The NPR Politics Podcast - Weekly Roundup: July 29, 2022

Episode Date: July 29, 2022

President Biden scored a major legislative victory this week as West Virginia Democrat Joe Manchin agreed to back the administration's Inflation Reduction Act in the Senate. But, what could the bill do if passed, and will it help an economy some argue is either close to — or already in — a recession?This episode: political correspondent Susan Davis, congressional correspondent Deirdre Walsh, White House correspondent Franco Ordoñez, and business correspondent David Gura.Support the show and unlock sponsor-free listening with a subscription to The NPR Politics Podcast Plus. Learn more at plus.npr.org/politics Connect:Email the show at [e-mail] the NPR Politics Podcast Facebook Group.Subscribe to the NPR Politics Newsletter.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hi, this is Julie Wong in Pleasant Grove, Utah, where me and my community theater are about to go on for our opening night of The Sound of Music. This podcast was recorded at 1.05 p.m. on Friday, July 29th. Things may have changed by the time you hear it, but over here, the hills will still be alive with The Sound of Music. Okay, here's the show. The Sound of Music, it still slaps, I guess, even with the kids. I just love that there's, you know, live theater going on. Hey there, it's the NPR Politics Podcast. I'm Susan Davis. I cover politics. I'm Deirdre Walsh. I cover Congress.

And I'm Franco Ordonez. I cover the White House. And it has been a big week for the White House and for Congress, with big implications for President Biden's domestic and foreign policy agendas. Here at home, Democrats are positioning to send two significant legislative victories to President Biden's desk. And U.S.-China relations are in focus as House Speaker Nancy Pelosi may take a controversial trip to Taiwan. Deirdre, let's start on the Hill. You know, not only did Democrats pass a pretty significant bipartisan piece of legislation to boost domestic production of semiconductor chips, it's actually called the chips bill, but those are the things that power your cars, your phones and many, many other things.

There was also this big surprise deal announced this week that essentially revives some big parts of Biden's Build Back Better plan. So take a little bit of a step back and explain to us how this came together. Well, you are right. This was definitely a big surprise. I mean, I think most Democrats in Congress had sort of long given up that West Virginia Senator Joe Manchin was going to agree to much of anything just days before the deal. Sue, as you know, we've covered Manchin torpedoing various versions of... It's like his favorite thing to do is torpedo things. Exactly. And he had essentially sort of announced, look, with the sort of latest state of the

economy and inflation concerns, I'm only willing to support sort of this narrow healthcare focus bill. Democrats are pretty demoralized by that and just sort of assumed, you know, any sort of serious negotiations were sort of over for the time being, just also given the timeframe. I mean, we're heading into a long planned August recess. But just days later, unbeknownst to us, Manchin reached out to Senate Majority Leader Chuck Schumer and said, let's start talking. And we learned sort of out of the blue right after the Senate passed that big chips bill that they had come to a deal. And not only was this deal on some big issues like allowing Medicare to negotiate the price of prescription drugs, extending health care subsidies, but also a big climate package that Manchin, you know, many times over has said he could not support.

And then all of a sudden we now have, you know, $370 billion in climate spending as part of this new domestic package. And I think, you know, I was standing outside the House chamber when House Democrats were learning about this announcement, and they were all sort of a little shell-shocked and sort of wondering if they had gotten punked again by Joe Manchin, and were sort of like, I can't really say much because I don't know what's in it, and I need to actually find out if this is actually happening. Franco, this was a shock to the Hill. It was a shock to K Street, to the lobbying community that works on these energy issues. Everybody was telling everybody, climate's dead, climate's dead, move on. The president said as much on the record. Nancy Pelosi said as much on the record. Was this a shock over at the White House, too? I mean, they definitely were trying not to make it sound like it was a shock.

But, I mean, it was really interesting how Manchin kept Biden on the sidelines during all this. I mean, it was fascinating to learn over the last few days, you know, that reportedly Manchin and Biden hadn't spoken for months, you know, since the last larger spending plan fell apart. Supposedly, it was the first time they spoke was on Wednesday when Manchin was briefing the president on the deal. And Manchin even, you know, insisted to local West Virginia reporters that the president was not involved and that he didn't think it was fair to Biden in case it fell apart. And as we've just been talking about, as you guys have just noted, it falls apart a lot. I can say, you know, that Biden is very happy about it now. You know, it's really breathing some life into his stalled domestic agenda. And frankly, it could not come at a better time.

You know, he's facing some of his lowest approval ratings since taking office. And of course, it is just before the midterms when he and the Democrats really need something to campaign on. Deirdre, this is obviously huge progress, but long way to go before this becomes law, right? Right. We are still waiting for the Senate parliamentarian to sort of clear all the language and say that it's okay to use through the budget process. Joe Manchin supports it, but fellow moderate Arizona Senator Kyrsten Sinema has yet to say whether she would support the package. Senate has to go through a huge vote-a-rama process to pass it, and then it still has to get through the House. I wonder what both of y'all think about this, because this is something I've been thinking

about a lot. I mean, Democrats are really worried about what they're going to run on in the midterms, that, you know, all the things that tend to go against their favor. But they can point to a lot of things. If they are able to pass this Inflation Reduction Act, if this also becomes law, I mean, you're looking at this CHIPS bill is significant. The Inflation Reduction Act is significant. That infrastructure bill they passed was pretty significant. They've been able to pass gun legislation and the first gun legislation in a generation. Yet Biden's approval ratings still pretty much in the tank. And I don't I don't I wonder how Democrats are sort of interpreting this. Like it makes more sense when you're not getting anything done, but they are getting some stuff done. But the climate

doesn't really still tend to balance in their favor right now. I think the other thing that Democrats are starting to try to do is to pivot about what's not in this bill to talk about what's in it. For so many months, they were sort of complaining and griping amongst themselves about what they couldn't get done. And now there's this, you know, like, look, if we can save people money on prescription drugs, that's a huge deal. And if we can bring money of this legislation, right? Like reducing the cost of prescription drugs is a huge deal. This is something politicians have been talking about again for a generation. But will voters feel it in time for the election and make that connection to have some impact on their politics? I guess we just don't know. Meanwhile, there has been a lot of focus on China this week as well. Speaker of the House Nancy Pelosi may take a visit to Taiwan.

This has been a very delicate issue talked about in Washington for a lot of reasons that I'm hoping, Deirdre, you can illuminate why there's so much turmoil about this question of whether she's going to step foot there. Details about congressional delegations abroad are usually tightly held because of security reasons. But in the case of the Speaker of the House visiting Taiwan, it's even more amped up because, you know, Taiwan, you know, China considers it to be part of its territory. The U.S. doesn't have official relations with Taiwan. But, you know, Speaker Nancy Pelosi over her more than three decades in Congress has been a big sort of critic of China. And there are, you know, national security and diplomatic consequences for such a high level official in the US government second in the line

for the presidency to go and visit Taiwan and talk about the importance of self governance. She for her part is not officially talking or publicly talking at all about her trip. But we know she's expected to go to the region and could possibly stop there. But I don't think anyone should be surprised that Pelosi wants to go. She's visited China several times and caused, you know, diplomatic incidents when she's been there before. And, you know, this may be her last term as speaker, as many expect. So this is sort of a capstone to her championing pro-democracy movements in other countries. Also worth noting that some of the people publicly encouraging her to take this trip are Republicans. Right. I haven't found anyone on Capitol Hill who doesn't think she should go.

You know, House Minority Leader Kevin McCarthy said, you know, he thinks she supports the trip. I mean, he wishes it was bipartisan. And we understand that there have been efforts to get Republicans to go on the trip. We don't expect any to be part of it. But no one is criticizing her or saying she should not go. President Biden also spoke with Chinese President Xi Jinping on Thursday about the relations between our two countries. Franco, what was the takeaway from that call? Yeah, the White House painted the call as part of ongoing efforts to maintain open lines of communication between the two superpowers, you know, and there are really some big tensions over the war in Ukraine, US tariffs, and Chinese aggression in the South

Pacific. But the big takeaway was Taiwan, which Beijing sees as part of China. And, you know, the two talked about Taiwan and the differences that they see about the self-governing island. And a lot of that was likely because of the increased tension over this trip. Now, China nor Biden acknowledged that Pelosi's potential trip spurred this on, but it certainly raised the stakes because China is very concerned about that trip. After first news of that was leaked, they promised or warned that there would be a forceful response if Xi followed through with it. And after the discussion between President Xi and President Biden, you know, in the readout from China, President Xi warned Biden against meddling in China's dealing with Taiwan, though he did not specifically mention Pelosi's possible trip. Has the White House indicated either overtly or slyly how they feel about Pelosi possibly

taking this trip? I mean, the White House doesn't get to tell lawmakers where they get to go or not go, but I imagine they might have some thoughts. Yeah, that's right. I mean, they have been largely tight-lipped about the trip, but Biden did let out last week that the military was not supportive of the idea, the idea of Pelosi traveling to Taiwan, that is. And, you know, you guys were kind of talking about this. Biden has got to be careful here, especially, you know, this close to the midterms. He doesn't want to be seen as caving to China. As you noted, so many politicians have supported the idea of this trip, and really not interested in the idea of the Chinese government dictating where a U.S. leader

goes. All right, Deirdre, we're going to let you dip out for a minute, but we're going to have you back on the podcast in a little bit. Franco, stay with us. We'll take a quick break. And when we get back, we're going to take a look at the economy. And we're back and we have our friend David Gurra, who covers the markets for NPR. Hey, David. Hey, how are you? And we should note, it is your first time, not on NPR, but on the NPR Politics Podcast. So this is a very exciting day for us. Glad to be here. Thank you. Yay. Because it has been a busy week for the economy. The Federal Reserve increased interest rates by 75 basis points, a pretty big jump. And we heard from Treasury Secretary Janet Yellen that the economic picture for Americans right now is not one many have seen for a while.

They're experiencing great stress from high inflation. We simply haven't seen anything like this since the 1970s. David, what is the impact of this for regular, everyday people? Yeah, you heard the Treasury Secretary there nodding to the 70s, the 80s, a period of time that people really don't, the administration don't want people to be thinking of too much here. But you heard the Federal Reserve Chairman saying the same thing the day before when they made this interest rate decision. Things are really bad. Jerome Powell was pretty frank in his assessment of what the economy looks like. He said the labor market is too tight and

inflation is too high. And, you know, the overarching thing here is prices have continued to go up really fast and really dramatically. Prices are rising at their fastest rate in four decades, and that's hurting a lot of people. And then we're seeing this kind of broader slowdown, and that's because of the economic situation we're in. It's also because of what the Fed's doing. It's pushing up interest rates. It's slowing demand. It's cooling off the economy.

So business activity is slowing. We're seeing a slowdown kind of in consumer spending as well. Construction is slowing as a result of interest rates getting higher. People aren't as eager to buy a home if a mortgage rate is getting higher, twice what it was last year. And I caught up with Lindsey Krenz. She runs a hair salon in Jamestown, North Dakota. And I just asked her how she is looking at the economy right now. Yeah, I guess we're just being a little extra cautious right now, my husband and I, and not doing a lot of extra spending on things that aren't necessities right now, my husband and I, and not doing a lot of extra spending on things that aren't necessities right now because we are uncertain about where things are going.

I can hear that from a lot of people. That's kind of coming in the crucible of this conversation of are we in a recession or not? And I think a lot of people just feel like things are bad and they could get worse, and that is making them proceed pretty cautiously. Yeah. I mean, this debate over whether or not we're in a recession, I'm hearing it a lot on Capitol Hill. You know, obviously, people are feeling pain right now in their own pocketbooks, but a recession is a technical, economic thing. I mean, how do economists define a recession? It's a tricky thing, and this really came to the fore this week.

There is no kind of uniform definition of what a recession is, and the rule of thumb among economists is if you have two back-to-back quarters of negative growth, that's a recession. If you look at past recessions, that's preceded past recessions. So aren't we in a recession? I think a lot of economists would say by that traditional definition, yes, things are really bad. But the quirk of this moment, and this is something the administration has really emphasized over the last week, is there's something unique about this economy right now. You don't tend to have a jobs market that is doing as well as the jobs market is right now before past recessions. I mean, look back to June, 372,000 jobs were added

to the economy. That's an astonishing number. And the unemployment rate is at 3.6%. That is really close to what it was before the pandemic. So you have policymakers, politicians arguing this can't be a recession just because it doesn't look like it. Presidents. Presidents as well. Yes. President Biden coming out, making his pronouncement about this as well. And again, it's just such a funny thing where there is this technical definition, I won't call it a textbook definition, but one that economists lean on. Really what it comes down to is feeling. And we were talking about that just a moment ago, how, you know, regular folks in this country are feeling. It's also just an element of how politicians and policymakers are feeling as well. And, you know, the closest thing we got to kind of

an unequivocal statement this week was from the Fed chair at the press conference that followed that rate announcement. He was asked several times by reporters, are we in a recession? He didn't bite. He didn't bite. And then he finally did. And using the same rationale, he said, no, we're not in one again because of the jobs market and just because there still is strength in some pockets of the economy. Franco, I think it's fair to say that no president wants the economy on their watch to be compared to the 70s and 80s. That's not a good thing, right? Even as any president only has so much control over what's happening in the U.S. economy, but they do have some control over how they message it. So what is the Biden administration's message here?

And do they even have one? Because frankly, I will tell you, I've heard a lot of frustration from Democrats on Capitol Hill that the president isn't doing enough to explain this. Yeah, I mean, you know, just echoing what David was saying. I mean, one clear message this week is from the White House that the United States is not in a recession, and they are hitting that drum over and over and over again, despite obvious signs of a weakening economy, you know, and, you know, quibble as they want over the definitions. That is definitely one of their focuses, to make sure they send that message. Other than that, you know, what they want to do is do everything that they can to show that they are working on these issues. I mean, as you point out, a lot of this is out of their control. But what they can do is just make sure

that they are bringing in all their White House heavy hitters to let the American people know that they understand that they're feeling some pain and that they're working to address those things. That's why you're seeing these high profile meetings with the economic team, all these announcements about pulling oil from the strategic petroleum reserves, trying to get gas prices down. And of course, you know, the big news from yesterday on the spending package, which Biden argues will help fight back inflation. You know, it just was announced,

but I am sure, I am sure we are going to continue hearing about it over the next week with, you know, very likely, you know, provided it gets across the finish line, a big signing ceremony. And, you know, the White House wants to show that they're taking action, even when, you know, even if it's on the margins. David, are economists as excited about the possible deficit reduction promise of this legislation as much as Joe Manchin is? I think a lot of them are. And the first thing I'll say is that it's a great name. I say that really objectively. I mean, I think Inflation Reduction Act communicates really clearly to people what the goal of it is, at least. And I think that's got to be,

of course, it's deliberate, that this is something that needs to be fixed. People want the rate of price increases to go down. I think the frustration of the Fed chairman, although he is he's so mild mannered and wouldn't say so and hasn't said so at press conferences is there's a real limit to what he can do. And monetary policy can only do so much. And the Treasury Secretary said this in her comments this week. She said, you know, it's fundamentally the Fed's job to kind of focus on inflation and bringing it down. But all along throughout this crisis from the beginning of the pandemic, the Fed has kind of looked to Capitol Hill to do more. So there's monetary policy. That's what the Fed does. There's fiscal policy. That's by and large the domain of Congress with help from the White House and sort

of ushering it through. I think that economists will look at what's happening here as a sign that another part of the government is taking this seriously and trying to do something to bring inflation down. And yeah, I think that economists see that as progress and see it as sort of a more people joining this fight against something that really is having a kind of profound effect on so many people in this country. All right, Franco, as always, thanks for coming on the pod. Hope you have a great weekend. Thanks all. Have a great weekend. And David, stick around. We're going to take a quick break, but then when we come back, we're going to haze you with your first Can't Let It Go. And we're back. And it's time to end the show like we do every week with Can't Let It Go,

the part of the show where we talk about the things from the week that we just can't stop talking about, politics or otherwise. David Gurra, first time on the NPR Politics Podcast. A lot of expectation here. What can't you let go of this week? I heard Frank with the top saying he's so glad live theater is happening again. I went to a music festival last weekend in Ithaca, New York, where I went to college and I play the fiddle. I've seen you on Twitter. Videos exist. There is proof of this on social media. Anyway, I got a call like out of the blue from friends I played with in college saying, you want to come up for this music festival in the summer? And spontaneously I packed up the car

and went and slept in a tent, which was not as fun as it was when I was younger. Anyway, I made it through that, ended up playing a lot of music. And it was just like, it was really wonderful to be back in that scene, seeing some return to normalcy and seeing people really enjoying just being in the mix and hearing that kind of music. Again, I heard a lot of great bands, played some music myself. And so that has sustained me through a busy week, I shall say. Was it the first music festival you've been to since the pandemic onset? Yeah, and this is like a festival that happens every summer in Trumansburg. So outside of Ithaca, it's very crunchy. But they didn't have it last year.

So I couldn't even have gone if I wanted to. But I grew up in North Carolina going to fiddlers conventions to music festivals every summer. So it's a big part of my life. And so to not have that last summer, I really missed it. And it felt eerily normal to be among friends. Eerily normal is a good feeling. Yes, for sure. I want to hear the music though. He's like, conveniently, I have some right here. I have the fiddle right here.

I happen to be holding my fiddle, Deirdre. I didn't know that. That could be arranged. We'll find something. There it is. There it is. Oh my God. Fun.

Deirdre, what can't you let go of this week? Well, I may be delusional, but I really can't let go of the fact that I may be the next multimillionaire winner of Mega Millions. I regret to inform you that that is incorrect because I will be winning the Mega Millions later this evening. Well, I would be happy to split the jackpot with you soon. Fair. I'll agree to that. With sort of everyone on the podcast team, if I win, I would spread the love. I'm so glad I did this today. I am not making this up that I have plans with our colleague Barbra Sprunt to go buy

some Mega Millions tickets after we finish taping this podcast. Is there like a threshold when you buy a ticket? A billion. Does the jackpot have to be a certain size? A billion is when you can't. It has to be big. Yeah.

I will say that the last Powerball was like, I can't remember what it was, it was really big and I won $4 and that's enough for me to just keep playing the big jackpot.

You got the itch. It felt good. So I feel like, you know, you got to be in it to win it. Do you pick your numbers or do you let the computer

pick them? No, it's all chance. I just let them. I do too. I figure if it's all chance anyway, I just let the chances of the algorithm. Do you pay the extra dollar? There's like a thing that you can do that's like you can win more, right? Am I wrong about that?

I don't know. It's like two bucks and then maybe it could be three if you get any. If you get the ball. Boy, I'm showing myself to be a real pro at this. Yeah, we're clearly not. I'm clearly not a regular. I also, when I went to buy lottery tickets earlier in the week, I tried to play with a debit card. And the people in the lottery line laughed at me.

No, no, no. Yes. I was shamed. I learned that lesson the last time. Yeah. They're like, oh, mom's in line. So, Sue, what can you not let go of this week? The thing I can't let go of this week, you may have heard of it, but maybe not for much longer. The Choco Taco. Oh, my gosh. Facet of gas station ice cream.

Chocolate treat of my childhood. Apparently, the Klondike Company announced this week that they're going to stop making the Choco Taco. If you don't know what it is, it's ice cream in a taco-shaped shell dipped in chocolate and nuts. It's delicious. And it caused, as you can imagine, quite a reaction. I have to give credit, though, to our colleague Domenico Montanaro. He did a highly unscientific Twitter poll, and it might explain the cancellation because while people feel very fondly about Choco Tacos, none of us have really had them since we were kids. And I would include myself if I'm being honest to our listeners, because I will always be honest to our listeners. I haven't had a Choco Taco in a really long time. I'm more of just a general Klondike bar fan. Yeah, those are still good.

Those are classic. Yep. I still buy those. Take nothing for granted. It feels like Klondike could just surprise you any day now with your favorite ice cream. Oh, do not say that. Do not say that, Sue. All right. That is a wrap for us today. David Gurra, thank you so much for coming on the podcast, and thank you for your reporting. A pleasure. Thank you. Our executive producer is Mathoni Mottori. Our editors are Eric McDaniel and Christian of Calamer. Our producers are Lexi Schapittle, Alina Moore, and Casey Murrell. Maya Rosenberg is our intern, thanks to Brandon Carter. I'm Susan Davis. I cover politics. And I'm Deirdre Walsh. I cover Congress. And thanks for listening to the NPR Politics Podcast.