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January 11, 2023
Punchbowl News Presents
Introducing Tech – our newest policy vertical. From high-profile interviews with industry influencers & policymakers to key lobbying updates, Punchbowl News Tech will be your go-to for timely technology insights.
PRESENTED BY
THE TOP
Happy Wednesday morning.
News: The House Republican Steering Committee will meet at 10 a.m. to begin filling out the roster for the chamber’s most important panels.
In other words, if you work for a member looking for a seat on an “A” committee, today is a big day for you. If you’re a lobbyist trying to figure out who you’re going to be targeting during the next two years, you’ll get a roadmap pretty soon.
The steering committee will debate the membership on the following panels: Appropriations, Ways and Means, Financial Services and Energy and Commerce.
Speaker Kevin McCarthy and GOP leaders are still working through committee ratios – how many Republicans and Democrats will serve on each panel. Then they’ll tell Democrats how many seats they get. The committee ratios essentially will be a reversal of the 117th Congress, when Democrats controlled the chamber by a similarly lean majority as Republicans have now.
Remember: McCarthy has promised to put more conservatives on “A” committees than ever before. That will be something to watch in the coming days.
It’s worth noting that the only change atop any of these four key panels for either party is Rep. Jason Smith (R-Mo.) taking over as chair of the Ways and Means Committee retired Rep. Kevin Brady (R-Texas). Otherwise, the chairs and ranking members have just reversed positions from the last Congress.
Also: We have a few staff updates for McCarthy’s office. We’ve already written that Dan Meyer will be chief of staff. But here are some more staff positions you’ll need to know:
| → | James Min will be deputy chief of staff. Min is a mainstay in McCarthy’s office. The two worked together for former Rep. Bill Thomas (R-Calif.). |
| → | John Leganski, Natalie Joyce and Matt Sparks. These three – all of whom have worked for McCarthy for a decade or more – will be deputy chiefs of staff. Leganski will run floor operations, Joyce will run member services and Sparks will run communications. |
| → | Machalagh Carr will be general counsel. Carr has perhaps the most critical role in the next Congress, running the GOP’s oversight push. Carr will oversee all investigative committees, including the newly formed “Weaponization of the Federal Government” panel under House Judiciary. |
| → | Brittan Specht will be policy director. Specht worked for the RSC and will serve as a chief negotiator on appropriations and, most importantly, the debt limit. |
| → | Alexandra Gourdikian will be director of operations. Gourdikian has worked for McCarthy for almost eight years and will be his gatekeeper. It will be impossible to see the speaker without going through her. |
In remembrance: Our friend and former colleague Blake Hounshell passed away Tuesday after what his family described as a long struggle with depression.
Many of us at Punchbowl News worked with Blake at Politico. He edited Playbook when Jake and Anna were at the helm. He was a quiet giant as an editor. Blake made everything he touched better. He was a brilliant person, fluent on a host of subjects ranging from politics to foreign affairs to pop culture. Read Garrett Graf’s remembrance of Blake.
We send our prayers out to Blake’s wife and children. And to our friends and colleagues at Politico, the New York Times – Blake’s most recent employer – and all around Washington and the world. We mourn with you and are thinking about and praying for you.
If you are struggling, there is help and hope for you.
– Jake Sherman and John Bresnahan
ACROSS THE STREET
New: The 2024 NRCC team
NRCC Chair Richard Hudson has tapped Chris Winkelman to serve as the organization’s executive director for this upcoming cycle. Hudson is taking over the NRCC this cycle from Rep. Tom Emmer, who has moved up to House majority whip.
Winkelman, an attorney, was most recently at Holtzman Vogel. But from 2015 until 2019, Winkelman was general counsel at the NRCC.
The 2024 cycle will be especially difficult for House Republicans. Democrats only need to flip five seats to win the majority in this presidential cycle.
Other members of Hudson’s senior staff:
| → | Micah Yousefi, deputy executive director: Yousefi was the deputy director of the independent expenditure arm of the NRCC last cycle. |
| → | Mike Thom, political director: Thom was the political director last cycle and previously managed Rep. Brian Fitzpatrick’s (R-Pa.) first campaign. |
| → | Leigh Ann Gillis, finance director: This is also a return from the Tom Emmer-run NRCC. Gillis was the finance director for former Sen. David Perdue’s (R-Ga.) race. |
| → | Jack Pandol, communications director: Pandol most recently worked as communications director for the Senate Leadership Fund. Pandol did a previous stint at the NRCC and worked on the Hill for several House Republicans. |
| → | Taylor Black, grassroots director: Black worked as the digital fundraising director in 2022. Previously, she was at Targeted Victory. |
| → | Erin Clark, general counsel: Clark has been general counsel at the NRCC since 2018. |
| → | Katy Williams, chief operating officer and CFO: This is her second cycle in the role. |
– Jake Sherman and John Bresnahan
THE AGENDA
AP: U.S. could reach borrowing limit this month
The AP’s Fatima Hussein and Josh Boak have some important news this morning about the debt limit and timing that will impact what’s happening on Capitol Hill.
OK, let’s break down what this means. The Treasury Department projects when the U.S. government won’t be able to borrow any more money to fund its operations. At that point, Treasury officials will deploy what are called “extraordinary measures” to help stave off the debt-limit deadline. You can read a bit about extraordinary measures in this Treasury statement from 2021.
Treasury can typically buy several months before the federal government actually reaches the debt limit. That’s why the AP says the debt limit won’t be hit until the summer.
Let’s note here that Treasury Secretary Janet Yellen hasn’t formally set an “X Date” yet. That depends on government spending rates and the level of tax revenue coming in.
But this news from AP should help begin to focus Congress’s mind. Here’s what you should watch over the next few weeks and months.
| → | House Democrats will likely introduce a “clean” debt-limit increase without any corresponding budget cuts or changes to entitlement programs, which is something conservative Republicans will want to see enacted. |
| → | Democrats will then begin to circulate a “discharge petition” to try to force the bill to the floor. This will get some support from moderate Republicans such as Rep. Brian Fitzpatrick (R-Pa.) |
| → | House Republican leadership will need to begin coming up with a firm plan to hike the borrowing cap. It will behoove GOP leaders to be honest with the Republican Conference about what is achievable with President Joe Biden in the White House and the Senate controlled by Democrats. |
| → | There are a handful of Senate Republicans who would probably be willing to pass a clean debt-limit increase. But like the House, conservative Senate Republicans will want big changes in government policy before they agree to any increase in borrowing authority or suspension of the debt limit. The dynamic here between Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell will be critical. |
Again, this will be one of the defining fights of 2023.
Here’s a CRS report to get you up to speed on everything about the debt limit since 2011, the last time Republican lawmakers took on a Democratic president over this issue.
– John Bresnahan and Jake Sherman
INVESTIGATION NATION
Get to know your House select committees
In a flurry of activity Tuesday afternoon, the House approved two new select committees with far-reaching investigative powers.
As we’ve been saying for months, investigations will be one of House Republicans’ main priorities during the next two years. The GOP has been itching to launch a litany of probes into the Biden administration and they’re getting right to work setting up the panels. Here’s a primer on the key investigative select committees for the 118th Congress. Spoiler alert: It doesn’t include the Jan. 6 select committee, which Republicans did not reauthorize.
Select Subcommittee on the Weaponization of the Federal Government
The panel will fall under the jurisdiction of the House Judiciary Committee. We hear that Rep. Jim Jordan (R-Ohio) could chair the panel in addition to holding the gavel for Judiciary.
Republican leadership touted the effort as a Church-style commission to investigate the investigators, a longtime rallying cry for conservatives who allege the federal government has unfairly targeted former President Donald Trump and his allies. Expect the ultra-conservative House Freedom Caucus members to play a large part in the subcommittee.
The subcommittee wants to scrutinize ongoing federal investigations, a move that is sure to set up a fight with the Biden administration. The Justice Department has argued for the better part of a century under both GOP and Democratic presidents that it won’t give Congress information on ongoing cases. DOJ says that turning over such information in these cases could improperly politicize them. Read the Linder Letter from Jan. 2000 to get a sense of how DOJ officials – as well as DHS and other agencies – are likely to respond.
Democrats have attacked the legitimacy of the panel. Rep. Jerry Nadler (D-N.Y.), the top Democrat on the Judiciary Committee, said the panel was “absurd” and “based on mythology.”
“The federal government hasn’t been weaponized against anybody and the resolution gives the special committee powers to go after any individual to find out any individual’s information,” Nadler said. “And that’s a gross assault on everybody in the country.”
Nadler intends to use the Democratic seats on the committee to “point out the absurdity in what they’re doing.”
Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party
Republicans notched a major bipartisan victory on Tuesday night when 146 House Democrats joined them to approve the CCP select committee. Former Speaker Nancy Pelosi was among the Democrats who backed the establishment of the panel.
Rep. Mike Gallagher (R-Wis.) will chair the China panel. Gallagher has said he wants it to serve as a “clearinghouse” for China-related legislation and to explore how to deter war in Taiwan.
Speaker Kevin McCarthy said Tuesday he hopes the committee will continue regardless of which party controls the House.
The big question: With all the newly established panels with oversight powers, will the GOP committees start stepping on each others’ toes? Here’s how Republicans are talking about it now.
“Jim and I get along great,” Oversight Chair James Comer (R-Ky.) told us, referring to his relationship with Jordan. “I’ve said from day one that anything pertaining to the Department Justice or FBI will fall under the Judiciary jurisdiction from an investigative standpoint. So this is what we’ve planned all along, and I’m really excited about it.”
House Majority Leader Steve Scalise said multiple investigative committees with overlapping jurisdiction was “nothing new to Congress” and added that he would help coordinate legislation among the different panels.
As we note above, Machalagh Carr, a top McCarthy aide, will be charged with keeping all of this in line.
— Max Cohen
PRESENTED BY AMAZON
Amazon is focused on supporting customers and small businesses in this challenging climate, and working with Congress to build a stronger economy for everyone.
FAR-GONE
Wells Fargo is done being a mortgage giant
Wells Fargo will pull back from the U.S. mortgage market, a significant shift for a firm that dominated the trillion-dollar industry as recently as 2019.
The $1.7 trillion-asset bank announced the change Tuesday evening, saying it would pursue a “more focused” mortgage strategy among its existing customers and in communities of color.
This latest development comes following years of scandal across Wells Fargo’s retail banking business, making the institution a favorite target of Democrats on Capitol Hill. Sen. Elizabeth Warren (D-Mass.) has called for it to be broken up, and former House Financial Services Committee Chair Maxine Waters asked regulators last summer to escalate scrutiny of the bank after years of what she called “recidivism.”
Warren told us in a statement Tuesday night that “after years of wrongdoing and mismanagement, bank regulators still need to break up Wells Fargo — and better protect American consumers.”
Financial regulators have spent the better part of a decade pounding Wells Fargo with history-making penalties, several of which were tied partly to its mortgage business. The most recent fine came just weeks ago, when the Consumer Financial Protection Bureau handed Wells Fargo a cumulative $3.7 billion fine that cited the bank’s approach to mortgages, auto lending and more.
Wells Fargo could be responding to regulatory pressure with this move, but the bank is also lining up with long-running trends in the financial sector. Non-bank mortgage providers are now a dominant force in the U.S.housing market, and the Federal Reserve’s rate hiking campaign against inflation is not making the mortgage sector any more appealing.
– Brendan Pedersen
THE CAMPAIGN
Rick Scott is on the air nationwide, talking about his race against McConnell
Sen. Rick Scott (R-Fla.), the former chair of the NRSC, is running an ad nationwide touting his race against Mitch McConnell for Republican leader and his 11-point plan, which became a widely used Democratic talking point.
The new spot is running in D.C., New York, Philadelphia and Los Angeles.
Scott is up for re-election in Florida in 2024, but this ad isn’t running in Florida, according to AdImpact. This is sure to raise lots of eyebrows in Senate GOP circles.
– Jake Sherman
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Punchbowl News Presents
Introducing Tech – our newest policy vertical. From high-profile interviews with industry influencers & policymakers to key lobbying updates, Punchbowl News Tech will be your go-to for timely technology insights.
Read our first Tech Quarterly now