Thought of the Week:
This week, I was fortunate enough to travel to Little Rock, Arkansas. The immediate attractions were to attend a Conference Board briefing at the William J. Clinton Presidential Library, participate in several programs at the Clinton School of Public Service, and, let’s be honest, possibly spend some quality time with the 42nd president of the United States. The tour of the library offered a trip into our collective past—a time before 9/11, the offer of a two-state solution, and an era where balanced budgets were more than a pipe dream. Programs focused on communication, and how President Clinton was able to purposefully elevate speech beyond merely a transactional device to a tool that resulted in co-authored stories (without being facetious, if you were lucky enough to spend any time with President Clinton, you knew that in the moment he was with you, you actually believed he felt your pain). Although we missed President Clinton by a day, what struck me most about traveling to the state’s capital was the chance to visit Central High School to see and hear the story of the Little Rock Nine. Although I had seen the famous photo of Elizabeth Eckford hidden behind sunglasses, I didn’t know her, and her eight classmates’, story beyond it having a role in the civil rights movement. In a nutshell, the Little Rock Nine were a group of nine Black students who enrolled at formerly all-white Central High School in Little Rock, Arkansas, in 1957. Their attendance was a test of Brown v. Board of Education, a Supreme Court ruling that declared segregation in public schools unconstitutional. In September 1957, Governor Orval Faubus called in the National Guard to block the students’ entry to the school; later that month, in a move that drew national attention, President Eisenhower sent troops to escort the nine into the school. Visiting the school, a national historic landmark and still active public high school, brought their story to life in a way that hit me deeper than I ever would have expected. Sure, the park ranger who gave our group the tour was able to bring the Nine’s story to life better than any entry in a text ever could, but it’s the relevance their story still holds today, 66 years later, that I took away from the experience. Through a message delivered by our park ranger, Minnijean Brown-Trickey, one of the nine, told our group that she remembers to this day the 30 or so students (Central High School had an enrollment of 2400) who were actually nice to them; she said most did nothing and stayed silent. Her lesson was that the only way to meet the challenges of today and the future, is to have an open and honest talk about our country’s painful and shared past. President Clinton honored the Little Rock Nine in November 1999, presenting them each with a Congressional Gold Medal, our nation’s highest civilian award.
Thought Leadership from our Consultants, Think Tanks, and Trade Associations
Eurasia Group Believes Senate Democrats Will Continue Their Effort to Discredit the Supreme Court. An acrimonious walkout by Republicans did not stop Democrats on the Senate Judiciary Committee from subpoenaing two central figures in the Supreme Court’s ethics investigation. The subpoenas—of conservative judicial activist Leonard Leo and billionaire Harlan Crow—are part of a wider effort by Democrats to discredit the conservative Supreme Court and the conservative legal movement writ large, which they hope will be a winning strategy to boost Democratic turnout in the 2024 elections and undermine confidence in future decisions of the 6-3 court. Although the subpoenas will not be approved by the full Senate, the partisan drama that ensues will allow Democrats to claim that Republicans are blocking an investigation into as-yet-unsubstantiated allegations of corruption on the court.
Eurasia Group Says Speaker Johnson Saved Christmas…by Setting Up a Partial Shutdown and a Possible Sequester Next Year. For the first time in years, Congress is not facing a holiday shutdown risk; Congress is unlikely to approve any funding package before the first of two funding deadlines early next year, though, meaning that a relatively painless partial shutdown in January is likely (a 75% probability; see chart below). EG’s basecase is that Congress will eventually pass a full-year continuing resolution that, under current law, would trigger a 1% across-the board sequestration in April (a 60% probability, up from 40%); that House Freedom Caucus Chair Scott Perry (R-PA) is softening his demands for deep spending cuts suggests that a deal to avert the sequester is possible (a 40% probability), but reaching one would require concessions such as the creation of a debt commission and the rejection of side deals that Senate Democrats seek. Senate negotiations to pair border security and Ukraine aid did not continue through the weekend as initially planned, casting doubt on the path forward on a foreign aid package; there is still a 55% probability that Congress will reach a deal later this year or early next year, though that figure would likely fall if the Senate were unable to make some progress on a deal in the next two weeks.
National Association of Manufacturers (NAM) Reports on the EPA’s Finalized Methane Rule. The U.S. oil and gas industry will soon be required to detect and fix methane leaks, owing to a newly finalized rule from the EPA. The final rule, which aims to cut methane emissions by nearly 80% through 2038 and was announced at the COP28 climate summit in Dubai, will crack down on methane leaks from industry in several ways. For instance, in a major development, it will end routine flaring of the natural gas that is a byproduct of drilling oil wells and will phase in a requirement for that gas to be captured instead of burned. The rule will also require stringent leak monitoring of oil and gas wells and compressors, and cut down on leaks from equipment like pumps, storage tanks, and controllers. It will also rely on independent, third-party monitoring—using satellites and other remote-sensing technology—to find very large methane leaks. The final rule came the same day 50 major oil and gas firms pledged at COP28 to slash their methane emissions by the end of the decade. The rule will put more of the burden on individual companies to control methane emissions, including by requiring producers to upgrade equipment and to search for existing leaks rather than relying on preexisting estimates.
Highlights from Punchbowl News’ Interview with Treasury Secretary Yellen. More than two years into her job as the Biden administration’s top economic official, Treasury Secretary Yellen is contending with a House transformed by the election of the most conservative speaker in memory. The relationship between Yellen and Speaker Johnson (R-LA) is not off to a great start. In fact, Yellen hasn’t spoken to Johnson since he was elected six weeks ago. With all that’s happening in the U.S. economy and abroad, this is a bit of a shocker. Moreover, the most notable legislative strategy Johnson has employed—tying Israel aid to IRS funding cuts—prompted swift condemnation from Treasury. Secretary Yellen has the unenviable job of securing funds for Ukraine and the Middle East conflict, implementing historic climate and infrastructure investments, and reopening economic talks with China. Not to mention, she’s also trying to sell President Biden’s economic agenda to a skeptical public. Congress has not made her job easy. Ukraine aid: while Treasury has directed a full-court press to shore up political support for another multi-billion dollar supplemental request, support for the war is waning among Republicans. The deficit: Yellen acknowledged that a shifting financial environment could force policymakers to grapple with the economic effects of the U.S’s $33 trillion national debt more quickly. Interest rates are up, and recent stress in the bond market, coupled with yields near historic highs, has left policymakers wondering whether federal payments on U.S. debt could introduce a real drag on the economy’s long-term growth. Secretary Yellen argues the Biden administration is taking the deficit seriously, citing budget proposals that would reduce the deficit by a few trillion dollars over the next 10 years, but she also said a persistent elevation in interest rates would create a greater challenge. Big fiscal: debt concerns notwithstanding, Secretary Yellen said she was increasingly sure the Biden administration’s “go big” fiscal response to the pandemic was the right approach. There’s been a lot of debate in Washington about whether federal spending in 2020 and 2021 fueled inflation in 2022. Secretary Yellen thinks recent economic developments are evidence that inflation was transitory.
“Off the Record”
The latest salvo in the House GOP’s drive to impeach President Biden came this week as the Judiciary, Ways and Means, and Oversight committees jointly release an interim staff report on one of the Hunter Biden investigations; a copy of the 78-page report was obtained ahead of its release. In the quest for impeachment, Republicans have pursued two tracks: President Biden’s potential involvement in any foreign business dealings of his relatives and any interference by the Biden administration into the criminal investigation of his son. The recently released report is an update on the second line of inquiry, which was sparked by a pair of IRS agents who came forward to claim there were irregularities in the Department of Justice’s Hunter probe. The report, which contains no smoking gun, comes as the House Republicans are likely to vote on formalizing an impeachment inquiry next week and hopes to make a decision on whether to pursue articles of impeachment in January. Read the report.
In Other Words
“We love this guy! He says, ‘You’re not gonna be a dictator are ya?’ I say, ‘No, no, no, other than day one!’” former president Trump during a town hall.
“If Trump wasn’t running, I’m not sure I’d be running. But we cannot let him win,” President Biden during a campaign fundraiser
Did You Know
Vice President Harris made history by setting a new record for tie-breaking votes cast by a vice president, breaking the mark set by John Calhoun in 1832. Vice President Harris, in her role as president of the Senate, cast the recording-breaking vote, her 32nd, to advance a district judge.
Graphs of the Week
Republican Debates Conclude Without a Real Challenger. Florida Governor DeSantis and former South Carolina governor Haley failed to land knockout blows against each other in the final debate of the primary season, meaning the race between the chief competitors to former president Trump will remain tight into the Iowa caucuses. The debates failed to provide any candidate with the breakout moment needed, and Trump’s abstention turned the debates into a sideshow.