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PRESENTED BY

BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN
WITH MAX COHEN AND CHRISTIAN HALL

THE TOP

Happy Friday morning.

If we were going to name this, we’d call it “Democrats’ Messaging Mess.” 

First we’ll start with inflation. Then we’ll get to former President Barack Obama’s advice to House Democrats.

The Labor Department delivered another inflation stunner Thursday. The Bureau of Labor Statistics reported that the Consumer Price Index rose 0.6% in January, and a shocking 7.5% during the last year. Overall, prices are surging at the fastest rate in 40 years.

For Senate Democrats – and their GOP counterparts – this is a huge political issue, one that could define who wins the November midterm elections. Republicans are convinced the spike in consumer prices is the single most important dynamic right now. They’re also convinced Democrats don’t have a real plan to address it.

“It’s the biggest issue in the country, and I think their biggest liability going into the fall,” Senate Minority Leader Mitch McConnell told us in a brief interview Thursday.

The American people are sour on the state of the economy, and poll after poll after poll shows that rising inflation is driving that pessimism. This is bad news for President Joe Biden, and even worse for Senate Democrats.

So we spoke to more than a dozen Senate Democrats, including their most vulnerable 2022 incumbents, about how Congress should respond to the inflation crisis. What’s most surprising to us is their responses were kind of all over the place. They don’t have a unified message. Compare that to the GOP message (accurate or not) – the government is causing inflation by spending too much money – which is easily understood and digested. 

Here are some of the ideas Democrats proposed to deal with inflation: Pass the Build Back Better Act (not possible right now); enact the expanded Child Tax Credit; cut prescription drug prices; beef up the supply chain and slash shipping costs; somehow rein in corporate profits; suspend the federal gas tax; grow more food; or even push through immigration reform. Democrats seem to lack ideas that can be quickly put into action or will have an immediate impact on inflationary pressures, as far as we can tell.

Democrats did note repeatedly that the underlying U.S. economy is strong, the GDP grew at its fastest rate since the 1980s, more than 6 million jobs were created during the last year – thanks in large part to the Democratic-passed $1.9 trillion American Rescue Plan – and unemployment is low. Home prices and the stock market remain strong, although the Federal Reserve is going to start raising interest rates soon to tackle inflation, which will have an enormous impact on both.

Here’s some of what we heard:

→ Sen. Mark Kelly (D-Ariz.) summed it up this way: “Seven-and-a-half percent was the highest it’s been in 40 years. That’s not good.” 

Kelly, whose reelection race in November is seen as one of the toughest in the country, said legislation he introduced along with Sens. Raphael Warnock (D-Ga.), Catherine Cortez Masto (D-Nev.) and others to suspend the federal gas tax for the rest of the year would help alleviate inflation’s impact on Americans.

→ Sen. Raphael Warnock (D-Ga.): “I am doing everything I can to address rising costs for the people of Georgia. It’s why I introduced my gas relief act yesterday.”

Warnock added: “I also think we need to do everything we can to reduce the cost of prescription drugs. And we need to deal with the ways in which there are some corporate actors who seem to be exploiting this pandemic. We’ve seen a 2000% increase in the profits of these ocean carriers. So too many Georgia voters are seeing record prices while corporate entities are seeing record profits. That’s why I called on the administration to investigate that.”

We asked Warnock if this is an issue that could cost him his election. “I am focused on the people of Georgia,” Warnock replied.

→ Sen. Catherine Cortez Masto (D-Nev.): “One of the things I’d like to see, and the things that should’ve happened already, is prescription drug negotiations, lowering health care costs and  prescription drug costs for families. It should’ve been done already. I don’t understand why it’s so hard to do.”

Our friend Ted Barrett of CNN asked Cortez Masto about the GOP claim that BBB, the $1 trillion bipartisan bill and other Democratic spending plans are causing “red hot inflation.” Cortez Masto wasn’t having any of it.

“First of all, BBB didn’t pass,” Cortez Masto noted. “The bipartisan infrastructure package, that the Republicans supported, is over a longer period of time, it’s not a one-time injection of money, and there’s pay-fors for that. So that does not contribute to the inflation we are seeing.”

We asked Cortez Masto – at this moment, the most endangered Senate Democrat heading into the midterms – whether this issue could cost her the election. Cortez Masto gave a long answer. She admitted inflation is a serious economic and political problem, but insisted Democrats have some solutions:

“My mother just went to the grocery store. It cost her eight dollars for a pound of ground round. I filled up my gas tank back home. Yes, we’re seeing it. It needs to be addressed, no doubt about it. We’ve got to look at how we lower those costs for families. And there’s way to do it, like I said, through health care, through continuing to put more money in their pocket through continuing and extending the Child Tax Credit. Subsidies for the Affordable Care Act. That helps them."

Cortez Masto emphasized again that extending the Child Tax Credit is something “we could do right now” that would help American consumers.

→ Sen. Bernie Sanders (I-Vt.): “One of the things that we tried to do yesterday was to bring a bill to the floor to lower the cost of prescription drugs and better focus on health care.”

More Sanders: “It’s a very serious problem that we’ve got to tackle. But in the midst of tackling it, we’ve got to also be aware that by and large, corporate profits are soaring. And we have to ask, ‘How does that happen? And how is that contributing to inflation?’ In other words, these guys are raising their prices and making a whole lot of money. That’s something we ought to look at.”

→ Sen. Jon Tester (D-Mont.): “Want to know three things we can do? Making child care more accessible, more affordable. Addressing the housing [crisis] though programs that already exist, [the] HOME [program], CDBG and others. And do a comprehensive immigration bill. That would help with inflation. One of the big drivers right now is the lack of workforce. It’s creating a lack of supply [of workers.]”

→ Sen. Debbie Stabenow (D-Mich.): “So we’ve got to tackle it in the short run, which is why I’m a co-sponsor of the bill we introduced yesterday to do a gas tax holiday between now and the end of the year. Very focused on other areas. We’ve got to pass prescription drug reform, that will lower costs. And there’s other areas. I’m working on food production, to bring down costs. So it’s very real for people, and we know that. At the same time, the underlying fundamentals of the economy are very strong.”

→ Sen. Amy Klobuchar (D-Minn.): “Well, the focus that we must have now is on everything from supply chains. Sen. [John] Thune and I have put out a bill on finally taking on the shipping industry.” 

Klobuchar added that workforce-related issues stemming from the Covid pandemic are also contributing to inflation. “Coming out of the pandemic, there’s some major changes we have to make with policy,” Klobuchar declared. “And that means laser focus on supply chains. Everything that’s related to workers and having enough workers for jobs. That means everything from having enough apprenticeships to immigration reform to making sure we’re bringing down prices for families” on health care.

→ Sen. Sherrod Brown (D-Ohio): As chair of the Banking Committee, Brown said his focus is on getting “Jay Powell and the nominees for the Fed” confirmed so “they can take on inflation. That’s their job.” Brown’s panel will vote on five nominees for the Fed’s Board of Governors next week.

Brown also said he was concerned about hedge funds and other institutional investors buying up homes “in very high numbers. And it’s clear they’re driving inflation, just like corporate profits, exorbitant corporate profits on shipping and component manufacturing, are driving inflation. Republicans will say it’s all government spending. There’s just no evidence of that. But we’ve got to address it.”

→ Sen. Ron Wyden (D-Ore): “The best antidote you can do here in the Senate from the standpoint of fighting inflation is really two things – Number one, cutting costs, which is what I’m all about with the prescription drug bill… And then making sure, and this is what I’m focused on in the Finance Committee, is that we will have the resources to pay for what the caucus wants to invest in. And we’re still having that debate.”

So, you see what we mean?

And what about Senate Majority Leader Chuck Schumer and the rest of the Democratic leadership? They have an unenviable job here. The problem is steep, the solutions are complex and difficult to pull off, their margins are tight and an election is coming up.

WHAT OBAMA TOLD HOUSE DEMOCRATS

44 gives Democrats a dose of political medicine

It was a message that only former President Barack Obama could effectively deliver.

Enough with all the bellyaching.

The 44th president Zoomed with House Democrats Thursday afternoon as part of their messaging retreat and implored them to “take the wins you can get” and told them that it “doesn’t help to whine about the stuff you can’t change.”

This is a message we often hear in the Capitol, chiefly from Speaker Nancy Pelosi, who has not so subtly urged President Joe Biden to brag more about his victories.

“Democrats have a tendency to complain about what we didn’t get done rather than talking about what we did get done,” Obama said on the call.

Obama has some experience in this realm – and he talked about that. The former president reminded House Democrats that he fought for the public option to be included in the 2010 Affordable Care Act, but dropped it when it was abundantly clear that it wouldn’t pass. Legislating, Obama said, is like a relay race. In other words, one Congress builds on what the previous Congress did. 

“If we can get some stuff done, some major domestic initiative, some progress on climate…there will come a point where you decide if you are getting nothing or getting that,” Obama said.

This is especially timely given the current legislative outlook in the House and Senate. Democrats passed the American Rescue Plan and the bipartisan infrastructure package last year, but they’ve struggled to rally around the Build Back Better Act, which Sen. Joe Manchin (D-W.Va.) blocked due to inflation concerns. Some Democrats have been urging their leadership to try to cobble together a legislative package with proverbial “low-hanging fruit” –  provisions Manchin has already agreed upon – and pass that so they have something to brag about in November. 

This type of realism was a hallmark of Obama’s presidency. But that presidency ended over five years ago, and politics has changed a good deal since then. We’ll see if Democrats heed this advice.

SNEAK PEEK

What you need to know from Lester Holt’s Biden interview

One of the lasting traditions in American politics is the network broadcasting the Super Bowl gets a presidential interview that airs in the lead-up to the big game and during the pregame of the football championship.

NBC’s Lester Holt traveled to Culpepper, Va., to interview President Joe Biden Thursday. Part of it aired on “NBC Nightly News” last night.

→ Biden on states lifting mask mandates: “I’ve committed that I would follow the science. The science as put forward by the CDC, and the federal people and I think it’s probably premature, but it’s, you know, it’s a tough call.”

→ On whether there’s a scenario in which he would send U.S. troops into Ukraine to rescue Americans: “There’s not, that’s a world war when Americans and Russians start shooting at one another. We are in a very different world than we’ve ever been in. … American citizens should leave, should leave now. We’re dealing with one of the largest armies in the world. It’s a very different situation and things could go crazy, quickly.”

→ On a SCOTUS nominee: “I think whomever I pick will get a vote from Republican side for the following reason — I’m not looking to make an ideological choice here, I’m looking for someone to replace Judge Breyer with the same kind of capacity Judge Breyer had, with an open mind, who understands the Constitution, interprets it in a way that is consistent with the mainstream interpretation of the Constitution.”

BTW: Democrats on the Senate Judiciary Committee met with Biden yesterday afternoon. Sen. Dianne Feinstein (D-Calif.) was the only one who couldn’t make it. Sen. Chris Coons (D-Del.) said they talked about Biden picking “someone in the model of Justice Breyer. Someone who will write stirring, compelling, lasting arguments.” Ketanji Brown Jackson fits that bill, since she worked for Breyer.

→ WaPo’s Seung Min Kim: “Biden talks Supreme Court timing with Democratic senators”: “Biden, who has pledged to make his selection by the end of the month, indicated to the senators he would begin interviewing the prospective candidates next week, after he spends this weekend continuing to review their record, according to two people with direct knowledge of the meeting.”

PUNCHBOWL NEWS X RO KHANNA

Missed our interview with Rep. Ro Khanna (D-Calif.) on Wednesday? Catch up on the full video below.

→ The NRCC is now list-building by asking people to “stand with Joe Rogan.”

→ This is a strong spot from Jessica Cisneros, who is running in a Democratic primary against Rep. Henry Cuellar (D-Texas). The ad opens with a woman saying that she’s been in Laredo for 40 years and she once liked Cuellar, but Washington has changed him. The woman talks about Cuellar taking money from insurance companies, while the cost of her prescriptions have gone up. Here’s the ad, courtesy AdImpact.

FRONTS

MOMENTS

9:30 a.m.: President Joe Biden will get his daily intelligence briefing.

9:45 a.m.: Vice President Kamala Harris will leave D.C. for Newark, N.J.

11:35 a.m.: Harris will hold a roundtable to “highlight the historic funding in the Bipartisan Infrastructure Law to remove and replace lead pipes.” This will be at the Training Recreation Education Center.

2:35 p.m.: Harris will leave Newark for D.C.

3:15 p.m.: Biden will leave for Camp David for the weekend.

CLIP FILE

NYT 

→ “Spurning Demand by the Taliban, Biden Moves to Split $7 Billion in Frozen Afghan Funds,” by Charlie Savage

→ “As Other Hot Spots Boil, U.S. Shows Its Foreign Policy Focus Is Asia,” by Edward Wong in Melbourne, Australia

→ “C.I.A. Is Collecting in Bulk Certain Data Affecting Americans, Senators Warn,” by Charlie Savage

WaPo

→ “With watchers on the ground and spy drones overhead, U.S. zeroed in on Islamic State leader’s hideout,” by Joby Warrick, Dan Lamothe, Matt Viser and Karoun Demirjian

→ “‘Freedom Convoy’ protesters shut down third border crossing as U.S. officials urge Canada to get control of spiraling crisis,” by Amanda Coletta, Miriam Berger, Amy Cheng and Jennifer Hassan

Bloomberg

→ “Blinken Says U.S.’s Ukraine Response Being Watched in Asia,” by Peter Martin and Ben Westcott

Politico

→ “How does Canada end the truckers’ mess?” by Andy Blatchford in Ottawa

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