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October 26, 2023
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PRESENTED BY
THE TOP
Happy Thursday morning.
Brand-new Speaker Mike Johnson has two brewing problems — House GOP moderates and Senate Republicans.
House Republican moderates overwhelmingly backed Johnson, ending several weeks of internal fighting. But they’re warning they aren’t going to blindly follow a far-right agenda.
The vow from center-right Republicans will have an impact across a range of issues, but there are two areas in particular worth watching — government funding and the potential impeachment of President Joe Biden.
“We have to speak up,” Rep. Lori Chavez-DeRemer (R-Ore.) told us. “We’re a strong voice as majority makers. Now’s the time to express it with a new speaker.”
In the aftermath of Johnson’s election, many House Republicans exuded a kumbaya vibe, as unrealistic as that seems.
Yet there are lasting scars from the last three weeks. The bitter clashes between top Republicans — with threats in particular aimed at GOP lawmakers, their families and staffers from some supporters of Rep. Jim Jordan (R-Ohio) — aren’t going to be forgotten anytime soon.
Politically vulnerable Republicans, notably the 18 members in districts Biden won in 2020, have already faced a slew of tough votes.
Now, with the right flank viewing Johnson as an ally to continue their hardline agenda, moderates say they’re ready to push back.
Rep. Mike Garcia (R-Calif.) made it clear that he didn’t see a vote for Johnson as speaker as a “concession to the far-right.” He wants to see Johnson make a concerted effort to listen to those in purple districts.
“It’s critically important we message correctly,” Garcia said. “We have one of the most conservative conferences now, probably in the history of the Republican Party in this Congress… We have to be mindful that there are still those in swing districts that need to be able to navigate some of these issues.”
Moderate members also expressed frustration over the myriad messaging bills the House has passed so far that play poorly in their districts, especially on issues like abortion access and transgender rights.
Rep. John Duarte (R-Calif.) said he supports an effort to get the U.S. government’s fiscal house in order. Duarte, though, had a warning for those colleagues pursuing hot-button social issues.
“If the conservative majority starts to feed us things that are socially conservative and messaging bills that we don’t want to sign on to, well, then they’ll get some pushback,” Duarte said.
Of course, Democrats are already hitting vulnerable GOP incumbents over their vote to elevate Johnson to the speakership. Expect plenty of campaign ads tying endangered incumbents to Johnson’s socially conservative views.
Across the Capitol: Effective governing will require Johnson to work closely with Senate GOP leaders, some of whom didn’t even know the Louisiana Republican before this week. Senate Minority Leader Mitch McConnell has never even met Johnson.
Johnson’s status as an unknown quantity in Washington has Senate Republicans concerned about the future of government funding, as well as new aid for Israel and Ukraine. Some are openly casting doubt on Johnson’s ability to work with Democrats, which will be necessary to approve the must-pass agenda items.
“To pass anything, you have to get Democratic votes. You don’t have to be Einstein’s cousin to figure that one out,” said GOP Sen. John Kennedy, a fellow Louisianan. “I just don’t know how he’s going to handle it. [Nov.] 17 is coming, the world’s on fire, the border’s open and inflation continues to gut the American people like a fish… All this has to be addressed.”
Senate Republicans aren’t yet sure how Johnson will deal with the looming funding deadline. Johnson told House Republicans this week that he wants to pass a stopgap funding bill through Jan. 15 or April 15 in order to avoid being jammed by the Senate with a year-end bill.
Senate Minority Whip John Thune described a stopgap as a “buying time” exercise, saying “We haven’t crossed that bridge yet.” Senators first have to “figure out what the art of the doable is in the next few weeks” on FY2024 appropriations, he added. The Senate is on track to pass its first three-bill minibus within the next week.
“We need somebody to work with and somebody who could get the House functioning again,” Thune told us.
The other big issue is Biden’s $105 billion national-security funding request. McConnell and several top Republicans support the idea of linking aid for Israel and Ukraine in one bill. Johnson has voted against Ukraine aid, but GOP senators said they expect him to honor the will of the bipartisan majority that supports more money for Kyiv.
“The question is whether — with a majority of his conference generally supporting Ukraine aid before you even go to the Democrats who also support it — what does he do?” Sen. Thom Tillis (R-N.C.) said of Johnson. “He’s going to get a chance to prove it pretty quickly.”
To be sure, GOP senators are relieved that the House was able to resolve its weeks-long speaker crisis, which reflected poorly on their party’s ability to govern. And Tillis said the fact that moderate Republicans voted for Johnson suggests the new speaker has assuaged their concerns about his priorities.
“One thing you learn when you become speaker — you can’t necessarily govern based on your own personal preferences,” added Tillis, a former state House speaker. “He’s got a tall order to fill.”
— Andrew Desiderio, Max Cohen, Mica Soellner and John Bresnahan
Tomorrow: We’ll be in Little Rock interviewing Arkansas Republican Sens. John Boozman and Tom Cotton about challenges facing rural small businesses. RSVP!
Next Month: On Thursday, Nov. 9 at 9 a.m. ET we’ll be discussing measures to address the opioid crisis with Sen. Shelley Moore Capito (R-W.Va.), RSVP Here.
THE NEW BOSS
Inside Johnson World: How the new speaker will build his team
Usually, when a new speaker takes office, they’ve spent years in the leadership or on a House committee assembling a top-flight staff, an extensive political infrastructure and a deep donor network.
Speaker Mike Johnson has a staff of 12. Eight of Johnson’s aides started working for the Louisiana Republican in 2023. He’s raised just $553,000 this year. Compare that to the $16 million former Speaker Kevin McCarthy raised in the third quarter alone.
In Johnson’s previous job, conference vice chair, his main role was scheduling one-minute speeches on the floor and urging members to pen op-eds. Johnson created a contest whereby the best orators and op-ed writers got mini statues of historical figures such as John Adams and Patrick Henry. During football season, Johnson handed out signed footballs.
Johnson was on the periphery of the House GOP leadership for a long time. He served on the Steering Committee, which chooses committee assignments, and attended the Elected Leadership Council meetings. But he never took part in the Daily Management Meeting, the nerve center for the House GOP leadership.
Johnson is about to have a very rude awakening.
The transition from low-level leadership to the speaker is a jump that few — if any — lawmakers make. And it will take time and a lot of effort for Johnson to build an operation that’s up to the job he’s taken on.
We’re going to explore a few dynamics that Johnson will face: The makeup of his own leadership table, his policy operation, political operation and his inner circle.
House GOP leadership. Johnson’s leadership table is filled with Republicans who tried and failed to win the speakership — most notably, Majority Leader Steve Scalise and Majority Whip Tom Emmer.
Scalise and Johnson — both Louisianans — are relatively close. Scalise’s chief of staff, Brett Horton, and Johnson’s chief of staff, Hayden Haynes, are both from Monroe, La., (As is Mehgan Perez-Acosta, chief of staff to Florida GOP Rep. Byron Donalds, another speaker candidate).
As we noted in our Wednesday AM edition — and as Brendan Buck, the former House GOP aide, wrote Wednesday as well — Scalise immediately becomes a more powerful figure in the House with Johnson’s ascension. It’s quite the turn of fortunes for Scalise, whose speaker campaign quickly fizzled out two weeks ago.
In some ways, Johnson’s ascendance could mark the revitalization of Scalise and Republican Conference Chair Elise Stefanik. McCarthy neutered the leadership table, to some degree, when he empowered close allies like Reps. Patrick McHenry (R-N.C.) and Garret Graves (R-La.) as his consiglieres. Johnson is much more likely to turn to other elected leaders for help, according to sources.
There is the potential for drama here. What happens if Republicans lose the majority? Will Scalise drop to minority whip and Johnson take minority leader? All very interesting.
Policy staff. Let’s now turn to policy staff. This may be Johnson’s most pressing concern.
It takes dozens of people to run the speaker’s office. And Johnson doesn’t have that kind of firepower yet.
Johnson told us Wednesday that he has “a staff that I’m bringing in” — meaning some staffers from his personal office. Haynes is likely one of those.
“We’ll be interviewing with a lot of the McCarthy staff — the institutional employees — to work through that and see how many want to stay on,” Johnson added.
The institutional employees Johnson is referring to likely include the House general counsel and sergeant at arms staffers.
But McCarthy has a number of aides that seem likely to get a look from Johnson. Brittan Specht, McCarthy’s policy director, understands the nuances of leadership policy debates and has roots in the Republican Study Committee. Jason Yaworske, McCarthy’s appropriations staffer, is also well respected in the GOP leadership world. He was chief of staff to conservative Rep. Warren Davidson (R-Ohio) for more than two years.
Johnson will have to build out a more extensive communications operation with a television booker — something he doesn’t have at the moment. The new speaker needs a member services team and protocol staffers for foreign dignitaries.
Political operation. Johnson will need a very extensive political operation. McCarthy has several people who work full-time on fundraising. Given the state of Johnson’s political operation — he has just $1.1 million on hand — the Louisiana Republican can barely afford to pay a team of political aides who will demand upwards of $150,000 annually each.
Inner circle. Johnson’s inner circle is incredibly small for a man who has ascended to the speaker’s chair. Outside of his staff, Johnson is close with the House’s Bible-study group. This includes Rep. Cathy McMorris Rodgers (R-Wash.), the Energy and Commerce Committee chair who nominated Johnson for speaker inside the GOP conference.
After asking dozens of sources over the last few days, the only downtown allies that Johnson has are the Heritage Foundation crew and Dan Ziegler, the former RSC executive director who works at Williams and Jensen. Ziegler lobbies for companies such as Eli Lilly, Merck, Novo Nordisk, Phrma and the News Media Alliance.
— Jake Sherman
PRESENTED BY JPMORGAN CHASE
What we’re watching in the Senate sanctions hearing today
The Senate Banking Committee convenes this morning to examine the illicit finance that helped fund the deadly Oct. 7 Hamas attack on Israel and weigh potential future sanctions.
It’s a high-stakes hearing for Chair Sherrod Brown (D-Ohio). There’s bipartisan interest in the upper chamber in some kind of repercussions for Iran, a longtime backer of Hamas, though U.S. officials have said they do not have evidence Iran was directly involved in the planning.
The White House has already re-frozen $6 billion in Iranian assets that were set to be released as part of a prisoner swap. We reported Wednesday that Brown doesn’t think Congress needs legislation to codify that freeze, though his committee’s top Republican, Sen. Tim Scott (R-S.C.), proposed a bill to do just that earlier this month.
Otherwise, Brown appears to be keeping his options open. “Senator Brown is reviewing all legislation related to Iran sanctions” and today’s hearing will “determine next steps and possible legislation,” spokesperson Alysa James said.
Scott and other Banking Republicans will slam the Biden administration’s approach this year to Iran. We’ll also hear broader discussions about possible sanctions. “It will be a good discussion about what options are available to us,” Sen. Mike Rounds (R-S.D.) said.
There’s also bipartisan pressure to address the role that crypto may have played in financing the Hamas attacks and other bad actors around the world. The latest push has been driven by Sen. Elizabeth Warren (D-Mass.), who told us Wednesday it was past time for crypto to face stronger money laundering rules.
“I’m always open to hearing other ideas for how we can constrain the flow of funds,” Warren said. “But it shouldn’t be an either-or – we need to shut down the crypto flow, and if there are other tools we need to use in other areas, let’s put them on the table and take a look.”
Brown’s opening remarks will also say lawmakers “need to crack down on the use of crypto to fund terrorism and evade sanctions.”
In the meantime, the crypto industry has strongly disputed that crypto played a crucial role in Hamas funding before this month’s attack. On Wednesday, the blockchain analytics firm Elliptic published a lengthy statement arguing that a widely-cited Wall Street Journal story had “misinterpreted” its data to suggest Hamas used millions of dollars in crypto in the period leading up to the attack.
Meanwhile in the House: Rep. Andy Barr (R-Ky.) is leading a fresh letter to the Federal Reserve today that will blast the U.S. central bank’s approach to capital reform.
Barr’s letter tracks with what the banking industry has been saying for some time now. Lawmakers will complain to Vice Chair for Supervision Michael Barr about “the lack of analysis” presented in the proposal.
“[Y]ou testified that any proposed additional capital requirements would need to be justified,” the lawmakers write. “However, to date, we have yet to see that justification.” Read the full letter here.
— Brendan Pedersen
THE SENATE
Senate Dems eye new plan to circumvent Tuberville’s military promotions blockade
Scoop: Senate Democratic leaders are crafting a new proposal that could help overcome Sen. Tommy Tuberville’s (R-Ala.) blockade of military promotions, according to multiple sources.
Democrats are preparing to send a resolution to the Rules Committee that would allow most of the 300-plus promotions Tuberville is blocking to be considered on the floor en bloc. This would dramatically reduce the number of votes the Senate would need to take to approve the long-stalled promotions. It would be in effect for a little over a year.
The resolution, described to us by several sources, includes a carve-out for upper-level promotions like members of the Joint Chiefs of Staff and combatant commanders, who would still require individual votes. The proposal technically qualifies as a “standing order,” not a permanent rules change.
It’s being spearheaded by Armed Services Committee Chair Jack Reed (D-R.I.) and Sen. Kyrsten Sinema (I-Ariz.), among others.
The group has already reached out to some Republicans to gauge their interest, and it was discussed in a number of side conversations during the Senate GOP lunch on Tuesday, we’re told. Tuberville is also aware of the effort.
“It’s their side that’s kind of forcing this down our throats,” said Sen. Joni Ernst (R-Iowa), who has been approached about it.
The Rules Committee would need to decide the threshold for adoption of the resolution on the Senate floor, but it would likely be 60 or 67 votes. Democrats had resisted this type of undertaking for months, arguing it was incumbent on Republicans to pressure Tuberville to lift his holds.
Earlier this week, we scooped a parallel effort by Sen. Dan Sullivan (R-Alaska) to force floor votes on the two Joint Chiefs of Staff vacancies. On Wednesday, Sullivan’s proposal received the requisite number of signatures to move ahead.
More Senate news: Sen. John Cornyn (R-Texas) will head to the border today alongside GOP Sens. John Barrasso (Wyo.), Ted Cruz (Texas), Pete Ricketts (Neb.) and Mike Lee (Utah).
Tonight, the senators will participate in a nighttime muster with Border Patrol officials. Tomorrow, they’ll get a CBP briefing and tour the Ursula Central Processing Center as well as a riverine. They’ll also hold a press conference.
It’s notable that Cornyn and Barrasso — two potential Mitch McConnell successors — are going together. And the Senate is already considering new border security measures as part of the White House’s supplemental funding request.
— Andrew Desiderio
AND THERE’S MORE…
Campaign news: The New Democrat Coalition Action Fund is endorsing three candidates in red-to-blue flip opportunities. The group is backing Christina Bohannan in Iowa’s 1st District to take on Rep. Mariannette Miller-Meeks (R-Iowa); Monica Tranel in Montana’s 1st District to run against Rep. Ryan Zinke (R-Mont.) and Adam Gray in California’s 13th District to oppose Rep. John Duarte (R-Calif.).
Bohannan, Tranel and Gray all ran in 2022 and lost to the current incumbents. Bohannan fell short by six points, Tranel lost by three points and Gray lost by less than a point.
Downtown Download: AMC Theaters has hired Arnold & Porter to lobby on “[f]ederal interstate commerce issues including fee disclosures related to event ticketing.”
Foley and Lardner has inked another client to lobby on the 2026 World Cup. Former Rep. Dennis Cardoza (D-Calif.) will lobby for the Dallas Sports Commission to seek “federal funding opportunities and awareness for 2026 World Cup hosting needs.”
— Jake Sherman and Max Cohen
PRESENTED BY JPMORGAN CHASE
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