The Archive

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Who we’re watching

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President Joe Biden: It’s the week before Election Day and Biden will head to Florida, Pennsylvania, Maryland, New Mexico and California. The NYT reported that Biden was attending rallies on behalf of Democratic candidates last week as the prospect that his party could lose control of Congress is looming.

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Federal Reserve Chair Jay Powell: The Fed is all but certain to announce another “jumbo” rate hike of 75 basis points Wednesday, the latest move in its aggressive campaign to bring down inflation. But Powell has some Democrats nervous. Senate Banking Committee Chair Sherrod Brown (D-Ohio) said Powell should reconsider the pace of rate hikes, as did Sen. John Hickenlooper (D-Colo.). We’ll see what Powell says at Wednesday’s press conference about December and beyond.

– Jake Sherman and John Bresnahan

POWER SHIFT

GOP win may force a power struggle over crypto’s future

As we’ve written about the money and policy surrounding crypto legislation on Capitol Hill over the last few weeks, we’ve heard one question asked a few times: “Wait, why are we talking about the Senate Agriculture Committee?”

The technical answer is a quirk of history. The Senate Agriculture Committee oversees the Commodities Futures Trading Commission, which is the focus of the Digital Commodities Consumer Protection Act, co-sponsored by Senate Agriculture Chair Debbie Stabenow (D-Mich.) and Ranking Member John Boozman (R-Ark.).

But that history belies a more important political question: Is there a power struggle simmering between the committee best known for producing the farm bill versus the financial committees?

A similar dynamic played out following the 2008 financial crisis as the Senate Agriculture Committee tried to assert authority over derivatives legislation, only to face a backlash from the Banking Committee and bankers.

As for the crypto legislation, that’s not happening, at least right now. But if the midterm election delivers Congress to the GOP, that will likely change.

Here’s what we’ve learned:

→	The Senate Agriculture Committee is driving crypto policy because the other committees have let them.

Let’s start with the Democratic leadership of the banking-focused committees. The Senate Banking Committee is led by Sen. Sherrod Brown (D-Ohio), and the House Financial Services Committee is chaired by Rep. Maxine Waters (D-Calif.).

The simple fact is that neither Democrat has made crypto a major priority over the past several years.

Over on the House Financial Services Committee, there’s very little daylight between Republicans and Democrats on big-picture crypto policy. Democrats want to prioritize consumer protection, and Republicans want a lighter-touch framework geared towards legal clarity.

As a result, Waters and Rep. Patrick McHenry (R-N.C.), the ranking member, have focused their efforts on stablecoins, a small but important sliver of the crypto policy universe.

The lack of ambition here is significant. There’s no federal law on the books today that defines digital assets.

But we don’t expect that to hold under a GOP House in 2023, which would hand the committee’s gavel over to McHenry. Expect the North Carolina Republican to have a broader agenda for crypto, which could complicate the Senate Agriculture Committee’s efforts.

Here’s what McHenry told us in a statement:

Waters’ office didn’t respond to a request for comment.

Brown, meanwhile, simply hasn’t had much to say about crypto beyond urging regulators to keep an eye on things. It’s also worth noting that the Ohio Democrat serves on the Agriculture Committee as well. Brown hasn’t publicly commented on the Stabenow-Boozman bill.

A person familiar with Brown’s thinking told us that the senator “will work with his colleagues on the best bill possible for consumers” and is focused on an “all-of-government approach” to crypto which includes the financial regulators.

→	The staff of the Senate Agriculture Committee isn’t working alone.

Several sources following crypto policy say that the staff of Senate Banking and Agriculture talked to each other a lot about the DCCPA. No one is accusing Senate Ag of going rogue.

An aide on the Senate Agriculture Committee disputed the idea that there was “tension” with their financial counterparts but did acknowledge “some differences of opinions on some aspects of the bill.”

A phrase that came up in several of our conversations was a desire for everyone to “Stay in their lane.” If you look at the thrust of the DCCPA, that tracks. The bill is focused on commodities, which is solidly in Senate Ag’s jurisdiction.

But let’s not underplay the bill’s potential impact. A key component of the Stabenow-Boozman bill would have the CFTC grow alongside the crypto sector with new regulatory fees.

The CFTC today is tiny compared to other financial regulators, with only about 600 employees. The Securities and Exchange Commission has closer to 4,000. If crypto does get a lot bigger in the coming years, both the CFTC and Senate Ag will gain power.

Representatives for Stabenow didn’t respond to multiple requests for comment.

→	Republicans outside of Senate Agriculture want a crypto bill that limits the Securities and Exchange Commission’s authority.

Current SEC Chair Gary Gensler is one of GOP lawmakers’ favorite punching bags. Along with several other flashpoints, Gensler has received criticism for his sometimes-expansive view of what constitutes a crypto security, which would bring it under his agency’s purview.

So a shortcoming of the DCCPA, as told by Republicans, is that it doesn’t draw a firm line between what makes a crypto product a commodity versus a security. The rules that apply to each type of product can vary widely.

Writing those definitions is a tall order. But without them, Republicans say there’s little to stop the better-staffed, better-funded SEC from staking a claim on most of the crypto universe.

Here’s what Amanda Thompson, a Senate Banking Republican spokesperson, told us:

– Brendan Pedersen

DOWNTOWN DOWNLOAD

→	Capitol Counsel has signed up the ​Business Council of Canada. They will lobby on “[p]romoting strengthened US-Canada relations, and issues regarding energy, climate, US-Canada border, automobiles, and supply chains.”

→	Subject Matter will now lobby for “LiveWire EV, LLC and its affiliate Harley-Davidson Motor Company, Inc.” LiveWire is an electric motorcycle made by Harley-Davidson.

– Jake Sherman

THE CAMPAIGN

→	The NYT/Sienna has new polls in four states.

Arizona: Sen. Mark Kelly (D) 51%, Blake Masters (R) 45%

Georgia: Sen. Raphael Warnock (D) 49%, Herschel Walker (R) 46%

Nevada: Sen. Catherine Cortez Masto (D) 47%, Adam Laxalt (R) 47%

Pennsylvania: John Fetterman (D) 49%, Mehmet Oz (R) 44%

→	New: In Sen. Maggie Hassan’s (D-N.H.) final TV ad of the cycle, the Democrat highlights “standing up to the president” and working with Republicans to “hire 100,000 new police officers.”

Hassan’s reelection race against Republican Don Bolduc has tightened over the past several months. Hassan led Bolduc by nine points in the FiveThirtyEight polling average at the start of the month, an advantage which has now narrowed to four points.

→	New: Frontline Rep. Josh Harder (D-Calif.) slams his opponent for contributing to higher costs in his closing reelection ad. In the economic-focused ad, Harder also plays up his support for lowering prescription drug prices and repealing the gas tax.

→	Joe O’Dea, the Republican running against Sen. Michael Bennet (D-Colo.), reported receiving $575,890 in contributions from Oct. 21 through Oct. 28. O’Dea chipped in with $500,000 of his own money on Friday.

→	Our Hudson PAC, a super PAC supporting DCCC Chair Sean Patrick Maloney, got $370,000 in October, as the New York Democrat faces a tough challenge from Mike Lawler.

Elena Silenok, the founder and CEO of Clothia, gave $100,000, as did venture capital titan Ron Conway. PAC to the Future, Speaker Nancy Pelosi’s PAC, gave $100,000 as well.

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Our American Century, a Republican group, is running an ad saying that President Joe Biden can count on Sen. Patty Murray (D-Wash.). The ad is cut to look like a positive spot for Murray, but it’s actually meant to tie the Washington State Democrat to the president. Murray is in a tough race against Republican Tiffany Smiley.

– Jake Sherman and Max Cohen

K Street weighs in on what will pass in the lame duck

It’s K Street Canvass Week. We’ll be bringing you lots of data on what K Street thinks of critical issues facing Washington. The Canvass, of course, is our public opinion survey that we conduct with the Locust Street Group.

This morning we’re coming to you with the prospects for the Big Tech antitrust bill and the Electoral Count Act, two issues that will suck up a lot of oxygen in the upcoming lame-duck session.

According to top lobbyists and downtown leaders, the Big Tech bill will get axed and the Electoral Count Act will pass.

76% of participants in our poll say the American Innovation and Choice Online Act won’t pass this Congress. This is relatively constant across both parties.

67% of those polled say that the Electoral Count Act will pass.

Remember: We are just three weeks away from the lame duck, so get ready.

– Jake Sherman

MOMENTS

8 a.m.: President Joe Biden will get his daily intelligence briefing in Delaware.

9:05 a.m.: Biden will leave Delaware for New York, where he will attend a private memorial service. Biden will leave New York at 12:55 p.m.

2:40 p.m.: The Bidens will arrive at the White House.

5:15 p.m.: The Bidens will host children of “firefighters, nurses, police officers, and members of the National Guard at the White House for trick-or-treating.”

Biden’s week: Tuesday: Biden will travel to Fort Lauderdale, Fla., to speak about “protecting Social Security and Medicare and lowering prescription drug costs.” He’ll attend a fundraiser for Democratic gubernatorial candidate Charlie Crist in Golden Beach, Fla., and then will go to Miami Gardens, Fla., for a DNC fundraiser for Rep. Val Demings (D-Fla.), who is running for Senate, and Crist.

Wednesday: Biden will speak about “working to strengthen the infrastructure talent pipeline, and will highlight how the Administration is bringing together employers, unions, and other partners to expand good-paying jobs in broadband, construction, and manufacturing.”

Thursday: Biden will go to New Mexico to speak about student debt relief. He’ll then participate in a rally for the DNC.

CLIP FILE

NYT

→	“The Battle for Blue-Collar White Voters Raging in Biden’s Birthplace,” by Shane Goldmacher in Scranton, Pa.

→	“Clinton, Obama and DeSantis Lend Star Power to Tight N.Y. Races,” by Luis Ferré-Sadurní in Hempstead, N.Y.

→	“​​Brazil Ejects Bolsonaro and Brings Back Former Leftist Leader Lula,” by Jack Nicas in Brasília

WaPo

→	“‘It was almost post-apocalyptic’: A reckoning awaits Seoul’s crowd tragedy,” by Michelle Ye Hee Lee and Kelly Kasulis Cho in Seoul, Stephanie McCrummen in Washington, Annabelle Timsit in London and Praveena Somasundaram in Washington

WSJ

→	“Twitter Is Drafting Broad Job Cuts in Whirlwind First Weekend Under Elon Musk,” by Alexa Corse and Salvador Rodriguez

Bloomberg

→	“Ukraine Hit by Russian Missile Strikes After Crimea Blasts,” by Daryna Krasnolutska and Kateryna Choursina

ABC News

→	“US Air Force to deploy nuclear-capable B-52 bombers to Australia as tensions with China grow,” by By Angus Grigg, Lesley Robinson and Meghna Bali

AP

→	“Confident GOP unifies behind candidates once seen as risky,” by Steve Peoples in Atkinson, N.H.

Politico

→	“Despite Eastman appeal, Jan. 6 committee accesses 8 disputed emails,” by Kyle Cheney

→	“The left lines up against Raimondo for Treasury,” by Ben White and Gavin Bade