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HAPPENING NOW — AG MERRICK GARLAND is making a statement at 1:15 p.m. Watch live here

DOCU-DRAMA — Just before President JOE BIDEN was set to deliver remarks about the latest inflation figures and the overall state of the economy this morning, the White House released a statement disclosing that the second batch of classified documents that had been found from Biden’s time as VP were stored in a garage at Biden’s Wilmington, Del., residence. Read the White House statement

At the conclusion of Biden’s remarks on the economy, seemingly every reporter in the room was shouting questions about the document revelation at Biden, but Fox News’ Peter Doocy caught the president’s attention: “Mr. President, classified material next to your Corvette. What were you thinking?” he asked.

“I’m going to get a chance to speak on this, God willing, soon. By the way, my Corvette is in a locked garage, it’s not like they're sitting out on the street,” Biden said in response. “But as I said earlier this week, people know I take classified documents and classified materials seriously. I also said we’re cooperating fully and completely with the Justice Department review.”

— “Multiple Biden aides have been interviewed by federal law enforcement in classified document review,” by NBC’s Carol Lee and Mike Memoli: “KATHY CHUNG, who was Biden’s executive assistant while he was vice president and helped pack up his vice presidential office in January 2017, is among those who have been interviewed, according to the sources, who spoke on the condition of anonymity to discuss the ongoing inquiry. Chung currently serves as deputy director of protocol for Secretary of Defense LLOYD AUSTIN.”

— Sen. MARCO RUBIO (R-Fla.) tweets: “The @ODNIgov must provide the Senate Intel Committee all classified documents which were discovered in the garage of President Biden’s home in Delaware & an assessment of the risk to national security if those classified documents were to be exposed in public or foreign adversary.”

— Related read: “In Washington, ‘classified’ is synonymous with ‘controversy,’” by AP’s Chris Megerian

WHAT ELSE BIDEN SAID — Before addressing the document controversy, Biden touted the latest inflation reading, which CNBC’s Jeff Cox classified as a “modest retreat, with consumer prices in December posting their biggest monthly decline since early in the pandemic.” The details: “The consumer price index, which measures the cost of a broad basket of goods and services, fell 0.1% for the month, in line with the Dow Jones estimate.”

Biden called the inflation figures evidence that his economic plan is working and providing families across the country with “breathing room.” He also took the opportunity to address the newly seated GOP-controlled House.

“Now the House has elected a new speaker and I called and congratulated him and I'm ready to work with him,” Biden said, referring to Speaker KEVIN McCARTHY. “Or any Republican in Congress to make progress for the American people.” But Biden quickly cautioned the new Republican majority against a list of bills regarding taxes and gas prices that have been introduced or proposed that he said would make inflation worse.

“If any of these bills make it to my desk, I will veto them,” Biden said. “I will flat veto them. I'm ready to work with Republicans, but not on this kind of stuff.”

— Biden did not address the looming need to raise the federal debt ceiling, but our colleagues Jonathan Lemire, Caitlin Emma and Adam Cancryn report that the White House is “laying the groundwork for negotiations” on the matter.

“Senior White House officials and aides from the Office of Legislative Affairs have already fanned out across the Hill, introducing themselves to freshman lawmakers and staff and zeroing in on moderate Republicans whom they imagine might be getable in a debt ceiling vote, according to several people familiar with the strategy.”

SPEAK(ER) NOW — Over at the Capitol, McCarthy held his first news conference since becoming speaker, addressing a range of topics, including the debt ceiling. Asked if he was willing to commit that Republicans will raise the ceiling, McCarthy said: “We don't want to put any fiscal problems to our economy and we won't. But fiscal problems would be to continue doing business as usual.”

McCarthy continued, saying he had a “very good conversation” with Biden when the president called to congratulate him on becoming speaker, and said he “would like to sit down with him early and work through these challenges.”

More highlights:

• On the Biden document discoveries: “I think Congress has to investigate this.”
• On New York Rep. GEORGE SANTOS: “He’s got a long way to go to earn trust. … The voters of his district have elected him. He is seated. He is part of the Republican conference. There are concerns with him, so he will go before Ethics. If anything is found to have been wrong, he will be held accountable exactly as anybody else in this body would be. That is the fair way to handle anything and that is how I’ll deal with any single issue that ever comes forward.”
• On an effort to expunge DONALD TRUMP’s impeachments: “I understand why members would want to bring that forward. Our first priority is to get our economy back on track. Secure our borders. Make our streets safe again. Give parents the opportunity to have a say in their kids' education. And hold government accountable.”
• On criticism from Republicans on the Senate side: “Is the Senate even in this week? What did they do this week? Oh, yeah, they haven't done anything.”

FWIW, Santos at the Capitol this morning said: “If 142 people ask for me to resign, I'll resign.” He later said he meant to say 142,000, per Nancy Vu: “That’s the vote count I got to get elected. When all 142,000 of them tell me, I’ll go.”

MARK YOUR CALENDARS — Former VP MIKE PENCE will represent Republicans and New Jersey Gov. PHIL MURPHY will represent Democrats at the Gridiron Club’s spring dinner on March 11.

Good Thursday afternoon, and thanks for reading Playbook PM. Send me your best Gridiron dinner joke: [email protected].

ALL POLITICS

JUST POSTED — “Ro Khanna says he’s looking at the Senate. His allies are talking about the White House,” by Holly Otterbein: “Those close to [California Rep. RO] KHANNA say he’s keeping his options open ahead of a potential presidential run in 2028 or beyond. But others in his orbit are talking about an even more compressed timeline: running in 2024 if President Joe Biden decided not to.”

Related: “Warren backs Porter in California Senate primary,” by NBC’s Ali Vitali

HOW FAR WILL THEY RISE? — As the Republican Party tries to reshape itself, a handful of governors make up the emerging stars that could go a long way in defining the GOP in 2024 and beyond.

— In Virginia, Gov. GLENN YOUNGKIN is trying to “bolster his conservative credentials and agenda as he tests a possible presidential run in 2024,” NYT’s Trip Gabriel writes from Virginia Beach. The balance that Youngkin is aiming to strike is one that emphasizes local action, but with a national profile. Yet perhaps the biggest challenge that he faces — unlike others with similar ambitions — is Virginia’s divided legislature, which makes it a bit tougher for Youngkin’s policy priorities to sail through.

Related: Youngkin told NBC that he is “overwhelmingly humbled” by discussions including him among 2024 talk, but that he is “so focused” on his job as Virginia governor. More from NBC’s Gary Grumbach

— In Georgia, Gov. BRIAN KEMP is enjoying the status of the “unquestioned head of state Republicans, with enormous political capital to burn, a proven ability to win over swing voters and a successful history of pushing priorities through the Republican-controlled Legislature,” the Atlanta Journal Constitution’s Greg Bluestein writes.

— And of course, we can’t forget about Florida:“DeSantis tested on immigration as he weighs 2024 candidacy,” by AP’s Steve Peoples, Adriana Gomez Licon and Anthony Izaguirre: Gov. RON DeSANTIS “has won admiration from many Republican voters nationwide by championing hard-line conservative policies on cultural issues — among them race, gender and immigration. But as he considers a presidential announcement, DeSantis appears to be treading more carefully with immigration developments in his own backyard.”

2023 WATCH — “Democrat Brandon Presley joins race for Mississippi governor,” by AP’s Emily Wagster Pettus in Jackson, Miss.

2024 WATCH — “‘Retire or get fired’: Senate GOP campaign committee targets Manchin, red-state Democrats with ad campaign,” by Fox News’ Paul Steinhauser: “The ad campaign from the National Republican Senatorial Committee (NRSC), titled ‘Retire or Get Fired,’ takes aim at Trump-state Democratic Sens. JOE MANCHIN of West Virginia, JON TESTER of Montana and SHERROD BROWN of Ohio over what the NRSC calls their ‘liberal records’ and ties the senators to President Joe Biden.” Watch the Manchin ad … Watch the Tester ad … Watch the Brown ad

— “New York Sen. Kirsten Gillibrand launches reelection bid,” by AP’s Michelle Price

CONGRESS

NEBRASKA’S NEW SENATOR — As expected, Nebraska Gov. JIM PILLEN picked PETE RICKETTS to fill the state’s open Senate seat that was vacated by BEN SASSE. Ricketts, who served two terms as Nebraska governor and endorsed Pillen in the race to replace him last year, would need to run in a fall 2024 special election to fill out the remaining two years of Sasse’s Senate term. More from Burgess Everett

WHAT THE GOP WANTS — “GOP Bill Would Bar Government From Pushing Internet Platforms to Block Lawful Speech,” by WSJ’s Ryan Tracy: “The bill addresses what its supporters claim to be efforts by the Biden administration to influence content on social-media platforms, including attempts to block speech on Covid-19 vaccines that runs counter to White House policy. It would bar federal employees from ordering or advocating for ‘the removal or suppression of lawful speech’ from internet platforms.”

JAN. 6 AND ITS AFTERMATH

TRIAL TIPOFF — “Proud Boys sedition trial to open 2 years after Jan. 6 riot,” by AP’s Michael Kunzelman, Lindsay Whitehurst and Alanna Durkin Richer

POLICY CORNER

CRYPTO CRISIS CONTINUES — Fallen FTX founder SAM BANKMAN-FRIED posted an “FTX Pre-Mortem Overview” on Substack, offering the “first detailed response to the criminal charges filed against him last month,” NYT’s David Yaffe-Bellany and Matthew Goldstein write, in which Bankman-Fried says “that the millions of customers of his collapsed exchange, FTX, could still get their money back.” Read the Substack post

EYES ON THE SKIES — “Minimal airline delays, cancellations a day after U.S. outage,” by AP’s Michelle Chapman and David Koenig

BEYOND THE BELTWAY

REPULSIVE RESULTS — “Survey finds ‘classical fascist’ antisemitic views widespread in U.S.,” by WaPo’s Michelle Boorstein and Scott Clement

MEGATREND — “U.S. Cancer Death Rate Has Dropped by a Third Since 1991,” by WSJ’s Brianna Abbott

MEDIAWATCH

HEADS UP — NPR’s @davidfolkenflik: “RUPERT MURDOCH to be deposed under oath by lawyers for Dominion Voting Systems on mornings of Jan 19 & 20th, according to court filings. It will take place at Fox Studio lot - part of $1.6B defamation suit [against] Fox News & Fox Corp over claims of election fraud in 2020.”

TEXT TROVE — “Alex Jones Phone Dump Reveals Text Convos With Tucker Carlson,” by HuffPost’s Sebastian Murdock: “From Sept. 19, 2019, to May 1, 2020, [ALEX] JONES and [TUCKER] CARLSON discussed coronavirus conspiracy theories, traded a few jokes, and had at least one phone conversation after Jones expressed unfounded fears that Democrats were ‘working to get me arrested.’ Jones also complained about The Daily Caller ― the right-wing publication founded by Carlson ― for not letting Infowars feature its content on the Infowars website. … Carlson did not respond to multiple requests for comment. Jones, who said he’s been friends with Carlson for 10 years, told HuffPost Carlson isn’t concerned with stories about him.”

AMERICA AND THE WORLD

COMING HOME — “U.S. Navy veteran released from Russian custody,” by CNN’s Natasha Bertrand: “TAYLOR DUDLEY, 35, of Lansing, Michigan, was detained by Russian border patrol police in April 2022 after crossing from Poland into Kaliningrad, a Russian exclave which is territory governed by Moscow between Poland and Lithuania. He was in Poland attending a music festival, and it is not clear why he crossed the border.”

PLAYBOOKERS

OUT AND ABOUT — SPOTTED on Tuesday night in NYC at a party hosted by Mike Bloomberg celebrating the podcast release of “Mandela: The Lost Tapes” by Rick Stengel: Gayle King, Tony Marx, Patrice Motsepe, Ursula Burns, Patti Harris, John Micklethwait, Harry Smith, Ken Jacobs, John Mack, Lawrence O’Donnell, Andy Lack, Stephanie Ruhle, Zenia Mucha, Jesse Rodriguez, Pat Burkey, Jim Rutenberg, Larry Hackett, Craig Minnassian, Tammy Haddad and Ali Zelenko.

— Washington insiders and CEOs gathered Wednesday for a dinner at Annabelle hosted by Semafor's Steve Clemons and U.S. Chamber of Commerce President and CEO Suzanne Clark, and featuring Reps. Lisa Blunt Rochester (D-Del.) and Young Kim (R-Calif.). SPOTTED: Neil Bradley, Michelle Russo, Karan Bhatia, Steve Case, Heidi Crebo-Rediker, Ed Gillespie, Carla Hills, Roger Krone, María Teresa Kumar, Stavros Lambrinidis, Edward Lawrence, Amy Liu, Ashok Kumar Mirpuri, Mark Ordan, Rosan Roeslani, Jose Manuel Romualdez and James Schenck.

MEDIA MOVES — Robert Samuels is joining The New Yorker as a staff writer. He currently is a national enterprise reporter at WaPo. … Alex Thompson is joining Axios as a national political correspondent, per NYT’s Katie Robertson. He currently is a White House reporter at POLITICO.

FIRST IN PLAYBOOK — Katy Montgomery is joining Adfero as executive VP and chief client officer. She previously was executive VP for corporate affairs and comms at Cyber Defense Labs.

TRANSITIONS — Lance West is joining the American Petroleum Institute as VP of federal affairs. He currently is chief of staff for Sen. Joe Manchin (D-W.Va.). More from Axios … The American Bankers Association is adding Frank Pigulski, Abby Truhart and Jon Blum to its congressional relations team. Pigulski most recently was senior policy adviser in the White House Office of Science and Technology Policy, and is a Treasury and Beto O’Rourke alum. Truhart most recently was senior director of advocacy at the Credit Union National Association. Blum most recently was public policy adviser at WilmerHale, and is a Treasury and Hill GOP alum. …

… Mike Marinella is now press secretary for Rep. Dan Newhouse (R-Wash.). He previously was press secretary for Sen. Ron Johnson’s (R-Wis.) reelect. … Wanyoike Kangethe is now a senior principal scientist with Altria’s regulatory affairs department. He previously was toxicology branch chief with the FDA’s Center for Tobacco Products’ Office of Science. … Jared Brewster is now director of federal government affairs at Duke Energy. He most recently was Washington representative with the Tennessee Valley Authority’s federal affairs division in D.C.

WELCOME TO THE WORLD — Samantha Tausendschoen (née Bisogno), senior comms manager at the Ocean Conservancy and a Rick Nolan alum, and Tristan Tausendschoen, cybersecurity solutions engineer at Leidos and an alum of Deloitte and the Social Security Administration, welcomed Nora Jeanette Tausendschoen on Dec. 28. Pic

— Alleigh Marré, president of Free to Learn and a Trump DOD and HHS alum, and Zack Roday, of Ascent Media, on Jan. 5 welcomed Bowen, who joins big sister Margo and big brother Holden. Pic... Another pic