The Archive

IN THIS EDITION

Inside the House GOP hunt for budget savings

The Vault: Finance Dems zoom in on Bessent’s taxes

Gabbard’s Intel Committee tightrope

Tech group unveils litigation center with CFPB suit

A major Dem ad buy, plus the latest on DNC race

THE TOP

Inside the House GOP hunt for budget savings

Happy Thursday morning.

News: The House Republican leadership has asked the incoming Trump administration to hold off on rolling back several Biden-era policies by executive order so that GOP lawmakers can repeal them in a reconciliation bill instead.

Remember: The GOP-run Congress has to find savings as part of any reconciliation package. And if President-elect Donald Trump wipes out big-ticket Biden policies using executive orders, Congress can’t claim them as savings in reconciliation.

So House Republicans have asked the incoming Trump administration to avoid several executive orders. These include:

– Rolling back President Joe Biden’s student loan forgiveness program, which Republicans estimate to cost as much as $250 billion.

– Provisions providing incentives for electric vehicles.

– Corporate Average Fuel Economy standards, known as CAFE standards. These are fuel efficiency benchmarks for cars and light trucks sold in the United States.

This behind-the-scenes effort is part of an overall hunt by senior House Republicans for additional budget savings to help offset their reconciliation package, which includes plans for tax cuts and border funding. Many Hill Republicans want to go big, like a long-term or even permanent extension of the Trump tax cuts in the reconciliation package.

But one of their chief obstacles will be pressure from the House GOP’s deficit hawks, as well as the arcane rules of reconciliation and budget scoring, especially in the Senate.

CBO concerns. How to produce enough cost-savings for reconciliation has been a major topic of conversation — and source of anxiety — in House GOP ranks.

Case in point: Republicans are bracing for the Congressional Budget Office to be a potential problem. In multiple meetings Wednesday, House Republicans lamented how they believe the non-partisan scorekeeper has gotten budget estimates wrong in the past.

House Ways and Means Committee Chair Jason Smith (R-Mo.) even presented lawmakers with a slide show highlighting past disparities in what the CBO estimated versus how much revenue was actually raised under the 2017 tax-cut law.

There was also some internal discussion of how to circumvent a “bad” CBO score.

Yet the reality is that the role of the House and Senate budget chairs during reconciliation is limited. They can ask CBO to use different assumptions to score a measure or direct the CBO on more technical matters. But they can’t order the CBO to change a score or permanently alter the numbers in a baseline.

Committees get to work. Ultimately, it will be up to House committees to compile cost-saving measures for their reconciliation package. The budget resolution, which Speaker Mike Johnson aims to pass by the end of February, will instruct committees to draft recommendations for spending or revenue changes.

Even before they finalize those targets, House GOP leadership is trying to game out what they think is realistically achievable while also taking into account potential lower-than-expected CBO scores.

House Majority Leader Steve Scalise has been the point man on this issue, working hand-in-glove with all the committees that will receive reconciliation instructions. Scalise and House Budget Committee Chair Jodey Arrington (R-Texas) have been in constant communication with committee chairs, but we’re told they’re hosting another round of one-on-one meetings this week.

Some committees are expected to play a bigger role than others. The Energy and Commerce, Ways and Means, Education and Workforce and Agriculture committees are likely to be given some of the biggest spending-reduction targets, given their areas of jurisdiction.

Yet it’s going to be all hands on deck. House Transportation and Infrastructure Committee Chair Sam Graves (R–Mo.), who expects his panel to play a smaller role in the process, held a meeting Wednesday evening to brainstorm ideas for raising revenue or decreasing expenses through his committee.

Rep. Brian Babin (R-Texas), the head of the Science, Space and Technology Committee, has also been having discussions with his committee about what cuts are possible and believes his panel has the potential to produce $50 billion to $55 billion in savings.

“There’s fat everywhere, and there’s waste, and there’s redundancy, and that’s just the kind of things that we’re looking at,” Babin told us.

House Judiciary Committee Chair Jim Jordan (R-Ohio) told us he’s been drawing up proposals — such as certain fees for people applying for asylum, temporary protected status, or parole — and has already sent some text to the CBO for preliminary scores.

“We’ve got a whole list of potential ways to raise revenue, and certain funds, specified funds, needed to accomplish what (Tom) Homan and (Stephen) Miller and the Trump administration and the transition team are talking about doing,” Jordan said. “We’ve been working on that for weeks.”

— Jake Sherman, Melanie Zanona and Laura Weiss

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THE SENATE

Gabbard’s Intel Committee tightrope

Former Rep. Tulsi Gabbard (Hawaii) faces a steep internal hurdle to clear the Senate Intelligence Committee, a preview of larger battles to come for President-elect Donald Trump’s nominee to serve as director of national intelligence.

Gabbard is one of several Trump nominees facing paperwork issues that are delaying her confirmation hearing, which has yet to be scheduled. Senate Intelligence Committee Chair Tom Cotton (R-Ark.) plans to issue the customary one-week notice for Gabbard’s hearing “the minute her paperwork is completed,” Cotton’s spokesperson Caroline Tabler told us.

That’s when the hard part begins.

Procedural hurdles: Republicans have a one-seat majority on the panel, meaning just a single GOP defection could prevent Cotton from being able to report Gabbard’s nomination to the floor favorably.

And the GOP side of the dais includes two senators who are seen by the leadership as swing votes on Gabbard’s nomination — Sens. Susan Collins (R-Maine) and Todd Young (R-Ind.).

Collins wouldn’t say whether she’s satisfied with Gabbard’s reversal on a key intelligence-gathering authority the Trump nominee previously opposed.

“I look forward to asking her about it at the hearing,” Collins told reporters, referring to Section 702 of the Foreign Intelligence Surveillance Act. Sen. James Lankford (R-Okla.), who now supports Gabbard, said the nominee’s views on Section 702 were among “several unresolved issues.”

It would be difficult — but not impossible — for Gabbard to advance to the Senate floor if she’s defeated in committee. Cotton could seek to report the nomination to the floor without a formal recommendation, which would allow the full Senate to eventually vote on Gabbard. But that would require a committee member who opposes Gabbard to switch their vote to allow the nomination to proceed.

GOP leaders could also hold a floor vote to discharge the nomination from the committee, but such a motion is debatable on the Senate floor, meaning it would require 60 votes.

The optimistic view: Gabbard’s team believes there’s a small number of Democrats who could support the former Hawaii congresswoman, including Sen. Jon Ossoff (D-Ga.), who sits on the Intelligence Committee and has met with her. Overall, Gabbard has met with five of the panel’s eight Democratic members.

But leadership sources in both parties say Gabbard is unlikely to attract any Democratic votes. That means she can’t lose more than three Republicans — if her nomination advances out of the Intelligence panel.

In the meantime, Gabbard is continuing her meetings on the Hill. She met with Avril Haines, the current director of national intelligence, last Friday and plans to meet with John Negroponte, the first-ever DNI, later this week.

More nomination news: We got an exclusive first look at HUD nominee Scott Turner’s opening statement ahead of his confirmation hearing. Turner will call for building “millions more homes of all kinds — single family, apartments, condos, duplexes, manufactured housing, you name it — so individuals and families can have a roof over their heads and a place to call home.”

And EPA administrator nominee Lee Zeldin, who has his confirmation hearing this morning, will tell the Senate EPW Committee this:

— Andrew Desiderio and Max Cohen

Tech group unveils litigation center with CFPB suit

A tech trade group is launching a new vehicle for the industry’s litigation efforts with a lawsuit challenging the Consumer Financial Protection Bureau’s recent regulation on larger tech companies.

The new TechNet initiative will “advance the interests of American innovation in the courts and the broader legal community” with lawsuits, according to an announcement shared first with Punchbowl News.

TechNet’s litigation operation, known as the Innovation Legal Center, is the latest industry effort to go on the policy offensive in court. For tech, it’s become an increasingly effective tactic.

ILC’s first foray will be a challenge to the CFPB’s rule on large nonbank payment companies in federal court. That regulation, finalized in November, placed payment apps and digital wallets under the bureau’s supervisory authority.

TechNet’s been leading opposition to the rule, saying it violated both the Dodd-Frank Act and Administrative Procedure Act. Among its members, TechNet counts Big Tech firms that have payment apps, gig companies that process payments and e-commerce players.

“Under this rule, a company offering digital payment services could find itself subjected to wide-ranging scrutiny over its tax payments or completely unrelated product lines,” Carl Holshouser, TechNet’s executive vice president, said in a statement. Holshouser will be leading ILC.

While the incoming Trump administration is unlikely to favor the CFPB rule, undoing it at the bureau or through congressional disapproval will be time-consuming, particularly with the competing priorities of a changeover in power.

TechNet is also hoping that a favorable ruling from a judge could make it tougher for CFPB to turn its eye to tech in the future, according to people familiar with the matter.

NetChoice, another tech trade group that’s allied with conservatives, has become something of a fixture at the Supreme Court with its focus on speech issues. The group, which is a co-plaintiff on TechNet’s CFPB lawsuit, recently succeeded in its challenges to state laws that tried to force ideological neutrality in social media content moderation.

— Ben Brody and Brendan Pedersen

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HOUSE DEMOCRATS

A major Dem ad buy, plus the latest on DNC race

News: House Majority Forward, the issue advocacy affiliate of Democratic super PAC House Majority PAC, is rolling out new ads as part of its $10 million ad buy hitting GOP incumbents on economic issues.

In two ads targeting GOP Reps. Mariannette Miller-Meeks (Iowa) and Ryan Mackenzie (Pa.), HMF ties the members to Robert F. Kennedy Jr.’s nomination to lead HHS.

“Marianette Miller-Meeks is supporting Robert Kennedy Jr., who plans to restrict safe products farmers rely on based on conspiracy theories,” the narrator says in one ad. “That will drive up the cost of meat and produce.”

Other ads are targeting Republican Reps. Nick Begich (Alaska), Zach Nunn (Iowa), Tom Kean (N.J.), Nick LaLota (N.Y.), Mike Lawler (N.Y.), Rob Bresnahan (Pa.) and Scott Perry (Pa.).

DNC update: House Democrats attended a town hall-style forum at the DCCC on Wednesday night, which included Wisconsin Democratic Party Chair Ben Wikler, Minnesota’s Ken Martin and former Maryland Gov. Martin O’Malley.

All three candidates discussed the need for Democrats to compete with Republicans digitally and online. Contenders also brought up wanting to expand support in rural communities and with working-class Americans, as well as needing to do better with men, according to sources in the room. In addition, the candidates were pushed on how the party can improve margins with Asian Americans, as well as Black and Latino voters.

Wikler and Martin also participated in a forum hosted by the Progressive Caucus on Tuesday.

So far, Wikler has gotten the most public support. Rep. Mark Pocan (D-Wis.) hosted a breakfast for Wikler on Wednesday, along with Reps. Marcy Kaptur (D-Ohio), Jan Schakowsky (D-Ill.) and Gwen Moore (D-Wis.).

Several other members, however, said they were impressed with Martin after strong presentations this week.

Judiciary news: House Judiciary Committee ranking member Jamie Raskin (D-Md.) is leading colleagues in a letter calling on Attorney General Merrick Garland to “publicly release Special Counsel Jack Smith’s full report on President-elect Donald Trump’s refusal to return classified documents after he left office.”

— Mica Soellner and Max Cohen

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