President Biden delivered the State of the Union. A Chinese spy balloon, as well as several unidentified flying objects discovered flying over the United States and subsequently shot down, have increased tensions between the U.S. and China. The new Select Subcommittee on the Weaponization of the Federal Government held its first hearing. The United States has reached the statutory “debt ceiling,” and negotiations have commenced between the White House and House Republican Leadership, while some look to moderate Republicans and Democrats to band together to avoid an economic catastrophe. Inflation continues to cool as the job market heats up. There is a new White House Chief of Staff. The discovery of additional classified documents at the home of President Biden, as well as former Vice President Mike Pence, raises new questions about the handling of classified material. On the eve of the five-year anniversary of the shooting at Marjorie Stoneman Douglas High School in Parkland, Florida, America suffers another mass shooting. Former South Carolina Governor and U.S. Ambassador to the United Nations Nikki Haley, formally entered the 2024 presidential race.
President Biden delivered his second State of the Union address on February 7 to a divided Congress. The address came as the President struggles with mediocre poll ratings and the White House prepares to face Congressional probes from the new Republican House majority. At the start of the address, Biden sought to strike a bipartisan and conciliatory tone, offering congratulations to the Speaker of the House, Kevin McCarthy—that was the high point of bipartisanship in the seventy-plus minute speech. A low point for decorum in the House chamber came when Republicans heckled and booed the President after he criticized some Republicans for proposing cuts to Social Security and Medicare, referencing plans floated by Senator Rick Scott (R-FL) and others—a far more aggressive display of dissent than the simple silence the opposition party has traditionally deployed during past State of the Union addresses. Nevertheless, the President offered some areas where there might be hope for bipartisan agreement, such as fighting the opioid epidemic and bolstering mental health care. But much of the night was about underscoring battlelines and previewing the contours of the 2024 presidential contest—the speech could be viewed as Biden’s opening salvo in his reelection campaign.
Health care, the economy, and infrastructure had the highest word-counts in the address. Biden leveled attacks at large corporations, “Big Pharma” and “Big Oil” to “Big Tech.” The address was also notable for what it lacked—there was not much beyond about two hundred words of the more than 7,200-word speech devoted to what is one of America’s top geopolitical threats, China. Ukraine also earned hardly a mention beyond Biden noting the presence of Ukraine’s ambassador, Oksana Markarova, and briefly touting what the U.S. has done for the country over the past year of its war with Russia. While State of the Union Addresses are often noticeably light on foreign policy matters, given the recent incursion into American airspace of a Chinese surveillance balloon and the upcoming one-year anniversary of the Russian invasion of Ukraine, the limited treatment is notable.
Printed balloons with Chinese flag are placed on U.S. flag in the shape of U.S. map outline, in this illustration taken February 5, 2023. REUTERS/Dado Ruvic/Illustration
On the eve of a visit to China from Secretary of State Antony Blinken, a suspected Chinese spy balloon was discovered over U.S. airspace. Blinken canceled the trip to Beijing over the incident and United States military aircraft downed the balloon just off the Atlantic Coast on February 4. The United States military went on to shoot down at least three more unidentified flying objects in American and Canadian airspace in recent days. On February 10, a U.S. fighter jet brought down an unidentified object over the waters of Alaska. On February 11, an American F-22 fighter shot down another object over the Yukon Territory, which borders Alaska. On February 12, an object flying at 20,000 feet was shot down over Lake Huron in Michigan. At this moment, it is unclear what the objects were, their purpose or who sent them. Nevertheless, the United States and Canada have become hypervigilant since the initial balloon incursion and the North American Aerospace Defense Command (NORAD), has adjusted its radar system to become more sensitive, sharply increasing the number of objects it detects. The Biden administration has since announced the establishment of an interagency team to look into unidentified objects in U.S. airspace. China has also accused the United States of flying high-altitude balloons over its airspace more than ten times since the start of last year, further souring diplomatic relations.
These incidents heightened tensions between the United States and China. In response to the incursions, the Commerce Department imposed new restrictions on companies tied to China’s surveillance programs and added six Chinese aerospace companies to a trade blacklist. Congress is also getting involved. Before departing for a two-week recess, the House of Representatives voted unanimously to condemn China for a “brazen violation” of U.S. sovereignty. A newly constituted House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party, under the leadership of Chairman Mike Gallagher (R-WI), will tackle a wide range of issues from the military, economy, technology and more. Some members of the committee are considering a trip to Taiwan as a display of support, a move certain to provoke a strong reaction from Beijing. House Republicans on the Science, Space and Technology Committee and Senate Democrats on the Finance Committee launched probes in recent weeks into EV and battery manufacturers, their dependency on Chinese businesses, the potential risks to national security and efforts to prevent forced labor abroad. Lawmakers are also taking aim at specific Chinese companies—Senators Marco Rubio (R-FL) and Angus King (I-ME) introduced legislation that would ban TikTok from operating in the United States, unless it cut ties with its current owner, the Chinese company ByteDance.
A new Select Subcommittee on the Weaponization of the Federal Government, under the leadership of Chairman Jim Jordan, who also chairs the House Judiciary Committee, held its first hearing on February 9. Jordan said, “We expect to hear from Americans who have been targeted by their government,” and the subcommittee is likely to probe claims that the Department of Justice, FBI and other federal agencies are biased against conservatives. The first hearing featured testimony from from current and former lawmakers—former Democratic Congresswoman Tulsi Gabbard (D-HI), Senator Charles Grassley (R-IA) and Senator Ron Johnson (R-WI)—who outlined an array of concerns ranging from smear campaigns organized by Hilary Clinton, to “partisan media and Democratic leadership,” and the investigations and impeachments of former President Donald Trump.
Congressman Jamie Raskin (D-MD), ranking member on the House Oversight Committee, also testified. Jordan promised new findings in the weeks ahead, including hearings featuring government officials, F.B.I. whistle-blowers, and members of the media.
The U.S. hit the statutory borrowing limit, known as the debt ceiling, set by Congress on January 18. In a letter to House Speaker Kevin McCarthy, Treasury Secretary Janet Yellen informed him that the nation’s outstanding debt is at its statutory limit of $31.4 trillion and that the agency will implement extraordinary measures so it doesn’t default on its debt, which would have enormous consequences on the US economy, global financial stability, and many Americans. Yellen said the measures would last through June 5. We are in an era of political brinksmanship; the solution to the debt ceiling drama is squarely in the hands of Congress and fears are growing that the partisan bickering could result in the nation defaulting on its debt for the first time ever—or coming dangerously close to doing so. Hardline Republicans in the House of Representatives have demanded that lifting the borrowing cap be tied to spending reductions. These hardliners have enormous sway due to Speaker McCarthy’s slim majority. The White House countered that it would not offer any concessions or negotiate on raising the debt ceiling and has pushed McCarthy to show the president his budget.
On February 1, Biden and McCarthy met at the White House to discuss the matter—McCarthy said it was a “first good meeting” and the White House called the meeting a “frank and straightforward dialogue.” Both sides viewed this initial meeting as the first of many over the next several months; an opportunity for both sides to size each other up and establish a starting point for talks that could drag well into the spring and summer. Outside of the negotations between the White House and House Leadership, there is speculation over how moderate House Republicans might band together with House Democrats to avoid a catastrophic default, whether through a discharge petition or other obscure House procedures that could allow a bipartisan coalition to skirt conservatives’ spending-cut demands.
Coming up next, the White House plans to release its budget proposal on March 9, and House Republicans, under the leadership of newly installed House Budget Committee Chair Jodey Arrington (R-TX), will then have to draft their own budget plan. This will be a real test for McCarthy and his slim House majority—it is one thing to call for fiscal responsibility, it’s another to be the political face of program cuts.
The Federal Open Market Committee (FOMC) raised the short-term federal funds rate by 25 basis points, or 0.25%, to a target range of 4.50% to 4.75%, on February 1. This was the eighth straight rate hike since the Federal Reserve began a program of tightening borrowing costs last year in an effort to bring down inflation. At the Fed’s last meeting in December, it raised rates by 50 basis points, which represented a slowdown from previous policy decisions. Prior to the December meeting, the FOMC had raised short-term rates by 75 basis points for four consecutive meetings. Inflation appeared to have peaked in 2022, with the Consumer Price Index (CPI) having dropped every month since June, landing at 6.4 percent annually in January (a decline of 2.7% from the peak reached in the 12-month period ending in June), and the Fed has somewhat softened its hawkish stance. Nevertheless, although inflation has moderated recently, it is still elevated—at a news conference following the February 2023 FOMC meeting, Federal Reserve Board Chairman Jerome Powell stated, “That’s not grounds for complacency. Although inflation has moderated recently, it remains too high.” The most recent CPI also showed that inflation picked up on a monthly basis last month, with core inflation, which excludes volatile food and energy prices, coming in at 0.4 percent on a month-to-month basis, offering continued reasons for concern and indicating that the pathway toward low inflation may be bumpier than advertised so far.
As inflation shows signs of cooling, the labor market is heating up. In January, the latest jobs report from the Department of Labor shocked analysts and vastly exceeded expectations, showing that the labor market added over 500,000 jobs and the unemployment rate dropped down to 3.4 percent, the lowest level in five decades. This tops the monthly average gain of 401,000 in 2022, a year that already had outsized job growth. This tight labor market cooled expectations that the U.S. central bank was close to pausing its monetary policy tightening cycle.
The FBI searched the Wilmington, DE and Rehoboth Beach, DE, homes of President Joe Biden as part of their investigation into how sensitive documents came to be found at Biden’s personal office in Washington and home in Wilmington. The latest developments in Biden’s case fit the bigger picture of a White House that has been cooperating with the Justice Department from the start, and one that’s tried to avoid the perception that Biden is unduly influencing the investigation. In part to maintain an air of distance, the Biden inquiry is now being led by Robert Hur, a special counsel appointed by Attorney General Merrick Garland, who officially began work on February 1. That means two special counsels are running parallel but separate investigations into a current and a former president. Garland appointed special counsel Jack Smith to investigate whether Trump broke laws by mishandling classified materials (the FBI recovered hundreds of documents marked as classified from Mar-a-Lago) and obstructed justice by not cooperating with the investigation. Whatever the facts of the Biden documents case, and regardless of evidence that suggests that Trump’s transgressions are far greater than that of Biden, House Republicans have a new opening they can use to damage the president. House Oversight Committee Chairman James Comer is already making noise. In addition to Trump and Biden, representatives for former Vice President Mike Pence told the National Archives that a lawyer had found “a small number of documents bearing classified markings” at Pence’s Indiana home in January. The National Archives then contacted the FBI, which worked with Pence’s legal team to hand over the documents. During a subsequent search of Pence’s residence, approximately three weeks after his attornies contacted the National Archives, the FBI found additional classificed documents. All of this points to a larger, more systemic problem with the handling of classified materials by former officials. The National Archives sent a letter to representatives of former presidents and vice presidents from the last six presidential administrations covered by the Presidential Records Act (PRA)–from former President Ronald Reagan’s White House to the present— formally asking these former presidents and vice presidents to re-check their personal records for any classified documents or other presidential records.
Valentine’s Day marked the five-year anniversary of the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, where 17 people were murdered and another 17 injured. The massacre ignited a wave of student-led protests across the country. Despite this activism, the scourge of mass shootings continues in the United States. On the eve of this notable anniversary, another shooting on an American campus left three dead and five wounded at Michigan State University. So far this year, there have been at least 67 mass shootings in the United States—attacks in which four or more people are shot, not including the assailant—according to the Gun Violence Archive.
Former South Carolina Governor and U.S. Ambassador to the United Nations, Nikki Haley, formally entered the 2024 presidential race on February 14. Haley is the first to officially challenge former President Donald Trump, who announced his candidacy in late 2022. Haley’s announcement, provided in a tweeted presidential campaign launch video, highlighted the theme of generational change and her background as the child of Indian immigrants.
She also noted that, “Republicans have lost the popular vote in seven out of the last eight presidential elections.” Certainly a dig at Trump who lost the popular vote in both his runs for the White House. It is still early in the 2024 nominating contest and more are expected to enter the race, including Senator Tim Scott, also of South Carolina, former Secretary of State Mike Pompeo, former Vice President Mike Pence, and Florida Governor Ron Desantis.
Department of Commerce – Miguel Estien is the Counselor to the Deputy Secretary.
Department of Defense – Brendan Owens was confirmed as Assistant Secretary Energy, Installations and Environment.
Department of Labor – Secretary Marty Walsh has resigned.
Department of Transportation – Kara L. Fischer is now deputy chief of staff for policy in the Office of the Secretary.
Department of State – Julie E. Turner has been nominated as Special Envoy on North Korean Human Rights Issues. Elizabeth Allen was nominated as Under Secretary of State for Public Diplomacy. Jasmine J. Wyatt is now Deputy Chief of Staff at United States Mission to the United Nations. The following ambassadorial nominations have been submitted to the Senate: Robin Dunnigan for Georgia; Lisa A. Johnson for Lebanon; Cindy Kierscht for Djibouti; Dave Kostelancik for Albania; and Heather Roach Variava for the to the Lao People’s Democratic Republic.
United States Trade Representative – Doug McKalip is now Chief Agricultural Negotiator.
The White House – Jeff Zients is now chief of staff. Natalie Quillian is now deputy chief of staff. White House Communications Director Kate Bedingfield will leave the White House at the end of February. Federal Reserve Vice Chair Lael Brainard will replace Brian Deese as director of the National Economic Council (NEC). Bharat Ramamurti, currently deputy director of the NEC, will also serve as advisor for strategic communications. Joelle Gamble is deputy director of the NEC. Heather Boushey, currently a member of the Council of Economic Advisers, is now Chief Economist to the Invest in America Cabinet.
Sarah O. Ladislaw is Senior Director for Climate and Energy on the National Security Council. Mary Frances Repko is now Deputy National Climate Advisor. RDML Eileen H. Laubacher, USN is now a Special Assistant to the Assistant to the President for National Security Affairs on the National Security Council staff. Rebecca E. Wexler is a Senior Policy Advisor for Data and Justice in the Office of Science and Technology Policy. Jessica L. Schubel is now Special Assistant to the President for Health Care on the Domestic Policy Council. Loren DeJonge Schulman is now Associate Director for Performance and Personnel Management at Office of Management and Budget. Zach Butterworth, director of private sector engagement, is leaving his post at the White House.
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