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December 14, 2022
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PRESENTED BY
THE TOP
Happy Wednesday morning.
The story of today – the story of this political moment – is the right squeezing House Minority Leader Kevin McCarthy and Senate Minority Leader Mitch McConnell.
This is evident everywhere you look, including in this NYT story, which illustrates former President Donald Trump failing to break the logjam between McCarthy and his conservative detractors.
On the Senate side, a group of GOP senators that includes Ron Johnson (Wis.), Ted Cruz (Texas), Mike Lee (Utah), Lindsey Graham (S.C.), Mike Braun (Ind.), Rick Scott (Fla.) and Rand Paul (Ky.), have convened a GOP conference meeting to talk about the party’s agenda for the 118th Congress. They claim it isn’t aimed specifically at McConnell – who just beat back a leadership challenge from Scott – but, in a big way, of course it is. McConnell has been atop the Senate Republican Conference for the last 16 years. So any criticism of the Senate GOP leadership is criticism of McConnell.
Across the Capitol, McCarthy – locked in a battle over the Jan. 3 speaker vote – is hosting a forum about changing the chamber’s rules. This meeting has been spurred by long-running conservative discontent over how the House is organized and operated under either party.
McCarthy’s math is tough. In a 222-seat House GOP majority next year, McCarthy can only lose a handful of votes on Jan. 3 and still become speaker. So far, he’s short, and his most hard-core opponents don’t believe McCarthy can ever get there. But to the California Republican and his allies, there’s simply no other choice, despite right-wing complaints.
The House
Unlike McConnell, McCarthy called today’s meeting to talk to his colleagues about the House rules. Conservatives Reps. Chip Roy (R-Texas) and Scott Perry (R-Pa.) have been pressing McCarthy to alter provisions they claim hurt conservatives by styming their policy initiatives.
Conservatives want McCarthy to agree to post legislation 72 hours before the House considers it. McCarthy told us he’s in favor of that.
But principally, these hardliners want to change the motion to vacate, which would allow any member to force a vote on removing the speaker. (Conservatives claim Thomas Jefferson created the motion to vacate. He didn’t.)
McCarthy said today’s session is meant to foster a conversation about the path forward so the full conference feels bought into next year’s rules package.
“Whatever we’re going to do in the next Congress – we’ve got a five-seat majority,” McCarthy said. “We’re going to have to find a way that we all come together.”
McCarthy will get pressure on the MTV – sure to be a big part of the discussion today.
But there’s concern inside McCarthy’s leadership that he may be forced to give up too much in order to secure conservative votes.
Rep. Tom Cole (R-Okla.), slated to be the chair of the Rules Committee, said this:
The Senate
As we noted, McConnell easily defeated Rick Scott a month ago for Senate GOP leader. But the “Breakfast Club” of conservatives has asked for today’s session to talk about what happens during the 118th Congress.
This comes as lawmakers prepare to take up a massive $1.7 trillion spending package next week. McConnell has endorsed the effort, saying it’s the best Republicans can do with Democrats controlling both the White House and Congress.
Conservatives, though, loathe omnibus funding bills. They’re too expensive, are jammed through with no committee hearings and increase the deficit. In other words, they’re everything wrong with Washington in one mega bill.
“I think that Republicans in general, and Republican leadership, have abdicated the power of the purse,” Paul said. “We don’t use it because the money is all crammed in one bill. I think we should have the House, which we control [next year], pass 12 spending bills and send them over here. And no more of this omnibus, no more of this CR, no more of all this spending.”
For his part, Rick Scott wants to pass a CR that extends into early 2023 in order to “give the new Congress an opportunity to do what this Congress decided not to do. This Congress decided not to pass a budget.”
Party leaders are downplaying what will come out of today’s session, which will be presided over by Senate Republican Conference Chair John Barrasso. It’s expected to last 60 to 90 minutes.
Here’s Senate Minority Whip John Thune:
– John Bresnahan and Jake Sherman
GOVERNMENT FUNDING
House, Senate leaders reach deal on omnibus ‘framework’
Washington, we have a deal.
House and Senate appropriators announced a “bipartisan, bicameral framework” on Tuesday for the massive $1.7 trillion omnibus spending package. They hope this arrangement will allow Congress to pass the legislation by Christmas.
This agreement comes as the House prepares to vote today on a week-long continuing resolution that will extend the funding deadline until Dec. 23. The current deadline is this Friday, Dec. 16. House and Senate leaders say the additional time is needed to complete action on the omnibus and avoid a government shutdown.
Three of the four top appropriators – Senate Appropriations Committee Chair Patrick Leahy (D-Vt.); Sen. Richard Shelby (Ala.), the panel’s ranking Republican; and House Appropriations Committee Chair Rosa DeLauro (D-Conn.) – simultaneously announced the “framework agreement” on Tuesday night.
The three veteran appropriators aren’t disclosing what the “topline” is for FY2023, or how much will be spent on defense versus social programs. There was a lengthy dispute over this issue, and party leaders don’t want to alienate their rank-and-file by saying who got what yet. That will be clear when the package is released next week. Yet at that point, there will be enormous pressure to support it with the holidays looming.
Missing from this agreement is Rep. Kay Granger (R-Texas), the incoming chair of the House Appropriations Committee. House Minority Leader Kevin McCarthy wants nothing to do with an omnibus and House Republicans are expected to vote en masse against it. Granger and McCarthy will hold a news conference today criticizing the omnibus.
Shelby, who is retiring at the end of this Congress, said:
What we expect:
| → | The House will vote on a one-week stopgap funding bill at some point today, probably late tonight. The Senate will likely take it up Thursday before leaving town for the week. |
| → | Appropriators will spend the next four to five days assembling the omnibus package. If the past is prologue, this process may take longer than we expect to be finalized. Nothing – and we mean nothing – has happened on time during the 117th Congress. Just keep this in mind while making your travel plans. |
| → | Next week could be difficult. It will take the House a day or two to pass the omnibus. Speaker Nancy Pelosi can only afford to lose two votes. Very few – if any – Republicans will vote for it. Democrats will look for GOP members who aren’t coming back next year for help. |
The Senate will need unanimous consent to get this bill finished in time. Any single senator can slow the process down. However, Minority Leader Mitch McConnell said Tuesday that the Senate needs to finish the bill by Dec. 22 or else he will only accept a yearlong CR. We’ll see if this holds.
– Jake Sherman and John Bresnahan
FOMC PREVIEW
‘Soft landings’ and other things that might be happening at the Fed
Is it that time already? The Federal Reserve Board will host a press conference this afternoon to announce the U.S. central bank’s next interest rate move, courtesy of the Federal Open Market Committee.
Analysts broadly expect a 50 basis point rate hike today, bumping the federal funds rate up to 4.25% to 4.5%. That would mark a slowdown from the last several hikes, which have been a super-sized 75 basis points. But the rate bump is still significant.
There’s a bit less suspense surrounding this event thanks to a speech Fed Chair Jay Powell gave last month at the Brookings Institution, where the top central banker said the Federal Reserve was mindful of how long it can take for the effects of monetary policy to be felt in the U.S. economy.
Plus, the economy is looking A-OK at the moment! Inflation figures released Tuesday came in cooler than expected, the number of job openings is trending down, and the unemployment rate is sitting pretty at 3.7%.
Is this… a soft landing? We’re not qualified to make that call. But Powell has continued to say that it’s possible that the United States could quash inflation via rate increases without destroying the labor market – something congressional Democrats spent a lot of time worrying about last month. (They’re still worried about it, but they’ve also had other stuff going on.)
There are still headwinds that the Federal Reserve will be thinking about in the weeks ahead. Fed Vice Chair Lael Brainard has argued that supply chain shocks could be here to stay, which could keep inflation elevated for reasons that monetary policy isn’t great at addressing.
The Fed will also have to grapple with China winding down its Zero Covid policy, which had dampened the nation’s economy through frequent and strict lockdowns the last three years. If China fully re-opens in 2023, a surge in consumer demand from the world’s second-largest economy could send inflation back up globally, at least in the short term.
Investors will be listening closely to Powell’s press conference this afternoon for hints of how the Fed is thinking about rate hikes in the early months of 2023. Eventually, hikes will slow and stop. Then the question will become how long rates stay high – and that could take a while.
– Brendan Pedersen
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THE NEW POWER PLAYERS
Inside Emmer’s senior staff
News: We have a first look for you this morning at incoming House Majority Whip Tom Emmer’s senior staff.
Why does this matter? Emmer is the newest entrant into the top rung of the House Republican leadership. There’s been a good deal of fascination about who the Minnesota Republican will hire.
In a 222-seat majority, whip will be a critical job. Emmer has never been a senior whip in his nearly eight years in Congress.
Here’s the list:
| → | Robert Boland will be Emmer’s chief of staff. Boland worked at the NRCC last cycle and, previous to that, was Emmer’s chief of staff in his personal office. |
| → | Chris Maneval will be deputy chief of staff. Maneval has been in senior roles with Emmer since 2016, ending up as his chief in 2019 when Boland moved over to the NRCC. |
| → | Ian Foley will be policy director. Foley was the legislative director for former Rep. Devin Nunes (R-Calif.). |
| → | Jackie Del Bonis will be member services director. |
| → | David Planning will be the floor director. This is the key role in a whip operation and especially with a four-seat majority. Planning would’ve been in line for a key role in any whip shop. He worked for Rep. Patrick McHenry (R-N.C.) when he was chief deputy whip and as a floor assistant for Steve Scalise. Planning also worked on the Financial Services and Small Business Committees in addition to serving in the Trump legislative affairs shop. |
Planning is the only person on this whip team with extensive leadership experience. Emmer will have to rely on Planning for a lot.
| → | Dennis Nalls will be Planning’s deputy. Nalls also has experience in the leadership; he has been a floor assistant on Scalise’s whip operation. |
| → | Shelbie Rogers will be director of operations. |
| → | Samantha Bullock will be Emmer’s communications director. Bullock worked at the NRCC. |
| → | Hailey Borden will be director of downtown coalitions. This is a very important role. Borden worked on coalitions on Small Business with Planning and for the Trump White House. |
| → | Justin Shockey will be a floor assistant. Shockey was Emmer’s body man at the NRCC. |
| → | Sally Fox will be Emmer’s personal office chief of staff. She most recently worked for Sen. Bill Cassidy (R-La.). |
| → | Michael McAdams will be a senior adviser running Emmer’s political operation. McAdams worked in communications at the NRCC for Emmer. |
– Jake Sherman
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Presented by Apollo Global Management
Learn how Apollo is rethinking retirement income to last the modern lifespan. Think It New.