Welcome to The Hill’s Morning Report. It’s Thursday! Our newsletter gets you up to speed on the most important developments in politics and policy, plus trends to watch. Co-creators are Alexis Simendinger and Al Weaver (CLICK HERE to subscribe!). On Twitter, find us at @asimendinger and @alweaver22.
Fears of a looming U.S. recession became painfully evident on Wednesday as warning signs of a slowdown flashed around the world.
U.S stocks suffered their worst day of losses this year — sending the Dow Jones Industrial Average down 800 points — after turmoil in the U.S. bond market and weak economic data from Germany and China raised the odds of a worldwide contraction.
{mosads}The market plunge reflects a collective assessment that economic projections for slower growth next year could lurch into contraction, ending more than a decade of U.S. expansion following the 2008 global financial crisis (The Hill).
Analysts pointed to worrisome indicators that another recession, long considered inevitable, may be nearer than imagined just a few months ago.
The yield on the benchmark 10-year Treasury note on Wednesday briefly broke below the 2-year rate, a phenomenon seen as a warning of tumult ahead. Investors rushed for cover in long-term, safe-haven assets (CNBC).
Analysts are debating whether a shock that may have snuffed out a lengthy expansion came from President Trump’s trade war with China or a mistake by Federal Reserve policymakers last winter. Trump has pointed to monetary policy set by the Fed as a problem, while the central bank has argued that its toolbox is ill-suited to fix tariff tensions (Reuters).
Wednesday’s market drop felt like whiplash a day after a 1.5 percent gain, driven by the White House decision to retreat for the rest of the year from Trump’s threatened next round of tariffs on Chinese imports. The announcement reflected concern that U.S. consumers, the undisputed engine behind U.S. growth, are critical to the holiday shopping season.
But there is increasing evidence that the fight between the two largest economies over trade, technology and economic dominance has already done significant damage to the world economy (The New York Times).
Germany reported on Wednesday that its economy shrank in the last quarter. If the next quarter is in decline, it means the eurozone’s largest economic engine is in recession. New indicators reported on Wednesday showed that China’s economy is slowing.
Neil Irwin of The New York Times explains that the turmoil reflects many factors around the world, including political dysfunction, uncertain policymaking and international conflicts: “The shift in the bond market since late July, and especially on Wednesday, signals something bigger is going on. The trade war is just one piece of it.”
A U.S. recession in 2020 would reshape the presidential contest and, if history is a guide, significantly weaken Trump’s chances for reelection. It could also cast a different light on Democratic candidates’ policy prescriptions and voters’ views of their executive experience and economic advisers. The president has unabashedly claimed credit for the stock market when it climbed, and he will find it difficult to dodge blame if investments plummet, growth stalls and employers shed workers.
“Our country now has the hottest economy anywhere in the world,” Trump assured plant workers in Pennsylvania this week. “Our economy is roaring.”
LEADING THE DAY
POLITICS & CAMPAIGNS: The Democratic presidential primary field is likely to shrink today as former Colorado Gov. John Hickenlooper is expected to end his bid for the party’s nomination, bringing the field to 23 candidates (The Associated Press).
Hickenlooper has struggled throughout his campaign and has been unable to gather momentum, including in two forgettable debate performances, creating problems for him to qualify for the next round of Democratic debates in mid-September.
According to CNN, it remains unknown whether Hickenlooper will jump to run for the Senate in Colorado against Sen. Cory Gardner (R-Colo.), who is among the most vulnerable Senate Republicans up for reelection next year. Senate Minority Leader Charles Schumer (D-N.Y.) has been prodding him for months to launch a bid against the incumbent Republican.
Although Hickenlooper has repeatedly said he isn’t cut out to serve in the Senate, he has warmed to the idea of running for the Senate, and he has plenty of time to consider his options. The filing deadline for Hickenlooper to jump in the race is not until March 17, 2020 ahead of a late June primary contest.
“He would win,” said Sen. Michael Bennet (D-Colo.) told MSNBC about Hickenlooper’s chances against Gardner if he were to make that decision. Bennet was appearing on “The Last Word with Lawrence O’Donnell” late Wednesday when news broke of Hickenlooper’s impending announcement.
“He’s right where the state is on a whole range of issues and he left office as popular as he came into office,” Bennet told the host. “We obviously have to win the Senate seat in Colorado. That’s critical.”
> Trump in N.H.: The president is making a foray into New Hampshire, a state he lost in 2016, today as he holds out hope to flip the state’s four electoral votes in a bid to increase his chances of winning reelection next year.
As Reid Wilson writes, Trump is making a rare appearance in a state in which he fell short in 2016, having lost the Granite State to Democratic nominee Hillary Clinton in 2016 by only 2,800 votes, the closest margin of any state in the U.S. Since the 2018 midterms, the president has not held a campaign event in any blue state, opting to woo voters in the key states that propelled him to the presidency — Wisconsin, Michigan, Pennsylvania, and Florida, to name a few.
However, New Hampshire is not like other states that went for Clinton in 2020, most of which Trump has little hope of flipping next year.
{mossecondads}Under ordinary circumstances, Trump’s campaign should see New Hampshire as a prime target to expand his base. Since he took office, New Hampshire has added about 20,000 jobs and its unemployment rate is down to 2.5 percent, close to its lowest mark ever. However, he finds himself underwater in polling in the state and in need to reach out to a group of Republicans that have largely spurned him, but continue to support New Hampshire Gov. Chris Sununu: Country club Republicans.
“Trump needs to improve in the more moderate, lean-GOP areas like Bedford and Amherst to win [New Hampshire],” said Mike Dennehy, a longtime Republican strategist who steered the late Sen. John McCain’s (R-Ariz.) two winning primary campaigns in New Hampshire. “Bedford is actually heavily Republican, but swing voters who are lean GOP are the ones who Trump needs to connect with.”
Sununu outperformed Trump in 2016 by over 8,000 votes, largely by winning over country club Republicans and a growing number of voters who reside in the state while commuting to Boston for work.
The Associated Press: Trump’s New Hampshire struggle: Voters feeling ‘Trumpgret.’
The Hill: Corey Lewandowski to join Trump at NH rally amid Senate bid speculation.
Politico: ‘Corey is a political hack’: Lewandowski Senate bid hits backlash in N.H.
> Beto back on trail: Former Rep. Beto O’Rourke (D-Texas) is looking to jumpstart his presidential campaign with a speech later today in his hometown of El Paso nearly two weeks after the mass shooting there that rocked the community and as O’Rourke has stayed off the campaign trail.
As Niall Stanage writes, after seeing his campaign fall flat throughout the spring and summer, O’Rourke is hoping to recapture the excitement that surrounded his Senate campaign last year, turning him into an overnight sensation before his loss to Sen. Ted Cruz (R-Texas) last fall.
But O’Rourke has catapulted back into the national spotlight in the most tragic circumstances imaginable — the Aug. 3 mass shooting in his hometown that left 22 people dead. Since then, the former Texas congressman has laid the blame at Trump’s feet for the rhetoric aimed at immigrants and has slammed the president at every turn, including in one back-and-forth with a reporter.
“I thought his response came across as very genuine,” said Keir Murray, a Texas-based Democratic strategist. “He was in a unique position to offer the response that he did because it is his city. It is a fine line and I think he largely walked it pretty well, and he did demonstrate some of his strengths.”
Today’s speech is expected to serve as his return to the campaign trail and will reportedly center on three key themes: racism, white supremacy and guns. It will start at 9:15 a.m. EDT.
The New York Times: Many Democrats love Sen. Elizabeth Warren (D-Mass.). They also worry about her.
The Washington Post: Sen. Kamala Harris (D-Calif.) outlines plan to boost efforts against suspected domestic terrorists.
The Hill: Deepfake videos may have an unwitting ally in U.S. media.
The Hill: Ex-CIA chief worries campaigns falling short on cybersecurity.
> Biden slowdown?: Allies to former Vice President Joe Biden have been floating the idea about slowing down the former vice president’s schedule in an effort to reduce the gaffes he has made in recent days. The allies, growing increasingly nervous about Biden’s misstatements, have said it’s an idea that’s been suggested to campaign officials in recent days.
“He needs to be a strong force on the campaign trail but he also has to pace himself,” said one ally who has talked to members of the campaign team and others in the broader Biden World about a future strategy. They ally said it was unclear whether the campaign would make any changes to Biden’s schedule. But it appeared that they would not (The Hill).
The Hill: 2020 Democrats fight to claim President Obama’s mantle on health care.
***
CONGRESS: Much to the chagrin of Republicans, Rep. Steve King (R-Iowa) is at it again.
King added to his lengthy list of incendiary remarks on Wednesday when he attempted to defend anti-abortion legislation with no exceptions for rape or incest while speaking to a group in Urbandale, Iowa, asking if there would “be any population of the world left” if rape and incest had not occurred in history (The Hill).
“What if we went back through all the family trees and just pulled those people out that were products of rape and incest? Would there be any population of the world left if we did that?” he said at the event.
“Considering all the wars and all the rapes and pillages taken place and whatever happened to culture after society? I know I can’t certify that I’m not a part of a product of that,” King continued.
The backlash was swift from both sides of the aisle. Rep. Liz Cheney (R-Wyo.), third in line in the House GOP leadership responded shortly after his remarks were reported by the Des Moines Register, saying “it’s time for him to go,” adding that the comments were “appalling and bizarre.”
“Today’s comments by @RepSteveKingIA are appalling and bizarre,” Cheney tweeted. “As I’ve said before, it’s time for him to go. The people of Iowa’s 4th congressional district deserve better.”
Democratic presidential candidates also came out swinging against the longtime Iowa congressman. Sens. Cory Booker (D-N.J.) and Kirsten Gillibrand (D-N.Y.) called on King to resign from Congress.
King is facing one of his toughest reelection cycles of his electoral career. He is facing a high-profile primary challenge from Randy Feenstra, a state senator, who announced his campaign a day before King was quoted in The New York Times saying, “White nationalist, white supremacist, Western civilization — how did that language become offensive?” The remarks resulted in him getting kicked off all of his congressional committees.
If he gets past Feenstra in the primary, he is staring down a rematch against Democrat J.D. Scholten, who he defeated by only 3 points in November, the closest race in his congressional career.
Jonathan Allen: The GOP would like Steve King to kindly shut up.
> Guns latest: The White House is in talks with lawmakers from both parties on gun control proposals, hoping for a plan of action before lawmakers return to Washington in September.
As Juliegrace Brufke and Peter Sullivan report, administration officials and senior staffers in both chambers are in early discussions about which bills are likely to see movement, and which ones the White House might support.
“I think the wheels are spinning pretty quickly right now on gathering a lot of this information,” a source familiar with the discussions told The Hill. “So I think the goal would be to have something ready by the end of the month or at least by the time Congress comes back — have some sort of a better picture.”
The New York Times: Trump weighs action on gun control. But it’s still a theoretical discussion.
The Hill: Pelosi vows no U.K. free trade deal if Brexit undermines Good Friday accord.
IN FOCUS/SHARP TAKES
WHITE HOUSE & ADMINISTRATION: Director of National Intelligence Dan Coats officially departs today after more than two years on the job, and his deputy, Sue Gordon, also resigned as of today, leaving behind an agency buffeted by management upheaval as Trump assembles an intelligence team more to his liking.
Joseph Maguire takes over as acting director, drawing on counterterrorism expertise and 36 years of military service. As Morgan Chalfant reports, those who have worked with the retired vice admiral say he’s up to the task and won’t automatically bend to the president’s instincts, as some in the intelligence community fear. Senators from both parties expressed regret that Coats and Gordon resigned. It puts pressure on Maguire, who could soon be succeeded by a Trump nominee for the post (The Hill).
> Transportation: The Trump administration has taken a step closer to relaxing federal regulations governing the amount of time truck drivers can spend behind the wheel, a move that was long sought by the trucking industry but opposed by safety advocates who warn it could lead to more highway crashes. The department’s Federal Motor Carrier Safety Administration issued proposed changes on Wednesday to the “hours of service” rules that dictate breaks truckers are required to take, and their time on and off duty (The Associated Press).
> Department of Agriculture is giving away $1.2 billion in foods and food products purchased by the government from U.S. farmers hurt by the tariff war the administration launched with China. The “trade mitigation” free food destined for school districts includes items such as canned kidney beans, pulled pork, apples and oranges. Other recipients of the taxpayer-funded generosity: child nutrition programs and regional food banks for the needy (The Associated Press).
The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@digital-staging.thehill.com and aweaver@digital-staging.thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!
OPINION
Criminal justice alternative could shrink the domestic terror threat, by Meryl Chertoff, executive director of the Aspen Institute, opinion contributor, The Hill. https://bit.ly/31BrQqw
Why Republicans should think twice about increasing presidential power, by former Rep. Steve Israel (D-N.Y.), opinion contributor, The Hill. https://bit.ly/33A7jo0
WHERE AND WHEN
Hill.TV’s “Rising” at 9 a.m. EDT features Sara Nelson, international president for the Association of Flight Attendants, to talk about how some labor unions are splitting with Biden over “Medicare for All”; Chris Jacobs, founder & CEO at Juniper Research Group, to discuss problems with a single-payer health care system; and Philip Mudd, former deputy director at the CIA’s counterterrorism center, to speak about his new book, “Black Site.” Find Hill.TV programming at http://digital-staging.thehill.com/hilltv or on YouTube at 10 a.m.
The House and Senate continue to meet in pro forma sessions but are not scheduled to return for votes until Sept. 9.
The president departs his home in New Jersey to headline a 7 p.m. reelection rally in Manchester, N.H.
Secretary of State Mike Pompeo meets with Lebanese Prime Minister Saad Hariri at the State Department at 3 p.m.
Economic indicators: The Federal Reserve at 9:15 a.m. releases its report on industrial production in July, and the Census Bureau at 8:30 a.m. reports on retail sales last month.
The Working Families Party hosts a live question-and-answer session for voters at 8 p.m. ET with presidential candidate Julián Castro, a former secretary of Housing and Urban Development. Information HERE.
“Woodstock: The Director’s Cut,” originally filmed at the 1969 festival, is showing in theaters nationwide just one time tonight at 7 p.m. local (3 hours and 44 minutes!). Directed by Michael Wadleigh, the film enjoys its first nationwide screening since its 1970 release and includes special added footage of Janis Joplin and Jefferson Airplane. Find theaters HERE.
ELSEWHERE
➔ Philadelphia: A gunman is in custody after they opened fire on police Wednesday as officers were serving a drug warrant in a Philadelphia neighborhood, wounding six officers and triggering a standoff that extended into the evening, including a hostage situation, authorities said. Two other officers were still trapped inside the house for nearly five hours, but were freed by a SWAT team late Wednesday. All six officers who were hit by gunfire were released from area hospitals, according to Philadelphia police Sgt. Eric Gripp. “It’s nothing short of a miracle that we don’t have multiple officers killed today,” Philadelphia Police Commissioner Richard Ross said (The Associated Press).
➔ Jeffrey Epstein: An autopsy found that Jeffrey Epstein had multiple neck fractures, including a broken hyoid bone, which is near the Adam’s apple. However, while that fracture can happen from hanging, it is more common in homicide victims who are strangled, leaving more unanswered questions about the death of the multimillionaire convicted sex offender (The Washington Post).
➔ United Kingdom: A showdown in parliament is brewing as Britain’s opposition Labour Party vows to call a vote of no-confidence in Prime Minister Boris Johnson’s new government as soon as it believes it can win it. The Labour Party seeks to form a temporary government under leader Jeremy Corbyn to delay Brexit, while Johnson insists Great Britain will exit the European Union on Oct. 31 with or without a transition plan (Reuters).
➔ Medicine: The Food and Drug Administration on Wednesday approved a new antibiotic for highly drug-resistant tuberculosis, the world’s leading infectious cause of death. The disease kills 1.6 million people a year, including 500,000 who succumb from drug-resistant strains. The antibiotic, called pretomanid, was developed by a nonprofit group called TB Alliance at a time when few companies are investing in the expensive and unprofitable push to find effective next-generation antibiotics (The Washington Post).
➔ In the Know: Former President Obama on Wednesday shared his summer reading list on Facebook, offering an appreciative reader’s embrace to novelist Toni Morrison, who died this month at 88. Obama’s recommendations include a range of fiction and non-fiction and subjects that range from mass incarceration to the internet’s impact on society (The Hill).
THE CLOSER
And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by the 50th anniversary of Woodstock this weekend, we’re eager for some smart guesses about music and the American mood during the summer of 1969.
Email your responses to asimendinger@digital-staging.thehill.com and/or aweaver@digital-staging.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 the original purpose of “Three Days of Peace and Music,” as conceived by organizing partners John Roberts, Joel Rosenman, Artie Kornfield and Michael Lang?
- Protest the Vietnam War
- Generate material for an art house film
- Make enough money to build a recording studio in Woodstock, N.Y.
- Impress their girlfriends
The legendary free music festival attracted between 400,000 and 500,000 people to farm fields in Suffolk County, N.Y. But Woodstock was conceived as an ambitious weekend event with hoped-for ticket sales. How many advance tickets had the organizers sold before masses of young people showed up and the event became a free happening?
- 200
- 2,000
- 50,000
- 186,000
The Woodstock weekend opened and closed with — ?
- Janis Joplin and Joan Baez
- Richie Haven and Jimi Hendrix
- The Jeff Beck Group and Iron Butterfly
- The Who and Santana
The festival experienced which of these challenges?
- Miserable rainy weather
- Insufficient restrooms and first aid stations
- Acoustics that rendered the music hard to hear for a massive crowd
- Abundant recreational drugs but scarce food and water
- All of the above
What public exposure served to really cement impressions and appraisals of the 1969 festival? (Hint: A clue appears elsewhere in our newsletter today.)
- Radio
- Woodstock album
- 1970’s Oscar-winning documentary “Woodstock”
- Rolling Stone magazine
