Happy Friday! The White House is still trying to manage the fallout from yesterday’s special counsel report on President Joe Biden’s handling of classified material and, more to the point, its politically damaging — and, as some have suggested, perhaps politically motivated — descriptions of the president’s memory.
Here’s what else we’re watching while marveling at the stock market and waiting for 6:30 p.m. on Sunday.
Senate Plods Along on $95 Billion Ukraine-Israel Aid Bill
The Senate is trudging ahead in its effort to pass a $95.3 billion package of foreign aid and humanitarian assistance. A day after clearing the first big procedural hurdle toward passing the bill, the Senate is set to take the next step to advance the legislation. But passing the bill may still take days as Republican Sen. Rand Paul objects to speeding the process. Senators are expected to work through the weekend before a final vote next week.
Senate Majority Leader Chuck Schumer said earlier in the day that he hoped to still reach an agreement with Republicans on amendment votes. “Democrats are willing to consider reasonable and fair amendments here on the floor, as we’ve shown on many occasions in the past three years,” Schumer said on the Senate floor. “Nevertheless, the Senate will keep working on this bill until the job is done.”
He said that the next vote would happen around 7 p.m. ET, barring a time agreement with Republicans.
Senate Minority Leader Mitch McConnell advocated for the bill Friday, again arguing that additional funding for Ukraine is “an investment in cold, hard U.S. interests” and not charity. “I mean quite literally spending tens of billions of dollars here in America, upgrading our capabilities, creating American manufacturing jobs, and expanding our defense industrial capacity to help us better compete with advanced adversaries,” McConnell said.
He noted that nearly $20 billion of the funding for Ukraine will be spent in the U.S. on replenishing the nation’s arsenal, $15.4 billion will be spent in America on weapons for Ukraine and another $3.5 billion will be spent domestically to expand production capacity. “Overall, even accounting for direct assistance sent to allies like Israel, more than 75% of this legislation is bound for investments right here in America,” McConnell said. “And more than 60% of it goes to the defense industrial base, where increasing capacity is a direct investment in long-term strength abroad and prosperity here at home.”
He added that the Senate bill also requires the president to detail objectives, requirements and metrics for the aid to Ukraine and funds an inspector general to help monitor how U.S. funding is being used.
The bottom line: The Senate looks likely to pass the bill next week, but it’s still unclear whether Speaker Mike Johnson will allow it to come to a floor vote given significant House Republican opposition to providing more aid for Ukraine.
Inflation a Bit Lower in December Than First Reported
The consumer price index rose 0.2% in December, an improvement on the 0.3% level cited in the initial report, according to revised numbers provided by the Bureau of Labor Statistics Friday.
However, the inflation reading for November was revised upward by one-tenth of a percentage point, from 0.1% to 0.2%. And the 3-month annualized inflation rate was adjusted from 1.8% to 1.9%.
The core inflation rate, which leaves out volatile food and fuel prices, remained unchanged at 0.3% on a monthly basis in December, and 3.3% on a yearly basis.
As CNBC’s Jeff Cox notes, the change in the broader price index in December is small, but the updated data confirms that inflation was easing at the end of 2023 while providing another bit of information that will inform the Federal Reserve’s decision to start cutting interest rates at some point this spring or summer.
“Today’s data primarily serves to solidify the market’s perception that Powell has made significant progress on inflation and therefore rate cuts will be in the offing, if not in March, then May or June,” Ian Lyngen of BMO Capital Markets said in a note, per Bloomberg.
Biden Administration Puts $5 Billion Toward Advanced Computer Chips
The White House said Friday that it is investing $5 billion in a new program focused on developing advanced computer chips, with funding provided by the CHIPS and Science Act of 2022.
The money will establish a public-private consortium for the National Semiconductor Technology Center, which focuses on the research and development of computer chips, as well as workforce training within the sector.
In a fact sheet, the Biden administration noted that the semiconductor was invented in the U.S., but the country now produces less than 10% of the global supply. The drop in production has been accompanied by a significant decline in R&D spending, which previously had been funded in large part by the federal government.
“Under President Biden’s Investing in America agenda, the CHIPS and Science Act aims to change that by making a historic investment in U.S. semiconductor manufacturing, research and development (R&D), and the workforce,” the White House said.
The White House said the CHIPS R&D program includes $11 billion in total funding for an alphabet soup of four programs: NSTC; the National Advanced Packaging Manufacturing Program (NAPMP); the CHIPS Metrology Program; and the CHIPS Manufacturing USA Institute.
Industry leaders gathered at the White House Friday to celebrate the announcement. “This is an inflection point in the industry,” Commerce Secretary Gina Raimondo said. “Not just because we’re dangerously dependent on one country for so many of our chips, but because AI is going to lead to an explosion of demand for chips, for sophisticated chips, more energy-efficient chips, cost-effective chips.”
Fiscal News Roundup
- Rand Paul Vows to Drag Out Senate Effort to Pass $95 Billion Foreign Aid Package – CNN
- Speaker Johnson in Increasingly Tough Spot on Ukraine – The Hill
- Tempers Flare After Graham Accuses Sinema of ‘Half-Ass’ Border Effort – The Hill
- Senate GOP Campaign Chief Challenges McConnell Over Ukraine, Border Strategy – The Hill
- Republicans ‘Shameful’ for Blocking Ukraine Aid, Says Australia’s Tony Abbott – Politico
- Hawley Proposes Adding New Radiation Compensation Amendment to Foreign Aid Supplemental – The Hill
- Democrats: The Economy’s Great! Republicans: Are You Kidding Me? – Politico
- US CPI Revisions Confirm Inflation Progress at End of Last Year – Bloomberg
- Recession Fears Evaporate in New Forecast of Top Economists – MarketWatch
Views and Analysis
- The Trumpification of the Senate GOP – Leigh Ann Caldwell and Theodoric Meyer, Washington Post
- Move Aside, Johnson and McConnell. Trump Is Now in Charge – Eugene Robinson, Washington Post
- Dumb and Dumber: Mike Johnson Is Even Worse Than Kevin McCarthy – Michael Tomasky, New Republic
- Can America Survive a Party of Saboteurs? – Paul Krugman, New York Times
- Congress’ Dwindling Numbers — and Returns – Jason Dick, Roll Call
- Three Key Strategies for Localities to Maximize a Surge of Federal Investment – Rip Rapson and Alan Berube, The Hill