Principals

☞ White House: President Biden and Vice President Harris plan to meet with members of the Congressional Black Caucus to discuss police reform, a day after Harris called on Congress to pass the George Floyd Justice in Policing Act in remarks at Tyre Nichols’ funeral in Memphis.

☞ Chuck Schumer: Puff, puff, pass a bill? The Senate majority leader reportedly met with a small group of Democrats on marijuana legislation, which would likely include banking reforms to allow dispensaries to operate more freely.

☞ Mitch McConnell: Sen. Rick Scott, R-Fla., who made a failed bid to replace the Senate GOP leader last year, accused McConnell of retaliating by removing him from the Senate Commerce Committee. (He still has other plum panel seats). Republicans were forced to cut membership to fit new committee ratios because of the one-seat loss in the midterm elections.

☞ Kevin McCarthy: Republicans advanced the resolution to remove Rep. Ilhan Omar, D-Minn. from the Committee on Foreign Affairs even though the committee has yet to be organized. GOP leaders have said they finally have the votes to remove her, despite some surprising initial resistance from rank-and-file members.

☞ Hakeem Jeffries: The minority leader released select committee assignments naming four ranking members: Rep. Jim Himes, D-Conn. to lead Intel, Rep. Raja Krishnamoorthi, D-Ill. to lead the committee investigating China, Rep. Stacey Plaskett, D-U.S.V.I. to lead the committee investigating the “weaponization” of the federal government, and Rep. Raul Ruiz, D-Calif. to lead the committee investigating the pandemic.

The Biden-McCarthy meeting didn’t yield any breakthroughs, but both sides seemed to characterize it as constructive and the two agreed to have more conversations. McCarthy sounded somewhat optimistic, telling reporters at the White House: “I think at the end of the day we can find common ground.” But McCarthy is adamant that he wants to see a path to lower spending as part of any deal to raise the debt ceiling. The White House, meanwhile, said in its readout that Biden wants to keep the two issues apart. “The President welcomes a separate discussion with congressional leaders about how to reduce the deficit and control the national debt,” the White House said.

The Justice Department conducted a preplanned search of President Biden’s Rehoboth beach home on Wednesday and found no classified documents, according to his personal attorney Bob Bauer, who noted that some materials including handwritten notes from Biden’s days as vice president were taken by the DOJ “for further review.” The White House insists it’s been as transparent as possible without interfering in the ongoing DOJ investigation, after reports about a previously undisclosed FBI search of the Penn Biden Center in November. Asked if Biden would submit for an interview with the DOJ, outgoing chief of staff Ron Klain told MSNBC’s Lawrence O’Donnell last night that “we’re going to cooperate fully with whatever this investigation requires.”

Klain passed the torch to Biden’s incoming chief of staff Jeff Zients during an emotional White House ceremony Wednesday evening and seemed to confirm Biden’s plans to run for another term. Meanwhile, Biden is said to be preparing changes on his economic team that will see Lael Brainard and Jared Bernstein elevated to top roles, per Politico.

Border crossings plummeted in January, the Washington Post reports, as the White House implemented a new carrot-and-stick approach that cracks down on migrants from Venezuela, Cuba, Nicaragua and Haiti while offering a new path to apply for asylum with a U.S.-based sponsor.

Sen. Michael Bennet, D-Colo. is asking Apple and Google to remove TikTok from their app stores, according to a letter viewed by Semafor, making him the latest Democrat to raise national security concerns about the platform because of its Chinese ownership.

— Morgan Chalfant

Punchbowl News: Sen. John Cornyn, R-Texas wants a deal on border security, even if it means some key concessions to Democrats, but divisions in Senate GOP leadership and the new conservative-led House may make that impossible.

Playbook: Rep. Maxine Waters, D-Calif. says she’s “not optimistic” about the chances of police reform passing this Congress. The Congressional Black Caucus nonetheless wants Biden to talk about the issue during his upcoming State of the Union address and is even considering feeding him some lines.

The Early 202: Rep. Raul Ruiz seemed optimistic about working with his GOP counterpart on the select committee investigating COVID-19, Rep. Brad Wenstrup, R-Ohio. “One thing for sure that I made clear, and he agrees, is that we should take a physician, public health approach to elucidate lessons learned,” he told the Washington Post.

Joe Biden says the economy is great. He might finally be right.

THE FACTS

President Biden is aggressively pitching his administration as an economic success story as he prepares to run for re-election, even if voters aren’t quite ready to hear it yet.

The president recently offered a taste of his rah rah message during a speech in Virginia last week, where he ticked off a slew of upbeat recent news on hiring, jobs, wages, and inflation before a crowd of union steamfitters. “The Biden economic plan, because of you all, is actually working,” he said. “It’s working.”

Biden, senior staff, and allied lawmakers have continuously highlighted new high-tech battery plants tied to the Inflation Reduction Act’s tax credits, new tunnels and roads funded by the infrastructure law, and gas prices down from their peak with help from the strategic petroleum reserve. The unemployment rate is at a 50-year low, normally a cause for celebration.

For now, however, it’s a contrarian pitch to voters whose views of the economy are overwhelmingly dim. A CBS News poll last month found only 28% of respondents rated the economy as “good,” in line with other surveys.

JORDAN’S VIEW

The administration might be right, though. While there’s plenty of uncertainty, some recent signs suggest that the U.S. could be drifting toward a so-called soft landing, in which inflation cools without an economic downturn. If those trends continue, it’s possible voters will start to notice, however slowly.

First, the economy finished off 2022’s roller coaster ride relatively strong, growing at a 2.9% annual rate in the fourth quarter. Corporate earnings have been healthy, too.

Second: Inflation looks like it may finally be easing up (please knock on wood). Over the last 6 months, the Consumer Price Index has risen at just under a 2% annual rate. Even setting aside bouncing food and gasoline prices, consumer prices have significantly decelerated in the past three months, and slowing rent hikes will likely help going forward. The year-over-year inflation numbers that feature so heavily in cable news chyrons should also start looking much better once last year’s spikes are in the rearview mirror.

Even as job growth remains strong, wage growth is creeping down toward a normal pace, easing fears of a “wage-price spiral” in which businesses pass more labor costs onto consumers, who demand higher pay in return.

Third: The Fed is sounding ever slightly more dovish these days. The biggest immediate concern about the economy at the moment is that the central bank’s rapid interest rate increases, aimed at quelling inflation, will also tip the country into a recession. Chair Jerome Powell announced a quarter percentage point rate increase on Wednesday and signaled that markets should expect more. But he also celebrated the fact that the “disinflationary process has started,” said he still saw a path to a soft landing, and left open the possibility the Fed could ease up on its rate hikes if inflation keeps improving quickly.

The spate of good news has led even some notorious economic pessimists to change their tune. Former Treasury Secretary Larry Summers, who last summer argued that the U.S. might need a year of 10% unemployment to beat inflation, recently said he thought chances were rising that the country might avoid a recession after all.

ROOM FOR DISAGREEMENT

Notwithstanding some negative headlines on layoffs at major tech firms and a weird egg shortage, economic analysts mostly concede there have been positive developments lately. But they still aren’t confident it will stay that way much longer. Retail sales have sagged, manufacturing is contracting, higher interest rates have socked the housing market, and leading recession indicators in the bond market have been flashing red.

Professional forecasters see a 65% chance of a recession in the year ahead, according to the latest Bloomberg survey of economists; 98% of American CEO’s surveyed by the Conference Board anticipate the same. On this topic, the White House is at odds with both popular and elite opinion.

Even if we do tame inflation and avoid a downturn, it’s still unclear whether voters will give Biden credit for a growing, healthy economy. After all, 46% of the country — and 39% of Democrats — believe we are currently in a recession even as the job market is historically strong. Americans might not be ready to move on from their brush with forty-year-high inflation, in which case Biden might need to be ready with a backup pitch for that second term.

What to expect from the new China panel, according to its top Democrat

Flickr/COD Newsroom

If there’s anything Democrats and Republicans can agree on these days, it’s their desire to take a tougher stand on China. Semafor sat down with Rep. Raja Krishnamoorthi, D-Ill. who was just named ranking member on the new select House committee dedicated to investigating the People’s Republic. He’s promising to work closely with his GOP counterpart, Chairman Mike Gallagher, on probing Beijing’s economic, national security, and human rights record.

Here are some of the highlights from our chat.

Krishnamoorthi says he and Gallagher want to ensure the committee’s work stays bipartisan. “We want to lay out the facts — that’s the investigatory function of the committee. And then also suggest ways to move forward,” he said. “The only way I think things get done in Washington that endure are bipartisan in nature.”

He says the committee can’t afford to become a forum for anti-Asian hate — the possibility of which led some Democrats to oppose its creation. “I know that there are people in Congress who have said some rather very problematic things in the past and so we can’t allow any of that to infect the discussions of the committee,” Krishnamoorthi said.

He doesn’t want to start a new Cold War with Beijing, either. Krishnamoorthi said that while he wants to probe genuine competitive threats China may pose, it’s important to “partner on those other common challenges where we have to work together, whether it’s climate change or bringing an end to the war in Ukraine.”

He also sounds wary of restrictions on outbound U.S. investment in China, which has been a focus of both the White House and some lawmakers. “It might be something that’s worthy of study by the committee,” he said. “I don’t think we should take any broad legislative action on this particular topic unless we know the facts.”

Krishnamoorthi said he receives messages from friends and constituents from his district who are concerned about everything from intellectual property theft by China to the TikTok. “The amount of interest in this issue is very high,” he said.

— Morgan Chalfant

Stories that are being largely ignored by either left-leaning or right-leaning outlets, according to data from our partners at Ground News.

WHAT THE LEFT ISN’T READING: Rep. Andy Biggs, R-Ariz. said he would introduce articles of impeachment against Homeland Security Secretary Alejandro Mayorkas, becoming the second House Republican to do so in the new Congress.

WHAT THE RIGHT ISN’T READING: The FBI is reportedly investigating allegations that Rep. George Santos, R-N.Y. stole money from a GoFundMe campaign to raise money for a veteran’s dying dog.

One Good Text ... with Sen. Chris Coons

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— Steve Clemons