Washington Edition: Democrats’ big weakness

I'm Jonathan Tamari, senior Washington reporter for Bloomberg Government, and each weekday I'll be coming to you with inside-the-room reporting and insights that reveal what's really happening in Washington—and how it impacts you. Email me with feedback and comments here. If this newsletter was forwarded to you sign up here.

Today, voters' dire economic outlook, a $200-per-barrel oil plan, and Democrats' "freaking terrible'" brand.

Democrats' Big Money Problem

The Democratic image is so damaged right now, even some of the party's big supporters won't give it money

"The Democratic party is not where people want to invest because the brand is so freaking terrible," Rufus Gifford, who served as finance director for Joe Biden and then Kamala Harris, told my colleagues.

The result is that while political vibes look great for Democrats at the moment, the money game might be their number one obstacle to winning big in this fall's midterm elections.

Consider: top national Republican political groups have amassed $750 million — nearly four times as much as their Democratic counterparts, according to reporting from Catherine Lucey, Nancy Cook and Bill Allison.

Photographer: Graeme Sloan/Bloomberg

Money isn't everything in politics, but it's certainly a factor as the parties compete for control of the House and scrap in top Senate races that could cost nine figures apiece.

Of course some individual Democratic stars are still exciting donors and raising big sums. And money issues haven't stopped the party from scoring major victories. Last year and this one they've won key governors races in New Jersey and Virginia and vastly overperformed expectations in special elections (including flipping Mar-a-Lago's state House district this week).

Polls show voters unhappy with Donald Trump and in a dire mood about the economy (more on that below).

"We don't need to outraise the Republicans," Democratic National Committee chair Ken Martin said. "We just need to have enough money to be in the ring and fight, and that's exactly the track we're on."

Most insiders still think Democrats will win the House, and that they have a shot at the Senate, despite a tough set of races there.

But if there's one thing that looks most likely to trip them up, it's the money gap.

Top News

Iran Latest: Strikes continue and Iran shows little sign of backing down as the war nears the end of its fourth week. Still unclear is the status of any peace talks. Donald Trump this morning urged Iran to "get serious soon, before it is too late, because once that happens, there is NO TURNING BACK."

$200 Oil?: Trump administration officials are examining what would happen to the economy if oil goes to $200 a barrel, Bloomberg scooped. Sources said it wasn't a prediction, just being ready for even extreme contingencies.

German Counterpunch: Officials in Berlin have started mapping vulnerabilities in US supply chains to identify points where Germany and its European Union partners could hit back if needed, according to a Bloomberg scoop. The exercise is part of an urgent European effort to manage increasing hostility from the US and the growing power of China.

TSA Frustration: TSA agents are feeling the strain after missing nearly $1 billion in pay since the DHS shutdown began. Angélica Franganillo Diaz spoke to some of them. "At this point, everyone's to blame," one officer told her.

Meta Meaning: A jury's finding that Meta and Google created products designed to be addictive is the first of thousands of product-liability lawsuits against social media and could spur more government regulation.

Moving Out: Four in 10 US counties shrank last year as the crackdown on immigration stifles the nation's main source of population growth, according to the latest Census Bureau data.

Canadian Brexit: Speaking of departures, a push in Alberta to break away from Canada is poised to reach the ballot this year. If the long-shot succeeds, the newly independent country would control one of the world's largest reserves of crude.

Eye on the Economy

The OECD this morning released estimates that the war in the Middle East will mean higher inflation rates and a hit on growth. The first major international economic organization to formally update its forecasts to account for the war, the OECD sees inflation now at 4.2% in the US this year, up 1.2 percentage points.

And if you ask everyday Americans how they feel about the economy right now, the takeaway is just, ooooof.

Some 58% disapprove of Trump's handling of the economy, against 39% who approve, according to a Quinnipiac University poll released yesterday.

Americans view Trump's handling of the economy worse than they did Joe Biden's, according to a Reuters/Ipsos poll noted by Odd Lots host Joe Weisenthal. 

None of which is being helped by rising gas prices tied to the Iran war.

There still could be bright spots. The energy sector is likely to see a bump and AI investment continues strongly, said Anna Wong, chief economist for Bloomberg Economics. She compared public frustration now to the "vibe-cession" of 2022, when GDP kept growing but people were angry over high prices. 

Still, people don't vote on statistics, they vote on feel. You might not necessarily win if the economy is good, but you're almost certain to lose if the economy is bad — or if people see it that way.

Go Deeper With BGOV

A Republican plan to fund DHS without money for ICE's enforcement and removal operations would have cut the agency's discretionary funding by 54%, BGOV analyst Karl Evers-Hillstrom writes.

ICE still wouldn't be short on cash, receiving nearly $75 billion from last year's tax-and-spending bill. That's why Democrats who voted to block the proposal Wednesday say it doesn't go far enough.

What's Next

• Former Venezuelan President Nicolás Maduro and his wife Cilia Flores appear in a New York City court for a hearing on narco-terrorism charges
• Senate Banking Committee hearing on reauthorizing the Export-Import Bank
• House Ethics Subcommittee hearing on Democratic Representative Sheila Cherfilus-McCormick, accused of stealing FEMA funding
• US initial jobless claims are released
• G-7 foreign ministers start a two-day meeting in Paris
• NATO releases its annual report
• Trump hosts a cabinet meeting

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