NotedDC — Democrats face economic messaging crisis

Democrats are poised to deal with an even bigger obstacle in touting a strong labor market and recently dropping gas prices following the report that annual inflation hit its highest rate since 1981.

A 9.1 percent increase over the past 12 months is not welcome news to Democrats who are trying to fend off attacks from Republicans about rising daily costs, especially when voters consistently rank inflation as a No. 1 or 2 priority issue in polls. 

Some party strategists are worried that the high rate is all voters will see — marking almost all the headlines Wednesday morning — despite some good news about a July decline in gas prices and signs of supply chain issues easing.

“The problem right now for Democrats is that Americans feel like things are getting worse,” Democratic strategist Matt McDermott told NotedDC. “They’re communicating against a tsunami wave.” 

As our colleague Sylvan Lane noted, the White House is pushing back on the inflation report and calling it outdated since it doesn’t reflect the full impact of the past 30 days.

“Until we have better inflation data, it’s going to be hard for the best message guru in the world to figure out how to handle this,” Jason Furman, former chairman of the Council of Economic Advisers in the Obama White House, told us.

Welcome to NotedDC: Your guide to politics, policy & people of consequence in D.C.

In today’s issue: We’ll look at how inflation is impacting Democrats’ last-ditch push for a reconciliation bill, and how the White House is treating the new COVID-19 variant.

Plus: What are the best jobs in government?

Inflation threatens Build Back Better revival

As if Democrats aren’t already having enough trouble corralling Sen. Joe Manchin (D-W.Va.) to revive the stalled budget package, the latest inflation report is further threatening their efforts.

“No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire,” Manchin said Wednesday.  

It’s a dangerous threat for Majority Leader Charles Schumer (D-N.Y.), leading the negotiations with Manchin on a slimmed-down version of the “Build Back Better” bill, since the only provision they’ve agreed on so far is the prescription drug pricing reforms. 

Everything but the kitchen sink is still on the table: Tax credits for electric vehicles, money to subsidize the cost of the Affordable Care Act and funds for renewable energy. 

“Getting a reconciliation bill done is now more important than ever,” Democratic strategist Doug Gordon told NotedDC. “Show voters in this moment of economic pain you want to make the ultra-wealthy pay their fair share.” 

If Manchin has his way, at least half of the revenue raised by the tax hikes in the bill would go toward reducing the federal deficit. But on Wednesday, he signaled he is now wary on tax reform measures.

“I’m going to make sure that I have every input on scrubbing everything humanly possible that could be considered inflammatory,” he told reporters. 

Not only would this risk killing the bill for good since Democrats aren’t guaranteed a majority in the House or Senate in the new year, but strategists said it would sink the possibility of a solution to inflation when Democrats need it the most. 

“It’d be really unfortunate if the best thing Congress could do to lower inflation ended up not happening because there is inflation,” Furman said. 

Read more from our colleague Alex Bolton.

THE HILL’S EXCLUSIVE WITH SEN. PAT TOOMEY

Sen. Pat Toomey (R-Pa.), who is leaving Congress after this year, spoke about a retirement savings bill at The Hill’s Securing America’s Retirement event on Wednesday.

• “For most Americans, their wealth is tied up in their home, which that’s not something you trade,” Toomey told contributing editor Steven Clemons about the Retirement Savings Modernization Act.
  
• “But the other big category is retirement savings … for me this is just a really, really important part of allowing ordinary Americans to have a better life and a comfortable retirement,” he said.

The bill would encourage the diversification of the average American’s investment portfolio. Toomey is attempting to find a Democratic co-sponsor to introduce the bill before he ends his term in January after more than a decade serving in the Senate.

Read more about the bill from Paige Kupas.

White House shakes off new variant

COVID-19 cases are on the rise again, but the White House is pressing ahead with public events, even as public health officials warn that the pandemic is far from over.

President Biden hosted the first White House Congressional Picnic since the start of the pandemic on Tuesday night, snapping selfies and shaking hands with members of Congress and their families hours before jetting off to Israel for his Middle East trip.

White House press secretary Karine Jean-Pierre and national security adviser Jake Sullivan told reporters Wednesday that Biden would try to “minimize” physical contact while on his trip overseas.

The question over whether the White House is changing its policies or schedule comes after it expressed concern over the high transmissibility of the virus on Tuesday, urging people to get booster shots if they haven’t already.  

Anthony Fauci, the government’s top infectious diseases expert, suggested people shouldn’t “let it disrupt our lives” but urged individuals to take it seriously, saying it is a “reality that we need to deal with.”

Read more from The Hill’s Morgan Chalfant.

Biden makes first trip to Israel as president

WHEN PRESIDENT BIDEN walked off Air Force One in Tel Aviv on Wednesday, instead of shaking the hands of the politicians who were greeting him, he was doling out fist bumps.

• The move set off speculation that Biden is setting up a chance to avoid shaking the hand of Saudi Crown Prince Mohammad Bin Salman when he meets him later this week.
  
• White House press secretary Karine Jean-Pierre dismissed such speculation, telling reporters: “There are precautions that we are taking because this is up to his doctor.” 

Coming up: Biden will meet with Israeli Prime Minister Yair Lapid on Thursday. After that meeting, the president will take part in the first leaders meeting of the “I2U2” group with the leaders of Israel, India and the United Arab Emirates. 

TV time: Biden pre-taped an interview at the White House before heading out that will air on Israel’s Channel 12. 

Next stop: Biden will travel to Saudi Arabia on Friday, landing in Jeddah to meet with King Salman and the crown prince.

Read more: Biden’s Saudi trip sparks backlash at home

PROGRESSIVES TAKE STAND AGAINST BIDEN’S SAUDI TRIP

Some House Democrats are voicing their disappointment with Biden’s trip to Saudi Arabia, scheduling a vote on constraining arms sales to the nation. 

• The amendments to the National Defense Authorization Act — driven by progressives — would temporarily limit the sales of weapons to the Saudis.
  
• It would also require reports related to the murder of journalist Jamal Khashoggi and require the U.S. to develop guidance for investigating indications that its weapons were used in Yemen.  

What’s underscoring this: As we reported, Biden is receiving backlash for meeting with the Saudis after he promised during his White House campaign to make it a “pariah” state, or an international outcast, over the murder of Khashoggi in 2018.

“Justice is still waiting,” Rep. Gerry Connolly (D-Va.), who represents the district Khashoggi lived in, told our colleague Jordan Williams. “And to me, that means you suspend normal relations with a country whose leader did that.” 

And via our colleagues Hanna Trudo and Alex Gangitano, this is just one of the many divides present between Biden and progressive activists ahead of the midterms.  

Keep reading: “On the outside, progressives are getting louder and louder as they grow increasingly tired of seeing the president’s campaign promises be cut down to size, only to have the midterms fall further out of their grasp.”

The best jobs in government

The results of the 2021 “Best Places to Work in the Federal Government” survey, conducted by the Partnership for Public Service and the Boston Consulting Group, were released Wednesday. 

In the top five: 

• NASA  
• Department of Health and Human Services 
• Department of Commerce 
• Intelligence Community 
• Department of Veterans Affairs 

….and in the bottom five: 

• Department of State
• Department of Agriculture
• Social Security Administration
• Department of Justice
• Department of Homeland Security

WASHINGTON MOVES

The Hill’s Karl Evers-Hillstrom has a weekly roundup of where people are moving in the lobbying world (and you can send us your professional updates, too!). Here are some highlights: 

• Former Sen. Mo Cowan (D-Mass.) joined startup accelerator MassChallenge as chairman of the board
  
• Lindsay Kryzak and Caitlin Canter are headed to Subject Matter as senior vice president of policy communications and lobbyist, respectively. 
  
• Laurie Rubiner joined Kelley Drye & Warren LLP as a member of the firm’s government relations and public policy practice, leaving her role as special counsel for the Senate Judiciary Committee 
  
• Andrew Lock will head Monument Advocacy’s government relations practice, departing the House Homeland Security Committee

One last thing: Bolton defends ‘coup’ comments

John Bolton, ex-national security adviser to former President Trump, defended his comments about helping plan coups in other countries after he sparked a flurry of media attention this week.

“There are a lot of snowflakes out there that don’t understand what you need to do to protect the United States,” Bolton said on Wednesday while appearing on Newsmax. 

The initial quote: “As somebody who has helped plan coup d’état, not here but other places, it takes a lot of work …”

Have some news, juicy gossip, insight or other insider info? Send us tips: Elizabeth Crisp and Kelsey Carolan. And encourage friends to sign up here: digital-stage.thehill.com/noted.

We’ll see you tomorrow!

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