The Pentagon fails another test

Welcome to the weekend! Here’s what we watch as we wait for the start of the soccer World Cup on Sunday and wonder how
controversial choice Qatar as the host country will be held.

Another year, another failed Pentagon audit

The US Department of Defense underwent its fifth annual financial audit this year and failed it for the fifth straight year.

This year’s review involved a team of 1,600 analysts who visited 220 sites in person and 750 sites virtually as they reviewed the Pentagon’s $3.5 trillion in assets and $3.7 trillion in liabilities checked. The overall audit was divided into 27 units, nine of which received a clean or pass grade, one received a modified pass grade once an identified issue was corrected, and the remainder received disclaimers for lack of complete data.

The cost of the audit was estimated at $218 million.

Defense Department Comptroller Mike McCord said the results were similar to last year’s. “We didn’t get an ‘A’,” he said
told reporters earlier this week. “The process is important to us and it allows us to improve. It doesn’t let us get better as fast as we want.”

McCord said he expects steady improvement in the Pentagon’s use of financial controls, but there are still challenges. “Evaluating real estate is probably the hardest thing for us,” he said. “I would say systems are probably the most important thing for us – reducing the number of systems, getting the right controls for the systems. There are areas where I think real progress will be made in the next two years. But it has to be across the board – it has to be across the board for those opinions to reverse – and I think that’s going to be difficult.

McCord added that the war in Ukraine served as an important reminder of the need for accurate records. “We were not in a conflict with a competitor, a kinetic conflict, like the Ukrainians are with the Russians,” he said. “And we weren’t in a position where we only had a few days of critical ammo left. Right? But we are now supporting a partner who is and if they come to us for help and say I have some left for weeks… when can you get me more? I mean, that’s a really great example for me of why it’s important to get something like this right, to count inventory, to know where it is and when it is.”

Dive into the Department of Defense audit for fiscal year 2022 here.

Hakeem Jeffries announces takeover bid for Pelosi

Rep. Hakeem Jeffries (D-NY) made it official on Friday, announcing his bid to succeed Nancy Pelosi (D-CA) as House Democrat leader. Jeffries, 52, would be
first black leader a Congress Party caucus. Rep. Katherine Clark (D-MA), 59, announced a run for the Democratic Whip, second place in the party leadership, while Rep. Pete Aguilar (D-CA) officially said he would run for caucus chair, the Number 3, running for office.

With a changing of the guard underway for House Democrats, President Joe Biden turns 80 on Sunday, becoming the first octogenarian to occupy the Oval Office — a milestone likely to be greeted with little official celebration. “The White House has few plans to celebrate the milestone publicly,” according to the Washington Post
reports. “Any celebration, whether intentional or not, will be eclipsed by the wedding celebrations of Biden’s granddaughter Naomi at the White House on Saturday.”

Hawley: “No more fiddling with Social Security under the guise of ‘entitlements reform'”

As the GOP grapples with its weaker-than-expected midterm election performance and the message voters may have sent, Sen. Josh Hawley (R-MO) has been vocal about pushing a more populist agenda for the party.

Hawley, a controversial conservative perhaps best known for raising his fist in solidarity with the pro-Trump crowd that gathered outside the Capitol ahead of the Jan. 6 riot, has attempted to rename Republicans. “The old party is dead. Time to bury them. Build something new,” he tweeted on Saturday. He has also argued that the party must go beyond criticizing the Democrats and “offer an actual agenda” – and his prescribed agenda differs
in a few crucial ways
from those of other prominent Republicans.

Hawley expanded on this criticism in a
Washington Post article write on Friday that the Republican problem is more than just picking bad candidates or weak turnout operations. The GOP’s problem, Hawley says, “isn’t primarily about tactics; the problem is substance.” Hawley argues that the party needs to transform itself into one that truly represents working people:

“For decades, Republican politicians have sung a familiar tune. On the economic front, they’ve cut taxes on big business and talked about changing Social Security and Medicare—George W. Bush even attempted to partially privatize Social Security in 2005. In the name of “growth,” the same Republicans have backed

ruinous trade policy — like China’s entry into the World Trade Organization — that collapsed American industry and pushed American wages down. …

“Republicans will only achieve the generational victories they crave if they come to terms with this reality: they must convince a critical mass of working-class voters that the GOP truly represents their interests and protects their culture. … We can start to stop the bleeding. no more talk
great bargain stimulate illegal immigration. No more liberalizing the United States’ trade agenda, making us more dependent on foreign adversaries. No longer
dealing with social security under the guise of ‘entitlements reform’.”

Hawley advocates Trump-style tariffs as a way to boost domestic industry and manufacturing, and he calls for breaking up big tech companies and relocating federal agencies like the Departments of Energy, Interior and Agriculture to “Central America.” Among other legislative changes, he is pushing for a tax credit for married parents with children under 13.

Why it matters: Some in the GOP — most notably Hawley and Florida Senator Marco Rubio — have embraced populism

economic agenda in the past few years and the party record brought on by midterm election disappointment could open the door to rethinking some pillars of Republican policymaking. Or not. Republicans might discuss such policy changes, but they might end up pouring more energy into investigating the Biden administration and trying to “own the Libs.” Or they might decide that Trump and his MAGA movement really did cost them more than anything else. The next two years will decisively determine the future of the party.

quote of the Day

“It is a totally non-functional majority. … If you’re down to just one or two in the majority, every person now has the power of a senator, where every bill basically has to be drawn — not dragged into something that can win or something that can be legislated , but to the far right.”

— Rep. Adam Kinzinger, the Illinois Republican who served on the Jan. 6 committee and not coincidentally retiring from Congress at the end of the year, in
an interview with the bulwark quoted in a
New York Times article about the GOP gaining control of the house.

As Republicans win a narrow majority in the House of Representatives, party leaders may struggle to bridge the gap between a relatively small number of moderates focused on taxes and the economy and a larger group of Trump-leaning extremists focused on politically explosive investigations urging the Biden administration to bridge. Rep. Kevin McCarthy (R-CA), the front-runner for the next speaker, is “probably the equivalent of the dog that got the car,” Kinzinger said.


Views and Analysis

  • Why Republicans’ razor-thin majority is a gift to Democrats – Blake Hounshell, New York Times
  • The child tax credit should be on the lame duck agenda of both parties — Catherine Rampell, Washington Post
  • How Rick Scott crashed and burned twice in one year – Marc A. Thiessen, Washington Post

  • Joe Manchin’s reign as King of America is over – Ed Kilgore, New York

  • Facility spokesman – Zak Cheney-Rice, New York

  • A soft landing is on the horizon, but can the Fed hold out? – Jonathan Levin and Leticia Miranda, Bloomberg

  • Why interest rates (probably) won’t stay high – Paul Krugman, New York Times

  • A new attempt to help places mired in poverty – Peter Coy, New York Times

  • Will Covid boosters prevent another wave? Scientists aren’t so sure – Apoorva Mandavill, New York Times

  • Wuhan’s early Covid cases are a mystery. What is China hiding? — Washington Post editorial board


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