Stefanik vs. Johnson: Inside a leadership battle royale

IN THIS EDITION

Why Elise Stefanik went to war with Mike Johnson

Van Epps wins Tenn. special despite Dem overperformance

The Vault: DeFi and other problems for the crypto Congress

Crockett inches toward Senate run

THE TOP

Why Elise Stefanik went to war with Mike Johnson

Happy Wednesday morning.

News: Rep. Elise Stefanik (R-N.Y.) is now engaged in an open war with Speaker Mike Johnson, a very public rift at the highest level of the House Republican Conference.

This fight is ostensibly about a dispute in the NDAA, the annual Pentagon policy bill.

Stefanik is so frustrated that she’s prepared to tank the must-pass defense bill — approved by lawmakers every year for more than six decades — if the speaker doesn’t include a provision requiring the FBI to alert Congress if it opens a counterintelligence investigation into an elected official or candidate. Democrats are opposed to this provision.

“I’ll take down the rule,” Stefanik told us in an interview. Stefanik has made this message clear to House GOP leaders as well.

As of very early Wednesday morning, sources said that Stefanik’s war might be successful. There was an effort afoot to put the provision back in the NDAA, showing that Stefanik’s brutal bare-knuckled effort is gaining traction.

And that’s why this fight says so much about today’s House.

Stefanik, whom Johnson appointed the chair of the Republican leadership, is a wily operator. Remember, Stefanik helped topple former Rep. Liz Cheney (R-Wyo.) back in 2021 for not being loyal enough to President Donald Trump. Stefanik replaced Cheney in the leadership under then Speaker Kevin McCarthy, with whom she enjoyed a better relationship.

Johnson is undergoing a particularly perilous moment. The Louisiana Republican is entering the most difficult stretch of his speakership, with anger over government spending, health care and the broader political climate rife inside the House GOP Conference.

Members find it easy – even convenient – to hammer the speaker. Johnson has little choice but to bend as he has a two-vote margin. And the speaker has lots of retiring members who are running for other offices, often by bashing the very Congress they serve in.

The policy. It’s inconvenient for Johnson that Stefanik has an issue that will garner immediate attention in Trump’s Washington.

Johnson has said he supports Stefanik’s language in the NDAA, but he adds that the policy dispute was handled at the committee level – not in the leadership. Rep. Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, vetoed the measure.

“He is siding with Raskin,” Stefanik said of Johnson. “Raskin was the only opposition.”

Stefanik insists Johnson can demand the language in the bill. However, the NDAA is a very delicate package with a long history of bipartisan support, and last-minute tweaks can unravel the entire bill. Yet there are times when a congressional leader circumvents a “Four Corners” agreement to fight for a policy’s inclusion.

Stefanik has gone absolutely ballistic on Johnson in the most public way during this dispute, saying the speaker was lying about her and instructing him to “fix this” – in other words, get the provision into the bill. Stefanik said Johnson was “blocking” her policy and the speaker was getting “rolled” by Democrats.

Johnson has had an incredibly rough period since the shutdown ended a few weeks ago – as if that episode wasn’t enough.

Rep. Marjorie Taylor Greene (R-Ga.) announced her resignation, criticizing the speaker and the House on her way out. There was a revolt on the House floor Tuesday as hardline Republicans led by Rep. Chip Roy (R-Texas). Roy – who is running for Texas attorney general – lashed out at the GOP leadership’s decision to move forward with a bill regulating the pay of collegiate athletes.

And Rep. Anna Paulina Luna (R-Fla.) is so sick of the leadership that she’s filed a discharge petition to force a vote on legislation banning stock trading for members of Congress. Stefanik has signed on.

The politics. Of course, Stefanik is running for governor of New York herself. That comes with a whole host of political priorities that don’t always line up with the House Republican majority. Picking a fight with Johnson might be good for Stefanik’s own Empire State politics, especially if this is seen as a pro-Trump move.

Stefanik can hardly seem to contain her personal disdain for Johnson, though. The tension between Stefanik and Johnson has been at a low boil for some time.

Stefanik privately blamed Johnson for torpedoing her nomination to be ambassador to the United Nations – something the speaker and the White House vehemently deny. However, Johnson did warn Trump about his thin majority as Trump tapped House Republicans for his new administration.

When Stefanik decided to stay in the House, Johnson was initially resistant to putting her back on the Intelligence Committee, saying that there wasn’t any room for the six-term lawmaker on the secretive panel. The speaker eventually relented.

Johnson also put Stefanik back on the GOP leadership team. Stefanik had stepped down from her role when she accepted the nomination to serve as Trump’s U.N. envoy. But Johnson complained that Stefanik hasn’t answered his calls or texts about this NDAA flap.

This is all a huge warning sign for Johnson. If the speaker faces this kind of very public pushback from a member of his own leadership team, how will Johnson be able to make bipartisan deals on Obamacare, FY2026 spending or anything else? Johnson has relied on Trump to help him achieve anything during this Congress, yet what if Republicans need to create distance from Trump in order to further their own careers?

With a margin this thin, Johnson is waging internal battles every day. And that’s even before he can turn his attention to Democrats.

– Jake Sherman

Happening tomorrow at 9 a.m. ET: We’ll sit down with Senate Appropriations Committee Chair Susan Collins (R-Maine) to discuss the news of the day and the future of Alzheimer’s disease diagnosis and treatment. RSVP now to save your seat!

THE VOLUNTEER STATE

Van Epps wins Tenn. special despite Dem overperformance

House Republicans averted disaster Tuesday night when veteran Matt Van Epps won the special election in Tennessee’s 7th District.

But Van Epps’ significant underperformance will do little to quell fears that the GOP is headed for a bruising midterm elections next year.

As we’ve noted many times, President Donald Trump won this district, which includes a slice of Nashville and outlying rural areas, by 22 points in 2024. Former Rep. Mark Green (R-Tenn.), the district’s last incumbent, won it by roughly the same margin.

Van Epps beat Democratic state Rep. Aftyn Behn on Tuesday by 9 points.

An ominous environment. The fact that Republicans spent millions of dollars to hold onto a safe red seat is already a win for Democrats.

It’s important to remember that this special election is a snapshot of the current political environment, which is undoubtedly positive for Democrats.

“Tonight’s results make it clear: No House Republican’s reelection should be considered safe next November,” CJ Warnke, a spokesperson for the Democratic-aligned House Majority PAC, said.

Let’s talk about the candidates. In numerous closer-than-expected special elections, Republicans have privately trashed their nominee in the run-up to Election Day. It’s been a tradition from Rick Saccone in Pennsylvania in 2018 to now-Rep. Randy Fine (R-Fla.) earlier this year.

But no one was disparaging Van Epps, a West Point graduate and combat veteran. And Behn was not a particularly moderate Democrat.

A longtime party activist, the 36-year-old Behn had staked liberal positions on policing and had been dubbed “the AOC of Tennessee.” The fact that she could massively overperform suggests the overall political environment is truly in a dangerous place for the GOP.

However, there’s no guarantee this will hold true 11 months from now when the midterms roll around.

Messaging. Both parties ran ads that were strongly focused on affordability. We expect to see a lot of attention on rising costs in 2026 messaging and a lot of finger-pointing at who caused it.

Other possible tea leaves: Trump didn’t take a starring role in ads. Nor did Republicans go out of their way to tout recent legislative achievements.

Despite this, Van Epps said that “running with Trump is how you win” following his victory.

Morale. It’s not fun to be a House Republican in 2025. That’s clear from the resignations, including the one that precipitated this special election.

Speaker Mike Johnson needs to stem those departures and retirements. Luckily for him – so far – most of the House Republicans heading for the exits are in safe red seats.

— Ally Mutnick and Max Cohen

The Vault: DeFi and other problems for the crypto Congress

Bipartisan talks on crypto market structure legislation are grinding along as pressure mounts for senators to host a markup before the end of this month. A final agreement remains elusive.

As negotiations continue, one area has reemerged as the stickiest for lawmakers. One senator after another has told us that the intricate policy around decentralized finance, or DeFi, has continued to be an obstacle to agreement.

In theory, DeFi allows people to use financial services without an intermediary like a bank or broker. That raises fundamental questions about who is responsible when those protocols fail or otherwise harm consumers.

But the difficulty here doesn’t mean lawmakers are preparing to skirt the issue. In an interview Tuesday afternoon, Senate Banking Committee Chair Tim Scott (R-S.C.) said it was critical to get DeFi policy right within market structure legislation.

“We’re talking about a paradigm-shifting experience that is embedded in market structure. And if you don’t have DeFi as a major part of it, then you really don’t have a need for a market structure,” Scott said. “As I said to [Democrats], without DeFi, there is no market structure.”

The latest. Sen. Cynthia Lummis (R-Wyo.), who leads the Banking subcommittee on digital assets, said Monday night that the current negotiations boiled down to “a couple of DeFi items.” This has been a sticking point for a while – talks collapsed last time after Democrats proposed a DeFi policy outline that enraged the industry.

Sen. Ruben Gallego (D-Ariz.), the ranking member on the crypto subcommittee, was a bit more bearish about the work left to do but acknowledged DeFi as a point of friction.

“It’s more than a couple things out in DeFi, but we do have a good working relationship,” Gallego said.

Scott and Gallego both said the current disputes went beyond DeFi. “I frankly think that the problem they’ve had with market structure is a long list of things that just includes DeFi,” Scott said.

Gallego pointed to ethics standards that Democrats were continuing to push for in these talks.

Other problems. Democrats have become more worried in recent days that Banking Republicans may pull the trigger on markup before a bipartisan agreement is reached.

Lummis told reporters on Monday night she didn’t want a markup to proceed without buy-in from Democrats.

“I don’t even want to think about that occurring. I want to get there with the Democrats. I want them to be comfortable with this,” Lummis said.

That could change if talks stagnate well into the new year. We asked Scott whether he was willing to host a partisan markup, and the Banking Committee chair suggested his panel was prepared to eventually move ahead without Democrats.

“I assure you the one thing I want to see is a bipartisan bill signed into law,” Scott said. “But without that as a possibility, because the Democrats keep dragging this out, I will go ahead and let people know where everybody is on the bill.”

In trade news. U.S. Trade Representative Jamieson Greer will be on Capitol Hill today for a private roundtable with members of the House Ways and Means Committee. The meeting is bipartisan.

— Brendan Pedersen and Laura Weiss

THE LONE STAR STATE

Crockett inches toward Senate run

Rep. Jasmine Crockett (D-Texas) is moving closer toward entering the crowded Texas Senate primary, muddying Democrats’ best chance in years to win statewide there.

Crockett, a controversial sophomore representing Dallas, is making a “special announcement” Monday afternoon. Crockett has polled the race and spoken to her potential Senate Democratic primary rivals — former Rep. Colin Allred (D-Texas) and state Rep. James Talarico — about her interest in running.

Crockett told us she’ll announce Monday if she is running for Senate or House (and if it’s the House, which district). But Texas Democrats are becoming increasingly convinced Crockett will launch a statewide bid.

“I will continue to say that I’m more of a yes than a no,” Crockett said of a Senate run.

Another sign that Crockett is likely eyeing the Senate: Rep. Marc Veasey (D-Texas) plans to run for her district if the Supreme Court leaves the new GOP-drawn gerrymandered map in place for the midterms.

Veasey won’t run against Crockett, per a person familiar with his thinking. So Veasey likely thinks Crockett’s seat will be open. Veasey’s district changed significantly in the remap.

The field. Democrats are more optimistic than they’ve been in years about Texas’ Senate race because the GOP primary field is so messy. Incumbent Sen. John Cornyn (R-Texas) has two high-profile challengers in Texas AG Ken Paxton and GOP Rep. Wesley Hunt.

But now Democrats will have a crowded contest of their own. Allred is fresh off a 2024 run. Talarico, a progressive seminarian, posted impressive fundraising.

Crockett said she recently spoke with Allred and Talarico and offered to share her internal polls with them, but neither asked to see her data. A source close to Talarico said Crockett didn’t offer to share polling.

“My polling is pretty consistent with any public polling that I’ve seen,” Crockett said.

Crockett has a national profile from her televised clashes with Republicans during committee hearings. The Texas Democrat frequents cable news, has high name ID and a strong fundraising base.

The Allred-Talarico clash is already unhelpful for Democrats. Adding Crockett into the mix means the primary will require more resources and almost certainly head to a May runoff.

– Ally Mutnick

THE CAMPAIGN

Endorsement news. EMILYs List is endorsing three House candidates in Democratic flip opportunities: Cherlynn Stevenson in Kentucky’s 6th District, Jessica Killin in Colorado’s 5th District, and state Rep. Lindsay James in Iowa’s 2nd District.

Ad news. Home of the Brave, a liberal 501(c)(4), is running a $250,000 ad buy featuring a U.S. Army veteran who was detained by federal immigration officers for three days.

In the ad, George Retes describes how he was detained in California without any information and missed his daughter’s birthday. The ad is targeted at viewers who have already seen DHS and ICE ads run by the Trump administration.

“What’s happening now isn’t right,” Retes says. “It doesn’t define who we are as Americans.”

— Max Cohen

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