The Hill’s Morning Report – Presented by Facebook – Senate nears surprise deal on short-term debt ceiling hike

by Alexis Simendinger and Al Weaver - 10/07/21 6:30 AM ET

Presented by Facebook

Welcome to The Hill’s Morning Report. It is Thursday! We get you up to speed on the most important developments in politics and policy, plus trends to watch. Alexis Simendinger and Al Weaver are the co-creators. Readers can find us on Twitter @asimendinger and @alweaver22. Please recommend the Morning Report to friends and let us know what you think. CLICK HERE to subscribe!

Total U.S. coronavirus deaths each morning this week: Monday, 701,170; Tuesday, 703,285; Wednesday, 705,284; Thursday, 707,788.

The Senate is on the verge of breaking a stalemate on the debt ceiling after Senate Democrats accepted Senate Minority Leader Mitch McConnell’s (R-Ky.) offer of an increase until December, which defers but does not resolve the disagreement.

The idea from McConnell came as a surprise to many on Wednesday after months of his insistence that Republicans would not vote to raise the nation’s borrowing authority and his advice that Democrats use the 50-vote budget reconciliation tool to lift the borrowing cap on their own. McConnell’s offer was accepted on Wednesday by Democratic leaders (The Hill).

“In terms of a temporary lifting of the debt ceiling, we view that as a victory, a temporary victory with more work to do,” Sen. Tammy Baldwin (D-Wis.) told CNN after Democrats met to discuss their options.

The two sides had until Oct. 18 to pass an increase or risk a default on the nation’s debt obligations.

Politico: Dems take GOP’s short-term debt fix offer, kicking deadline to December.

The Associated Press: Congress foresees short-term debt fix amid perilous standoff.

McConnell’s proposal was two-pronged: a two-month increase with GOP help, after which he said Democrats would be on their own to pass a longer-term debt ceiling increase. (Democrats said no to the second portion of the offer.)

As The Hill’s Alexander Bolton notes, Democrats can now sidestep using the time-consuming budget process to temporarily extend the nation’s borrowing authority, a victory. But Republicans also notch a win by requiring Democrats to commit publicly to raising the statutory borrowing limit by a specific amount. That dollar figure will almost assuredly be used in campaign ads against Democratic incumbents ahead of the 2022 midterm elections.

Democrats also will need to vote again later this year to raise the debt ceiling. That timing could plow into continued wrestling over a bipartisan infrastructure bill and the Democrats’ efforts to enact trillions of dollars in social spending. McConnell’s maneuver this week could prove advantageous for his party.

The Wall Street Journal: Stock futures rise after debt-limit extension proposal.

As of Wednesday night, McConnell told reporters that the two sides are “trading paper” in search of a final resolution, which is expected today.

“We’re making good progress. We’re not there yet. But I hope we can come to an agreement tomorrow morning,” Schumer said shortly after midnight (The Hill).

White House press secretary Jen Psaki indicated to reporters that the proposal was not President Biden’s first choice but did not weigh in specifically on McConnell’s offer.

However, the agreement left a number of Democrats nonplussed and begging for more at the end of the day. When asked for her take, Sen. Mazie Hirono (D-Hawaii) declared that it was “not much.”

“What kind of offer is that?” she said. “Bullshit.”

The agreement came after one avenue to raising the debt ceiling was shut off only hours earlier when Sen. Joe Manchin (D-W.Va.) told reporters that he would not support nixing the filibuster in any way, including to create a carveout to raise the U.S.’s borrowing limit.

“I’ve been very, very clear where I stand, where I stand on the filibuster. … Nothing changes,” Manchin said (The Hill).

The Washington Post: These are the payments at risk if the U.S. defaults on its debt.

Elsewhere on Capitol Hill, Manchin also poured cold water on the possibility that he would support a reconciliation bill with a price tag around $2 trillion, maintaining to reporters that his number has not changed for more than two months.

“My number has been 1.5. I’ve been very clear,” Manchin said.

The comments come as skepticism rises within Democratic ranks over the party’s chances to pass both the reconciliation bill and the $1 trillion bipartisan infrastructure package by the end of the month amid continued divisions between progressives and centrists.

As The Hill’s Jordain Carney notes, Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles Schumer (D-N.Y.) have both pointed to the end of the month for getting the two blueprints through Congress. Although Democrats have made inches of progress on a top-line price tag, they remain far from final resolution on that and other issues and priorities that were set for inclusion in the large bill.

However, there remains some untamed bitterness between the two camps within the Democratic Party. That hostility exploded into the open on Wednesday night when Axios reported that Sen. Bernie Sanders (I-Vt.) refused to sign a joint statement condemning the actions of protesters against Sen. Kyrsten Sinema (D-Ariz.) (pictured below), which included following her into the restroom and filming her, because it wouldn’t include a criticism of her stance in negotiations.

Sanders declined to add his name to a joint statement (which has yet to be released) being organized by Sen. Cory Booker (D-N.J.) calling the actions of protesters “plainly inappropriate and unacceptable.” Mike Casca, Sanders’s communications director, asked for the statement to be edited to include a line: “While we hope Senator Sinema will change her position on prescription drug reform and support a major [budget] reconciliation bill, …”

Booker’s team declined, and Casca informed them on Thursday morning that Sanders would “not be signing.”

The Hill: Rift widens between business groups and House GOP.

More in Congress: Today is the deadline for four Trump advisers — Mark Meadows, Steve Bannon, Kash Patel and Dan Scavino — to respond to subpoenas for documents from the Jan. 6 investigative committee in Congress. However, the four appear set to defy the requests and the committee was unable to physically locate Scavino to serve its subpoena (CNN).

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It’s working: We lead the industry in stopping bad actors online. In the past few months, we took down:

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Our work to reduce harmful content is never done. Learn more about how we’re making our platforms safer.

LEADING THE DAY

MEDICAL HISTORY + CORONAVIRUS: The World Health Organization (WHO) on Wednesday announced the approval of the first vaccine for malaria, one of the oldest known and deadliest infectious diseases, representing a major breakthrough in the fight against it.

The new drug made by GlaxoSmithKline, known as “Mosquirix,” is the first vaccine developed for any parasitic disease. Malaria kills about half a million people each year, nearly all of them in sub-Saharan Africa — among them 260,000 children under age 5.

According to the first analysis, the vaccine, which is given in three doses between ages 5 and 17 months, and a fourth dose roughly 18 months later, is expected to save thousands of lives per year.

Clinical trials of the vaccine were carried out in Kenya, Malawi and Ghana, with more than 2.3 million doses being administered in those countries to more than 800,000 children. Mary Hamel, who heads the WHO’s malaria vaccine implementation program, told The New York Times that the vaccine output increased the percentage of children protected against the disease in some way from 70 percent to more than 90 percent.

“The ability to reduce inequities in access to malaria prevention — that’s important,” Hamel told the Times. “It was impressive to see that this could reach children who are currently not being protected.”

> COVID-19: The White House revealed on Wednesday that the U.S.’s supply of at-home rapid COVID-19 tests is set to quadruple by December after an additional $1 billion investment in the production of tests that produce a result in as little as 15 minutes.

A White House official said that production of rapid tests will rise from roughly 30 million per month to 200 million per month starting in December, with the price of those tests expected to fall as well.

The move comes as Biden revealed an additional $1 billion investment in rapid testing on top of the $2 billion announced last month and the Food and Drug Administration’s move to authorize a new rapid test by ACON Laboratories on Monday. For weeks, the FDA has come under fire for moving too slowly with rapid antigen tests (The Hill).

> How many jabs of COVID-19 vaccines for adolescents?: Officials in Britain, Hong Kong, Norway and other countries have recommended a single dose of the Pfizer-BioNTech vaccine for children ages 12 and older — providing partial protection from the virus, but without the potential harms occasionally observed after two doses. On Wednesday, Sweden and Denmark joined the ranks, announcing that adolescents should get only one jab of the Moderna vaccine. Health officials in those countries are particularly worried about increasing data suggesting that myocarditis, an inflammation of the heart, may be more common among adolescents and young adults after vaccination than had been thought. The issue is likely to be the focus of intense discussion when agency advisers meet next week to review the evidence for vaccinations of children ages 5 to 11 years. The latest analysis, which was published on Wednesday in The New England Journal of Medicine, found that the incidence of myocarditis after vaccination in Israel was highest among males 16 to 29 years old (The New York Times).

> Relief spending: Tribal groups that represent Native Alaskans are racing to spend half a billion dollars in federal coronavirus relief payments ahead of a December deadline after a delay that tribal leaders say could become catastrophic for communities now at the epicenter of the pandemic’s latest wave, The Hill’s Reid Wilson reports.

Those groups, called Alaska Native Corporations, have only recently begun receiving money allocated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law in 2020 by former President Trump. The $2 trillion package allocated $8 billion to federally recognized tribal governments, of which about $500 million was earmarked for Alaska Native Corporations. But three Native American tribal governments in the lower 48 states sued, arguing that the Alaska Native Corporations were not formally recognized by the federal government and therefore should be ineligible for the funds.

IN FOCUS/SHARP TAKES

ADMINISTRATION: Oil prices were weaker on Wednesday with U.S. government data showing growing crude stockpiles and amid Russian President Vladimir Putin’s indications that Moscow is willing to ramp up natural gas exports to Europe to stabilize energy markets (Bloomberg News, The Wall Street Journal). Energy Secretary Jennifer Granholm on Wednesday raised the prospect of releasing crude oil from the U.S. Strategic Petroleum Reserve and said that “all tools are on the table,” the Financial Times reported, citing her comments during an energy summit. Granholm did not rule out a crude oil export ban, the Financial Times said. The administration had previously urged producers to boost crude output amid intensifying fears about tightening global energy supplies (Yahoo Finance).

> Medicare Rx: Negotiating drug prices, which the federal health insurance program for seniors is barred from doing, is a goal among many Democrats and the president, and part of the majority’s pending legislative agenda. Despite a big push from Democrats and the White House, change may not happen in Congress anytime soon. The AARP, consumer groups, and health insurers are pressing for Medicare negotiations. Business groups and the pharmaceutical industry are opposed. Drug companies have spent $171 million so far this year on lobbying, far above any other industry, according to the watchdog group OpenSecrets (The Associated Press).

> Evictions: Today, the Housing and Urban Development Department unveils a new rule aimed at preventing evictions for tenants in public housing after the federal eviction moratorium expired in August. The rule will prohibit individuals living in federally subsidized housing from being evicted from their homes for not paying rent unless the tenants are given a 30-day notice and information regarding federal emergency rental assistance that may be available (The Hill).

> Student loans: The federal government will temporarily allow student borrowers to claim credit on all federal loan and repayment programs toward debt forgiveness, the Department of Education said on Tuesday. The agency said it was doing so to “restore the promise” of the Public Service Loan Forgiveness program, which cancels student loans for individuals who have worked in qualifying public service for 10 years and made 10 years worth of payments on federal loans (The Hill).

*****

POLITICS: U.S. District Judge Robert Pitman on Wednesday night temporarily blocked Texas’s so-called “heartbeat” law that bans abortions after about six weeks of pregnancy, ruling that “a person’s right under the Constitution to choose to obtain an abortion prior to fetal viability is well established,” adding that “depriving citizens of this right” would be “flagrantly unconstitutional.” The suspension was in response to the Biden administration’s emergency request to prevent the law from being enforced as the court considers a Justice Department lawsuit challenging its constitutionality. Attorney General Merrick Garland in a statement called Pitman’s order “a victory for women in Texas and for the rule of law.”

The Supreme Court narrowly allowed the Texas law to take effect in early September (The Hill and The New York Times).

The Texas Tribune: Texas’ near-total abortion ban is temporarily blocked by a federal judge, spurring the state to quickly appeal.

> Arizona politics are fascinating. Some Democrats are so unhappy with Sinema’s moderate positions when it comes to progressives’ big-ticket reconciliation agenda and the Senate filibuster that they want to back a primary challenger, specifically Rep. Ruben Gallego (D-Ariz.), to try to unseat her in 2024. One group, Run Ruben Run, is already at work, reports The Hill’s Max Greenwood. Since Biden’s inauguration, Sinema’s Senate votes have been consistent with Biden’s positions, according to the Five Thirty Eight tracker.

Separately today, Arizona’s recent presidential election “audit” will be the subject of a House Oversight and Reform Committee hearing at 10 a.m., with an emphasis on “threats to American democracy.” Maricopa County election officials are scheduled to testify (12News).

> For Democrats eyeing midterm contests, the Lone Star State remains a fever dream. Lawmakers and operatives are cobbling together a 2022 playbook, but they’ve been disappointed before, including in November. After boasting they might turn Texas blue and control its state House, voters backed Trump and reelected Republican Sen. John Cornyn while the GOP maintained its majority in the lower legislative chamber. As The Hill’s Tal Axelrod reports, congressional redistricting will not improve Democrats’ chances in Texas.

> School boards have attracted attention nationwide as political battlegrounds. The Hill’s Niall Stanage in his Memo writes that Sens. Josh Hawley (R-Mo.) and Tom Cotton (R-Ark.), have raised concerns about school-based freedom of speech and linked the issue to what they see as a broader attempt to stifle dissent over everything from COVID-19 to critical race theory. In the administration, on the other hand, Attorney General Merrick Garland this week announced new measures, including a task force, to combat violence and threats of violence aimed at teachers and school board members. School boards have long been community battlefields, and they are now intensely partisan (Education Week).

The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@digital-stage.thehill.com and aweaver@digital-stage.thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!

OPINION

Is the government up to the task of regulating Facebook? by Tara D. Sonenshine, opinion contributor, The Hill. https://bit.ly/3iE2FOY

The rot of democracies, by Eliot A. Cohen, contributing writer, The Atlantic. https://bit.ly/3ljXwxa “The problem today is that there is no United States behind the United States. If America succumbs to its internal divisions, to its preoccupation with partisan feuding and its desire to withdraw from international politics, the world order, such as it is, will crumble.”

WHERE AND WHEN

The House meets at 10 a.m. on Friday for a pro forma session. The full House is out until Oct. 19.

The Senate convenes at 10 a.m. and resumes consideration of legislation to increase the debt limit.

The president will receive the President’s Daily Brief at 9:30 a.m. Biden will travel to suburban Chicago and deliver remarks on COVID-19 vaccination mandates. He will return to Washington in the evening.

The vice president and Labor Secretary Marty Walsh at 11 a.m. will host a second meeting of the White House task force on worker organizing and empowerment.

Economic indicator: The Labor Department at 8:30 a.m. reports on filings for unemployment benefits in the week ending Oct. 2.

The Center for American Progress hosts a noon event about the current state of climate related litigation in the federal courts, with keynote speaker Rep. Joe Neguse (D-Colo.). Information is HERE.

Hill.TV’s “Rising” program features news and interviews at http://digital-stage.thehill.com/hilltv or on YouTube at 10:30 a.m. ET at Rising on YouTube.

A MESSAGE FROM FACEBOOK

Facebook’s Industry-leading investments are stopping bad actors

We’ve invested $13 billion in teams and technology over the last 5 years to enhance safety.

It’s working: In just the past few months, we took down 1.7 billion fake accounts to stop bad actors from doing harm.

But there’s more to do. Learn more about how we’re working to help you connect safely.

ELSEWHERE

➔ THEY NEED REINDEER: Toy companies are racing to get their products to retailers as they grapple with a severe supply network crunch that could mean sparse shelves for the holidays. They’re trying to find containers to ship their goods while searching for alternative ports. Some are flying in some of the toys instead of shipping by boat to ensure delivery before Dec. 25. For toymakers that heavily rely on holiday sales, there’s a lot at stake for the nearly $33 billion U.S. industry. The fourth quarter accounts for 70 percent of annual sales. On average, holiday sales account for 20 percent of the overall retail industry. And 85 percent of the toys are made in China, estimates Steve Pasierb, CEO of The Toy Association (The Associated Press).

➔ CATHOLIC CHURCH: Pope Francis on Wednesday said that he has “sadness and pain” for victims of child sexual abuse by clergymen in France following the release on Thursday of a report detailing the extent of the abuse over a span of 70 years. The pontiff added that he and the church have “shame” for what occurred. “I would like to express to the victims my sadness and pain for the trauma that they suffered,” Francis said at his weekly general audience. “It is also my shame, our shame, my shame, for the incapacity of the church for too long to put them at the center of its concerns” (The Hill).

➔ TECH: Facebook CEO Mark Zuckerberg is done apologizing, according to news reports. On Tuesday, he pushed back against testimony and documents provided to Congress by former Facebook employee and company critic Frances Haugen, saying the company’s work and motives have been mischaracterized and the company he founded would continue research into social media’s potential harms, including to children (The Wall Street Journal). Haugen has accused the company of repeatedly weighing internal research and options and choosing to put profits ahead of people.

THE CLOSER

And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! The beginning of the spooky season has started, with much of the news emanating from the Bay Area, inspiring this week’s puzzle about the beginning of October (Silicon Valley edition).

Email your responses to asimendinger@digital-stage.thehill.com and/or aweaver@digital-stage.thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

What was (apparently) the ultimate cause of the hours-long blackout of Facebook and its associated platforms this week?

A foreign hack
Configuration changes on routers
Whistleblower fallout
Revenge of Winklevoss twins

Which of the following things has happened this week in the Elizabeth Holmes/Theranos trial?

Former Theranos board member (and ex-Defense Secretary) James Mattis testified
High-stakes testimony by company’s former lab director
Holmes wore her trademark black turtleneck again
None of the above

The San Francisco Giants won 107 games this season en route to winning the National League West Division for the first time since when?

2000
2004
2008
2012

Facebook CEO and co-founder Mark Zuckerberg saw his net worth drop by roughly how much immediately following the outage and revelations made by a whistleblower?