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December 20, 2023
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PRESENTED BY
THE TOP
Happy Wednesday morning. The Senate is done voting for the year, and Congress will return on Jan. 8. The chamber cleared a short-term FAA reauthorization until March 8 on Tuesday night.
In May 2022, just three months after Russia launched a brutal invasion of Ukraine, 368 House members and 86 senators voted to send $40 billion to Ukraine.
It was an overwhelming message to the world that the vast majority of Congress was standing with Ukrainian President Volodymyr Zelensky in his quest to beat back Russian President Vladimir Putin’s invasion. (Future Speaker Mike Johnson was one of the no votes.)
But in the intervening 19 months, Washington has cooled on Ukraine — a trend driven by Republicans. Public support for the war effort has steadily dropped. World attention shifted to the Oct. 7 terror attacks and Israel’s brutal battle with Hamas in Gaza. Lawmakers have left town now without approving any new Ukraine aid since the end of 2022. This would have been unthinkable just a short time ago.
Ukraine, for the moment, has lost Washington. But there were numerous warning signs along the way.
1) No “blank check.” On Oct. 17, 2022, we were traveling with then-House Minority Leader Kevin McCarthy for a campaign swing. McCarthy issued a significant warning — Congress wasn’t going to rubber stamp President Joe Biden’s requests for new Ukraine funding if Republicans won the House that November.
McCarthy was reflecting a reality inside the growing isolationist wing of the House Republican Conference. GOP lawmakers, influenced by former President Donald Trump, were souring on foreign intervention. Especially Ukraine.
At the time, Biden said he was “worried” Ukraine aid could be curtailed by a House Republican majority. In response, the lame-duck House Democratic majority — with the help of Senate leadership — secured $45 billion for Ukraine in the year-end funding package following a dramatic Zelensky speech to Congress.
The United States has spent $100 billion-plus on the conflict, including more than $75 billion in economic, military and humanitarian aid for Ukraine.
2) Stop-gap misses. Congress passed — and Biden signed — two continuing resolutions during 2023 to avoid government shutdowns. Despite Biden’s requests for tens of billions of dollars in new funding — and a resurgent Russian war effort — both CRs excluded Ukraine.
In September, McCarthy devised the strategy of trying to extract border concessions from Biden in exchange for new Ukraine aid — a story we broke Sept. 7.
In doing so, McCarthy made clear that Ukraine funding was going to come at a price.
After averting the September government shutdown, McCarthy was booted from the speakership. Johnson, long a Ukraine skeptic, was next to take the gavel following a brutal internal House GOP fight. In his “two-step” CR plan to avoid a mid-November shutdown, Johnson left out new Ukraine funding.
And a highly anticipated Ukrainian counteroffensive failed to make major gains despite huge Ukrainian casualties and an influx of new Western weapons.
3) The September slip-up. In one of his final acts as speaker, McCarthy was forced to strip $300 million in aid to help train Ukrainians from the Pentagon funding bill. Instead of including it in the bill, McCarthy held a separate vote.
Most of the headlines after the vote blared that Congress “overwhelmingly” passed $300 million for Ukraine. This masked the real problem.
The signal here was that 117 Republicans voted against the relatively paltry sum. These “no” votes laid bare that a clear majority of House Republicans opposed continuing to support Ukraine. This was another warning that passing new assistance would be a herculean challenge for Biden and GOP defense hawks.
At the time, House Republicans said that they wanted more information on how Biden and top aides viewed the war ending. The administration continued to brief lawmakers, but this wasn’t enough for many Republicans.
4) The White House. On July 12, as Republicans were weakening on Ukraine, Biden was projecting extreme confidence on the world stage. During a trip to Lithuania for a NATO summit, Biden said this:
The White House said repeatedly that a majority of Congress favors Ukraine aid. But that metric doesn’t matter much in the modern-day House especially. McCarthy understood he had a growing block of Republicans who were opposed. Biden was making a promise he wasn’t sure he could keep.
In August, Biden asked Congress for $24 billion in new Ukraine funding as part of a larger package that included border security money. This didn’t go anywhere.
In October — with McCarthy out of the speakership — the White House sent a massive supplemental spending request for the year-end legislative rush. That proposal again included both border security and Ukraine aid as national-security priorities.
Lumping the two issues together allowed Republicans to say the White House agreed that they should move in tandem. This is where we are today. Some top Democrats have since said it was a mistake for the White House to link them.
Then there’s the question of the speed with which the White House got serious about the negotiations. To their credit, both Johnson and McCarthy were pretty clear in their objective — to pair border security and Ukraine. The White House didn’t engage heavily in the Hill talks on the supplemental until late in the process.
5) GOP leadership. Let’s face it — Republican leaders on the Hill did very little to push back on the burgeoning anti-Ukraine movement inside their party. Senate Minority Leader Mitch McConnell took to the floor on a near-daily basis to make the case for Ukraine, but it didn’t change many minds. Trump’s looming lead among 2024 GOP presidential contenders didn’t help either.
Much of McConnell’s frustration stemmed from his belief that Biden wasn’t doing enough publicly in making the pro-Ukraine case, and that this was contributing to the belief among some Republicans that Ukraine couldn’t win the war.
At the September funding deadline, McConnell kept pushing for even a small amount of Ukraine funding, only to be outnumbered by those in his conference who wanted to pass the House GOP’s stopgap bill, which included no additional aid. That’s what ended up happening.
Overall, there’s plenty of blame to go around here. It’s also abundantly clear that the United States, which has led the global coalition to help Ukraine, is at real risk of abandoning Kyiv.
Border talks latest: Ukraine backers did get a small boost on Tuesday night. McConnell and Senate Majority Leader Chuck Schumer released a joint statement saying the border-security talks are making enough progress that the Senate could vote on a border-Ukraine-Israel-Taiwan package “early in the new year.”
But there’s no guarantee this will pass the House, especially as the GOP presidential primary formally kicks off in mid-January.
— Jake Sherman, Andrew Desiderio and John Bresnahan
THE SENATE
Hawley blocking ex-McConnell aides’ appointments to FTC, NTSB
Sen. Josh Hawley (R-Mo.) and Senate Minority Leader Mitch McConnell have been butting heads for months now on several fronts. This week, tensions between them are escalating.
We first reported on Tuesday that Hawley is blocking an effort by leadership to fast-track a year-end nominations package that includes two former aides to McConnell. Andrew Ferguson, McConnell’s former chief counsel, was nominated to serve as an FTC commissioner. And Todd Inman, who was a campaign aide, was nominated for a National Transportation Safety Board role.
When asked for comment, Hawley’s office sent us a statement that first noted the fact that both nominees once worked for McConnell and were recommended by the GOP leader for the roles.
“I have significant concerns with Senator McConnell’s views on transportation and safety policy, including rail safety, and I want to understand how Mr. Inman’s views do or do not differ,” Hawley’s statement continues. “I [also] have significant concerns about Senator McConnell’s positions on antitrust and Big Tech. I want to understand whether and how Mr. Ferguson’s views differ.”
Ferguson was McConnell’s chief counsel during the impeachments of Donald Trump, as well as during Amy Coney Barrett’s Supreme Court confirmation process. Inman was a McConnell campaign staffer in Kentucky before serving as chief of staff for Transportation Secretary Elaine Chao, McConnell’s wife, during the Trump administration.
Hawley was already angry with McConnell after the GOP leader, along with Speaker Mike Johnson, recently blocked his effort to reauthorize a compensation program for victims of nuclear contamination.
And we scooped in October that McConnell singled out Hawley during a closed-door GOP lunch after Hawley introduced legislation that would roll back the Supreme Court’s Citizens United decision. Campaign finance is a key aspect of McConnell’s legacy, and he has vigorously opposed efforts that would restrict outside spending on political campaigns.
So it may not be surprising that Hawley is doing this — especially since the Missouri Republican has real policy differences with McConnell on the issues he named, plus a whole host of others. But it’s nonetheless rare for these types of nominees to be blocked, especially by a member of the same party. The move suggests that Hawley will continue to be a thorn in McConnell’s side.
Hawley, like most Republicans, hasn’t been present for Senate votes this week. But objections to unanimous-consent packages are typically honored regardless.
That means the Senate could process them on the floor sometime today — but only if Hawley relents — as part of the year-end nominations package. This could include a random assortment of non-controversial nominees, such as Foreign Service officers and ambassadors.
— Andrew Desiderio
THE CAMPAIGN
Vulnerable House Democrats say they’re fine with Biden’s polling
Heading into the election year, just under four in ten voters approve of President Joe Biden’s job in office. But according to the most vulnerable House Democrats, this widespread voter dissatisfaction isn’t of any concern.
Frontline Democrats we spoke to said they’ve largely lost faith in polling after several big misses in recent years. And they maintain that once Democrats fully sell their accomplishments from the last Congress, Biden’s standing will improve.
But privately, House Democrats are sounding the alarm — in group chats and other media — after a string of polls have shown former President Donald Trump ahead of Biden in 2024.
Several House Democrats told us this month it’s all anyone can talk about. But no one wants to draw the ire of the White House by speaking out publicly.
The razor-thin Republican majority means that Democrats only need to flip a handful of seats to reclaim the House. The party must also be wary of protecting its vulnerable incumbents. That’s a task that may prove increasingly difficult if Biden drags the party down from the top of the ticket.
But the prospect of needing to outrun the national party isn’t anything new for Frontliners like Rep. Matt Cartwright (D-Pa.). Cartwright has repeatedly won reelection in a district that voted for Trump twice and says he expects Biden to get more credit for the economy as November approaches.
“What are we, 11 months out from the next election?” Cartwright told us. “I mean, that’s a double eternity in politics.”
Democrats also are quick to point out how House polls last cycle predicted a “red wave” that never came.
“I think polling is increasingly useless,” Rep. Pat Ryan (D-N.Y.) said, adding he’d welcome Biden to his district. “If we haven’t taken that away from the last few elections, I don’t know how much more we need to see.”
“I haven’t kept up with poll numbers,” Rep. Don Davis (D-N.C.) said. “It’s early anyway.”
And Rep. Greg Landsman (D-Ohio) told us he thinks the polls are more indicative of general frustration, rather than anti-Biden sentiment.
Yet talk to Rep. Dean Phillips (D-Minn.), Biden’s primary opponent and the only congressional Democrat speaking out against the incumbent. Phillips claims the Frontliners’ public statements are all bluster.
“Everyone’s reading the polls, everybody sees,” Phillips said. “[The Frontliners] won’t say it publicly, most likely, because that’s cutting off your nose to spite your face. But I think they’re all feeling the same thing.”
Phillips has become ostracized inside the House Democratic Caucus ever since launching his quixotic presidential bid. But he claims a number of Democrats have reached out to him to fret about Biden’s standing.
House Democratic Caucus Chair Pete Aguilar, who once sat at the leadership table with Phillips, said he was confident voters would give Biden credit for achievements like prescription drug reform.
“So many of these things that we have an ability to talk about make a difference in the lives of real voters in our districts,” Aguilar said.
— Max Cohen
Many college-backed bank products have ‘high and unusual’ fees: CFPB
The Consumer Financial Protection Bureau released a report to Congress on Tuesday that outlines a pattern of higher-than-average costs among financial products sponsored by higher education institutions.
The CFPB, led by Director Rohit Chopra, said that many students participating in banking or credit programs offered through their college end up “paying more for financial products than they would on the open market.” In a few cases, that included expensive and increasingly unpopular overdraft fees.
Chopra argued in a press release that the long-term impact of college-backed financial products can be especially significant.
“Many students get their first credit card or deposit account when they enroll in college,” Chopra said, “And banks know that consumers are unlikely to move to a different provider once a product is integrated into their financial life.”
Read the full report here.
A few findings that caught our eye: Financial firms generated $17.3 million in revenue in the 2021-2022 academic year from roughly 650,000 students.
Comparing accounts between different colleges, the CFPB also found that students at Historically Black Colleges and Universities, for-profit colleges and Hispanic-serving institutions “all pay higher-than-average fees per account.” HBCU students with college-sponsored financial accounts paid an average of $30.62 in fees per year, compared to the $26.52 average for all colleges.
“Recent changes in bank overdraft and related practices warrant a reconsideration of whether these fees are consistent with or below current prevailing market rates,” the CFPB wrote in its report.
The CFPB also suggested that policymakers may need to review the existing protections for students around credit card marketing. “Many colleges continue to offer and market financial products in ways, including through online and email advertisements, that may mislead students under certain circumstances,” the report noted.
The report comes a few years into the Biden administration’s broader crackdown on what it calls “junk fees.” A lot of that attention has been directed at food delivery services and live entertainment functions, but the financial services sector hasn’t been spared.
Higher education has very much been the congressional spotlight this month following a disastrous hearing with college presidents on the prevalence of antisemitism on their campus.
We’ll be curious to see if lawmakers on either side of the aisle pick this issue up in the new year. The CFPB and House Republicans have frequently clashed under Biden. But we’ve seen some recent signs of goodwill between the agency and House Financial Services Committee Chair Patrick McHenry (R-N.C.), who has lauded the consumer watchdog’s approach to data privacy reform.
In other news: Dozens of congressional Republicans wrote to Treasury Secretary Janet Yellen and the leadership of the Financial Crimes Enforcement Network Tuesday evening asking the Biden administration to delay the implementation of a key provision of the Corporate Transparency Act of 2019. Championed by former Rep. Carolyn Maloney (D-N.Y.), the CTA was designed in part to close significant money laundering loopholes by having businesses over a certain size report the identity of their “beneficial owners.”
Led by Republicans including McHenry, Rep. Warren Davidson (Ohio), Sens. Rick Scott (Fla.) and Mike Rounds (S.D.), the lawmakers in the letter claim the federal government is “woefully behind in educating small business owners and stakeholders of their new obligations under the CTA that begin in just a few short weeks.”
— Brendan Pedersen
…AND THERE’S MORE
News: The New Democrat Coalition Fund is endorsing Jason Blazakis — a former State Department anti-terrorism specialist — in the Democratic primary for New Jersey’s 7th District. Blazakis is vying to challenge Rep. Tom Kean (R-N.J.) in the general election.
In the Democratic primary, Blazakis is facing progressive leader Sue Altman. Blazakis is positioning himself as a more moderate candidate who is better suited to flip the battleground seat in 2024. Kean is a freshman who narrowly beat former Rep. Tom Malinowski (D-N.J.) last cycle.
— Max Cohen
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