The Morning Report – Will Biden’s oil release work?
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President Biden delivered a message about U.S. gas prices on Thursday that Democrats favor, according to recent polls, but Republicans, some economists and many in the oil and gas business are swift to challenge.
“Our prices are rising because of Putin’s action,” the president said while outlining a plan to lower gas prices and ease inflation. “Putin’s price hike is hitting Americans at the pump,” he said, blaming Russian President Vladimir Putin for waging a war in Ukraine that invited global sanctions. Those punishments, which the president said are “the right thing to do,” boomerang to become shortages in the United States and other parts of the world.
“There isn’t enough supply,” Biden said as he repeated his explanation that Americans are hit at the gas pump because of Russia. Other culprits responsible for the onset of petroleum production shortages, he said, are oil industry executives and companies unwilling to pump more oil to help ease consumer gas prices because, he asserted, they want to “exploit the situation, sit back, ship those profits to the investors while American families struggle to make ends meet.”
In a complex global petroleum market, Biden has little power to significantly dampen world demand, which the pandemic briefly did in 2020, or increase petroleum supply fast enough to lower U.S. gasoline prices quickly. Even the president’s announcement that he approved the largest release ever from the U.S. Strategic Petroleum Reserve (SPR) — up to 1 million barrels of oil per day for up to six months — requires time before lower prices show up at gas stations (The Associated Press and The New York Times). The president called it “a wartime bridge … to the fall.”
And autumn is on his mind.
Democrats worry that the midterm elections in November will put Republicans in control of the House and Senate next year. Most Americans say inflation and rising prices are top of their worries, but Republicans and independents tell pollsters they blame the president’s energy and economic policies more than Russia’s war.
“Look, I know gas prices are painful. I get it. My plan is going to help ease that pain today,” the president said. “I’m going to continue to use every tool at my disposal to protect you from Putin’s price hike. It’s not time for politics. Americans can’t afford that right now.”
Market watchers are listening to Washington and suspect politics are in the air.
— “The SPR release is like putting duct tape on a leaking ship — it will hold for a bit but will not sustain,” Manish Raj, chief financial officer at Velandera Energy Partners, told MarketWatch.
— “There is some terror” in the diesel market right now, said Linda Salinas, vice president for operations at Texmark Chemicals, a Texas company that converts imported undistilled diesel — made from used cooking oil and waste — into a renewable jet fuel. “How often do we have a major power like Russia invade another country and have a global impact like this? All the fuel streams are connected” (The New York Times).
— The strategic reserve release would bring short-term relief on prices and would be akin to “taking some Advil for a headache,” said Stewart Glickman, an oil analyst for CFRA Research. “The root cause of the headache is probably still going to be there after the medicine wears off,” he said (The Associated Press).
— And what about the law of unintended consequences? “Looming exhaustion of strategic stockpiles could send a bull signal to structurally tight markets similar in character to the one that lean OPEC spare capacity sends: without a cushion, even small supply interruptions could deliver outsized price spikes,” ClearView Energy Partners said in a research note (S&P Global).
The Hill: Speaker Nancy Pelosi (D-Calif.) frowns on a proposed hiatus for the federal gas tax in part because oil companies are not required to pass savings onto consumers.
The Wall Street Journal: The Organization of Petroleum Exporting Countries decided Thursday that it will stick with a Moscow-backed production plan that has not lowered high world oil prices.
Biden on Thursday told reporters Putin appears to be self-isolating after the White House declassified intelligence suggesting the Russian leader feels “misled” by his military.
“That’s an open question,” Biden said when asked how badly Putin is being misinformed by his advisers. “There’s a lot of speculation but he seems to be — I’m not saying this with a certainty — he seems to be self-isolating and there’s some indication that he has fired or put under house arrest some of his advisers.”
Biden declined to offer more details when pressed (The Hill).
Meanwhile, the administration tacked on additional sanctions against Moscow on Thursday, announcing a blacklist of dozens of individuals and entities it says are working to evade international sanctions aimed at imposing severe costs on Moscow.
“These designations will further impede Russia’s access to western technology and the international financial system,” Secretary of State Antony Blinken said in a statement. “We will continue to target President Putin’s war machine with sanctions from every angle, until this senseless war of choice is over.”
As The Hill’s Laura Kelly notes, the sanctions target 10 individuals and 17 entities Blinken says are involved in networks designed to evade sanctions and procure western technology. The announcement comes more than a month after the administration first began rolling out sanctions against Russia, which includes measures blocking their access to key technology needed to support its military industry.
The Associated Press: Russians leaving Chernobyl over radiation exposure as fighting rages elsewhere.
The New York Times: Besieged city of Mariupol waits for relief.
Bloomberg News: Russia says Ukraine helicopters make rare cross-border strike.
Finally, talks between Ukrainian and Russian officials are set to continue today virtually, with a new set of in-person discussions potentially resuming within weeks in Turkey. What exactly will come of today’s discussions remains unclear, especially after Moscow did not follow through after saying it would drastically scale back its military operations in northern Ukraine (The New York Times).
➤ What’s it like these days for John Sullivan, the U.S. ambassador to Russia? Reuters went to find out, and it’s an interesting read. “We’re in the Mariana Trench as far as diplomatic relations go,” he said during a video interview, referring to Earth’s deepest ocean abyss.
The Atlantic: When war ends, family separation remains.
📨 Introducing NotedDC: The Hill’s curated commentary on the beat of the Beltway. Click here to subscribe to our latest newsletter.
LEADING THE DAY
CONGRESS: Lawmakers are putting the final touches on a deal that would OK $10 billion in new aid to combat COVID-19, a package they are trying to pass by the end of next week before they leave for a two-week recess.
As The Hill’s Jordain Carney reports, Senate negotiators indicated they are nearing a finalized agreement, but still need to hammer out legislative text, receive a score from the Congressional Budget Office and work out the final details of the bill.
Senate Majority Leader Charles Schumer (D-N.Y.), who has been in talks with a group of Republican senators, said that they were “getting close to a final agreement that would garner bipartisan support.”
“We are working diligently to finalize language, scoring, and a final agreement on what should be funded in the final COVID package, both domestic and international,” Schumer told reporters.
The New York Democrat went so far as to cancel a procedural vote on the legislative vehicle for a COVID-19 aid deal, a sign that an accord is close. Republicans also sang a positive note about talks on Friday, with two negotiators — Sens. Mitt Romney (R-Utah) and Sen. Roy Blunt (R-Mo.) — saying they have a deal in principle.
“We haven’t got the final draft done, and it hasn’t been scored by the CBO, but we’ve reached an agreement in principle on all the spending and all of the offsets,” Romney said. Blunt, a member of GOP leadership, added that it would win the 10 GOP votes needed to advance in the Senate and ultimately pass.
The Hill: Pelosi: “Shameful” for GOP to scale down COVID-19 relief.
Bloomberg News: Jared Kushner gave Jan. 6 panel “valuable” information, lawmaker says.
Sen. Lindsey Graham (R-S.C.), a panel member who weeks ago said he would support Judge J. Michelle Childs, a Black female candidate he favored from his home state, announced he plans to vote against Jackson to succeed Justice Stephen Breyer (The Hill).
“I will oppose her, and I will vote no,” Graham said on the Senate floor. He was among three Republicans who supported Jackson last year for her ascension to the influential D.C. Circuit Court of Appeals.
Graham’s move cements that no Senate Judiciary Committee Republicans will back Jackson in Monday’s vote to send her nomination to the full Senate.
To date, the only Senate Republican who has announced plans to back Biden’s nominee is Sen. Susan Collins (Maine) (CNN). All eyes now are on Sens. Lisa Murkowski (R-Alaska) and Romney, who are considered the two Republicans most likely to break ranks and back Jackson.
The Hill: The Navy announced it will christen a future ship the USNS Ruth Bader Ginsburg after the late Supreme Court justice.
The Hill: Senate, House Democrats urge Biden to extend loan pause, “cancel student debt now.”
The Hill: House set to pass marijuana legalization Friday.
IN FOCUS/SHARP TAKES
POLITICS: Since 2021, Democrats have eyed a measure that would require Supreme Court justices to follow a specific code of ethics. The idea has been revived amid recent scrutiny of Justice Clarence Thomas’s handling of Jan. 6 legal cases and news reports that his wife, Ginni Thomas, lobbied the Trump White House to try to overturn the 2020 presidential election results. The Hill’s Jordain Carney reports that Senate Republicans are cool to legislating an ethics code. Justices currently have the discretion to determine when and why they recuse themselves from cases.
Politico: Is Ginni Thomas a Trumpworld power player or a gadfly?
Sen. Rick Scott (R-Fla.), in charge of the political committee devoted to getting more Republicans elected to the Senate, is moving ahead with his mission to sketch out a conservative agenda for a new GOP majority, despite public and private pushback from Senate Minority Leader Mitch McConnell (R-Ky.).
McConnell has refused to outline a governing blueprint before the midterm elections. Scott’s bold maneuvers stir speculation he may run for president or perhaps Senate majority leader, if former President Trump, an outspoken critic of McConnell’s, returns to the White House, The Hill’s Alexander Bolton reports.
“I think of myself more like Grant taking Vicksburg, and I think as a result of that, I’m always going to be perceived as an outsider,” the former Florida governor and businessman told The Associated Press in a recent interview. “I’m going to keep doing what I believe in whether everybody agrees with me or not.”
The Washington Post: Scott won’t back down from a GOP party fight.
The Hill’s Niall Stanage in his latest Memo explores the mounting troubles facing Trump and his allies related to the Jan. 6 Capitol attacks.
Seeking to influence a primary in North Carolina’s 11th Congressional District, Sen. Thom Tillis (R-N.C.) announced on Thursday that he will endorse state Sen. Chuck Edwards (R) in his primary challenge against Rep. Madison Cawthorn (R-N.C.), as the freshman congressman faces blowback from within his own party over recent comments his colleagues insist have been damaging falsehoods (The Hill).
Will Putin kill the global economy? by Paul Krugman, columnist, The New York Times. https://nyti.ms/3DreQI4
Biden needs to make up with Saudi Arabia, or China will gain, by Karen Elliott House, opinion contributor, The Wall Street Journal. https://on.wsj.com/3tXmY07
WHERE AND WHEN
The House meets at 9 a.m.
The Senate convenes on Monday at 3 p.m.
The president will speak about the government’s March jobs report and the economy at 10:45 a.m. Biden will receive the President’s Daily Brief at 11:15 a.m. The president departs the White House for Wilmington, Del., at 3:25 p.m.
Vice President Harris will travel to Greenville, Miss. She will visit Joycee’s Embroidery, Fabrics, Alterations & Sewing, which is a small business, at 12:30 p.m. CT. Harris will speak about the administration’s economic policies for underserved communities at 4:10 p.m. CT at Delta Center Stage in Greenville. She departs for Washington an hour later. Harris will appear at 7 p.m. on MSNBC for an interview about current events with host Joy Reid.
The Bureau of Labor Statistics at 8:30 a.m. reports on employment in March. Analysts expect to see another solid month of U.S. hiring, The Associated Press reports.
A China summit is taking place today through April 3 in Beijing among representatives of Indonesia, Thailand, the Philippines and Myanmar. A U.S.-ASEAN summit that was to take place in Washington this week appears postponed indefinitely (Benar News).
The White House daily press briefing conducted by communications director Kate Bedingfield is scheduled at 2:30 p.m.
➤ CORONAVIRUS: Total U.S. coronavirus deaths each morning this week: Monday, 976,704; Tuesday, 977,688; Wednesday, 978,692; Thursday, 979,870; Friday, 980,627. … CIA Director William Burns announced on Thursday he tested positive for COVID-19. He met with Biden on Wednesday but was distanced from the president and masked (The Hill). … In China, many patients have died in recent days at a large Shanghai elderly-care hospital that is battling a COVID-19 outbreak, according to people familiar with the situation, a sign that a new wave of infections is hitting China’s financial capital harder than Chinese authorities have publicly disclosed (The Wall Street Journal).
➤ X GENDER PASSPORTS: U.S. citizens can opt beginning in April to select “X” when identifying their gender on their passport applications and on other documents, such as the Transportation Security Administration’s Precheck system (CNN and The Hill). The announcement on Thursday marked International Transgender Day of Visibility. The State Department announced in June that it would update its procedures to allow applicants to self-select their sex marker for passports and that it “will no longer require medical certification” if an applicant’s self-selected sex marker doesn’t match the sex listed on other official identity documents.
➤ HOOPS: One of the best nights on the sports calendar is upon us as the Final Four tips off in New Orleans on Saturday night with the blue blood programs taking center stage. For the first time in history, Duke and North Carolina will face off in the Final Four, and will do so with a ton on the line as Duke coach Mike Krzyzewski looks to take home his sixth national title. In the other matchup, Kansas, the lone one-seed left in the tournament, will take on Villanova. In total, the four teams have won 17 national titles. For those who are financially inclined, Duke is a 4-point favorite (-196) over North Carolina (+162), with the over/under listed at 151. Kansas (-200) is favored by 4.5 points over Villanova (+164). The over/under is set at 133. Duke is currently the odds-on favorite to win it all (+150). The action gets underway on TBS at 6:09 p.m. ET.
And finally … 👏👏👏 Bravo to the movie-savvy Morning Report Quiz winners! Because of Sunday’s Oscars, we asked for some smart guesses about vintage scripted cinematic slaps, and readers played along.
Ready for their close-ups this week: Daniel Bachhuber, Tracey Newton, Patrick Kavanagh, Michael Fessenden, Mary Anne McEnery, Jack Barshay, Rick Cummings, Richard Beal, Robert Bradley, Bonnie LePard, Eric Truax, Virginia J. deLisle, Chris Clark, Lori Benso, Mark Roeddiger, Len Jones, Pam Manges, John Donato and Steve James.
They knew that in the 1987 romantic comedy “Moonstruck,” the character played by Cher famously says, “Snap out of it!” as she slaps the lovesick character portrayed by Nicholas Cage.
Jennifer Lopez’s character gets into a real slapfest with her soon-to-be mother-in-law, played by Jane Fonda, in the 2005 romantic comedy “Monster-in-Law.”
Captain Jack Sparrow, played by Johnny Depp, receives more than one face slap in 2003’s “Pirates of the Caribbean: The Curse of the Black Pearl.” His slurred retort as a prostitute sends his head spinning: “Not sure I deserved that” (YouTube).
In a 1980 film gag in “Airplane!,” a traveler begins to panic during an impending disaster and the captain and passengers react with “get-a-hold-of-yourself” slaps, shakes, a baseball bat, boxing gloves, a pipe wrench and a handgun.
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