaiian Airlines flies between Hawaii’s islands, in addition to multiple destinations in Japan, South Korea and Australia. In addition, the airline services multiple airports on the West Coast, New York, Austin, Orlando and Boston.
Kahele’s office says that he is earning less than $29,595, the maximum amount allowed in outside income for members of Congress and some senior staff. Hawiian Airlines says its first officers make $81 per hour and they fly a minimum of 1,500 flight hours a year, for a total of $121,500.
But in the years we’ve been covering Congress and congressional ethics, we’ve never seen an arrangement quite like this before.
→ First of all, we asked Kahele’s office for any documentation from the Ethics Committee that shows that they approved this arrangement, whereby Kahele serves as a member of Congress but moonlights part-time for an airline. They didn’t produce it.
→ Kahele has only voted five times in person in 2022 because of the coronavirus pandemic, according to the Civil Beat story. This is permitted, of course, under the Democrats’ proxy voting rules. We asked Kahele’s office if he has been flying for Hawaiian Airlines while voting by proxy. They didn’t answer this either.
→ Hawaiian Airlines has business in front of the Transportation and Infrastructure Committee, on which Kahele sits. The airline lobbies the federal government. So this means that Kahele is collecting a salary from a company that is trying to lobby the federal government, and more specifically the committee on which he serves.
→ Kahele has, on one occasion, talked about Hawaiian Airlines in a congressional hearing, expressing dismay about furloughs.
“I have decided to sit here through almost 3 hours of this hearing because I not only sit here representing the Second Congressional District in Hawaii, but I also sit here representing 810 Hawaiian Airlines employees who all received warning involuntary furlough notices just a few days ago, of which 647 flight attendants and their families and 99 pilots and their families both received those same involuntary notices. American Airlines will be issuing 13,000 involuntary furlough notices beginning tomorrow. And so this is something that I am deeply concerned about.”
We’re going to keep reporting on the propriety of this, and we’ll report back when we have more. But again, we’ve never seen anything quite like this.
PUNCHBOWL NEWS EVENTS
What Gary Peters told us in Detroit
Sen. Gary Peters (D-Mich.) joined us Friday as part of our “Road to Recovery” series focused on small businesses coming out of the pandemic. We touched on everything from the Small Business Administration reauthorization to Senate Democrats’ chances in the upcoming midterms.
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→ First in Punchbowl News AM: Winning For Women Action Fund, a group devoted to electing Republican women to Congress, will report raising $4.6 million in the first quarter of 2022. More than $2 million of that haul is in hard dollars, meaning they are subject to the federal donation limits. This is the group’s best quarter yet. WFWAF has raised $8.4 million this cycle.
→ New: Mandela Barnes, the lieutenant governor of Wisconsin, raised $1.7 million in the first quarter as part of his bid to capture the Democratic nomination to take on incumbent GOP Sen. Ron Johnson (Wis.). Barnes is facing Milwaukee Bucks executive Alex Lasry and Wisconsin State Treasurer Sarah Godlewski for the Democratic nomination.
→ Some of us on the Punchbowl News team – ahem, Jake – are big golfers. So this fundraiser that Sen. Marco Rubio (R-Fla.) is throwing is interesting to us. No. 1: RTJ is one of the top courses in the country. No. 2: You get points shaved off of your score if you have attended the outing before and another if you can get someone new to attend the fundraiser. Here’s the invite:
Happening again this year!! If you are past attendee of the Senator’s golf outing and are able to join, one stroke will be deducted from your final score. Then, if you are able to get someone new (does not include program members) to attend, you will receive another stroke off your final score. It doesn’t get any better than that! This is a great laid back event, and we hope you are able to join us.
Golf Outing benefiting Marco Rubio for Senate
Monday, June 20 at 10:30 am – Robert Trent Jones Golf Club
Co-Host: $5,000 PAC / $2,500 Individual (2 Golf Slots)
Attend: $2,500 PAC / $1,500 Individual (1 Golf Slot)
Complimentary Invitation for Senator Rubio’s 2022 Season Pass Donors
**Golf slots are limited, so please do not wait to sign up!**
→ New: Rep. Ruben Gallego (D-Ariz.) will report raising $512,740 last quarter, nearly four times what he raised in the first quarter of 2020. Let’s not be coy here: Gallego is looking at a run against Sen. Kyrsten Sinema (D-Ariz.), so his fundraising numbers will be of intense interest. It’s not as if Gallego needs the money for his own re-election campaign; Gallego represents a D+24 district. But Gallego will need to show that he can raise millions of dollars to mount a serious bid against Sinema in 2024.
→ Sen. Mike Lee (R-Utah), up for re-election this cycle, raised $1.3 million in the first quarter and has $2.4 million on hand.
→ HUD Secretary Marcia Fudge donated $50,000 from her congressional campaign account to Emily’s List, and $25,000 to Collective PAC, which works to elect Black Democrats to public office.
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All times eastern
10 a.m.: President Joe Biden will get his daily intelligence briefing.
10:35 a.m.: Vice President Kamala Harris will leave D.C. for Philadelphia.
11:15 a.m.: Biden will leave the White House for Andrews, where he will fly to Des Moines. Jen Psaki will brief on board Air Force One. He will arrive in Des Moines at 2:05 p.m.
3:15 p.m.: Biden will visit POET Bioprocessing in Menlo.
3:45 p.m.: Biden will speak about his administration’s “actions to lower costs for working families, reduce the impact of Putin’s Price Hike, and Build a Better America with Bipartisan Infrastructure Law investments in rural communities.”
5 p.m.: Harris will speak at the Sheet Metal Workers Local 19 Training Center about the administration’s “commitment to worker organizing and empowerment.” Labor Secretary Marty Walsh will also speak.
6:10 p.m.: Biden will leave Des Moines for D.C. He’ll arrive at the White House at 9:40 p.m.
→ “Alaska Man Who Threatened to Kill U.S. Senators Gets Nearly 3 Years in Prison,” by Christine Chung
→ “Hubris and isolation led Vladimir Putin to misjudge Ukraine,” by Paul Sonne, Ellen Nakashima, Shane Harris and John Hudson
→ “Ukraine’s Zelensky Calls for More Military Aid Ahead of Battles in Eastern Regions,” by Matthew Dalton, Yaroslav Trofimov and Mauro Orru
→ “‘It’s not the end’: The children who survived Bucha’s horror,” by Cara Anna in Bucha, Ukraine
→ “Mayor: More than 10,000 civilians dead in Ukraine port city,” by Yuras Karmanau, Adam Schreck and Cara Anna
→ “Biden’s new favorite to be Fed bank cop,” by Victoria Guida
PRESENTED BY BLACKSTONE
Blackstone focuses on investing in the sectors and themes with the greatest potential for growth. This means backing companies, like Bumble and Ancestry, that are advancing how we use technology to connect to one another. Blackstone is providing the leaders of these companies with the partnership and resources they need to accelerate their growth and reach their full potential.
Blackstone takes a long-term approach to investing because building successful, resilient businesses can lead to better returns for investors, stronger communities, and economic growth that works for everyone. Learn more.
Editorial photos provided by Getty Images.
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