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November 14, 2024
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THE TOP
Trump opens the flood Gaetz
Happy Thursday morning.
If for some reason, you needed a reminder of how chaotic President-elect Donald Trump’s second term could get, we’re in the middle of one of those episodes right now.
Let’s leave aside for a moment the controversial nominations of Pete Hegseth as Defense secretary and former Rep. Tulsi Gabbard (D-Hawaii) as director of national intelligence. Let’s just focus on Rep. Matt Gaetz’s (R-Fla.) already endangered nomination to be the next attorney general.
Trump announced Gaetz’s nomination without giving Senate Republicans a heads-up. Many were absolutely stunned. Sen. Chuck Grassley (R-Iowa), a 50-year veteran of Congress, stood speechless for 30 seconds when reporters grilled him on whether the widely disliked Gaetz deserved to be confirmed. Sens. Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska) signaled their dismay. Other Senate Republicans told us privately that Gaetz can’t get the votes to be approved.
Speaker Mike Johnson then informed reporters that Gaetz had resigned from this Congress effective immediately. Gaetz has won reelection to the 119th Congress that begins in January, so there’ll have to be a special election to replace him. In other words, Gaetz’s resignation is just the start of the process of picking some to replace him.
We scooped moments later that Gaetz’s sudden resignation came just two days before the House Ethics Committee was set to vote on releasing what was described as a “highly damaging” report about the fourth-term lawmaker.
Gaetz has been under ethics investigation on and off since 2021. He was also criminally investigated by the Justice Department for child sex trafficking. The DOJ, which Gaetz is seeking to lead, told Gaetz last year that it wouldn’t bring charges against the Florida Republican. The Ethics Committee then restarted its own wide-ranging probe into Gaetz.
This chain of events — and series of unforced errors — neatly encapsulates everything that maddened Republicans about Trump’s style of governance. He’s nominated someone that can’t get confirmed. He’s ignoring House Republicans’ pleas to stop poaching their members. And Trump has stepped all over the rollout of other well-qualified nominees.
The House GOP’s vanishing majority. Trump tapped Rep. Elise Stefanik (R-N.Y.) to be ambassador to the United Nations and Rep. Michael Waltz (R-Fla.) to be his national security adviser. Having Trump nominate Gaetz — and Gaetz’s sudden resignation — reduces Johnson’s current margin to just four votes (220 Republicans, 213 Democrats.) It could be even tighter at the start of the next Congress.
“I have begged and pleaded with the new president, ‘Enough already.’ Because our numbers are small,” Johnson said on a day when he should’ve been celebrating being renominated as speaker by his colleagues.
Florida Gov. Ron DeSantis and Johnson are scheduled to have a phone call this morning to discuss timing for special elections to replace Gaetz and Waltz.
Early test for Thune: The Gaetz debacle came less than two hours after incoming Senate Majority Leader John Thune declared that Republicans would do “everything we can to process his [nominees] quickly.”
As we wrote in Wednesday’s PM edition, many Senate Republicans see no path to confirmation for Gaetz. At least three GOP senators have already made calls to Trump’s inner circle pleading for a course reversal, sources told us.
Whether Trump intended it or not, this is an early test for Thune and the new Senate GOP leadership team. So far, Thune isn’t breaking with Trump publicly, saying only that the Senate will do its due diligence on Gaetz’s nomination.
Yet at a certain point, if Trump insists on moving ahead with Gaetz, Thune and Sen. John Barrasso (R-Wyo.) — the incoming No. 2 Senate Republican — could be forced to tell Trump that the votes simply aren’t there.
The same could happen with Gabbard’s nomination. Incensed by Gabbard’s isolationist views and penchant for conspiracy theories, some GOP national security hawks are already discussing ways to derail her nomination, according to two senators familiar with the matter. The Senate Intelligence Committee will be charged with vetting Gabbard. The former lawmaker will also have to undergo an FBI background check.
Thune has meetings scheduled today with his new leadership team and incoming committee leaders. One silver lining on nominations? Thune will be more than happy to push through Trump’s pick for secretary of state, Sen. Marco Rubio (R-Fla.). DeSantis will get to choose someone to replace Rubio.
A mandate, but, but, but … Trump and Hill Republicans have taken to saying the 2024 election provided the president-elect with a mandate.
But a mandate means nothing unless Trump knows how to use it. He needs to govern in a partnership with House and Senate Republicans. With that approach, Trump can get a lot done. Without it, the press will have plenty to write about, but the House and Senate floor will be quiet. Trump can try to force things to happen on his own. But if Trump simply works with the Hill within the bounds given to him by voters, he can get a lot more done.
Rand to HELP? Sen. Rand Paul (R-Ky.) told us he’ll make an announcement this morning on whether he’ll try to leapfrog Sen. Bill Cassidy (R-La.) to claim the gavel of the Senate Health, Education, Labor and Pensions Committee. Paul was expected to remain atop the Homeland Security Committee as its chair next year, but he has seniority over Cassidy on HELP and there’s speculation that he could choose that gavel instead.
— Jake Sherman, Melanie Zanona, Andrew Desiderio and Samantha Handler
November Events
Next week: Join Punchbowl News founder Jake Sherman and Rep. Steve Womack (R-Ark.) on Thursday, Nov. 21 at 9 a.m. ET. They’ll discuss the news of the day and the future of defense and industrial policy. RSVP here!
HOUSE DEMOCRATS
Hispanic Caucus seeks new messaging strategy after Trump gains
The Congressional Hispanic Caucus is rethinking its messaging strategy after a crushing election that shifted a huge chunk of Latino voters to former President Donald Trump.
The group, which worked hand-in-hand with the Kamala Harris campaign, said it’s crafting a better economic message to help Democrats regain support in key regions of the country.
“Hispanic families, in particular, are saying everything is really expensive,” Rep. Juan Vargas (D-Calif.) told us. “They felt like we weren’t paying attention… what we don’t handle well is the cost of living and that really hurt us.”
Trump, who ran on hardline immigration and border security proposals, did 14 points better with Hispanic voters than he did in 2020. Trump took 46% of voters identifying as Hispanic. It was the highest level of support for a Republican presidential candidate since 2004.
The numbers are alarming for House Democrats, who were already struggling with the Biden administration’s unpopularity among Hispanics for months before the election. We reported extensively on tension points between the CHC and President Joe Biden before he withdrew from the White House race.
Sources close to CHC have also complained that Democrats have treated Hispanics as too much of a monolith. Trump, who has made significant gains among Cuban Americans in recent years, also made inroads in Puerto Rican-heavy areas in Pennsylvania and with Mexican-Americans in south Texas.
Rep. Vicente Gonzalez (D-Texas) argued that Democrats should’ve resurrected Trump’s comments from the 2016 presidential campaign where he referred to Mexican immigrants crossing the border as “rapists” and “murderers.”
“I didn’t see a single ad or a single mouthpiece quoting those things,” Gonzalez told us. “I think that would have resonated. Some consultant fumbled there.”
Rep. Adriano Espaillat (D-N.Y.), who is poised to serve as the next CHC chair, said Democrats also need to recognize the grievances of struggling Hispanic men.
“It’s critical for us to be better messengers and for us to listen to Latinos in general, but particularly Latino men,” Espaillat said.
Meanwhile, CHC Chair Nanette Barragán (D-Calif.) noted that some of Trump’s gains have been taken out of context, but she acknowledged the group needs a fresh start.
“There’s a lot of work we’ve got to do,” Barragán told us. “We’ve got to continue engagement. We got to take people seriously. Frankly, a lot of it is how people feel. It’s how people feel and us having to listen.”
To flip the script, CHC’s campaign arm BOLD PAC celebrated adding six new Hispanic members to their ranks, as well as holding on to most of their vulnerable incumbents. BOLD PAC transferred $6.15 million for independent expenditures to support incumbents and candidates — the largest investment ever made by the group.
CHC members are expected to hold a press conference on Friday to tout those wins.
In other House Dem news: Rep.-elect Sarah Elfreth (D-Md.) is running for freshman class representative. Elfreth will succeed retiring Rep. John Sarbanes (D-Md.) and won an expensive primary this spring over former U.S. Capitol Police Officer Harry Dunn.
Elfreth said in a letter to colleagues that her history of winning a competitive Maryland Senate seat gives her experience to effectively represent Frontline members.
— Mica Soellner
TECH REPORT
Andreessen Horowitz ramps up DC operation to advance AI
Andreessen Horowitz has hired a former top Facebook policy official to advance the venture capital firm’s vision of artificial intelligence at a key moment.
Matt Perault will lead AI policy for the firm, now known as a16z, with a focus on supporting AI for startups and entrepreneurs. Perault’s move is the latest policy hire by the firm, which also brought on Matt Cronin, a former White House director of national cybersecurity, in October.
The staff-up comes at a moment of opportunity in Washington for a16z. The firm’s founders, Marc Andreessen and Ben Horowitz, have emerged as enthusiastic — and generous — supporters of President-elect Donald Trump. Horowitz also donated to Vice President Kamala Harris’ failed bid. Increasingly, so-called “Little Tech” in Silicon Valley is expanding its presence in Washington too.
The most powerful force in tech lobbying is Big Tech, of course, but startups and VC firms want to make a stronger showing going forward. Big and small tech firms are both racing for the rewards of the AI revolution.
“AI’s future is going to be driven by Little Tech, and I’m looking forward to working across the AI ecosystem and with policymakers to make sure startups and entrepreneurs can compete fairly and have the freedom to create, build, and thrive,” Perault said in a statement to Punchbowl News.
Part of Perault’s advocacy will include a push for open-source models. Unlike proprietary algorithmic tech, open-source allows small researchers and entrepreneurs to build on prior breakthroughs. Safety advocates have worried, however, that open-source models allow bad actors to harm consumers cheaply and at scale.
Most recently, Perault was a professor at the University of North Carolina at Chapel Hill.
At Facebook, Perault was a director on the public policy team, where he focused on antitrust, AI and human rights for the social media site and WhatsApp. Perault worked at the company for almost nine years until leaving in 2019.
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— Ben Brody
PRESENTED BY RTX
Electrification. Advanced, secure networking. Next generation materials. Hypersonic flight. High-energy lasers. Autonomous, smart sensors. Sixth-generation engine technologies. These are just some of the ways we’re transforming how we connect and protect our world. Finding answers to the biggest questions is what defines us.
The Vault: Hill’s plan to ‘make community banking great again’
First in the Vault: Rep. French Hill (R-Ark.) has a new plan to “make community banking great again” — a key part of his pitch to be the next chair of the House Financial Services Committee under the incoming Trump administration.
In an agenda blueprint to be released later today, the Arkansas Republican will advocate for a broad set of community banking priorities. That includes a call for regulatory tailoring to be “reestablished” by banking supervisors, curtailing how U.S. regulators interact with international regulatory bodies and simplified bank merger reform.
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“I think for our economy to thrive, we have to have banks of all sizes that are growing, have access to capital themselves [and] can offer competitive products and services,” Hill said in an interview. “We have counties that don’t even have banking offices anymore.”
Read the full memo here.
We’ve written elsewhere about the banking industry’s desire to make it simpler for small banks to thrive and new banks to develop — better known as de novo banking.
This push comes as consolidation in the banking system continues apace and the number of community banks continues to shrink. For Hill, bank consolidation isn’t something to block so much as a force to harness for the health and competitiveness of the system.
“Consolidation is perfectly fine in banking, but you want to make sure the community banking space is just as competitive as the big, globally systemically important bank,” Hill said.
There’s also a piece here for financial tech companies and other innovative companies. Hill’s memo says federal bank regulators “should be open to innovation in a way that is consistent with safety and soundness and provide clear supervisory expectations to financial institutions about their third-party relationships.”
Hill’s community banking framework also carries scars from the spring banking crisis of 2023. The agenda memo says it “should be harder for the FDIC to waive the national deposit cap rule for the acquisition of a failing or failed bank” — which is something the agency did with the failure of First Republic Bank when it was bought by JPMorgan Chase.
— Brendan Pedersen
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TRADE MOVES
Moolenaar unveils bill to revoke China’s trade status
News: Rep. John Moolenaar (R-Mich.) is unveiling a new bill to revoke normal trade relations with China, which would trigger major tariffs and likely set off a new trade war.
The proposal from Moolenaar, who chairs the China select committee, would set minimum 35% tariffs on non-strategic goods imported from China and 100% levies on strategic goods. The tariffs would gradually phase in over five years.
Moolenaar’s bill would also strip de minimis treatment for low-value packages coming in from China and some other countries, which means they’d face more duties, fees and scrutiny.
China would be expected to retaliate with tariffs of its own on U.S. goods. That could have a big impact on industries like agriculture. Moolenaar’s bill would direct revenue partly toward U.S. farmers and manufacturers impacted by that retaliation.
“Having permanent normal trade relations with China has failed our country, eroded our manufacturing base, and sent jobs to our foremost adversary,” Moolenaar said in a statement. “At the same time, the CCP has taken advantage of our markets and betrayed the hopes of freedom and fair competition that were expected when its authoritarian regime was granted permanent normal trade relations more than 20 years ago.”
Moolenaar added that his proposal ”levels the playing field and helps the American people win this strategic competition with the CCP.”
We scooped last week that Moolenaar was readying a bill to end normal trade relations with China. President-elect Donald Trump has threatened to impose tariffs of 60% or more on Chinese-made goods. This effort will go over well with some key players influencing Trump on trade, like Robert Lighthizer, the former U.S. Trade Representative who’s expected to return to the new Trump administration.
Some Trump allies — GOP Sens. Tom Cotton (Ark.), Marco Rubio (Fla.) and Josh Hawley (Mo.) — also introduced a bill to revoke normal trade relations with China in September.
The trouble here is something like this could rankle key GOP allies like ag groups. It could also raise the cost of everyday goods.
— Laura Weiss and John Bresnahan
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Presented by AARP
48 million family caregivers give everything to help older loved ones. They give time and energy, too often giving up their jobs and paying over $7,000 a year out of pocket. With a new Congress, it’s time to act on the Credit for Caring tax credit.