The Archive

FUNDING FIGHT

With no omnibus deal yet, House to take up short-term funding bill

With no agreement so far on an omnibus funding package, House Democratic leaders will introduce a short-term spending bill today designed to keep federal agencies open until Dec. 23.

The measure will be taken up by the House Rules committee today and go to the floor Wednesday. The Senate will then get the bill before Friday’s deadline. The current continuing resolution expires on Dec. 16.

House and Senate appropriators have been negotiating for weeks on a topline funding target for the omnibus bill. Sens. Patrick Leahy (D-Vt.) and Richard Shelby (R-Ala.), the chair and ranking member of the Senate Appropriations Committee, told us Monday that they were making good progress and felt confident they’d reach an agreement soon. Shelby said he felt more optimistic this week than last.

But here’s what you should keep in mind: Once the two sides agree on a topline number, they’ll still need four to five days to put together the package. That means nothing can happen on the floor until early next week even if the two sides reach a deal quickly – like today. The House can move an omnibus package in a day or two, but the Senate will need more time. The upper chamber could take up to a week at the most, although anything can happen in the Senate by unanimous consent.

In other words, making a Dec. 23 deadline is tough. Not impossible, but tough.

– Jake Sherman, John Bresnahan and Heather Caygle

THE QUEST FOR 218

Will McCarthy have to bend on the motion to vacate?

For a century prior to 2015, no member had attempted to remove a speaker from office by offering a “motion to vacate the chair.” Then conservative hardliners used the arcane procedure to help oust former Speaker John Boehner, and nothing has ever been the same.

Speaker Paul Ryan, Boehner’s successor, always faced the threat of such a motion being filed if he alienated hardliners. Any single member could do so and get a vote. When Speaker Nancy Pelosi took office, she changed the rule so that only a party leader could do it at the behest of a majority of their lawmakers.

But 21 days before the election of the next speaker, it’s becoming ever more clear that House Minority Leader Kevin McCarthy may have to restore the motion to vacate to the old standard if he wants to be speaker.

This will be a major topic of conversation Wednesday at a closed-door House GOP forum on the chamber’s rules. Conservatives who don’t believe McCarthy is up to the task of being speaker want the MTV to hold him accountable. For his part, McCarthy wants to keep the rule as is in order to allow him to operate more freely with a razor-thin GOP majority.

Quite frankly, how McCarthy handles the motion-to-vacate debate may play a big role in whether he can get the votes needed to become speaker. Can McCarthy revise the threshold required to offer a motion to vacate from a majority of the conference to, say, 20 to 30? That would allow some middle ground between one member and more than 100. Some of his allies suggest this is a plausible alternative.

McCarthy told us he’s open to talking about a different threshold.

“You can always discuss a different number,” McCarthy said.

McCarthy also noted that if the House allows one member to force a vote to boot the speaker, a Democrat could also move against him.

“Don’t you think Eric Swalwell will make a motion every day?” McCarthy said Monday evening, referring to his California Democratic colleague.

But Rep. Scott Perry (R-Pa.), who met with McCarthy Monday, told us he wants a single member to have the ability to call a referendum on the speaker.

Some McCarthy allies believe he can’t or shouldn’t cave on this issue. And this shows how delicately McCarthy has to tread. He can’t give in too much to conservatives or he risks alienating his more mainstream colleagues. They’ll vote for him to become speaker, of course, but his ability to govern could be damaged, and that will only hurt McCarthy in the long run.

“I am totally opposed to that,” said Rep. Tom Cole (Okla.), the top Republican on the Rules Committee. “Not only do you blackmail the speaker, it blackmails everybody. I think that’s a really bad idea. That’s my personal opinion. We’ll live with it if the conference decides, but it’s not something I’d support.”

– Jake Sherman and John Bresnahan

DCCC

How a gender imbalance in leadership could impact Jeffries’ DCCC pick

Incoming House Minority Leader Hakeem Jeffries is leaning toward nominating a woman to lead the DCCC next cycle, according to multiple Democrats.

The move would be both an acknowledgement of the lack of gender diversity within the incoming upper House Democratic leadership ranks and the shortcomings of the two publicly declared candidates for the post, California Reps. Ami Bera and Tony Cárdenas.

Jeffries met with Bera and Cárdenas on Friday. But as we reported last week, nothing in the new rules change requires the Democratic leader to nominate a DCCC candidate who is publicly seeking the role. A decision from Jeffries on a DCCC pick could come as soon as this week, we’re told.

Multiple Democrats have put the situation to us this way – if the House Democratic Caucus wanted Bera or Cárdenas, its members probably wouldn’t have voted to change the rules.

A member who could be poised to seize the mantle: outgoing New Democrat Coalition Chair Suzan DelBene (D-Wash.). DelBene ran unsuccessfully for the DCCC post in 2018, finishing third behind Rep. Cheri Bustos (D-Ill.) and former Rep. Denny Heck (D-Wash.).

“You know, this is a decision made by the leader. And so I think if you have any questions about it, you should talk to him,” DelBene told us when asked about whether she had any interest in the DCCC role.

Here’s DelBene’s response on if she’s concerned with a gender imbalance in leadership: “I’m always excited to see women in leadership, but this particular decision is up to Leader Jeffries.”

DelBene would check many of the boxes of what members say they want in a DCCC chair. She hails from a safe district and just won reelection by 27 points. She’s familiar with the needs of Frontliners from her time leading New Dems. And a substantial portion of incoming Democrats who flipped red seats are joining the center-left caucus.

Incoming House Minority Whip Katherine Clark is the only Democratic woman set to serve as a high-ranking leader in the next Congress. Of course, Speaker Nancy Pelosi led the Democratic Caucus for two decades. And to be sure, Bera — the son of Indian immigrants — and Cárdenas — a Latino who chaired the Congressional Hispanic Caucus’ BOLD PAC — are a far cry from the white men who dominated congressional leadership for decades.

DelBene has an interesting role in the situation, given she, along with Reps. Brad Schneider (D-Ill.) and Mark Pocan (D-Wis.), proposed the aforementioned rules change which granted the Democratic leader the power to essentially anoint the DCCC chair.

— Max Cohen

THAT ESCALATED QUICKLY

FTX hearing proceeds despite a star witness in Bahamian jail

Until last night, we were prepared to cover a House Financial Services Committee hearing this morning featuring virtual testimony from Sam Bankman-Fried, the former CEO of collapsed crypto exchange FTX.

That was until he was arrested by authorities in the Bahamas at the request of the Justice Department just about five hours after telling a Twitter Spaces audience he didn’t expect to be arrested. Oops!

The Royal Bahamas Police Force detained Bankman-Fried Monday night. That was followed by a tweet from U.S. Attorney for the Southern District of New York Damian Williams. Williams confirmed that local authorities had arrested the one-time crypto billionaire “at the request of the U.S. Government, based on a sealed indictment filed” by his office.

The Securities and Exchange Commission has also “authorized separate charges relating to his violations of securities laws,” the agency announced. Those charges will be “filed today in the SDNY.”

Bankman-Fried is being held in custody pending extradition to the United States.

We caught up with House Financial Services Committee Chair Maxine Waters (D-Calif.) twice after the news came out on Monday night. Waters first told Max Cohen she was “surprised” by the arrest. Not long after that, Waters said this to John Bresnahan:

In an official statement Monday night, Waters announced that today’s hearing would proceed despite the stunning development. But Waters also complained about the timing of Bankman-Fried’s arrest and said she’d be “disappointed” not to have him appear before her panel.

Here’s Waters:

The spectacle of Bankman-Fried’s arrest notwithstanding, we think this will still be an important hearing. Many lawmakers are anxious to introduce some kind of legislation to better regulate the crypto sector in 2023 and beyond. And the FTX collapse remains one of the best examples so far of what can happen to customer funds in the absence of clear rules and direct U.S. government oversight.

We expect to hear plenty of fresh details about the fiasco from current FTX CEO John Ray, a bankruptcy and corporate restructuring expert who said in filings last month that he’d never seen such a “complete failure” of governance as had occurred at FTX.

We also anticipate hearing a number of attacks from Republicans, and even some Democrats, to be directed at someone who isn’t on the witness list for today – SEC Chair Gary Gensler.

Gensler is deeply unpopular with Republicans. Here’s what Rep. Andy Barr (R-Ky.) told us on Friday about how GOP lawmakers will balance their criticisms of Bankman-Fried with other barbs aimed at the Biden administration:

There are also a number of more crypto-friendly Democrats on the House panel who we expect to spend time shielding the broader industry from criticism levied at SBF. Rep. Ritchie Torres (D-N.Y.) told us this:

Also of note: As we reported last week, Torres sent a letter to the Government Accountability Office asking the agency to investigate Gensler’s approach to crypto at the SEC in light of the FTX collapse.

But there are plenty of Democrats on the committee who still back Gensler. Rep. Sean Casten (D-Ill.) told us that he was “generally a pro-Gensler guy. I think he’s done a nice job.”

– Brendan Pedersen, Max Cohen and John Bresnahan

MOMENTS

9 a.m.: President Joe Biden will get his daily intelligence briefing.

Noon: House Majority Leader Steny Hoyer will host a pen and pad.

12:30 p.m.: The incoming House Democratic leadership will hold a news conference.

2 p.m.: Senate leaders will host their post-lunch news conference.

2:15 p.m.: Karine Jean-Pierre will brief.

3 p.m.: Rep. Andy Biggs (R-Ariz.) will hold a news conference calling for DHS Secretary Alejandro Mayorkas to be impeached.

3:30 p.m.: Biden will host a signing ceremony for the Respect for Marriage Act. Vice President Kamala Harris will attend.

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