NotedDC — Biden attempts to dig himself out of the hole

President Biden is on the brink of celebrating some major wins ahead of the November midterms after the Senate passed a bill to compete better against China and revived efforts to fight climate change. 

But a recession might overshadow those long-awaited victories. 

As Senate Democrats met on the Hill to discuss the text of the Inflation Reduction Act — a scaled-back version of what used to be known as the Build Back Better Act — the Biden administration reacted to news that the economy shrunk for the second consecutive quarter. 

Two straight quarters of economic decline — typically used as a rule of thumb to determine a recession — is not welcome news to the White House, but Biden did his best not to let it rain on his parade Thursday when he touted how Congress was moving on his agenda.

“This is the strongest rebound in American manufacturing in over three decades,” he said about the bill to subsidize the domestic chip manufacturing industry and the clean energy tax credits included in the Inflation Reduction Act. 

“That doesn’t sound like a recession to me,” the president said at the end of his speech, walking away without taking any questions. 

Now being able to tout concrete solutions to inflation and the addition of domestic manufacturing jobs, Biden emphasized the White House’s long-held message that a strong labor market means there is not a recession on the horizon. 

But it is still a daunting task to quell fears of an economic downturn, as our colleague Tobias Burns notes, since Republicans will continue to “bang the recession drum” to make the case that Democrats shouldn’t control Congress next year. 

What we’re watching: New data on inflation from the Personal Consumption Expenditures index will be released on Friday.

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

In today’s issue: The new Manchin-Schumer deal has revived Democrats’ hopes. Plus: The growing Trump-Fox News gulf.

What’s next for the Inflation Reduction Act

The Build Back Better Inflation Reduction Act of 2022 appears to be on track, with an agreement reached between Senate Majority Leader Chuck Schumer and moderate Sen. Joe Manchin (D-W.Va.), but the latest Capitol COVID-19 outbreak is still raging and could slow progress on the long-awaited reconciliation bill. 

Senate Democratic Whip Dick Durbin (D-Ill.) is the latest member to test positive, following announcements from Manchin and Sen. Lisa Murkowski (R-Alaska) that they had tested positive earlier this week. President Biden recently recovered from COVID-19 after a five-day isolation period, and Vice President Harris also caught the virus earlier this year. 

The razor-thin margin in the Senate — Democrats have the support of 50 votes plus the vice president’s tie-breaker — means any coronavirus absences can threaten the Democrats’ agenda.  

The House has allowed proxy voting because of the pandemic, but senators must vote in person.  

Democrats have hoped to put up the reconciliation bill next week. Durbin’s test has him sidelined until at least Tuesday, but other positives could pop up in the coming days as the Capitol appears to be feeling its own mini-surge of coronavirus cases.  

SEN. KYRSTEN SINEMA (D-Ariz.) may also determine the fate of the bill, so far remaining silent on whether she would agree to close the so-called carried interest tax loophole. 

From our colleague Alex Bolton: “Sinema’s office has so far declined to comment on the legislation. She did not attend a Senate Democratic Caucus meeting Thursday to discuss the deal, according to a senator in attendance. The senator noted that Sinema often misses caucus meetings and that it was not unusual for her to miss the specific meeting Thursday.” 

Manchin already committed to closing the loophole, which Democrats argue allows wealthy money managers to pay lower tax rates than working-class Americans, so the ball is in Sinema’s corner.

REACTIONS FROM INTEREST GROUPS

The sudden revival of the reconciliation bill threw interest groups for a loop, some for the better and others for the worse. 

Climate activists applauded the sudden revival of the bill, which aims to reduce carbon emissions by roughly 40 percent by 2030, after Sen. Joe Manchin (D-W.Va.) signaled he would not support it earlier this month. 

It comes amid plans of a climate protest at the annual Congressional Baseball Game on Thursday and a few days after congressional staffers protested in Majority Leader Charles Schumer’s (D-N.Y.) office for Democrats to move on a climate bill.  

But the climate provisions aren’t thrilling lobbying groups who represent big corporations since it proposes a 15 percent tax on businesses to help pay for investments in energy security, our colleague Karl Evers-Hillstrom writes. 

What we’re watching: “Big business lobbyists are expected to make a last-minute push to defeat or weaken the Manchin-Schumer agreement, which took K Street by surprise.” 

Tide turning between Trump and Fox News

If former President Trump makes another run for the White House in 2024, he might not have one former ally completely on his side anymore: Fox News. 

As Trump’s been ramping up his appearances at political events and rallies after he teased announcing a bid before November, Fox has given him lesser airtime, declining to air the speech on Tuesday that marked his first return to Washington since January 2021. 

“The recent ascension of Florida Gov. Ron DeSantis to the national spotlight has given Murdoch’s news outlets a new face to put forth for its millions of viewers and readers as a potential successor to Trump as the leader of the Republican Party and conservative movement,” our colleague Dominick Mastrangelo writes.

In a behind-the-scenes look at what might’ve caused some of this tension, Trump’s son-in-law Jared Kushner revealed in his upcoming memoir that Fox News owner Rupert Murdoch said there was “nothing” he could do about Fox calling Arizona for President Biden, a move that infuriated Trump. 

While there are still anchors on Fox News who support Trump and spread his false claims of widespread voter fraud, including hosts Sean Hannity and Laura Ingraham, Trump’s frustration likely lies in the way he no longer gets 24 hours of coverage, a media expert told Mastrangelo.  

Worth noting: One America News Network, a conservative network that Trump turned to after the November 2020 election, won’t have as broad of a reach since Verizon, its last major carrier, refused to renew its contract with the network this week.

TUESDAY’S PRIMARIES TO HINT AT TRUMP’S GRIP ON THE GOP

As former President Trump teases a 2024 announcement, Tuesday’s primaries will be another indicator of whether he still holds a grip on the Republican party. 

IN ARIZONA, we’re watching the Republican gubernatorial primary to see whether Trump-endorsed candidate Kari Lake will come out on top against Pence-endorsed candidate Karrin Taylor Robson.  

• In a battle similar to the Georgia gubernatorial primary, when Pence-backed candidate Gov. Brian Kemp defeated the Trump-endorsed hopeful, former Sen. David Perdue, the winner would signal whether voters align more with Pence or Trump as they suggest they may run against each other in the 2024 Republican presidential primaries.
• We are also watching the state Senate primary between House Speaker Rusty Bowers and Trump-endorsed state Sen. David Farnsworth (R). 
  The race is another example of how Trump is still keenly focused on the 2020 election, and sees it as a key to energizing his base, railing against Bowers since he rejected pressure to overturn the election results and later testified to the Jan. 6 House committee. 

IN MICHIGAN, we’re watching the Republican House primary between Rep. Peter Meijer, who voted to impeach Trump, and Trump-endorsed candidate John Gibbs. 

As we noted yesterday, Democrats are hoping that Gibbs pulls out a victory over Meijer since they view him as easier to defeat in the general election, with Meijer being one of the few House Republicans to go publicly against Trump.

Weather outlook: Congressional Baseball Game

Republicans and Democrats will go to battle on the baseball field Thursday night in the annual Congressional Baseball Game. You can see the action live on C-SPAN if you can’t make it in person. 

After several sweaty days in D.C., weather predictions are calling for mid-80s and a chance of rain when the game kicks off at 7:05 p.m.  

The predictions for how the game will turn out are also up in the air.  

Democrats had been on a remarkable winning streak but lost their star player, former Rep. Cedric Richmond (D-La.) when he left the House to join the Biden administration. 

Like many things in Congress these days, the experts at FiveThirtyEight has deemed this showdown a “toss-up.”

Calling all football fans

The Washington Commanders (formerly known as the Washington Football Team) is asking fans to help update the team’s fight song to remove a racial slur and pick a new mascot. 

According to the team, the Commanders Marching Band will debut the new song at the team’s preseason home game on Sunday, Aug. 13 vs. the Carolina Panthers. The new mascot will be unveiled at the fan appreciation game at FedExField against the Cleveland Browns on Jan. 1, 2023. 

The two song options are essentially minor changes to the old “Hail to the Redskins,” with “Commanders” replacing the old name and the line “Sons of Wash-ing-ton” replaced by “All of Wash-ing-ton.” 

Fans can decide how to fix the third line of the original song, “Braves on the warpath!” Either “Fight for our Commanders!” or “Leaders on a mission!”

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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