How appropriators have clawed back their power

IN THIS EDITION

Wow, Congress is actually governing

Schumer’s recruitment victory lap

Vault: Are banks winning the yield wars?

CLF, AAN raises $136M in 2025. Lawler’s huge quarter

THE TOP

Wow, Congress is actually governing

Happy Wednesday morning.

Something shocking is happening in Washington.

Since the record 43-day government shutdown ended in mid-November, congressional appropriators are trying to get their power back. And party leaders are pushing hard to give it to them.

Battered and bruised following the record-breaking shutdown, a flood of stopgap funding bills and rank-and-file members who refuse to vote for spending bills, House and Senate leaders are on the brink of reaching agreement on a full slate of FY2026 appropriations bills. They’ll still have to pass these bills — more accurately, funding packages — before the end of this month, though.

Both Speaker Mike Johnson and Senate Majority Leader John Thune made this a priority when they took over their respective posts — the much-ballyhooed “return to regular order.”

Yet let’s not give anyone too much credit here. It’s mid-January, three months into FY2026, and they’re just getting around to this. And there are still major hangups with the Homeland Security spending bill.

Not to mention that the House Republican leadership embarrassingly lost another floor vote Tuesday evening on a labor policy bill. Johnson and GOP leaders then pulled two other bills from consideration. All the House could pass was a measure that loosened water-flow regulations on shower heads. Seriously.

With such razor-thin margins, a group of discontented conservatives or GOP moderates can sink any bill. Someday, House GOP leaders will figure out how to avoid that. This Congress may be over by the time they do, however.

Yet the House has already approved six bipartisan FY2026 funding bills and is expected to pass two more today: National Security-State and Financial Services-General Government. Next week, the House will take up its final spending package, potentially its hardest: Labor-HHS, Defense, Transportation-HUD and Homeland Security.

The Senate will vote this week on the $180 billion Commerce-Justice-Science, Interior and Energy and Water package. This passed the House by a huge margin, 397-28. The lopsided results showed how much members want to avoid another shutdown.

Remember: All these bills have to be passed by Jan. 30, the shutdown deadline under the current CR.

Homeland blues. Funding for the Homeland Security Department — already politically fraught following President Donald Trump’s immigration crackdown — is even more difficult after last week’s fatal shooting of a woman in Minnesota by an ICE agent.

Some Democrats have warned that they’ll vote against any bill without new ICE restrictions and oversight mandates. Faced with that reality, several House and Senate leaders have suggested they may have to fund DHS via a yearlong CR, a suboptimal result for appropriators. The Homeland Security Department, though, received tens of billions in new funds already under the One Big Beautiful Bill Act, so the White House could live with a CR.

But in recent days, leaders in both parties and appropriators have sounded optimistic about passing the DHS spending bill.

Rep. Henry Cuellar (Texas), the top Democrat on the DHS subcommittee, told us that negotiators are close to agreement on the Homeland Security package and they hope to release text this weekend, along with the other three funding bills. House GOP leaders may split the DHS vote from the other bills to ease passage.

“I feel cautiously optimistic,” said the ever-optimistic House Appropriations Committee Chair Tom Cole (R-Okla.). “If you don’t believe you can get there, you certainly won’t, so I’m not expecting a CR.”

Appropriations rebound. Nobody needs these wins more than appropriators. The House and Senate Appropriations panels have clung to their final bit of relevancy since OMB Director Russ Vought declared last year that the funding process should be less bipartisan. Trump, Vought and other senior administration officials have also run roughshod over the panels’ traditional prerogatives. Yet Vought – to the relief of appropriators – hasn’t publicly derailed the negotiating process so far.

This is an important moment for appropriators to show they can still pass bipartisan spending bills and reassert congressional authority over the nation’s purse strings. Cole said during a Rules Committee hearing that passing these spending bills is best for Congress as an institution.

Plus, if Democrats win the House majority this fall, there may not be another chance for Congress to pass full-year appropriations bills in a divided government. Meaning it makes sense for the White House to cut deals now.

“This is what we do. We keep the government open,” House Appropriations Committee Ranking Member Rosa DeLauro (D-Conn.) said.

The Senate. The timing on all of this is more difficult in the Senate. As we noted, senators are set to pass the three-bill package this week: Commerce-Justice-Science, Interior and Energy and Water.

But senators will leave town for recess after this week, which doesn’t give them much time to pass two more funding packages before Jan. 30. The Senate would have to combine the final two packages for consideration during the last week of January to make that deadline.

Thune has vowed to keep next week’s recess intact no matter what. There are CODELs leaving Washington on Thursday, with high-profile bipartisan trips to Europe and other destinations. So there is going to have to be a real burst of action up to — and maybe a little beyond — Jan. 30.

– Jake Sherman, Samantha Handler and John Bresnahan

SENATE DEMS

Schumer’s recruitment victory lap

Entering the 2026 cycle with 47 Senate seats and an unfavorable map, few thought Democrats had any shot of flipping control of the chamber.

But Senate Minority Leader Chuck Schumer has notched the final pieces of a complex recruitment plan, successfully persuading top-tier candidates to run for GOP-held seats in Alaska, Maine, Ohio and North Carolina.

“We’re feeling great and we now have a clear, strong path to winning back the Senate,” Schumer told us in an interview Tuesday at the DSCC headquarters. “A year ago, no one thought we could do that.”

It’s true that Schumer has dramatically improved his chances with successful recruitment efforts paired with a more favorable political environment for Democrats. But reclaiming the majority — which means netting four seats — remains a steep uphill climb.

Schumer’s view. A new memo from the DSCC claims that “Democrats have created multiple paths to flip the majority in 2026.” Democrats believe they’ve recruited their best possible candidate in multiple states: Former Gov. Roy Cooper in North Carolina, former Sen. Sherrod Brown in Ohio, Gov. Janet Mills in Maine and, just this week, former Rep. Mary Peltola in Alaska.

“They’ve run because they care about their states and they care about America,” Schumer said. “Every one of them knows the danger if we don’t take back the Senate with the Supreme Court getting considerably worse.”

Democrats still have to defend Michigan — where there’s a bitter primary brewing — and Georgia, two states President Donald Trump won in 2024. And there are contested Democratic primaries in Iowa and Texas, too.

Primary problems? Schumer dismissed progressive favorite Graham Platner’s chances of taking down Mills in the Maine primary. Platner has put his campaign on “hiatus” as he and his wife seek IVF treatments in Norway.

“My current sense is we’re going to win,” Schumer said. “Susan Collins is in a very weak, weak position, and Janet Mills has been a two-term governor, and she’s the only Democrat who has won statewide in 20 years.”

Schumer wouldn’t discuss any of the Democratic candidates running in Michigan. The Senate minority leader responded to questions about the individual candidates by saying: “The bottom line is that we’re going to win Michigan.”

The GOP. Republicans, who just launched their road tour promoting the One Big Beautiful Bill Act, are looking to counter Democrats’ focus on affordability by highlighting the bill’s tax benefits, most of which won’t be fully realized until April at the earliest. Plus, the measure comes for massive Medicaid cuts starting next year, even as Obamacare premium subsidies expire, threatening the health care coverage for millions of Americans.

“Those issues don’t come close to the burden of increased costs,” Schumer said. “That is far and away the dominant issue. And I think it’s wishful thinking on their path.”

GOP candidates, meanwhile, are being careful not to completely dismiss concerns about the high cost of living, even as they tout Trump’s signature legislative accomplishment.

“Until your bacon, your eggs and your toast come down, you don’t see a difference,” Mike Rogers, the GOP Senate candidate in Michigan, told us at the kickoff for the OBBB sales pitch last week. “They’re not thinking about all of this. And so all the things that we’re doing to try to push those prices down and get their wages up will pay off, I believe it.”

— Max Cohen, Andrew Desiderio and Ally Mutnick

Vault: Are banks winning the yield wars?

We’re just one day from the Senate Banking Committee’s high-stakes markup to rearrange the traditional financial system for the sake of crypto. For one crucial fight inside the sprawling market structure bill, however, the banking sector seems to have secured the upper hand over crypto: stablecoin yield restrictions.

We can’t say that for certain. The bill remains unfinished. Dozens of amendments are in the works. And key lawmakers of both parties continue to withhold support for the latest draft.

“I have no idea how I’m going to vote,” Sen. John Kennedy (R-La.), a Banking Committee member, told us Tuesday afternoon.

But all public signs point to momentum behind banks and their political allies, who have maximized their leverage in last-minute talks around the treatment of stablecoin yield. Sens. Thom Tillis (R-N.C.), Angela Alsobrooks (D-Md.) and Katie Britt (R-Ala.) have played a crucial role in elevating banks’ concerns in recent days.

Crypto exchanges, led by Coinbase, have sought broad latitude to offer rewards for customers who hold or use crypto, part of an effort to improve digital asset adoption among the public. Top negotiators supported the crypto position for months and wanted to avoid another fight over stablecoins.

But bankers have repeatedly warned lawmakers that such arrangements from their less-regulated counterparts could cause a “deposit flight” out of the traditional financial system, particularly among community banks, with downstream economic impacts in towns and smaller cities nationwide. In recent days, enough senators have acknowledged that risk that the dynamics on the Banking Committee have flipped.

Crypto wasn’t strictly thrilled with the stablecoin language released by the Banking panel late Monday night. But industry allies put on a happy face on Tuesday. “I’m cautiously optimistic we’ve got a workable bill. Sen. Tim Scott deserves the Nobel Peace Prize,” Sen. Bernie Moreno (R-Ohio) said.

Yet bank allies remain unsatisfied. Tillis and Alsobrooks emphasized on Tuesday that the work on yield wasn’t done yet. Market structure legislation isn’t about to advance through the Banking Committee without lawmakers like Tillis, Alsobrooks, Britt and Kennedy.

“I think we’ve had a lot of progress,” Alsobrooks said Tuesday after we asked about yield. “Still a few loopholes that I think we have to address, and we’re still talking. This is still very fluid.”

Asked about yield minutes later, Tillis told reporters: “I don’t think it’s solved yet.”

There are clear, public signs of discontent among the crypto faithful. Blockchain Association CEO Summer Mersinger released a remarkable statement on Tuesday that chastised the “relentless pressure campaign by the Big Banks to rewrite this bill to protect their own incumbency.”

In another episode, White House official Patrick Witt, who has been a leading crypto liaison in these talks, not-so-subtly threatened the banking industry with credit card swipe fee reform on Tuesday evening if it didn’t “take the deal being offered on stablecoin rewards and yield.”

These aren’t the types of messages you blast out when you think your side is winning.

We’re also skeptical the Credit Card Competition Act is going to be a real cudgel in these talks. Crypto market structure legislation will head straight to the floor if it can limp out of committee. The path for swipe fee reform and other credit card restrictions is far more precarious.

– Brendan Pedersen

MONEY MOVES

CLF, AAN raises $136M in 2025. Lawler’s huge quarter

We have a bunch of fundraising news for you: Big quarterly results from CLF, Rep. Mike Lawler (R-N.Y.) and former Rep. Elaine Luria (D-Va.).

The super PAC. House Republicans’ biggest outside groups raised a whopping $136 million in 2025 to help Speaker Mike Johnson keep his majority.

That total is a record for the Congressional Leadership Fund and its allied nonprofit, the American Action Network, both of which are closely aligned with Johnson. CLF, a super PAC, raised $72 million of the $136 million haul and ended the year with $54 million in the bank. (That includes a $9 million transfer from AAN).

House Democratic groups also raised a record amount, but fell slightly short of their GOP counterparts. House Majority PAC and its nonprofit House Majority Forward raised $121 million combined. The two groups didn’t provide a breakdown of what each raised individually.

Lawler’s big quarter. Rep. Mike Lawler (R-N.Y.), perennially a target of the DCCC, raised $1.2 million in the fourth quarter 2025, bringing his cash on hand to a whopping $3.5 million.

Lawler has raised nearly $5.2 million this cycle so far from 20,311 individual donors. And the New York Republican has increased his cash on hand total from January 2024 by more than $1 million. Lawler had $2.5 million this time last cycle

There’s no question that Lawler is now in the top 15 of House fundraisers and one of the biggest outside the leadership. This will come in handy in what’s sure to be one of the most contested races of 2026. Lawler is crushing his opponents in the money game.

Virginia. Former Rep. Elaine Luria (D-Va.) raised $1.1 million since launching her campaign in mid-November for her rematch with Rep. Jen Kiggans (R-Va.).

Luria brought in $500,000 in the first 24 hours of her campaign and ended 2025 with more than $1 million in the bank.

– Ally Mutnick and Jake Sherman

… AND THERE’S MORE

Downtown Download. Maha Capital, a Sweden-based investment fund, has hired Brian Ballard’s Ballard Partners to lobby on “[a]pprovals for Venezuelan oil field acquisitions and operations.”

Campaign news. Elect Democratic Women is endorsing Gov. Janet Mills in the Maine Senate Democratic primary. Mills is facing off against Graham Platner.

Merger watch. Rep. Sam Liccardo (D-Calif.) is preparing a letter to Paramount CEO David Ellison that urges the media executive to “voluntarily submit” his bid to purchase Warner Bros. Discovery for review by the Committee on Foreign Investment in the United States.

Ellison’s bid relies on extensive foreign investment. Liccardo’s letter, which comes as the House Financial Services Committee hosts a hearing on CFIUS today, tells Ellison the attempt to buy Warner Bros. “carries implications far beyond ordinary commercial consolidation.”

— Max Cohen and Brendan Pedersen

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