NEWS: Scalise's chief is leaving the Hill

IN THIS EDITION

Scalise’s longtime chief is leaving for K Street

How the weird U.S. economy looks to Powell

House Dems: GOP causing SNAP crisis on purpose

ICYMI: Van Duyne urges content creators to engage with Congress

Maryland Senate president says he won’t redistrict

THE TOP

Scalise’s longtime chief is leaving for K Street

Happy Wednesday morning.

It’s Day 29 of the shutdown. There’s no resolution in sight to this crisis.

The House has now been out of session for 40 days.

House Minority Whip Katherine Clark will be our guest on Fly Out Day tomorrow. Subscribe to our YouTube channel.

Breaking news: Brett Horton, longtime chief of staff to House Majority Leader Steve Scalise, will leave Capitol Hill in December, a seismic departure at the top rung of the House Republican leadership.

Horton is one of the longest-serving leadership staffers and one of the primary architects of Scalise’s career.

Horton will join the American Hotel & Lodging Association as chief advocacy officer, where he will oversee lobbying, advocacy and political activities.

The Louisiana native joined Scalise’s rank-and-file operation in 2010 as a legislative counsel. Horton helped steer Scalise’s career from the chairmanship of the Republican Study Committee to a surprise yet overwhelming victory over former Rep. Peter Roskam (R-Ill.) for the GOP whip job in 2014.

This move eventually helped catapult Scalise to the No. 2 slot in the House Republican leadership. Horton has been Scalise’s chief for nearly 10 years.

Horton has been by Scalise’s side during an attempted assassination, bouts with cancer and a failed run for speaker of the House in the wake of conservative hardliners overthrowing former Speaker Kevin McCarthy.

In GOP leadership circles, Horton is known for his encyclopedic expertise on the House Republican Conference and his extraordinarily close relationship with Scalise. Horton was deciding between multiple offers downtown after his search.

Horton’s departure will raise a question that makes Scalise’s orbit extremely uncomfortable: Will the No. 2 House Republican call it quits? During the last few months, Scalise’s communications director and two deputy chiefs of staff both left for the private sector. Scalise, who came to D.C. in 2008, is the longest-serving member of the leadership.

Scalise told us on Fly Out Day two weeks ago that he’s going to run for reelection.

“I’m enjoying this,” Scalise said.

Day 29. At some point, the government shutdown is going to end. Maybe. Somehow. We hope.

But the fight has placed health care at the center of the national political debate, and that’s already proving to be a messy topic for the GOP.

There are some Republicans who want to extend the expiring Obamacare subsidies as is or with minor changes. These moderate Republicans are awfully quiet nowadays.

There are others — such as Senate Majority Leader John Thune and Speaker Mike Johnson — who say they’re open to broader conversations about health-care reform but really don’t want to extend the ACA subsidies.

Then there are GOP lawmakers like Sen. Rick Scott (R-Fla.) urging President Donald Trump to scrap the subsidies altogether, a direct challenge to the Affordable Care Act. These Republicans argue the need for subsidies in the first place shows that Obamacare has failed in its stated goal of keeping health-care costs down.

“If you’re going to support anybody with a subsidy, then you should give it to them in cash and let them be a health care buyer,” said Scott, who was part of a closed-door meeting with Thune on the issue last week.

Scott was alluding to the fact that the Obamacare enhanced tax credits — the issue behind this shutdown — go to insurance companies, who then lower enrollees’ premium payments to reflect the subsidy. This is a favorite GOP argument against the credits.

During last week’s meeting, Scott and other conservatives pitched Thune on using the reconciliation process to craft a new health care law, arguing Democrats have shown they won’t actually negotiate a bipartisan deal. Senate GOP leaders have, in general, been cool to a second reconciliation bill.

“They keep wanting to defend Obamacare,” Scott said of Democrats. “Obamacare needs to just be fixed.”

The reconciliation question underscores just how significant Republicans’ process disagreements are in addition to their differing policy views.

Other key GOP lawmakers have been pushing for a bipartisan health care package to pass by the end of the year, though that would involve narrower and more universally-backed changes like pharmacy benefit manager crackdowns.

But what some Republicans are now envisioning could be much broader.

Danger, danger. The problem for Republicans is they’ve got a bunch of different views and little time. The midterms are just one year away. And the idea of muscling through another large-scale reconciliation bill, especially with conservatives eager for more spending cuts, seems far fetched. A health care bill would be politically and substantively complex.

Just watch Sen. Bernie Moreno (R-Ohio) response to CNN’s Kaitlan Collins when she asks him if Republicans have a health-care plan. Moreno named a few policies and said it would take months for Republicans to coalesce around a set of policies. That’s just on their side.

And who knows what the political landscape will look like after the shutdown? Will the mood on Capitol Hill be so toxic that Democrats can’t work with any Republicans on any issue or vice versa? This is a historically bitter standoff that will be difficult to move past. Plus, don’t rule out another shutdown over FY2026 funding levels.

Some proponents believe it could be difficult at this point to introduce big changes to the enhanced Obamacare subsidies for 2026, which is the bare minimum for many Republicans to consider the idea. This is the Democrats’ top ask. And open enrollment begins Saturday, with premium costs predicted to soar.

“We need to eliminate the Covid-era subsidies,” Sen. Thom Tillis (R-N.C.) said. “We just can’t do it immediately. It’s too late into the cycle. I hope that people coalesce around maybe a one-year extension and then year two ramp down.”

The back-and-forth all underscores the challenge for Republicans politically. Democrats are eager to spotlight health care costs and believe it’s an issue they can win on politically. The GOP leadership is biting, saying they want to do something. But a Republican health care overhaul is far easier said than done.

— Jake Sherman, Andrew Desiderio and Laura Weiss

NEW EVENT: We will be streaming live today and tomorrow from inside the Goldman Sachs 10,000 Small Businesses Summit in Washington D.C. Register to catch our conversations with Rep. Adrian Smith (R-Neb.), Sen. Ben Ray Luján (D-N.M.), Goldman Sachs Chairman and CEO David Solomon, and more! See more details about the sessions and RSVP here.

FED DAY

How the weird U.S. economy looks to Powell

Are America’s top economic policymakers flying blind right now, or are things basically fine? We’ll hear Federal Reserve Chair Jay Powell’s take on the question this afternoon.

The Federal Open Market Committee will announce its next move in interest rate policy at 2 p.m., followed by Powell’s 2:30 p.m. news conference. The result isn’t much in doubt, with the vast majority of economists expecting a 25 basis point cut.

But the government shutdown will add a strange tilt to the day’s proceedings.

All month long, the Federal Reserve has been forced to contend with an incomplete data picture. The last U.S. employment report from the Bureau of Labor Statistics covered August. September’s report has been delayed indefinitely, and October’s may never exist. Economists have been sifting through private sector job reports since, which have shown a muddier picture.

The angle. Democrats have wasted no time this month attacking the Trump administration for this state of affairs.

“Thanks to Donald Trump’s refusal to release the job numbers, the Fed is now going to make interest rates like an airplane trying to land with only one wing,” Sen. Elizabeth Warren (D-Mass.) said.

Republicans aren’t quite so concerned. “They have ways of keeping their finger on the pulse of what’s going on in the economy,” Sen. Steve Daines (R-Mont.) said. “I’m hoping to see a rate cut.”

The vibe. And what about the state of the economy, anyways? The main threads we’ve been poking at over the last few months still hold, and the shutdown hasn’t had much of an economic impact nationally yet. Although not paying roughly 1.4 million federal employees for a month so far — and maybe far longer — is very painful to them.

Here’s your cheatsheet: Inflation has picked back up under the Trump administration. The labor market has slowed down significantly, but without actually increasing unemployment from around 4% so far. We won’t know the government’s latest GDP estimates on Thursday, thanks to the shutdown, but Q2 growth was a solid 3.8%.

“I think there’s a lot of confidence. That’s positive,” Sen. John Curtis (R-Utah) said. “The economy feeds on confidence.”

Yet consumers’ overall impression of the economy may be waning. The Conference Board’s consumer sentiment survey hit a six-month low this week. And the word “layoffs” is very much in the news this month, with major employers like Amazon (14,000 employees cut), UPS (48,000 cut), Target (1,800 cut), Nestle (16,000 cut), Novo Nordisk (9,000 cut) and Microsoft (6,000 cut) all announcing significant restructurings.

It’s worth remembering that members of Congress are all feeling the economy in different ways. Some states and municipalities are experiencing micro recessions. Moody’s Analytics estimates just under two dozen states are in or close to a recession. And it’s the states closest to the nation’s capital that have been some of the hardest hit.

“In Virginia, it’s bad. The GDP’s gone from 6.2% to 1.7% in the year before Trump to this year,” Sen. Tim Kaine (D-Va.) said. “We’re seeing higher prices, fewer jobs and slower growth.”

– Brendan Pedersen

SHUTDOWN SHOWDOWN

House Dems: GOP causing SNAP crisis on purpose

House Democrats did something that their Republican counterparts haven’t done in nearly six weeks — they met in person Tuesday night on Capitol Hill.

Democrats discussed the looming crisis over SNAP funding, which runs out on Nov. 1. They blamed President Donald Trump and GOP congressional leaders for the situation, even though virtually all House Democrats voted against a Republican plan to fund federal agencies through Nov. 21. And there was extreme bitterness toward Speaker Mike Johnson, who hasn’t brought the House back into session for more than 40 days while refusing to swear in Rep.-elect Adelita Grijalva (D-Ariz.).

“Mike Johnson — what an insignificant, irrelevant human being he has become,” Rep. Jim McGovern (D-Mass.) complained. McGovern and other Democrats want Johnson to bring back the House immediately.

Democrats claim that the responsibility for the SNAP crisis is squarely on the Trump administration, arguing that the Agriculture Department should draw on a roughly $5 billion contingency fund to pay benefits for a few weeks. The Trump administration doesn’t believe it can use that funding to keep benefits available in November for more than 40 million Americans who use the program.

“This is a hoax being perpetrated by this administration for political reasons to point a finger at Democrats,” said Rep. Rosa DeLauro (Conn.), ranking Democrat on the Appropriations Committee. “They have $5 [billion] to $6 billion in a contingency fund which says it’s exactly for these kinds of purposes… They are in violation of the law.”

Democratic attorneys general from California, Massachusetts, Minnesota, Nevada and possibly other states will brief Democratic members and senators on a lawsuit filed Tuesday against USDA over the contingency fund, said lawmakers and aides.

Rep. Angie Craig (Minn.), top Democrat on the House Agriculture Committee, urged members at Tuesday night’s caucus meeting to message on rising health care premiums and SNAP benefits running dry.

“It makes them more corrupt and more cruel every single day when they actively choose to try to leverage people — hungry Americans,” Craig said of Republicans. “That’s on them.”

Frontliner Rep. Tom Suozzi (D-N.Y.) said he believes the shutdown’s impacts, including the SNAP cliff, will raise the pressure on both parties to end the impasse. Suozzi is also bullish that Republicans will feel heat when Obamacare open enrollment begins Saturday.

“I personally am concerned that a lot of people are suffering in our country,” Suozzi said. “We have to be able to effectively demonstrate that we’re fighting for them and that we’re doing everything we can to address the challenges they face.”

– John Bresnahan and Laura Weiss

PUNCHBOWL NEWS EVENTS

ICYMI: Van Duyne urges content creators to engage with Congress

Rep. Beth Van Duyne (R-Texas) urged content creators to engage with lawmakers and help shape legislation during a Punchbowl News event Tuesday.

Van Duyne encouraged content creators to reach out to her office and fill out a personalized form to make suggestions relevant to the industry, including on tax policy and internet regulation.

The three-term lawmaker also discussed the latest on the government shutdown and said it’s going to take “some sensibility in the Senate” to end the federal funding impasse.

You can watch the full recording here.

– Shania Shelton

THE CAMPAIGN

Maryland Senate president says he won’t redistrict

Maryland redistricting news: Maryland Senate President Bill Ferguson (D) won’t move forward with redistricting even as he acknowledged that President Donald Trump’s national push to add more GOP House seats is a major threat to Democrats.

“Despite deeply shared frustrations about the state of our country, mid-cycle redistricting for Maryland presents a reality where the legal risks are too high, the timeline for action is dangerous, the downside risk to Democrats is catastrophic, and the certainty of our existing map would be undermined,” Ferguson said in a letter to Maryland senators late Tuesday night.

This a win for GOP Rep. Andy Harris, the House Freedom Caucus chair who many Maryland Democrats want to redistrict out next year.

But Ferguson argued such a move faces legal challenges and could disrupt the state’s 2026 election calendar.

Maryland’s Democratic Gov. Wes Moore — a possible 2028 White House hopeful — and Maryland House Speaker Adrienne Jones are pro-redistricting, so Ferguson’s stance puts him in conflict with those two powerful Democrats.

We’ll have more on this in the Midday edition.

Big Apple ads: We have two new ads in the New York mayoral race.

The first is from Fix the City, a PAC designed to boost former Gov. Andrew Cuomo. This spot urges voters to not “waste their vote on Curtis Sliwa,” the GOP candidate for mayor.

“Want to stop Mamdani from slashing the police and killing jobs?” the ad asks. “Sliwa has zero chance. Face it, a vote for Sliwa is a vote for Mamdani.”

The next ad is from Zohran Mamdani’s campaign. The spot features a number of Fox News segments playing on various televisions.

“I’m the actual Zohran Mamdani, not the guy they talk about on this channel,” Mamdani says in the spot.

“My radical agenda? Turn the page on the billionaire backed politics of Andrew Cuomo. Make the city affordable, tackle government waste, keep New York safe, and deliver on our promises with universal childcare, rent that you can afford, and a property tax system that actually makes sense. So don’t be fooled by the noise. This is who I am, and you’re who I’m fighting for.”

– John Bresnahan and Jake Sherman

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