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January 10, 2023
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PRESENTED BY
THE TOP
Happy Tuesday morning.
Out: Adam Schiff, Eric Swalwell and Ilhan Omar.
In: Paul Gosar, George Santos and Marjorie Taylor Greene.
With passage of the House rules package on Monday night, the next big fight for the chamber will be “populating” its committees. And that’s going to lead to a big partisan brawl on the floor.
House Democrats are expected to name Schiff and Swalwell to the Intelligence Committee, as well as place Omar on Foreign Affairs, according to multiple Democratic leadership sources. And Republicans under Speaker Kevin McCarthy will block this from happening.
At the same time, Republicans will add MTG, Gosar and Santos to House panels, and there’s nothing Democrats can do to stop it.
This is all payback for what occurred in the 117th Congress when Democrats stripped MTG and Gosar from their committee assignments. Republicans warned that this was a precedent that Democrats would regret down the road. Now McCarthy and his GOP colleagues will deliver on their threat.
As speaker, McCarthy can unilaterally block Schiff and Swalwell from serving on the Intelligence panel. The full House would have to act against Omar.
In an interview, McCarthy acknowledged he would block Schiff and Swalwell from spots on the Intelligence Committee. The normal procedure would be for Minority Leader Hakeem Jeffries to offer their names to McCarthy and the speaker would approve. McCarthy, though, has been vowing since 2021 to block them.
“Swalwell can’t get a security clearance in the private sector. I’m not going to give him a government security clearance,” McCarthy told us. “Schiff has lied too many times to the American public. He should not be on Intel.”
McCarthy added: “I made all [three] cases before. It’s not like it’s anything new… Remember, this is what Nancy Pelosi, this is the type of Congress she wanted to have.”
Democrats declined to comment publicly on the issue before the three lawmakers were formally named to committee posts. McCarthy and Jeffries still haven’t worked out the ratios for House committees as of Monday night, a process that may take several days.
An agreement was delayed due to the extraordinary floor fight McCarthy had to go through last week to win the speaker vote. House Republicans may bring the GOP steering committee back to Washington during recess next week to work on committee composition.
However, multiple Democratic sources said Jeffries was unlikely to let McCarthy’s threat stop him.
MTG was booted off the Budget and then Education and Labor panels in Feb. 2021 over a series of racist, Islamophobic and anti-Semitic comments the Georgia Republican made before she was elected to Congress. Eleven House Republicans backed the Democratic resolution on MTG when it came to the floor.
McCarthy and GOP leaders are expected to add MTG to the Oversight and Accountability Committee, among other potential panel assignments.
Gosar – who has made appearances at white nationalist events – was censured and stripped of his committee seats after he posted a bizarre animated video that depicted violent acts toward Rep. Alexandria Ocasio-Cortez (D-N.Y.) and President Joe Biden.
“They promised me that if I wanted to stay on Natural Resources and Oversight, I could stay,” Gosar said of GOP leaders.
Santos, for his part, has allegedly lied about large parts of his resume and is under criminal investigation.
The three Democrats in question say they have done nothing wrong and are being improperly targeted by Republican leaders.
Swalwell faced questions over his ties to an alleged Chinese spy. The woman in question helped fundraise for Swalwell’s 2014 campaign. Swalwell said he cut all ties with the woman following an FBI briefing on the purported Chinese influence operation and has done nothing wrong.
Omar has made anti-Semitic comments criticized by other Democrats. Republicans have long said they’d take action to remove her from the Foreign Affairs Committee if they won the House.
Omar, a Somali-born progressive who has been in Congress since 2017, counters that McCarthy and Republicans have “made it their mission to use fear, xenophobia, Islamophobia and racism to target me on the House Floor and through millions of dollars of campaign ads.”
Schiff, who was the lead House manager for former President Donald Trump’s first impeachment trial, has attacked McCarthy over the threat to block him from serving on the Intelligence panel. Schiff said McCarthy “will adhere to the wishes of Marjorie Taylor Greene.”
Also: Texas GOP Rep. Jodey Arrington is the new Budget Committee chair. Arrington beat Reps. Buddy Carter (Ga.) and Lloyd Smucker (Pa.) to win the gavel in just his fourth term in the House.
| → | Recap: Missouri Rep. Jason Smith is the new chair of the Ways and Means Committee. He beat Reps. Vern Buchanan (Fla.) and Adrian Smith (Neb.). North Carolina Rep. Virginia Foxx won another term as chair of the Education and the Workforce Committee. Check out our full coverage in Monday’s Midday and PM editions. |
— John Bresnahan and Jake Sherman
Reminder: We’re one week away from our interview with Durham, N.C., Mayor Elaine O’Neal (D). On Tuesday, Jan. 17 at 5 p.m. ET we’ll be talking to her about big issues facing local government and what can happen at the local level when there is a divided Congress. RSVP to join us in-person at the Capital Hilton! The conversation will be followed by a reception.
ON THE GROUND
Senate gang goes full steam ahead on immigration push
EL PASO, Texas — A Republican-controlled House and historically grim odds aren’t stopping senators from pursuing a once-in-a-generation compromise on immigration reform.
A bipartisan group of senators traveled here Monday to chart a path for the 118th Congress on an issue that has eluded lawmakers for more than four decades.
This week’s CODEL to El Paso and Yuma, Ariz. — led by Sens. John Cornyn (R-Texas) and Kyrsten Sinema (I-Ariz.) — is the largest and most bipartisan border visit in recent memory.
This particular cadre of lawmakers also played big roles in the Senate’s bipartisan achievements from the last two years, lending at least some credibility to their optimism that they can strike a deal.
We shadowed the group in El Paso amid a record-breaking surge in illegal border crossings. The senators toured a migrant care facility along the border and met with local law enforcement officials who described the cascading humanitarian, legal and national security crises in stark terms.
The case for a deal: The Senate just wrapped up a wildly productive two years in which a 50-50 body notched several bipartisan wins — infrastructure, same-sex marriage, CHIPS, gun safety and more. And despite the tricky politics of the immigration issue in particular, they see no reason to stop.
Plus, they actually have a framework — courtesy of Sinema and Sen. Thom Tillis (R-N.C.), who was also part of the CODEL — and a gang of senators eager to make a deal rather than a political point.
Here’s more from Cornyn:
House Republicans are already planning to pass a border security bill, and Cornyn and Sinema think it should serve as the foundation for the Senate’s effort.
“Having it start in the House is really practical. It allows them to put a handprint on it and say, ‘Here’s what we want.’ And we can kind of add to it and change it to get 60 votes,” Sinema told us. “We’re in a groove. We’re good at doing this.”
Not so fast: Their problem, of course, is that a GOP-controlled House isn’t likely to swallow even the most carefully crafted bipartisan Senate immigration deal, much like 2013. And this is especially true after all of the concessions Kevin McCarthy had to make to conservative hardliners to secure the speakership.
Even if the Senate can cobble together 60-plus votes, it might be political suicide for McCarthy to hold a vote on a bill that a large chunk of his conference will slam as “amnesty.”
The CODEL was put together with those dynamics in mind, the senators said. The group includes border-state lawmakers, appropriators, bipartisan dealmakers and border hawks — all of whom would be key for securing 60 votes from a variety of Senate factions.
“This group knows how to do big, important things. My hope is that we can get something done,” said Sen. Chris Murphy (D-Conn.).
The GOP senators on the trip said that if House Republicans really want to solve the problems at the border, they’re going to have to accept some elements of a compromise that they might not like. This would be necessary to break a filibuster in the upper chamber.
“It’s not just about border security; it’s not just about a path to citizenship or some certainty for a population. It is both. It’s the only way it works in Washington,” said Tillis.
Tillis’ proposal with Sinema would provide a path to citizenship for Dreamers in exchange for robust border-related provisions. If that sounds familiar, it’s pretty much exactly what the Senate tried and failed to do in 2018 under then-President Donald Trump.
The conditions at the border are worsening, the Biden administration is crying out for congressional action and this group seems determined to fix it.
“The alternative is we do nothing,” Cornyn said. “And nobody believes the status quo is acceptable.”
—Andrew Desiderio
THE INSIDE GAME
The key players for Team McCarthy
Now that Kevin McCarthy is speaker, there will be a cottage industry downtown taking credit for the victory. Lobbyists benefit from showing close proximity to McCarthy and his team. There will be lot of people reminding you of that one time that they raised some money for McCarthy, served as a mid-level legislative aide in his office or worked alongside him in the leadership.
We wanted to get ahead of that and let you know those who actually played a role here.
| → | Dan Meyer: McCarthy’s chief of staff is now chief of staff for the speaker for the second time. Meyer was chief to former Speaker Newt Gingrich in 1995 and 1996. Meyer ran the inside operation for McCarthy, directing the California Republican’s team in the Capitol. |
| → | Jeff Miller: Miller is one of McCarthy’s closest friends and allies. He’s also a blue-chip lobbyist with clients such as Altria, Blackstone, Charles Schwab, GE, the PGA Tour and Southern Company. Miller ran McCarthy’s outward facing operation and was a key strategist for McCarthy. |
| → | Arthur Schwartz, Dan Conston, Andy Surabian and Brian Jack: Jack and Conston are at the core of McCarthy’s political operation. Jack is McCarthy’s political director and Conston runs the McCarthy-aligned Congressional Leadership Fund super PAC. Jack and Conston worked lawmakers and donors as part of McCarthy’s speaker bid. Several donors made calls to lawmakers to lean on them to support McCarthy. |
Surabian and Schwartz helped corral surrogates – especially in the conservative media space – to act as validators for McCarthy.
Who gains downtown with McCarthy’s victory: Miller will be among the most sought after lobbyists in town now. Here’s the other top lobbyists who will be seen as hot commodities with McCarthy in the speakership:
| → | Ben Howard, The Duberstein Group. Howard was a key figure in McCarthy’s orbit as his floor director when the California Republican served as majority leader and whip. Howard was also a top staffer in the White House legislative affairs shop during the Trump administration. |
| → | John Stipicevic and Tim Pataki, CGCN. Stip, as he is known, and Pataki both worked for McCarthy in the early days. Stip was his floor director and ran the member services operation. Pataki also served in the Trump White House, in addition to working for McCarthy in his leadership operation. |
| → | Will Dunham, Brownstein Hyatt Farber Schreck. Dunham was McCarthy’s policy director for seven years. He understands how McCarthy thinks about policy and, perhaps more importantly, understands the committees and how they operate in the modern House. |
– Jake Sherman and John Bresnahan
PRESENTED BY AMAZON
“The door is always open for growth and opportunities,” said Francisco, who started in an Amazon fulfillment center and is now a trained robotics technician.
CRYPTO COLLAPSE CONT.
Senators’ letter to FTX bankruptcy judge targets law firm, Sullivan & Cromwell
First in Punchbowl News: A bipartisan group of four senators wrote to the federal judge overseeing the bankruptcy case of crypto exchange FTX, urging the court to appoint an “independent examiner” and assess top law firm Sullivan & Cromwell’s involvement in the proceedings.
Led by Sen. John Hickenlooper (D-Colo.) and joined by Sens. Thom Tillis (R-N.C.), Elizabeth Warren (D-Mass.) and Cynthia Lummis (R-Wyo.), the lawmakers are focused on the white shoe firm with deep ties in D.C. and New York.
Sullivan & Cromwell had worked with FTX in the months leading up to the crypto exchange’s rapid collapse in November. The firm earned $8.5 million in non-bankruptcy fees over a period starting in July 2022. Sullivan & Cromwell is also the former employer of FTX General Counsel Ryne Miller.
Now, Sullivan & Cromwell is taking a leading role advising FTX’s new management led by CEO John Ray as the company mounts a complicated effort to untangle its finances, pay back investors and investigate potential fraud.
But given those prior ties, the senators appear skeptical that Sullivan & Cromwell is “in a position to uncover the information needed to ensure confidence in any investigation or findings,” according to the letter addressed to Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware.
Here’s a key excerpt, which you can read in full here:
Representatives for Sullivan & Cromwell did not respond to a request for comment.
– Brendan Pedersen
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