The Hill’s Morning Report — Bear market, Jan. 6 witnesses loom large

by Alexis Simendinger and Al Weaver - 06/14/22 6:25 AM ET

A video is played as an exhibit for the committee investigating the Jan. 6 attack — Pool
A video is played as an exhibit as the House select committee investigating the Jan. 6 attack on the U.S. Capitol continues to reveal its findings of a yearlong investigation June 13, 2022.

In split-screen America on Monday, lawmakers listened to testimony about alleged assaults on democracy more than a year and a half ago by the former president of the United States, while at the same hour, markets took a swan dive because of fears of recession, higher inflation, and skepticism that the current Oval Office occupant and the Federal Reserve can keep the economy from cratering.

As The Economist reported, “Inflation, far from peaking, seems to be gaining altitude, with potentially dramatic consequences for the Fed, for investors and for American politics.”

It was a dispiriting sort of Monday. The House select committee investigating the Jan. 6 attack on the Capitol heard video testimony from former Attorney General William Barr that he resigned the month after the 2020 elections because he thought former President Trump might be “detached from reality” because he grasped at election fraud rather than political failure as an explanation for the end of his presidency. At the time, Barr publicly said Trump’s theories of a rigged election were unsupported by facts, but he did not directly reveal to Americans that he knew Trump pursued bogus claims, a pattern that continued through Jan. 6 and beyond (The Hill).

Committee members asserted that Trump and his campaign team knowingly used fiction about election fraud to prey on small-dollar donors to rake in millions of dollars (The Hill).

“Throughout the committee’s investigation, we found evidence that the Trump campaign and its surrogates misled voters as to where their funds would go and what they would be used for. So not only was there the big lie; there was the big rip-off,” Rep. Zoe Lofgren (D-Calif.) said.

Former Trump campaign adviser Jason Miller told the committee that he believed former New York City Mayor Rudy Giuliani, once Gotham’s crime fighter and a private legal adviser to the 45th president, was “intoxicated” on election night as he sought an audience with Trump and spoke with a group of campaign and White House officials (The Hill).

The upshot: lies, fantasies, schemes, grifting for millions of dollars, election fraud claims rejected by dozens of U.S. courts, disgraced advisers, abuse of government and Trump supporters who followed a president’s every word.

The committee, with an eye on prosecutorial consequences, on Monday sought to establish using evidence and testimony that Trump knew he lost the election, was advised that his claims of election fraud had little merit or likelihood of success, and barreled ahead for months to try to overturn election results in order to cling to power (The Hill).

Trump, in a 12-page statement on Monday, described the Jan. 6 panel as “a Kangaroo Court, hoping to distract the American people from the great pain they are experiencing” (The Hill).

What is as yet unclear is what the House committee plans to do with its assembled evidence. Does it want Congress to enact reforms? Some members clearly hope the Justice Department might act on a criminal referral about Trump’s actions before, during and after Jan. 6.

▪ The Hill: Five takeaways: Trump aides describe chaotic post-election White House.

▪ Niall Stanage: The Memo: How the Jan. 6 panel is using Republicans to go after Trump.

Outside the committee room, Monday was a rough day for investors, including millions of Americans who have their retirement savings tied up in the financial markets. The S&P 500 fell more than 20 percent off its recent high in the beginning of the year into a bear market driven by rising prices, recession fears and the near certainty that the Federal Reserve will aggressively raise interest rates in a statement on Wednesday (The Hill).

This morning, world shares inched higher and Wall Street appeared poised for a stronger Tuesday open following Monday’s worst selloff in years (Reuters and The Wall Street Journal).

The Associated Press and The New York Times: On Monday, the S&P 500 entered a “bear market.” Here’s what that means (the last one was two years ago).

A bear market demands patience. Stocks in history have often regained their previous highs within a few years. But in a midterm election year, and amid a costly war in Ukraine, a pandemic, social unrest and crime, President Biden and fellow Democrats fear that voters won’t experience economic security and confidence before November.

Related Articles

▪ The Hill: Crypto firms Celsius and Binance halt withdrawals as bitcoin plummets. ▪ The Hill: The White House takes a new look at a federal gas tax holiday, which would require congressional approval.

▪ The New York Times: The Fed this week may discuss the biggest interest rate increase since 1994.

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LEADING THE DAY

➤ CONGRESS

The race to turn the framework negotiated by senators into legislative text is on as lawmakers push for a vote to be held before the July 4 recess and to pull more GOP support to the bill’s side in the meantime.

Sen. John Cornyn (Texas), the lead GOP negotiator, told reporters on Monday that he wants text of the legislation this week. That move would allow Senate Majority Leader Charles Schumer (D-N.Y.) to put the bill on the floor next week before the upper chamber leaves town.

“I will put this bill on the floor as soon as possible, once the text of the final agreement is finalized, so the Senate can act quickly to make gun safety reform a reality,” Schumer said on the Senate floor.

The Texas Republican added that there is no price tag of the proposal yet, adding that it would likely be partly paid for by unused money for infrastructure projects that is “left over” and cannot be used for the bipartisan infrastructure law that passed last year (CNN).

Meanwhile, the wait for the legislation also raises another question — whether the group of 10 Senate Republicans who signed on to the framework released on Sunday will stick together as pressure grows from pro-Second Amendment and gun advocacy groups. As The Hill’s Alexander Bolton writes, criticism is ramping up over the proposed incentives for states to establish red flag laws, including from a number of Senate Republicans.

It also remains to be seen how intense the opposition grows, especially from the National Rifle Association, and if it impacts whether any additional Senate Republicans sign on.

“I don’t think any single organization is going to control the outcome,” Cornyn told reporters (CNN).

Opposition is also expected across the Capitol from certain corners of the House GOP conference. As The Hill’s Emily Brooks reports, House Minority Whip Steve Scalise (R-La.) and members of the Second Amendment Caucus have been vocal opponents of the red flag provisions, with the Louisiana Republican saying that they are “unconstitutional.”

However, passage remains likely, as at least a handful of House Republicans are expected to support the final bill.

▪ Politico: Senate sprints to wrap gun deal by next week.

▪ Reuters: Attorney General Merrick Garland calls Senate gun legislation “meaningful progress.”

▪ Politico: Ohio Gov. Mike DeWine (R) signs bill allowing armed school employees.

▪ The Hill: Why a bipartisan data privacy proposal faces an uphill battle.

Elsewhere on Capitol Hill, Senate Republicans on Monday said that changes by the House to a bill giving additional protection to Supreme Court justices and their families would not pass the upper chamber. The original bill by Cornyn and Sen. Chris Coons (D-Del.) passed the Senate unanimously but was held up by House Democrats, who amended the bill to give additional protections to clerks and other staffers at the court — a move that drew the ire of top Republicans.

“We’re not going to pass this House bill,” Senate Minority Leader Mitch McConnell (R-Ky.) said, adding that the lower chamber should take up the original bill (The Hill).

Later on Tuesday, House Democrats relented as House Majority Leader Steny Hoyer (D-Md.) announced plans to vote today on the Senate-passed bill without changes (The Hill).

IN FOCUS/SHARP TAKES

➤ POLITICS

Voters in four states head to the polls tonight as primary contests continue to test Trump’s power within the Republican Party and offer clues about the political season to come.

Headlining tonight’s races are a pair in South Carolina, where Trump has put his endorsement on the line in a push to oust two House Republicans he deems disloyal.

In the state’s 1st District, Rep. Nancy Mace (R-S.C.) is looking to hold on against Katie Arrington, the Trump-backed candidate who defeated former Rep. Mark Sanford (R-S.C.) four years ago but lost in the general election. Mace is considered the favorite, having significantly outraised and outspent Arrington.

Mace also has some key support in her corner, as South Carolina Gov. Nikki Haley (R) has endorsed her bid and has held public events alongside the incumbent congresswoman during the homestretch of the race.

To the north, Rep. Tom Rice (R-S.C.), one of the 10 House Republicans to vote to impeach Trump last year, is facing a tougher fight against state Rep. Russell Fry (R), whom the former president is backing. According to a Trafalger Group poll taken last month, Fry led with 42 percent support to just 25 percent for the five-term lawmaker.

The Hill’s Max Greenwood also offers a preview of other races to keep an eye on, including the Senate GOP contest in Nevada where former state Attorney General Adam Laxalt (R) is attempting to stave off a challenge from Sam Brown.

In addition, primary contests will also be held tonight in Maine and North Dakota.

▪ The Associated Press: Nevada GOP contest crucial to Senate control.

▪ The Hill: New York Gov. Kathy Hochul (D) signed five measures on Monday protecting patients and providers from out-of-state restrictions ahead of the expected Supreme Court decision on the landmark case Roe v. Wade.

▪ Reid Wilson, The Hill: Pride month marred by rising anti-LGBTQ hate.

▪ The Hill: The Federal Railroad Administration on Monday announced it will send up to $2 million for 25 projects in 13 states, including grants focused on preventing trespassing and reduction of railroad-related suicides. The grants are targeted toward communities and states with high occurrence rates of trespassing and casualties.

📘 Georgia Democratic Sen. Raphael Warnock’s memoir “A Way Out of No Way” hits bookstores today. He’s running for reelection and will promote his book beginning with events this week. The senator also has a children’s book coming in mid-November based on his experience as one of 12 siblings (Lewistown Sentinel).

📝 Introducing NotedDC, The Hill’s curated commentary on the beat of the Beltway. Click here to subscribe to our latest newsletter.

OPINION

■ We could be in for many months of high gas prices, by Mark Gongloff, opinion editor, Bloomberg Opinion. https://bloom.bg/39po3WM

■ Biden’s Middle East trip is an opportunity for a much-needed reset, by Ahmed Charai, opinion contributor, The Hill. https://bit.ly/3xt906D

WHERE AND WHEN

The House meets at 10 a.m.

The Senate convenes at 11 a.m. and resumes consideration of the Honoring Our PACT Act of 2021. The bill would expand eligibility for Veterans Affairs health care for post-9/11 combat veterans, including those exposed to toxic chemicals.

The president will fly to Philadelphia to speak at 11 a.m. at the AFL-CIO’s Quadrennial Convention. Biden will be back at the White House by 1:30 p.m.

Vice President Harris will convene a roundtable at 2:30 p.m. in her ceremonial office with constitutional law, privacy and technology experts to discuss the future if the Supreme Court overturns Roe v. Wade and hands abortion decisions to the states (The Hill).

Treasury Secretary Janet Yellen will meet privately with the board of directors of the National Retail Federation to discuss the state of the economy.

🖥 Hill.TV’s “Rising” program features news and interviews at http://digital-stage.thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.

ELSEWHERE

➤ SUPREME COURT

Justices ruled on Monday that double jeopardy does not apply to overlapping federal and tribal prosecutions. The Supreme Court in a 6-3 vote said a member of the Navajo Nation could be tried in a certain type of Indian court as well as a federal district court for the same crime without violating the double jeopardy clause of the Constitution (CNN). … Also on Monday, justices ruled in two cases against detained immigrants seeking release while they contest deportation orders (The Associated Press). In recent years, the high court has taken an increasingly limited view of immigrants’ access to the federal court system under immigration measures enacted in the 1990s and 2000s.

➤ INTERNATIONAL

White House national security adviser Jake Sullivan met with Yang Jiechi, China’s top diplomat, for more than four hours in Luxembourg on Monday to discuss a range of topics, including the administration’s commitment to the “one China” policy. According to a senior administration official, Sullivan also brought up concerns about China’s “coercive and aggressive actions” across the Taiwan Strait and warned the Asian power against aiding Russia in its war in Ukraine (The Hill).

In Ukraine, Russian troops destroyed the final bridge connecting Sievierodonetsk with Lysychansk, its twin city, making evacuations of civilians and forces impossible as fighting escalates in the key locale. Serhiy Haidai, the regional governor of Luhansk, said that Ukrainian troops still holds partial control of the key city, which is one of the last remaining Ukrainian-held cities in Luhansk (The Washington Post).

▪ The Hill: Ukraine says troops hold out in Sievierdonetsk after last bridge destroyed.

▪ The New York Times: A top Ukrainian official says urgency is missing in the West’s response to the war.

➤ PANDEMIC, POX & POWASSAN

What is it about weekends? Headlines on Monday were replete with prominent officials and celebs who announced they tested positive for COVID-19.

Health and Human Services Secretary Xavier Becerra was one, reporting he tested positive for the second time in less than a month (The Hill). … Canadian Prime Minister Justin Trudeau was another case of repeat transmission (The Hill). … The Rolling Stones’ Mick Jagger, 78, through his representatives, announced he contracted COVID-19 and the band canceled its Monday concert in Amsterdam, subject to rescheduling (The Hill). … Following Sunday’s Tony awards show, actor Hugh Jackman announced he tested positive for COVID-19 (ET).

The Hill: Mexico’s COVID-19 transmission risk rises to Level 3 (high), according to a travel warning updated Monday by the Centers for Disease Control and Prevention.

Massachusetts on Monday identified “several” ticks that tested positive for the same Powassan virus that recently killed a 90-year-old woman in Connecticut (MassLive and Independent). What is the virus, you ask? It is rare, it is spread by ticks and there are no vaccines to prevent or treat the disease. It may not produce obvious symptoms of illness, either (CDC).

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,011,543. Current average U.S. COVID-19 daily deaths are 276, according to the Centers for Disease Control and Prevention.

➤ TECH

Google is set to pay $118 million as part of a settlement for a case alleging the company paid female employees less than men for similar work. The agreement will also include a third-party examination of Google’s pay practices. The settlement comes five years after the case was first brought by former employees of the tech giant. It will cover roughly 15,500 female employees dating back nearly a decade. A San Francisco Superior Court judge will now have to approve the agreement (The Hill).

THE CLOSER

And finally … 🇺🇸 What’s so important about a red, white and blue symbol? In this country, a lot.

On June 14, 1777, the Second Continental Congress passed a resolution that “the flag of the U.S. be 13 stripes, alternate red and white” and that “the union be 13 stars, white in a blue field, representing a new constellation.” In 1916, former President Wilson marked the anniversary of that decree by officially establishing June 14 as Flag Day (History.com). Thirteen became 50. That’s the kind of inflation Americans saluted.

It’s Flag Day. It’s Tuesday. Stars and stripes forever!

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