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November 14, 2023
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THE TOP
Happy Tuesday morning.
Speaker Mike Johnson is set to face his first big vote on the House floor today — a clean stopgap funding bill designed to avert a government shutdown after Nov. 17.
And just like the GOP speakers before him, Johnson — who came into power vowing he would change the way Washington works — will have to rely on a bailout from House Democrats to pass the bill.
Support for Johnson’s “two-step CR” was so soft inside the House Republican Conference that the GOP leadership team decided to consider the bill under suspension of the rules. This circumvents the normal House procedural hurdles yet requires a two-thirds majority for passage, meaning 290 yes votes.
As of now, roughly 50 House Republicans are expected to vote against the CR, according to preliminary estimates. But the scale of the internal opposition will be clearer following the GOP conference meeting this morning.
House Minority Leader Hakeem Jeffries and other senior Democrats also want to hear from their rank-and-file before publicly committing to this maneuver. We talked to more than a dozen Democratic lawmakers and aides on Monday night. Democrats don’t love the GOP plan, yet they want to avoid a shutdown as well.
One challenge for Johnson — what happens if more Democrats vote for the measure than Republicans? What kind of fallout would he face over that?
Remember: Johnson’s plan would extend funding for the Agriculture, Energy and Water, MilCon-VA and Transportation-HUD spending bills until Jan. 19 at current funding levels. The other eight bills — including Defense — would be extended through Feb. 2.
From a strategic perspective, there are problems and opportunities for both Republicans and Democrats here.
The fact that Johnson needs Democrats to pass his first major piece of legislation undermines the central tenet of his speakership — that the Louisiana Republican is decidedly more conservative than his predecessors and would govern that way.
This is a clean funding bill with no policy changes, no spending reductions, or anything conservatives really want. All House Republicans can hang their hat on is that Johnson has avoided a government shutdown while making sure that the Senate doesn’t jam them on a huge funding package before Christmas. It sets up new funding deadlines in January and another in February. Whether that helps Republicans achieve anything remains to be seen.
Johnson huddled with the House Freedom Caucus on Monday night. The HFC is leading the outcry against the new speaker’s plan.
At the same time, Democrats are getting nothing here for their support. They’re bailing Johnson out merely to keep the federal government open. Democrats tried and failed to get the annual defense authorization bill attached to this CR. They did get an extension of farm bill policies, but there’s no aid to Israel, Ukraine or Taiwan either. Those will have to be dealt with separately, and there’s no guarantee that Ukraine aid in particular will be approved.
“Democrats don’t want to shut down the government,” Rep. Steny Hoyer (D-Md.) said Monday evening. “I think this is a bad process that he set up.”
“The main thing is we have a clean continuing resolution and we don’t shut the government down,” added Rep. Brendan Boyle (Pa.), top Democrat on the Budget Committee. “Shutting the government down would cost taxpayers billions of dollars and impede our economic recovery.”
We talked to several senior Democrats who told us they’ll push for some “future considerations” when it comes to negotiating FY2024 funding bills. Exactly what those considerations are, no one would say.
Sen. Susan Collins (R-Maine), the top Senate GOP appropriator, told us she emphasized to Johnson during their meeting last week that the “Four Corners” — the top GOP and Democratic appropriators in both the House and Senate — still need to agree to toplines before going to conference on the FY2024 bills.
But even if Democrats were going to try to put up a fight or haggle for concessions in exchange for their support, it seems no one really has the energy to do so. Several Democrats told us bluntly Monday night that the House has been in session for 10 straight weeks and members are ready to go home and celebrate Thanksgiving.
In the Senate: Senators from both parties are indicating a willingness to pass the House’s CR if it’s dropped in their laps. It doesn’t include any obvious poison pills that Democrats are objecting to, and the January-February laddered dates will give the Senate some breathing room to finish up the national-security supplemental. That’s the hope, anyway.
We first reported Monday that negotiations around the border security provisions — which will be necessary to unlock GOP support for the Ukraine-Israel-Taiwan package — were faltering as the two sides were trading proposals.
Democrats pushed back on many of the border policy changes the GOP proposed, and they’re publicly condemning Republicans for tying Ukraine’s future to this issue. But Senate Republicans also see an urgency to get new Ukraine funding out the door, insisting they’re putting serious border-related ideas on the table to accomplish this.
“Ukraine is going to start to have problems finding bullets for their guns in a couple weeks,” said Sen. Chris Murphy (D-Conn.), the lead Democratic negotiator. “So we don’t have 30 or 60 days. We have one or two weeks to get this done.”
— Jake Sherman, John Bresnahan, Andrew Desiderio and Heather Caygle
Happening Today! Starting at 5 p.m. ET, Reps. Shontel Brown (D-Ohio) and Nikema Williams (D-Ga.) will join us for a conversation about disparities impacting Black women. The discussion will focus on health, finance and education. The program will be followed by a cocktail reception with drinks and light bites. There is still time to RSVP!
THE SENATE
Tuberville faces impossible task as Dems inch closer to ending blockade
Senate Democrats today will take a major step toward circumventing Sen. Tommy Tuberville’s (R-Ala.) months-long blockade of military promotions.
The Senate Rules Committee will take up, and likely approve, a resolution that would temporarily allow the body to vote on most promotions en bloc, dramatically reducing the time needed to approve them.
But the real test will be on the Senate floor, where Democrats need at least nine Republicans to join them if they have any hope of ending the nomination crisis, which has dragged on since February.
Tuberville is still considering potential off-ramps. But senators from both parties are getting impatient as they look to topple the blockade by highlighting his intransigence and arguing they’ve exhausted all other options.
“No matter how hard [Republicans] try, he’s not budging,” Senate Rules Committee Chair Amy Klobuchar (D-Minn.) told us. “It’s a temporary solution. I would change a bunch of Senate rules if I could wave a magic wand.”
GOP leaders want to put this nine-month episode — and the accompanying internal strife — behind them. But they also don’t want to be seen as caving to Democrats. And the Republicans leading the charge against Tuberville are wary of becoming a small minority of the GOP that just barely puts this over the 60-vote threshold.
“We’re demanding that a broader group of Republicans be pulled together if we’re going to take any course of action like this,” said one GOP senator involved in the discussions.
Tuberville said Monday he’s not feeling pressure to make a decision before the Rules vote or subsequent floor action. He has a seemingly impossible task here — wiggling his way out of this mess while claiming a win.
“If they can get nine Republicans, God help us,” Tuberville said.
The Rules Committee counts Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell as members. Both are expected to speak during the 3 p.m. meeting. Schumer has already said he’ll put this on the floor.
All eyes will be on McConnell, who has kept quiet on the resolution itself.
To be sure, McConnell has said he disagrees with Tuberville’s tactics. And McConnell recently revealed he tried convincing Tuberville to turn his ire away from service members who have nothing to do with the abortion policy he’s protesting.
But McConnell has also spoken over the years about the need to preserve senators’ individual prerogatives — such as the ability to place holds on nominations — and has warned against taking actions that would set new precedents.
“It’d be a huge mistake to change the character of the U.S. Senate just because you have a personal grudge against Tommy Tuberville,” Sen. J.D. Vance (R-Ohio), a Tuberville ally, told us.
Democrats — and some Republicans — dispute the idea that the resolution would radically change the Senate.
Here’s Klobuchar:
Important note: None of the Republicans who’ve been the most outspoken against Tuberville’s blockade sit on the Rules panel.
Sen. Todd Young (R-Ind.) fits into that category. Young says he’s trying to find other ways to end the standoff. But the Indiana Republican also has given tacit indications that he’s open to voting for the resolution. Young suggested Monday its passage might not amount to setting a new precedent, as some argue.
“It’s obviously not an ideal situation,” Young told us. “My understanding is there would not be a precedent established with what the Rules Committee is contemplating. Nonetheless, that may be disputed, and there may be cleaner ways to resolve this.”
— Andrew Desiderio
What to expect from bank regulator hearings this week
The Biden Administration’s bank and credit union regulators will testify before the Senate Banking Committee and House Financial Services Committee in back-to-back hearings starting today.
These hearings tend to cover a lot of disparate policy ground, from climate change risks to the financial system to nonbank regulation.
But this week, we know that one big issue is going to take up a whole lot of lawmakers’ time from both sides of the aisle – capital reform. Banks have been worried about this for months, but their lobbying has taken on a more feverish quality in recent weeks.
This is extremely technical stuff we’re talking about, but don’t underestimate the economic importance. The rules that banks follow when it comes to safety and soundness play a fundamental role in how profitable certain activities can be, like in mortgages or small business lending. The less profitable an activity is, the less likely the regulated banking system will try to engage in it.
Financial regulators led by Federal Reserve Vice Chair for Supervision Michael Barr have been working toward stricter capital rules since 2022. That effort took on fresh urgency after the mini-banking crisis in March. Also testifying today will be Federal Deposit Insurance Corp. Chair Martin Gruenberg, acting Comptroller of the Currency Michael Hsu and National Credit Union Administration Chair Todd Harper.
When we say “capital reform,” we’re not talking about just one proposal but several. That includes the finalization of international standards known as Basel III and changes to how authorities weigh the regulatory costs of long-term debt.
Barr will take the brunt of questions about capital reform. Republicans will attack regulators’ approach to the proposal from several angles, arguing the proposed rules could weigh heavily on the U.S. economy while running afoul of regulatory or administrative procedures.
“Vice Chairman Barr has not been responsive to our extensive requests for quantitative analysis on capital reform, on Basel III endgame,” Rep. Andy Barr (R-Ky.) said. “The administrative process is totally flawed. The fact that, after they proposed it, now they’re seeking data from the industry? That’s backwards.”
Progressive Democrats, on the other hand, are chiefly concerned that the Fed may bow to political pressure and water down its proposed changes. Sen. Elizabeth Warren (D-Mass.) said the current rules are overdue for an update.
“It’s been 15 years that those regulations have been pending,” Warren said. “It’s time to get them done.”
But there are differences in opinion among Democrats. Sen. Mark Warner (D-Va.) said he was worried about how the rules could shift financial activity from the banking system to the nonbank sector. “I’ve got questions about the amount of seepage beyond the regulatory perimeter,” Warner said.
Policymakers will be listening to regulators’ responses closely for any hints as to how these capital proposals could — or won’t — change before they’re finalized.
One more thing: We strongly suspect the FDIC’s Gruenberg will get sharp questions about this Wall Street Journal investigation into the agency’s “toxic” culture among some of its regional hubs. Gruenberg has led the agency as chair twice since 2012 and served on its board since 2005. That will open up the veteran regulator to questions about his awareness of these problems over the previous two decades.
— Brendan Pedersen
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THE MONEY GAME
Scalise launches big-money political vehicle
News: House Majority Leader Steve Scalise is launching a new joint-fundraising vehicle, Scalise Leadership Fund 2024, that is aimed at supporting more than 50 Republican incumbents, candidates and committees.
Scalise Leadership Fund 2024 will filter money to Scalise’s reelection campaign; Eye of the Tiger, Scalise’s leadership PAC; Congressional Leadership Fund, the House GOP super PAC; the NRCC’s general, building and legal funds; 34 incumbents; eight candidates and eight nominee funds.
Scalise will be able to raise up to $586,200 from individual donors into this account. Then the JFC redistributes those contributions.
With Rep. Kevin McCarthy (R-Calif.) out of the leadership and Speaker Mike Johnson untested as a national fundraiser, Scalise will become more of a focal point in the House Republican money game. We reported in the AM edition Monday that Johnson raised $16 million in the 10 days since starting to raise money for CLF. But all eyes will be on the NRCC’s November fundraising report, which should be out in the next week or so, to see how McCarthy’s ouster and resulting internal GOP battle to replace him impacted the party committee.
Scalise has long been one of the top online fundraisers — and he’s looking to leverage that ability for this new vehicle. The Louisiana Republican has raised more than $96 million online in the last seven years.
— Jake Sherman
Greene’s Mayorkas impeachment effort fails
The House Homeland Security Committee will again be the focal point of the effort to impeach DHS Secretary Alejandro Mayorkas.
The House on Monday night voted 209-201 to refer Rep. Marjorie Taylor Greene’s (R-Ga.) impeachment resolution to that committee.
Eight House Republicans joined with 201 House Democrats to send MTG’s resolution to the committee.
Following the vote, Greene seethed that some of her colleagues crossed the aisle to support Democrats on the referral vote. The Georgia GOP lawmaker said there will be political fallout for those members.
“I can assure you that Republican voters will be extremely angry that they’ve done this,” Greene said after the vote.
GOP Reps. Darrell Issa (Calif.), Virginia Foxx (N.C.), Ken Buck (Colo.), Cliff Bentz (Ore.), Mike Turner (Ohio), Patrick McHenry (N.C.), Tom McClintock (Calif.) and John Duarte (Calif.) all voted to punt the resolution.
Rep. Tony Gonzales (R-Texas) also blasted the move by his colleagues to refer the Mayorkas resolution back to committee.
“It’s clear Democrats don’t want to do anything and they’ll use any dirty tactic that they can get their grubby little hands on,” Gonzales told us.
Issa released a statement after the vote saying he supports impeaching Mayorkas but he wants it done through regular order.
“I will be requesting my opportunity to testify before the committee and make my case why Sec. Mayorkas is the worst to ever hold his job and why impeachment would be a fitting punishment,” Issa said.
The motion to refer mirrors an earlier effort to successfully delay a vote on Rep. Lauren Boebert’s (R-Colo.) impeachment resolution targeting President Joe Biden.
In other House news: Education Secretary Miguel Cardona will speak to the New Democrat Coalition today at the group’s weekly lunch.
— Max Cohen and Mica Soellner
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