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December 11, 2023
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THE TOP
Happy Monday morning.
Welcome to Congress’s final (scheduled) week in session of 2023. Lawmakers are anxious to head home for the holidays in the next few days, but there are a number of outstanding issues that could alter that timetable.
There’s a better-than-even chance that Congress will leave town without approving critical new aid for Ukraine and Israel, two staunch U.S. allies locked in bitter wars. And the House is on track to formalize its impeachment inquiry into President Joe Biden.
These could turn out to be the most consequential decisions of this entire Congress.
On Ukraine: President Volodymyr Zelensky is traveling to Washington this week to deliver a last-minute plea for aid even as GOP opposition continues to grow. Zelensky will attend an all-senators meeting on Tuesday morning at the invitation of Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell. He’ll also meet face-to-face with Speaker Mike Johnson and Biden.
This is Zelensky’s third trip to the Capitol since Russia invaded Ukraine in February 2022, and it’s not an overstatement to say these will be his most important conversations with U.S. officials since the war began. Biden and most lawmakers believe Ukraine’s fate is directly tied to Congress’ ability to approve a new aid package by year’s end.
The holdup remains the same — Republicans’ insistence that the migrant crisis at the U.S.-Mexico border be addressed in the same legislative package as any new Ukraine funding. For weeks, we’ve heard that the urgency of providing aid to Ukraine would push lawmakers to get a bipartisan border deal. Yet there’s been no breakthrough thus far.
The lead negotiators, Sens. James Lankford (R-Okla.) and Chris Murphy (D-Conn.), indicated during separate Sunday show appearances that little progress was made over the weekend. Murphy, however, said he expects the White House to get more engaged on the issue. This would need to happen quickly.
Senate Majority Whip Dick Durbin called us Saturday from Guatemala. Durbin and a group of Democrats traveled there seeking to highlight the root causes of migration that have led to the record-breaking illegal crossings at the U.S.-Mexico border. Durbin, the No. 2 Senate Democrat, was blunt about what’s necessary to unlock a massive foreign aid bill for Ukraine, Israel and Taiwan.
Here’s Durbin on the migrant crisis:
It’s fair to ask at this point whether any of the $60 billion that Biden has requested for Ukraine is salvageable. Republicans who oppose this aid aren’t going to support a Ukraine package simply because it includes stricter immigration policies. And most progressives aren’t going to back restrictive border changes, either. Simply put, there may not be enough votes up for grabs in both chambers to pass anything.
What’s next: The Senate is on track to pass the annual defense authorization bill as soon as Wednesday. Then the chamber is supposed to recess on Thursday until January. The border negotiators will need to show a deal is possible by then in order to give Senate leaders a reason to stay in session. Durbin told us the Senate should stay put until the job is done.
Schumer could buy some time by working to approve the dozen or so 4-star military promotions that remain stalled.
Of course, if a border deal isn’t in the offing, Schumer could bring Biden’s supplemental funding bill back up for a vote and dare Republicans to filibuster it again. This would put Senate GOP defense hawks — especially McConnell — in a tough position following Zelensky’s visit.
Impeachment inquiry: The House Rules Committee has a Tuesday markup scheduled on a resolution formalizing the Biden impeachment inquiry, which is being run by the Oversight, Judiciary and Ways and Means committees.
This is a day before the president’s son, Hunter Biden, is scheduled to be deposed by the Oversight Committee. The younger Biden was indicted Thursday in California on tax evasion charges brought by special counsel David Weiss. Hunter Biden faces separate federal gun charges in Delaware. James Biden, the president’s brother, had a subpoena deadline last week.
It’s clear that moderate House Republicans — even those in districts that Biden won in 2020 — are ready to back a formal impeachment inquiry. Yet we continue to believe it’ll be very difficult for Johnson and House GOP leaders to avoid a Biden impeachment vote once an inquiry is opened. So the stakes here are enormous.
House floor this week: After the Senate passes the NDAA, the House will pick it up and try to clear it by the end of the week. Conservative House Republicans are in a bit of an uproar over Johnson’s decision to tie an extension of FISA authority to the annual Pentagon policy bill. We expect upwards of 50 GOP no votes on the NDAA.
There’s more: The House has an FAA extension bill on its suspension calendar. This bill would extend most federal aviation programs to March 8. The Senate will need unanimous consent to pass this quickly.
— Andrew Desiderio, Jake Sherman and John Bresnahan
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What we’re watching
Monday: The House Rules Committee will meet to prepare several bills for the floor, including two competing FISA reform proposals.
Director of National Intelligence Avril Haines, National Security Agency Director Paul Nakasone, Deputy National Security Adviser Jonathan Finer, Deputy Attorney General Lisa Monaco and Deputy FBI Director Paul Abbate will brief Democrats on the House Intelligence Committee on the FISA bills. The Biden administration officials will warn that the House Judiciary Committee’s version of FISA reauthorization would hurt national security agencies’ ability to conduct investigations.
Tuesday: Ukrainian President Volodymyr Zelensky will meet with all senators in the Mansfield Room off the Senate floor at 9 a.m. He’ll then head to the other side of the Capitol to meet with Speaker Mike Johnson.
The House Transportation and Infrastructure Committee will hold a hearing on the GSA’s process of selecting Maryland over Virginia for FBI headquarters. GSA and FBI officials will testify.
The House Rules Committee will consider the resolution to open an impeachment inquiry into President Joe Biden. The Senate Judiciary Committee has a hearing about “ensuring accountability for corporate criminals.”
The Senate Foreign Relations Committee will have a secure briefing on Iran’s proxies in the wake of the Oct. 7 attack on Israel. The hearing will feature Undersecretary of State John Bass and Assistant Secretary of State for Near Eastern Affairs Barbara Leaf.
Wednesday: The House Financial Services Committee has a hearing on money flow to Iran with two senior Biden administration officials.
Federal Reserve Chair Jay Powell will host his final press conference for the year at 2:30 p.m. after the Federal Open Market Committee decides its next interest rate move. Economists expect the U.S. central bank to hold rates steady.
— Jake Sherman and Max Cohen
McHenry wants to make deals in 2024 — on his terms
Fresh off his retirement announcement, House Financial Services Committee Chair Patrick McHenry (R-N.C.) spoke at length to us about financial policy and what he thinks 2024 could hold. There’s a lot of news to unpack, so let’s dive right in.
Start high level: As we wrote in Friday’s PM edition, McHenry is more bullish than we’d expect about the potential for policymaking next year given the upcoming elections. But the North Carolina Republican thinks that the FY2024 spending fights scheduled for January and February offer a rare opportunity for legislating in the new year.
“With the twists and turns of Washington right now, you don’t know what the next couple months hold,” McHenry said.
The House Financial Services Committee’s tentative early 2024 schedule includes hearings focused on Biden’s “rogue regulators” in January, “holding bad actors accountable” in February and “ensuring American competitiveness” come March.
McHenry’s personal legislative goals continue to revolve around consumer data privacy reform, digital asset reform and capital formation.
The Senate’s political dynamics will continue to be the chief obstacle to those efforts, particularly with crypto. Senate Banking Committee Chair Sherrod Brown (D-Ohio) opposes the House GOP’s digital asset bills. Brown’s tough-looking reelection makes us more skeptical about the potential for bicameral dealmaking.
Digital download: McHenry told us it was time for the House to take a closer look at the anti-money laundering rules for crypto. This should get both the Senate and the crypto industry’s attention.
To date, the Senate has been the most focused on anti-money laundering reform targeting crypto. When we pointed that out to McHenry, he acknowledged this as an area of potential bicameral compromise — which is news in and of itself:
This effort is in the very early stages, to be clear. But McHenry’s interest in anti-money laundering policy is a sign the industry might need to brace for a serious regulatory reform effort.
Stablecoin status: McHenry isn’t backing down on his committee’s approach to regulating stablecoins, which has encountered resistance from Democrats and the Biden administration over limiting the Fed’s role.
McHenry acknowledged that the Fed isn’t getting the supervision powers it’s asking for when it comes to state-issued stablecoin firms. Stablecoins imitate the role of private money in crypto, which makes the U.S. central bank more than a little nervous.
But McHenry says his stablecoin bill is still better than the status quo. “Right now, there’s no role for the Fed. There’s no federal role,” he said. “So they can take a modest amount of power in the hopes of later getting more power, or they’ll get none.”
The veteran lawmaker argued that the Fed needs to wait for the stablecoin ecosystem to develop and that state authorities like New York and California are well-positioned to get the ball rolling:
Outbound overtures: One area where McHenry’s not sounding so compromise-y? Outbound investment reform, another conflict that spilled out into the open during final negotiations around the annual defense authorization package.
Republican lawmakers including House Foreign Affairs Committee Chair Michael McCaul (R-Texas) and Sen. John Cornyn (R-Texas) have a bill that would introduce new reporting requirements on American investments abroad. McHenry and several other senior lawmakers on the House Financial Services Committee are opposed to that approach.
And while some lawmakers, including McCaul, have suggested there could be some compromise between the two camps, McHenry wants to make sure lawmakers understand how far apart the bills are today.
“I’m talking about sanctions. They’re talking about reporting requirements,” McHenry said. “Sanctions have a global effect. Their reporting requirement would have a domestic effect. I’m talking about an effective, time-tested regime. They’re trying to create a new reporting requirement.”
— Brendan Pedersen
THE MONEY GAME
A big week for collecting checks
If you are yearning to give a bunch of money to members of Congress, this is your week. The House and Senate will likely be gone next week. So here are your big events for the next few days.
Monday: Rep. Linda Sánchez (D-Calif.) has her holiday party at Fight Club on the Hill.
Tuesday: This is a fun one. “Pasta with Costa” is Rep. Jim Costa’s (D-Calif.) lunchtime fundraiser at RPM Italian. House Democratic Caucus Chair Pete Aguilar is fundraising for California Rep. Mike Levin on the Hill. House Minority Whip Katherine Clark has a “labor lunch & roundtable” at the ALPA offices. Rep. Raul Ruiz (D-Calif.) has a 4 p.m. whiskey tasting at the Bold PAC townhouse.
Anheuser Busch is hosting a holiday reception for Rep. Veronica Escobar (D-Texas). Do you love the House Rules Committee? Rep. Jim McGovern (D-Mass.), the ranking member of the Rules panel, will be hosting a winter wine tasting on Capitol Hill at 5:30 p.m.
Rep. Brian Fitzpatrick (R-Pa.) is hosting a dinner with Ways and Means Committee Chair Jason Smith (R-Mo.).
Wednesday: Rep. Josh Gottheimer (D-N.J.) has his annual Hanukkah party, benefitting Jersey Values PAC at 12:30 p.m. Rep. Chrissy Houlahan (D-Pa.) is hosting a gingerbread competition on the Hill. Do you like bourbon? Rep. Morgan McGarvey (D-Ky.) is hosting his “bourbon and brews” birthday party with Aguilar and Sánchez at the Majority Group’s townhouse.
House Minority Leader Hakeem Jeffries is appearing at a fundraiser for Rep. Jared Moskowitz (D-Fla.). Rep. Henry Cuellar (D-Texas) is hosting a cigar event at Club Rex in Old Town.
Rep. Vern Buchanan (R-Fla.) has his holiday party with a bunch of members, including House Majority Leader Steve Scalise. Rep. Byron Donalds (R-Fla.) has an event right after Buchanan’s — a Festivus party.
Thursday: Rep. Shri Thanedar (D-Mich.) has “tea with Shri.” Rep. Gerry Connolly (D-Va.) has a champagne holiday party on the Hill.
— Jake Sherman
THE CAMPAIGN
Tim Sheehy, the GOP Senate candidate in Montana, has a new ad running statewide linking Sen. Jon Tester (D-Mont.) to President Joe Biden. The ad says Biden and Tester are “too liberal to keep us safe.”
— Jake Sherman
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