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GOVERNMENT FUNDING

$1.66T omnibus funding package released as deadline looms

With a Friday government funding deadline looming – and Christmas on Sunday – House and Senate appropriators released a $1.66 trillion FY2023 omnibus funding package late Monday night.

Here’s the 4,155-page bill.

The big question now is when can Congress pass this massive package. Senate leaders will need a time agreement with GOP conservatives to get this measure through the chamber by the end of the week. That will be the biggest drama of the next couple days. The other thing to watch is a huge winter storm bearing down on the Midwest and East Coast. With Christmas on Sunday, that could be a major challenge for lawmakers looking to get home.

Both parties claimed wins in the compromise package, which funds federal agencies through next September. It’s the last act for Sens. Patrick Leahy (D-Vt.) and Richard Shelby (R-Ala.), the chair and ranking member of the Appropriations Committee who helped forge this deal. Leahy, who was elected to the Senate in 1974, will give his farewell address this morning; Shelby gave his last week.

Republicans sought and received a big increase in defense spending, totaling nearly 10%. Overall defense spending is $858 billion. Senate Minority Leader Mitch McConnell and his GOP colleagues pushed hard on this front and were successful in the end.

There’s more than $45 billion in military and economic aid for the war in Ukraine, which is billions of dollars higher than President Joe Biden requested. It’s a win for the White House and Ukraine backers on Capitol Hill, who overcame growing House GOP opposition. The supplemental calls for “reporting on accountability of U.S. defense articles provided to Ukraine” as overall American spending on the conflict zooms toward the $100 billion mark.

And there’s at least $38 billion in disaster aid in the package (the two parties have some slightly different numbers here.)

Non-defense spending rose as well, but at a slower rate than the Pentagon budget. Republicans wanted to end “parity” in increases for defense and social spending, and they’ve achieved that here.

Yet Democrats also notched some important wins. Non-defense spending has reached $800 billion, a record amount, according to House Appropriations Committee Chair Rosa DeLauro (D-Conn.). And there’s more than $5 billion worth of Democratic earmarks for 3,200-plus projects. That’s funding that House and Senate Democrats can brag about back home.

The National Institutes of Health gets $47 billion, a $2.5 billion increase. There’s more money for Violence Against Women Act programs. The measure includes $4.4 billion in grants for state and local law enforcement, a $500 million boost from last year. The legislation adds $1 billion for Puerto Rico’s electrical grid, $600 million to address water problems in Jackson, Miss., and another $1 billion for low-income heating assistance.

One of the biggest increases in the package is a $21 billion boost for veterans’ health care to nearly $119 billion. Congress passed the PACT Act this year to help veterans exposed to toxic substances during their military service.

The Senate’s version of the Electoral Count Reform Act is in there as well. This legislation, led by Sens. Susan Collins (R-Maine) and Joe Manchin (D-W.Va.), will limit the vice president’s role in certifying the Electoral College count and make challenges to state results more difficult. This will ensure there’s no repeat of 2020 next cycle.

One huge loser: TikTok. Sen. Josh Hawley’s (R-Mo.) push to ban the hugely popular app from federal government phones was included in the legislation. Hawley has held up a number of Defense Department nominations over this issue, and he refused to let up until Democrats gave in. TikTok is owned by a Chinese company with government ties, and U.S. officials have raised security concerns.

We told Premium subscribers last Thursday in our PM edition about the backdoor negotiations between Hawley and Sen. Brian Schatz (D-Hawaii) over these noms and the TikTok ban. These bipartisan talks were focused on getting language in the omnibus from the start. Here’s more from a source familiar with the situation:

The nominations include: Lester Martinez-Lopez, assistant secretary of Defense for health affairs; Agnes Schaefer, assistant secretary of the Army for manpower and reserve affairs; Franklin Parker, assistant secretary of the Navy; Ravi Chaudhary, assistant secretary of the Air Force for energy, installations and the environment; Russell Rumbaugh, assistant secretary of the Navy (financial Management and comptroller); Brendan Owens, assistant secretary of Defense for energy, installations and environment; Laura Taylor-Kale, assistant secretary of Defense for industrial policy; and Radha Iyengar Plumb, deputy under secretary of Defense.

On the FBI HQ: An issue that cropped up late in the negotiations was a tussle between the Maryland and Virginia delegations over the future headquarters of the FBI. This is a fight that has been going for more than a decade and is far from over now.

The background here is that the federal government has been considering three sites for the FBI’s new headquarters: one in Springfield, Va., one in Landover, Md., and one in Greenbelt, Md.

The General Services Administration has set five criteria for selecting the new site: FBI mission requirement, including the proximity to the training facility in Quantico, Va.; transportation access; site development flexibility; promoting sustainable siting; and advancing equity.

The FBI mission requirement category is weighted more heavily than the other four; it is 35% of the decision. This means that Virginia has a leg up, since Springfield is closer to Quantico than Landover and Greenbelt.

House Majority Leader Steny Hoyer has been fighting to get language in the omnibus to set all categories equally to give Maryland a better shot of securing the facility. This has pitted him against Sen. Mark Warner (D-Va.). Warner is advocating to stick with the GSA’s guidelines.

Senate Majority Leader Chuck Schumer was pulled into the debate and sought to find a solution, according to multiple sources. Here’s a Senate Democratic aide:

Proponents of the Maryland sites — namely Hoyer — have said that it’s a once-in-a-generation opportunity to help spur development in predominantly Black population centers.

Prominent Black leaders, including the Rev. Al Sharpton and National Urban League President Marc Morial sent a letter to the president and GSA saying choosing one of the Maryland sites would help fulfill Biden’s “commitment to equity and empowerment initiatives.”

Since his first day in office, Biden has pledged to advance racial equity and increase diversity within the federal workforce.

– John Bresnahan, Heather Caygle and Jake Sherman

AGENCY MOVES

Gruenberg, long-time regulator, confirmed to FDIC once more

The Senate confirmed Martin Gruenberg to chair the Federal Deposit Insurance Corp. Monday night, the second time the former Senate Banking Committee staffer has been approved to lead the agency full-time since 2012.

Gruenberg was confirmed by a voice vote to a five-year term as the FDIC’s chair, a position that acts as the agency’s chief executive and makes key decisions on regulators’ agenda, organization and staffing.

The Senate had earlier voted 45-39 to confirm Gruenberg to a separate six-year term as a board member.

The FDIC is one of the United States’ three prudential banking regulators and is best known for insuring customer funds in the event of a bank failure. It also serves as the chief federal regulator of state-chartered banks.

Gruenberg isn’t beloved by the banking industry, but he’s also one of the capital’s best known Democratic regulators. A long-time skeptic of financial deregulation and crypto, the phrase “tough but fair” gets thrown around a lot.

We expect Gruenberg to support stronger capital requirements for large banks, as well as efforts to better assess the risks of climate change within the U.S. financial system.

Gruenberg has served as the FDIC’s acting and confirmed chair several times over two decades, including during the Bush and Obama administrations. He’s held the post since February under President Joe Biden.

Gruenberg’s nomination was controversial among some Senate Republicans who argue the agency veteran kicked off a power struggle last year that culminated in the resignation of former FDIC chair Jelena McWilliams, a Trump appointee.

Sen. Pat Toomey (R-Pa.) brought up the incident at a Senate Banking Committee hearing last month but voted in favor of Gruenberg on Monday night. That was part of a deal with Democrats to secure a full slate of FDIC board members.

Gruenberg will be one of five votes on the agency board, which will consist of three Democrats and two Republicans. GOP nominees Travis Hill, a former FDIC staffer under the Trump administration, and Jonathan McKernan were also confirmed via voice vote to sit on the board last night. Both Hill and McKernan previously served as Senate Banking Committee staffers as well.

The confirmations mark the first time since 2015 that the FDIC has had a full five-member board. The Trump administration never put up a full slate of nominees.

Until this week, just three Democrats were seated on the typically-bipartisan board. And the only member with Senate confirmation was Rohit Chopra, whose position as director of the Consumer Financial Protection Bureau grants him a seat at the FDIC as well. Michael Hsu is also a board member as head of the Office of the Comptroller of the Currency, but he remains an acting official.

– Brendan Pedersen

OPPO, WYA?

Did Dems drop the ball on Santos?

When The New York Times published a searing report exposing the numerous lies in Rep.-elect George Santos’ (R-N.Y.) resume, many political observers were left wondering why the big piece dropped in December.

The bombshell story alleged that Santos lied about his employment at Citigroup and Goldman Sachs, as well as his attendance at Baruch College and New York University. Plus, some glaring omissions in the New York Republican’s financial disclosure forms could run afoul of House ethics rules.

The story left many Hill Democrats wondering whether the Democratic Congressional Campaign Committee fell asleep on the job.

“It’s difficult to overstate how many people would’ve had to drop the ball in not even verifying the mere fact of Congressman-elect Santos’ prior employment as he ran to flip a key House seat,” said Rep. Mondaire Jones (D-N.Y.), summing up the mood on Twitter.

Yet the DCCC can hardly be accused of ignoring Santos’ candidacy. The campaign arm compiled an 87-page opposition document in August complete with dozens of social media posts, financial filings and information on Santos’ employment with a scandal-ridden corporation. The bulk of the research centered on Santos’ false claims of voter fraud, his hardline anti-abortion rights stances and support for conspiracy theories.

But the DCCC appears to have missed out on fact-checking basic biographical information, such as Santos’ education and employment. The NYT also revealed that Brazilian authorities charged Santos for making fraudulent purchases with a checkbook in 2010.

While the DCCC document did surface questions about Santos’ connection with shady business dealings, the largest revelation from the Times story deals with Santos’ omitting clients of the Devolder Organization from his personal financial disclosure form. Misrepresentations on these official forms is a federal crime.

The DCCC can argue a lack of interest from national media on the New York 3rd District race — which didn’t top the list of most-tracked races — played into the surprised reaction to the Times story.

→	Among the nuggets the DCCC did flag over the summer was that Santos’ animal rescue charity might not have been all it seemed. “A search of IRS’ tax exempt organizations for ‘Friends Of Pets United’ returned no results,” the opposition research memo read.

The DCCC also noted that Santos loaned his own campaign hundreds of thousands of dollars.

— Max Cohen

DOWNTOWN DOWNLOAD

→

Miller Strategies, the firm run by Jeff Miller, House Minority Leader Kevin McCarthy’s top ally and close friend, has signed a number of new clients: WellHive, the Federation of American Hospitals, Oracle and the PGA Tour. Miller will be one of the town’s hottest lobbyists if McCarthy becomes speaker.

– Jake Sherman

THE CAMPAIGN

→	The American Petroleum Institute is running a new campaign in D.C., suggesting that the answer to the country’s energy problems lie with the oil and gas industry.

– Jake Sherman

MOMENTS

9:50 a.m.: President Joe Biden will get his daily intelligence briefing.

2 p.m.: Senate leadership will hold its weekly news conference after their private lunches.

2:45 p.m.: Rep. Kevin Brady (R-Texas) will gaggle before the Ways and Means Committee holds a hearing at 3 p.m. on whether to release former President Donald Trump’s tax returns.

3:50 p.m.: Vice President Kamala Harris will swear in the following people: Kiran Ahuja as director of the U.S. Office of Personnel Management; Sandra Thompson as director of the Federal Housing Finance Agency; Shelly Lowe as chair of the National Endowment for the Humanities; and Maria Rosario Jackson as chair of the National Endowment for the Arts.

CLIP FILE

NYT

→	News Analysis: “A Diminished Trump Meets a Damning Narrative,” by Maggie Haberman

→	“Release of Trump Tax Returns Could Herald New Era for Taxpayer Privacy,” by Alan Rappeport

→	“In Virginia, Democrats Sprint to Select Nominee for Special House Election,” by Maya King

WaPo

→	“Chief justice temporarily keeps pandemic-era Title 42 border policy in place,” by Ann E. Marimow and Maria Sacchetti

WSJ

→	“Sam Bankman-Fried’s Lawyers Hash Out His Transfer to U.S. After Confusion in Court,” by By James Fanelli and Corinne Ramey

AP

→	“Kari Lake will get to make case for election misconduct,” by Jonathan J. Cooper in Phoenix