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After championing the biggest expansion in federal aid to American families in decades, Biden is now putting the government’s budget deficit back in the spotlight, a nod to fiscal conservatism that may be needed to pass any more of his agenda. In recent speeches, Biden has promoted the rapidly declining shortfall between revenues and public spending—a result of the country’s rebound and the phasing-out of pandemic aid—while also emphasizing that his long-term economic agenda would speed the deficit’s contraction.

It’s a message the White House plainly hopes particularly resonates with Sen. Joe Manchin (D-W.Va.), who blocked Biden’s ambitious Build Back Better economic package (H.R. 5376) in December. Manchin has argued any revised plan—including higher corporate taxes, climate-change measures and drug pricing reform—must cut the deficit. But it’s a delicate balancing act. Read more from Josh Wingrove.

Sen. Joe Manchin (D-W.Va.)

House GOP Leader Kevin McCarthy said he’d urge Donald Trump to resign, according to an audio recording from Jan. 10, 2021, four days after the Jan. 6 Capitol insurrection. In the audio, posted late Thursday by the New York Times and aired on Rachel Maddow’s MSNBC show, McCarthy (R-Calif.) can be heard telling fellow Republicans during a leadership call that he planned to discuss with Trump the Democratic effort to remove him from office. “The only discussion I would have with him is that I think this will pass, and it would be my recommendation you should resign,” McCarthy says in the recording, which has not been independently verified by Bloomberg.

McCarthy—who ultimately publicly opposed removing Trump from office—tweeted a denial of the New York Times story posted earlier in the day before the audio was broadcast. He called the report “totally false and wrong.” Read more from Kathleen Hunter.

Ethics regulators are cracking down on legal expense funds for U.S. officials, like those created for Trump allies facing lawsuits and investigations. The Office of Government Ethics offered a rule on Thursday that would limit the use of the funds for executive branch employees and require public disclosures tracking the flow of the money. Read more from Roy Strom.

Two of Steve Bannon’s former co-defendants accused of misusing donations intended to fund a wall with Mexico pleaded guilty. Brian Kolfage and Andrew Badolato told a Manhattan judge Thursday they used money donated to the non-profit Build the Wall Inc. for personal expenses. Bannon, a one-time strategist to former President Donald Trump, was pardoned on the last day of Trump’s term in office in January 2021 and is no longer involved in the case. Read more from Bob Van Voris.

Pennsylvania Lt. Gov. John Fetterman’s opponents in the Democratic primary for U.S. Senate used a debate Thursday night to criticize his proposal for a gas tax holiday, his plans for a billionaires tax and a 2013 episode in which he confronted a Black jogger with a gun. It was the second debate among the Democrats, and the first in which the front-runner, Fetterman, participated. So Rep. Conor Lamb, State Rep. Malcolm Kenyatta took turns attacking him on fracking, health care and taxes. Read more from Gregory Korte.

Democratic congressional candidate Nyanza Moore, who accused opponent Derrick Reed of domestic violence against his ex-wife, won her challenge to dismiss his defamation suit under Texas’s anti-SLAPP law, a state court of appeals ruled Thursday. Moore and Reed were both candidates in the Democratic primary in 2020 for Texas’ 22nd congressional district. Read more from Janet Miranda.

Florida Gov. Ron DeSantis is getting the congressional redistricting plan he wants. DeSantis’ office submitted a House configuration tailored to maximize GOP interests, and on Thursday lawmakers in Florida left every proposed line intact and sent it back to him with their approval. Earlier, Democrats had been told to limit discussion of racist voting laws in Florida’s history. Jennifer Kay has more.

An arm of the Justice Department cast doubt on far-right radio host Alex Jones’s use of bankruptcy as three companies he once owned prepare for their first day in court Friday. The DOJ’s bankruptcy watchdog, known as the U.S. Trustee, said the companies’ Chapter 11 filing may be “an abuse of the bankruptcy system,” according to court papers filed Thursday, Steven Church reports.

The Education Department urged colleges to help students register to vote, after Biden directed U.S. agencies last year to promote voter access when they interact with the public. Universities under federal law are required to promote voter registration. In addition to helping with registration, university campuses can double as voting sites, the Education Department said Thursday, Courtney Rozen reports.

Kentucky is barred from enforcing a new law adding administrative requirements on abortion providers while its validity is being litigated because the administrative forms and regulations required to comply don’t yet exist, a federal court in the state said Thursday, Mary Anne Pazanowski reports.

Biden to Sign Order to Shield Old Growth Forests

Biden will sign an Earth Day executive order designed to safeguard old-growth forests that have come under threat from wildfires and drought. The federal government will inventory the old-growth forests on federal lands and conduct an analysis of the threats facing them—as well as policies that could reduce those risks.

That work will help determine how the administration spends $8 billion in forest and land management funds provided in the bipartisan infrastructure bill passed last year, as well as $5.7 billion for wild land fire management included in this year’s government funding bill.

Scientists have identified old-growth trees as critical to fighting climate change, because they function as reservoirs for carbon dioxide—a key greenhouse gas. But timber companies have resisted restrictions regarding their logging operations on federal land, while others have argued that dense forests can fuel more extreme forest fires.

The executive order, which Biden intends to sign at an event on Friday in Seattle, will also require the government to develop reforestation targets, and seeks to bolster federal cone and seed collection and nursery capacity. Shortages of location-specific seeds have hindered efforts to plant new trees in the aftermath of devastating wildfires. Read more from Justin Sink.

MORE IN ENERGY & ENVIRONMENT COVERAGE:

• More than two million additional Americans were affected by unhealthy particulate matter and ozone pollution than last year, according to the American Lung Association’s new air quality report, which uses EPA data. The annual State of the Air report said more than 137 million people living in the U.S., or 40%, are exposed to unhealthy levels of pollution, which over time can cause serious illness and death, Jennifer Hijazi reports.
• Manufacturing industries newly targeted by proposed traveling pollution rules are pushing back against the EPA’s updates to rules that tackle wandering emissions from upwind states. Read more from Jennifer Hijazi.
• Biden’s energy chief expects volunteers will take U.S. nuclear waste, at least temporarily, potentially solving a long-running problem for the industry. But Energy Secretary Jennifer Granholm Thursday declined to identify any of the places that may be interested in hosting an interim storage facility. Read more from Ari Natter.
• U.S. climate envoy John Kerry put natural gas on notice, saying the world’s reliance on the fossil fuel should be limited to potentially a decade, unless its greenhouse gas emissions are fully captured. Read more from Jennifer A. Dlouhy and Janet Wu.
• The Federal Energy Regulatory Commission released the first set of draft rules for upgrading and expanding the U.S.’s aging electric grid to create a cleaner, more resilient network in the face of extreme weather events. Read more from Naureen S. Malik.

Defense & Foreign Affairs

Lessons learned from the chaotic evacuation from Afghanistan have contributed to ongoing Department of Defense efforts to update data systems, change its acquisition strategy and improve information-sharing across agencies. The initial coordination of over 300 aircraft carrying hundreds of thousands of Americans and Afghans represented a “really bad example of how to manage your data,” said Sharon Woods, acting chief of the Defense Department’s Defense Information Systems Agency’s Hosting and Compute Center, Patty Nieberg reports.

MORE DEFENSE & FOREIGN AFFAIRS:

• The tiny agency—the National Telecommunications and Information Administration—that failed to avert a messy fight between airlines and telecommunications companies over 5G airwaves will soon be back in the spotlight as the U.S. looks to deploy more spectrum now used by Navy and Army radars that track targets or artillery fire and launch points for missiles, Todd Shields and Alan Levin report.
• The Labor Department opted against wading into the litigation push by military reservists seeking expanded paid leave from their employers, telling the Ninth Circuit Thursday it won’t file a brief in a case against Alaska Airlines and Horizon Air, Jacklyn Wille reports.
• Spain is confident the U.S. will remove additional custom duties on olive imports in coming months if a court in Washington rules again in favor of Spanish growers. The U.S. Court of International Trade is set to issue its third decision on the matter by the end of July
• Honduras Thursday extradited former President Juan Orlando Hernandez to the U.S. where he faces drug-trafficking and weapons charges, Michael McDonald and Bob Van Voris report.

The Coronavirus Pandemic

Biden mixed up the U.S. mask mandate with pandemic-related border controls Thursday, temporarily causing confusion about his response to key issues facing the White House. Asked by a reporter whether he plans to delay lifting a policy, known as Title 42, that allows most migrants to be quickly turned away at the border, the president responded as if he’d been asked about a judge’s ruling Monday striking down the government’s mask requirement on public transportation. Jennifer Jacobs and Jordan Fabian have more.

MORE ON THE PANDEMIC:

• In its effort to build up its stockpile of Covid treatments, the federal government held talks with Japanese drugmaker Shionogi about buying its experimental antiviral pill, people familiar with the matter said. Finding the money to pay for it may be an issue. A stalemate at the Capitol has left those in charge of building up the country’s drug supplies without the resources to do so. Read more from Riley Griffin and Josh Wingrove.
• Aspen Pharmacare is in talks with African leaders about how to raise demand for Covid-19 vaccines after the continent’s biggest drugmaker warned a lack of orders may force it to stop making the shots, Janice Kew reports.
• The federal moratorium on student-loan payments due to the pandemic is slated to be lifted at the end of August, but over half of borrowers said they wouldn’t be able to make a single monthly payment today if they had to, according to a poll from Payitoff, Emma Kinery reports. A national policy forgiving U.S. federal student loans would primarily benefit younger borrowers and people with lower credit scores, according to separate research released Thursday by the Federal Reserve Bank of New York, Jonnelle Marte reports.
• Shareholders in some of the biggest U.S. companies reaped wealth gains in the pandemic that outpaced pay hikes for their employees by more than 50 to 1, according to a study by the Brookings Institution, Katia Dmitrieva reports.

Also Around the Administration

BIDEN’S SCHEDULE:

• At 10:30 a.m. Pacific time, Biden is scheduled to deliver Earth Day remarks from Seattle about his climate change agenda.
• At 12:30 p.m. Pacific time, the president is slated in Auburn, Wash., to discuss his anti-inflation efforts and call on Congress to pass measures to lower health care and energy costs.

Vice President Harris’s chief of staff is leaving the White House, a White House official said on Thursday, in the latest shake-up of the vice president’s senior staff. Tina Flournoy’s departure comes after the recent exit of a series of high-profile aides, including deputy chief of staff, Michael Fuchs, as well as chief spokesperson Symone Sanders and communications director Ashley Etienne. Justin Sink has more.

A Gallup Poll conducted in September found just 37% of Americans thought the IRS was doing an excellent or good job, down from 50% in a poll conducted in April 2019. Even among Democrats, only half said that the agency was doing an excellent or good job. That lack of trust adds political obstacles as the IRS seeks more funding from Congress, particularly for enforcement. Read the latest installment in a multi-part series from David Hood, Naomi Jagoda, and Jasmine Ye Han on the problems plaguing the IRS.

Many unauthorized, tobacco-free nicotine products could stay on the market beyond a summer deadline as the FDA grapples with its new power to regulate them and a surge of marketing applications. A government spending package for fiscal 2022 gave the FDA the authority to regulate synthetic nicotine, closing a loophole that popular e-cigarette makers had used to skirt federal oversight. Celine Castronuovo has more.

FCC Commissioner Brendan Carr asked Apple’s CEO Tim Cook if the company plans to allow access to the Voice of America mobile app on its App Store in China, according to a letter Carr tweeted. Maria Luiza Rabello has more.

The Federal Trade Commission intends to update its rule governing telemarketing calls to consumers, according to the agenda for an April 28 meeting. Commissioners plan to vote on initial steps toward launching a rulemaking focused on the FTC’s telemarketing sales rule, the agenda says, Andrea Vittorio reports.

The Agriculture Department’s Trump-era decision to move several offices from Washington, D.C., to Kansas City missed some key costs and may have been the wrong choice, the Government Accountability Office said in a report. The move has come under fire after it caused an exodus of workers who left the agency rather than move. Meave Sheehey has more.

Federal Reserve Chair Jerome Powell blessed a half-point interest-rate hike next month and signaled support for further aggressive tightening to curb inflation by noting that he saw merit in “front-end loading” policy moves, Craig Torres, Alexander Weber and Catarina Saraiva report.

The CFPB and New York State sued MoneyGram for violations of the bureau’s remittance rule, including allegations that the company gave false information to customers about when payments would be available, Evan Weinberger reports.

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With assistance from Courtney Rozen and Jack Fitzpatrick

To contact the reporters on this story: Michaela Ross in Washington at mross@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com