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December 13, 2023
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THE TOP
Happy Wednesday morning.
When is “progress” progress? The bipartisan immigration-border security-Ukraine talks will test that question over the next few days.
The White House swooped into the Senate negotiations late Tuesday, just minutes after GOP leaders said a deal to unlock Ukraine aid can’t pass by the end of this month. A delay or even an end to U.S. aid could prove disastrous for the embattled ally, according to Ukrainians and top administration officials.
Senate negotiators and Biden administration sources reported progress after a nearly two-hour meeting with Homeland Security Secretary Alejandro Mayorkas and aides to Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell. Republicans cheered the Biden administration’s expanded role in the talks, saying it was long overdue.
It also came on the same day Ukrainian President Volodymyr Zelensky pleaded with lawmakers to approve additional aid this month — only to be confronted once again with the reality that no Ukraine funding will pass Congress without significant immigration policy changes.
CBS News reported Tuesday that the White House backs new authority to expel migrants without asylum hearings, in addition to the “dramatic expansion of detention and deportation” of undocumented migrants. A senior administration official confirmed the outline of the report.
But the whiplash doesn’t change the timetable for reaching an agreement that could ultimately pass both chambers and be signed into law by President Joe Biden. It remains exceedingly unlikely that anything will get done before Congress leaves town for the holiday recess, according to sources involved in the talks. Lawmakers could always be called back if needed for a vote.
Yet the even bigger issue here is whether Biden and congressional leaders can find a sweet spot on both Ukraine and immigration that can pass muster with Speaker Mike Johnson and the very conservative House Republican Conference.
Senate Republicans are keeping Johnson and his staff in the loop on the nascent talks. But the White House’s Senate-centric strategy here is out of a 2021-22 playbook, when bipartisan deal-making was en vogue under a Democratic-controlled House and Senate.
Rep. Patrick McHenry (R-N.C.), who negotiated the debt-limit deal with the White House, put it this way:
In other words, the real pathway for a deal isn’t talking to Senate Republicans. It’s working out a deal with Johnson and then forcing the Senate to take it.
But reaching an agreement with Johnson is incredibly complicated. He’s proven to be unwilling or unable to make tough decisions. He’s never negotiated major legislation, nor has his staff. And Johnson is already in hot water with conservatives over his ever-changing positions on FISA and government funding. Legislating on the immensely difficult topic of immigration now would be treacherous.
Johnson has already said H.R. 2 — the restrictive border security bill — is the House GOP position. This has led much of his hardline conservative right flank to adopt an all-or-nothing approach.
“You gotta go back to the policies that work,” House Judiciary Committee Chair Jim Jordan (R-Ohio) insisted. “Remain in Mexico. You come across, we’re going to detain you. We’re not going to release people in the country. That’s what it all boils down to. Short of that, I don’t think you get Republicans to go along with something they’re against anyway.”
Not everyone is welcoming the White House’s last-minute push. Progressive lawmakers and pro-immigration groups are fearful that Biden will cave to GOP border demands out of desperation to secure Ukraine aid. The Congressional Hispanic Caucus is holding a press conference this afternoon to speak out against policy changes the White House may be considering as part of the talks.
Sen. Alex Padilla (D-Calif.) told us Tuesday he’s troubled that Biden would be entertaining Title 42-like authority to quickly deport undocumented migrants, as well as policies that would limit migrants’ ability to apply for asylum.
“It’s just adding to my list of concerns about how the talks are going,” Padilla said. “We should not return to Trump’s failed policies.”
Republicans see Biden as more malleable than most Hill Democrats when it comes to immigration policy, especially given his poor poll numbers on the topic.
To be sure, there are plenty of moderate and vulnerable Democrats who would be comfortable with many of Republicans’ proposed border restrictions. Some Republicans close to the ongoing talks believe Democrats’ lead negotiator, Sen. Chris Murphy (D-Conn.), is running cover for progressives — and that Biden would cut a deal that’s more favorable to the GOP.
“The key is to get the commander-in-chief involved in the negotiations,” Sen. Lindsey Graham (R-S.C.) told us. “Sen. Murphy — I have no confidence he is ever going to get a deal we can live with because he’s worried about selling it to the left.”
Of course, Murphy has been emphasizing that the GOP proposals to date simply can’t pass muster with the Democrats whose votes will be necessary to advance any agreement.
— Andrew Desiderio, Jake Sherman and John Bresnahan
Hunter Biden testimony fight reaches fever pitch
The biggest oversight dispute of this Congress may end in an anti-climactic no-show today. All eyes are on whether President Joe Biden’s son, Hunter Biden, will appear for his scheduled behind-closed-doors testimony before the House Oversight and Judiciary committees.
This comes the same day that the House is scheduled to vote on a resolution formally authorizing an impeachment inquiry into the president. Despite loud complaints from the White House and Democratic leaders, it looks like Speaker Mike Johnson and GOP leaders have corralled enough moderate Republicans to pass the resolution.
But don’t hold your breath for any explosive testimony by Hunter Biden.
Abbe Lowell, Hunter Biden’s lawyer, has insisted that he’s only willing to allow his client to testify publicly to avoid potential misrepresentations of what is said. Top House Republicans have rejected Lowell’s attempt to dictate how the younger Biden will testify, arguing a private deposition is necessary before any public session.
The takeaway? Expect the bickering over Hunter Biden’s compliance with the House GOP subpoena to continue for the foreseeable future. And get ready for possible contempt proceedings against the president’s son.
Representatives for Lowell didn’t respond to requests for comment on whether Hunter Biden would appear.
House Judiciary Committee Chair Jim Jordan (R-Ohio) told us Tuesday that he’s “definitely considering” holding Hunter Biden in contempt if he doesn’t show up. Jordan said the Oversight and Judiciary counsels have not had success talking to Lowell.
House GOP investigators have zeroed in on Hunter Biden’s conduct as a central focus of their presidential impeachment inquiry. Republicans are trying to connect Hunter Biden’s lucrative overseas business dealings with official actions Biden took as vice president from 2008-16.
To date, Republicans haven’t uncovered any conclusive evidence linking the elder Biden to any impeachable offenses.
Throughout the year, House Republicans have disclosed that Biden’s involvement with his son’s deals went further than previously known. Testimony from former Hunter Biden business associate Devon Archer revealed that Hunter Biden would regularly place the then-vice president on speaker phone with other business partners. But Archer insisted the conversations never touched on business itself.
Republicans subpoenaed scores of Hunter Biden’s bank records earlier this fall in an attempt to dig into his finances. They uncovered payments between a Hunter Biden-linked bank account and his father’s bank account. The White House said these were payments related to a truck Hunter Biden bought.
Even as the uncertainty surrounding Hunter Biden’s appearance swirls, House Oversight and Judiciary committee staffers are prepping for the testimony. GOP aides have cameras set up to film the potential deposition and lawyers have prepared hundreds of questions to ask the younger Biden.
Hunter Biden, of course, is the focus of a special counsel investigation spearheaded by U.S. Attorney David Weiss. Weiss has already returned separate indictments against Biden for tax and gun charges.
House Republicans have also subpoenaed Joe Biden’s brother, James Biden, to appear for a private testimony. James Biden was scheduled to testify on Dec. 6 but hasn’t appeared yet. James Biden’s lawyers have been in contact with Oversight Committee staff on the subpoena.
— Max Cohen
Powell’s final presser of 2023 is all about 2024
The Federal Reserve is set to announce its final interest rate move for 2023 this afternoon. But Wall Street and Washington will be far more preoccupied with what’s in store for 2024.
Economists overwhelmingly expect the Federal Open Market Committee to announce an unchanged rate today. The federal funds rate has sat between 5.25% and 5.5% since July.
That means Fed Chair Jay Powell’s press conference this afternoon will largely revolve around expectations for the first two quarters of 2024. Investors are counting on rate cuts in that period.
If history is any guide, Powell will make an effort today to chill those expectations and label them “premature.”
And it’s not just Wall Street itching for a reprieve. Lawmakers in both parties told us this week they’re getting a bit nervous about the longer-term economic effects of elevated rates.
Rep. Ann Wagner (R-Mo.), who chairs the House Financial Services Subcommittee on Capital Markets, said she’s been alarmed by recent reports of weakening investor appetite for U.S. Treasuries.
Lawmakers have “some things to get worked out with the Fed,” Wagner said. “If they’re not getting to whatever they think is their sweet spot — they’ve gotta realize they’re affecting credit going forward, and people’s ability to get capital and invest, by keeping these interest rates high at this point in time.”
Rep. Zach Nunn (R-Iowa) told us that credit is already “very, very expensive. So baseline, American families are already feeling the pinch. If it goes any higher, we’re now talking about a real roller coaster ride into a substantial downturn for most of working-class, middle-class America.”
Until recently, this was a concern we mostly heard from progressives. “I always think they could lower the rates,” Rep. Juan Vargas (D-Calif.) said. “I’m afraid they’ve been keeping them too high. They should have already taken the brake off.”
But there are still some pockets of heat in the economy that could, in theory, fuel inflation’s comeback tour. The U.S. labor market is the big one, with unemployment continuing to hover below 4%.
“Right now, it looks like labor returns, employment numbers are strong,” Sen. Mike Rounds (R-S.D.) said. “I suspect [the Fed] may very well consider holding for a longer period of time at where they are right now. I don’t think they necessarily go up.”
Wild card watch: We wanted to flag one unusual factor heading into today’s presser — the Freedom of Information Act.
Researchers tracking the Fed have unearthed a handful of fascinating historical documents in recent weeks laying out how the U.S. central bank responds to crises, including a possible breach of the debt limit.
Powell could definitely be asked about these documents and how they inform the Fed’s approach today. His answers could change how lawmakers approach future debt-limit fights… but we’re not holding our breath.
— Brendan Pedersen
THE CAMPAIGN
Rep. Pat Fallon (R-Texas) is running a campaign ad touting his impeachment work through his spot on the House Oversight Committee.
Fallon says in the ad that the panel is “leading the charge to investigate Hunter Biden, the Biden family and the alleged payments they received from foreign countries.” It’s an interesting example of how lawmakers are messaging on the impeachment inquiry into President Joe Biden back home. Even more interesting — this ad was paid for with taxpayer money, not campaign dollars.
“I joined the House Oversight Committee because I am sick and tired of politicians thinking that they’re above the law,” Fallon says. Lawmakers are poised to vote this week to officially authorize the inquiry into Biden.
The ad is running in the Sherman, Texas, media market.
— Max Cohen
DOWNTOWN DOWNLOAD
Burning Man, the festival in the Nevada desert, has hired a lobbyist. Burning Man Project has enlisted Swenson Strategies to lobby on “[e]nvironmnetal permitting related to the Burning Man event in Black Rock City, NV.”
— Jake Sherman
The Canvass Year-End Report
And what senior aides and downtown figures believe will happen in 2023.
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