Playbook PM: Marty Walsh heads back to Boston

SHIPPING UP TO BOSTON — Labor Secretary MARTY WALSH will leave his post to become executive director of the NHL Players’ Association, with an announcement expected in the coming days, Daily Faceoff’s Frank Seravalli scooped. Walsh met with the executive board and got a green light last week, though the formality of an official yes vote hasn’t happened yet and Walsh couldn’t leave before the State of the Union. His contract is expected to include a roughly $3 million annual salary and allow him to live in Boston.

Walsh would be the first Cabinet secretary in the line of succession to leave President JOE BIDEN’s administration after a remarkably stable first two years.

Palace intrigue: “Walsh emerged as a candidate for the position only within the last three weeks. Sources indicated [executive search firm] RUSSELL REYNOLDS was rebuffed by Walsh over multiple attempts to include him earlier in the process, but Walsh had a change of circumstance once he was not selected as Biden’s next chief of staff,” per Seravalli. Walsh had also considered running for office again in Massachusetts, Lisa Kashinsky notes.

Walsh’s departure, of course, would also create a new Cabinet opening. Other senior officials have left, like chief of staff RON KLAIN and Office of Science and Technology Policy Director ERIC LANDER. But Labor secretary looks poised to be the first Cabinet role to require a new Senate confirmation since the early days of the administration.

That the news broke this morning is less than ideal timing for Biden, who likely would have preferred to avoid any distractions ahead of tonight’s State of the Union.

Here’s what else you should be reading ahead of SOTU:

— The view from the GOP: Speaker KEVIN McCARTHY told his conference this morning to be on good behavior tonight, “reminding them that the ‘cameras are on’ and the ‘mics are hot,’” per CNN’s Melanie Zanona. He later slipped in a dig at NANCY PELOSI, telling reporters, “We have a code of ethics of how we should portray ourselves. … That’s exactly what we’ll do. We’re not going to do childish games tearing up a speech.”

— The speech that won’t die: White House aides across multiple administrations have wanted to kill or shrink the State of the Union — to make it more interesting and accessible by shortening it or moving it around the country. There’s no constitutional imperative for the speech to unfold as it always does. But presidents want to keep it the same, NBC’s Peter Nicholas reports. The prominent platform, the pomp and circumstance, the tradition and the viewership: They can’t give it up.

More speech previews: “Biden to Outline Plan to Crack Down on Illegal Fentanyl Distribution,” by WSJ’s Andrew Restuccia and Tarini Parti … “Biden to Lay Down Economic Challenge to House Republicans,” by NYT’s Peter Baker … “In his SOTU, Biden will call for plugging gaps in his health policies,” by WaPo’s Rachel Roubein … “State of the Union? Congress doesn’t fully reflect diversity,” by AP’s Lisa Mascaro

Good Tuesday afternoon, and thanks for reading Playbook PM. Drop me a line at [email protected].

ALL POLITICS

IT’S ELECTION DAY SOMEWHERE — Control of the Pennsylvania state House will be decided today in three Pittsburgh-area special elections for seats whose November winners died or were elected to higher office. Democrats are expected to win all three and officially flip control of the chamber by a one-seat margin — but any Republican upset would keep the House in GOP hands. Turnout is expected to be low. Details from the Pittsburgh Post-Gazette

WHAT HAS DEMS SALIVATING — The discourse around the Fair Tax may not die down anytime soon: Democrats have loved attacking Republicans over the proposal to replace the tax code with a big sales tax, and Semafor’s Joseph Zeballos-Roig and Shelby Talcott report that it could be a vulnerability for several 2024 GOP contenders. MIKE PENCE, MIKE POMPEO, NIKKI HALEY and Florida Gov. RON DeSANTIS have all backed the idea at some point. DONALD TRUMP smells an opening on the issue too: He opposes the Fair Tax, and is indicating that he could hammer fellow Republicans for wanting to raise a tax.

Important context from NYT’s Maggie Haberman: “This discussion is taking place as if Trump didn’t sign a tax bill that slashed corporate rates by a lot, and is more a reminder that Trump often reinvents himself devoid of context.”

SCHIFF STAFFS UP — Rep. ADAM SCHIFF’s (D-Calif.) Senate campaign is getting an independent expenditure committee, Standing Strong PAC, our California Playbook colleagues scooped. KYLE LAYMAN will lead the IE, along with Bearstar Strategies, JESSE FERGUSON, MOLLY MURPHY and NATALIE LeBLANC.

NOTE OF SKEPTICISM — After the Koch network said this weekend that it would jump into the 2024 GOP presidential primary against Trump, the news got broad media coverage. But Popular Information’s Judd Legum, Rebecca Crosby and Tesnim Zekeria write that the press shouldn’t be so quick to accept their word as fact: “[F]or years, [CHARLES] KOCH has repeatedly announced he was reorienting his political strategy away from far-right Republicans, including Trump — with no discernible change in his actual political activity. After each media-assisted rebrand, Koch quietly resumed business as usual. The reality is that few individuals have spent more money to legitimize Trump and his allies.”

THE ECONOMY

NEW RECORD — The U.S. trade deficit hit an all-time high last year of $948 billion, jumping more than 12% from 2021, per new Commerce Department data out today. “A record value of imports in 2022 reflects in part a push by retailers to replenish inventories well ahead of peak selling periods and avoid a repeat of shortages and supply-chain delays that clogged West Coast ports in 2021,” notes Bloomberg’s Augusta Saraiva.

IMMIGRATION FILES — “Migrants Are Doing Better Than Ever Thanks to Tight Labor Market,” by WSJ’s Santiago Pérez and Michelle Hackman: “Migrants who come to the U.S. to find work are now being hired more quickly, at higher pay and under better working conditions than at any time in recent memory.”

AMERICA AND THE WORLD

BALLOON FALLOUT — The Chinese spy balloon incident has quickly deflated some Democrats’ hopes that the new congressional panel on China competition could present a rare opportunity for bipartisanship, The Daily Beast’s Sam Brodey and Ursula Perano report. After Republicans hammered the Biden administration over its handling of the balloon — striking some Democrats as unfair and needlessly partisan — panel members like Reps. ANDY KIM (D-N.J.) and JAKE AUCHINCLOSS (D-Mass.) say they’re disappointed with the GOP or growing more pessimistic about the committee. Republicans say they see the balloon as a Chinese test for the U.S. that the Biden administration didn’t ace.

— The all-senators briefing on the balloon will take place at 11:30 a.m. Thursday, Punchbowl’s Andrew Desiderio reports.

— Experts think the worsening of U.S.-China ties means it could take a while for Secretary of State ANTONY BLINKEN’s trip to get rescheduled, WaPo’s Christian Shepherd and Lyric Li report. It also amounts to “a tough test for a crop of newly installed Chinese diplomats, as they attempt to mend what Beijing considers its most important bilateral relationship.” They’ll have to balance contrition with the desire not to appear like they’re giving in to the U.S.

— The balloon has also ramped up Republican antipathy toward TikTok, which isn’t directly connected but is getting caught up in increasing tough-on-China talk, NBC’s David Ingram and Scott Wong report.

— Hot job, via Daybook: Intelligence Specialist (China) at the U.S. Air Force.

A MILESTONE THE U.S. WON’T LIKE — China has now surpassed the U.S. in its number of intercontinental ballistic missile launchers on land, WSJ’s Michael Gordon scooped. U.S. Strategic Command notified the congressional armed services committees of the news last month. The shift is fueling calls from some Republicans to expand the American nuclear arsenal. Caveats: Many of China’s launchers are empty silos, and the U.S. still leads on other missile metrics.

DANCE OF THE SUPERPOWERS — “How U.S.-China Tensions Could Affect Who Buys the House Next Door,” by NYT’s J. David Goodman in Houston: “Chinese owners have very slowly expanded their holdings in U.S. agricultural land in recent decades, but the increasingly hostile political climate has made the topic a rising concern, with at least 11 states considering some form of new legislation related to foreign ownership of farmland or real estate … Some of the new and proposed laws go beyond targeting Chinese nationals to broadly take aim at ownership by all foreign governments, businesses and new immigrants. Other laws, like the one under consideration in Texas, single out countries seen as particular security threats.”

CONGRESS

HOT ON THE RIGHT — Republicans were outraged this morning that Twitter suspended Sen. STEVE DAINES’ (R-Mont.) account apparently because he posted a photo of him and his wife hunting. ELON MUSK said the situation is being fixed.

HAPPENING TOMORROW — “Twitter hearing a test of new House GOP majority’s seriousness,” by Yahoo’s Jon Ward

NIGHT OF THE HUNTER — “GOP’s Probe Into Hunter Biden Risks Political Blowback,” by Bloomberg’s Billy House and Jarrell Dillard

TRUMP CARDS

THE INVESTIGATIONS — “Trump Charges in Georgia Over 2020 Could Lead to Bigger Fed Case,” by Bloomberg’s Chris Strohm, Zoe Tillman and Billy House: “If [Fulton County, Ga., DA FANI] WILLIS goes first, that case would road-test possible testimony, helping to determine what evidence holds up in court and providing a blueprint for prosecutions involving other battleground states where Trump and his supporters tried to undermine President Joe Biden’s win. Legal experts say nothing stops a US special counsel overseeing the federal Trump probe [from] pursuing similar charges at the federal level, regardless of what Willis ultimately does.”

POLICY CORNER

ALEJANDRO MAYORKAS UNDER FIRE — The DHS secretary is staring down a possible impeachment from House Republicans, who have elevated him as the man culpable for problems at the southern border. NYT’s Eileen Sullivan and Zolan Kanno-Youngs talked to two dozen people who have worked with Mayorkas to get a sense of how he’s actually doing in the job: He’s “an embattled secretary who may have had good intentions with his immigration policy goals but has been hamstrung by elements outside his control. … Still, Mr. Mayorkas, who has pledged to execute the Biden administration’s promise to create a fairer and more humane immigration system, is running behind schedule on delivering those results.”

DIPPING INTO CHIPS — It’s implementation time: The Commerce Department later this month will explain the process for semiconductor manufacturers to apply for new Chips Act funding, WSJ’s Yuka Hayashi scooped. Secretary GINA RAIMONDO will give a related speech Feb. 23.

UP IN THE AIR — “As Southwest, FAA probes begin, fallout could shape flying for years,” by WaPo’s Lori Aratani, Ian Duncan and Michael Laris

JAN. 6 AND ITS AFTERMATH

WASN’T ME — “‘I started a riot for the sitting president’: Why Ali Alexander won’t go to jail for his role in Jan. 6,” by Raw Story’s Jordan Green: “[ALI] ALEXANDER has displayed an uncanny ability to walk right up to the line of incitement, eluding prosecution in the largest criminal inquiry in the Justice Department’s history. … This is the story of how Alexander became the nation’s most untouchable J6er — for now.”

PLAYBOOKERS

MEDIA MOVES — Daniella Diaz is now a congressional reporter at POLITICO. She previously was a Hill reporter for CNN. … Chad Day is returning to the AP as its new chief elections analyst. He most recently was a national political reporter at the WSJ.

TRANSITIONS — Jonathan Gilad is now government affairs director for the National Emergency Number Association. He previously was associate VP for association solutions at MCI USA. … Emily Duncan will be SVP for federal affairs at American Electric Power. She previously was VP of government relations for National Grid. … Kristin Rudman is now media and comms manager at Squire Patton Boggs. She most recently was senior director at the Levinson Group. …

… Katherine Lugar will be EVP of global corporate affairs at Hilton. She currently is president and CEO of the American Beverage Association, departing in March. … David Stier is now a partner at DLA Piper. He previously was a trial attorney with the DOJ’s Money Laundering and Asset Recovery Section’s Bank Integrity Unit. … Abby Spring is now SVP of strategic engagement at the Conservation Fund. She previously was founder and president of Spring Global LLC, and is an Edelman alum.

ENGAGED — Ryan Emery, a surgeon, proposed to Kristin Strobel, director of state and local government affairs at Microsoft, over the weekend at sunset overlooking Poipu Beach in Kauai, Hawaii. They met online. Pic … Another pic

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