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December 7, 2023
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PRESENTED BY
THE TOP
Happy Thursday morning.
Senate Republicans insist their decision to block President Joe Biden’s massive foreign aid package will force a “reset” of the slow-moving negotiations over border policy changes.
But leaders in both parties are already raising serious doubts about the path forward for the foreign aid measure — if there is one — following Wednesday’s failed vote.
Senate GOP negotiators are openly deriding their House colleagues’ posture on the supplemental package. And Democrats are privately fretting that House Republican leaders may send members home for the holidays at the end of next week without acting, a potentially devastating delay for Ukraine.
But the problem starts with the serious public disconnect between the top Republican and Democrat handling the Senate’s border-security talks.
Sen. Chris Murphy (D-Conn.), the lead Democratic negotiator, reiterated Wednesday evening that, from his perspective, the talks are on hold because Republicans are making “unreasonable” demands on immigration policy that can’t pass the Senate.
“I don’t want to give the impression that there’s a path here when so many Republican senators are saying they don’t want to negotiate,” Murphy said. “They have to figure out whether they want to negotiate or whether they want to make ‘take-it-or-leave-it’ demands.”
Sen. James Lankford (R-Okla.), the top Republican negotiator, insisted that both Murphy and Biden want to find a solution even as he complained that Democrats’ counter-proposals won’t have any impact on illegal border crossings. Lankford also said it was a positive sign that Biden declared Wednesday he’s willing to make “significant compromises” in order to get Republicans to approve Ukraine funding.
We asked Lankford why his and Murphy’s public outlooks are so different.
“I think his frustration is the same as mine. We’re not making progress as fast as we need to make progress,” Lankford said.
But even Lankford is making the case — perhaps inadvertently — for the more pessimistic outlook.
For the second day in a row, Lankford went after House Republicans who’ve said Congress must pair Ukraine aid with H.R. 2, the House GOP’s hardline border-security bill. That measure passed with only GOP votes in the House and likely wouldn’t get any Democratic backing in the Senate.
“How many Democrats did you get on your side? It doesn’t work that way on our side,” Lankford said, referring to House Republicans and H.R. 2. “There’s no belief we’re going to pass a Republican-only bill here with a few Democrats and it’s going to be a Republican bill over there. It’s going to have to be bipartisan.”
Even setting aside Congress’ decades-long failure to pass meaningful immigration reform, some Hill leaders are suggesting there might not even be enough lawmakers who’d vote for both restrictive border policies and Ukraine aid.
“Any kind of a change that reduces, significantly, the flow [at the border] is anathema to [progressives],” Senate Minority Whip John Thune said. “That’s what we’re up against here.”
The same can be said, however, about a sizable chunk of House Republicans who would see any border compromise as insufficient when compared to H.R. 2. These members don’t want to send any more money to Ukraine anyway.
“You’re going to see people in the House as dug in. I mean, this has become a political issue for them. So they’re not going to vote to move no matter what,” Sen. Markwayne Mullin (R-Okla.), a former House member in frequent contact with his one-time colleagues, told us.
Meanwhile, the White House is shouting from the rooftops about a looming funding cliff for Ukraine. The administration’s attempts to convey that to senators fell flat during a classified briefing on Tuesday that devolved into a shouting match over the crisis at the border.
Both the House and Senate are scheduled to leave for the holiday recess at the end of next week. Thune said the Senate would likely need to remain in session up until Christmas in order to pass a border-Ukraine-Israel-Taiwan bill. Lankford wants the Senate to do just that.
“If we walk away at Christmas time, it’s perceived by Israel and perceived by Ukraine… that this is not important, when it is,” Lankford said.
Yet it’s hard to see the House waiting around to pass the foreign aid bill, especially since there isn’t a hard deadline for doing so. Plus, Murphy hasn’t yet seen a reason to “restart talks” with Republicans.
“If the room is just a forum to make unreasonable demands, then I’ve got other things I can do with my time,” Murphy said. “But if we’re actually going to sit down and negotiate and Republicans are going to move, and we’re going to move, then let’s sit down and talk.”
Exclusive: Sens. Mike Rounds (R-S.D.) and Joe Manchin (D-W.Va.) are unveiling legislation allowing military officers caught up in Sen. Tommy Tuberville’s (R-Ala.) nominations blockade to receive back pay for assuming new posts while their promotions lingered. This bill would also ensure they receive better retirement benefits.
NDAA update: The Senate will likely need to take a procedural vote on the NDAA today, the GOP cloakroom told senators Wednesday night. This is because Sen. Josh Hawley (R-Mo.) is objecting to a voice vote on proceeding to the conference report, as it’s usually done.
Hawley is throwing up roadblocks after his bill reauthorizing a compensation program for victims of nuclear contamination was stripped from the final NDAA package. This adds another step to the process and could put more stress on the calendar next week.
The bipartisan NDAA text was released late Wednesday night — all 3,100 pages of it!
— Andrew Desiderio
THE SPEAKER
Johnson’s style: Inside the speaker’s neck-snapping flip-flop on FISA
In the course of roughly one week, Speaker Mike Johnson took the following positions on the renewal of FISA’s Section 702, a key provision that allows the federal government to surveil foreign nationals operating outside the United States:
Nov. 29: Johnson told Senate Republicans he wanted to extend FISA in the NDAA, the annual defense policy bill, until Feb. 2. This would’ve lined up the expiration of FISA authority with the end of the second tranche of government funding. This approach didn’t make a ton of sense.
Dec. 5: Johnson then told a meeting of House Republicans that he was considering putting two FISA bills on the floor — one from House Judiciary Committee Chair Jim Jordan (R-Ohio) and another from House Intelligence Committee Chair Mike Turner (R-Ohio). Whichever bill got more votes would then be sent to the Senate.
Around the same time, we scooped that Johnson had told NDAA negotiators he didn’t want a FISA extension attached to the defense authorization bill. Johnson got cheers from conservatives for this statement.
Dec. 6: Johnson gave in to demands that he put a FISA extension in the NDAA package. And this time, Johnson agreed to extend Section 702 authority until mid-April.
This baffled Jordan, whose bipartisan FISA reform bill — which includes new search warrant requirements for 702 queries on U.S. persons — was adopted by the Judiciary Committee on Wednesday by a huge 35-2 margin. Jordan wanted his bill on the House floor next week.
Johnson’s flip-flopping on these issues is somewhat understandable. After former Speaker Kevin McCarthy was pushed out of the job by conservative hardliners, any successor would be hesitant to make big decisions on sensitive topics.
This might help explain why Johnson paired $14 billion in new Israel aid with cuts to IRS funding. A clean Israel bill would have cleared the House with 400 votes and put Senate Democrats in a tough position, sources in both parties say.
However, Johnson wanted to appease conservatives upset about emergency spending, and he caved to their demands for an offset, despite the political downside.
Yet this situation underscores some of the frustration with Johnson within his leadership and the broader House Republican Conference. The frustration is twofold.
No. 1: Johnson seems to have trouble making decisions, which ends up paralyzing his GOP colleagues. Without clear direction, the leadership team can’t prepare the rank and file for legislation that is coming down the pike.
No. 2: Johnson is angering the rank and file because of his indecision. For instance, while we don’t cover Rep. Marjorie Taylor Greene (R-Ga.) intensely, we’ll note that MTG was furious that she was asked to sign onto the NDAA conference report after leadership added the FISA extension.
Jordan, for his part, said he didn’t agree with Johnson’s decision to extend FISA until April, but wouldn’t comment further on how the speaker has handled the issue. As of Wednesday night, Jordan had no plans to meet with Johnson.
“I wish that wasn’t the case,” Jordan told us on the NDAA-FISA move. “Ours is ready to go now. We had a great strong markup and a strong vote.”
Our main takeaway here is that Johnson is still struggling to figure it all out. The House is oriented around the speaker. Making decisions by committee — or trying to appease everyone — is a tough way to run the institution.
— Jake Sherman
Bipartisan Senate group eyes big expansion of terror financing rules
News: A bipartisan group of senators led by Sen. Mark Warner (D-Va.) will unveil legislation today designed to significantly expand the federal government’s power to sanction firms that finance terror groups.
The bill, called the Terrorism Financing Prevention Act, would allow the U.S. government to sanction any firm facilitating transactions around “Foreign Terrorist Organizations.” The current framework is limited to the terms of a 2015 law that focused largely on Hezbollah.
The bill is sponsored by several other senators including Sens. Mike Rounds (R-S.D.), Jack Reed (D-R.I.) and Mitt Romney (R-Utah). That’s the same group behind another version of money laundering reform circulating in the Senate today that targets foreign crypto firms: Crypto-Asset National Security Enhancement and Enforcement Act, or CANSEE Act, which focuses largely on the role of “DeFi” platforms in money laundering.
The bill being introduced today would direct the Treasury Department to identify banks and crypto companies abroad that “knowingly” facilitate payments to designated terror groups beyond Hezbollah and sanction them.
The crypto sector should also take note of a provision — lifted from the CANSEE Act — that will also be included in the Terrorism Financing Prevention Act. The section would give the Financial Crimes Enforcement Network the authority to restrict accounts suspected of money laundering beyond U.S. bank accounts.
That means the federal government would in effect have an easier time restricting the flow of terror funding involving digital asset firms and decentralized finance companies.
It’s an interesting time for money laundering and terror financing reform in Congress. There are a lot of senior lawmakers pushing for reforms these days, and most of them are directed at crypto.
Case in point: This new bill comes just one day after the Senate Banking Committee hosted the CEOs of several systemically important banks to testify. Toward the end of that hearing, Sen. Elizabeth Warren (D-Mass.) pressed the executives on whether they believed crypto needed stronger AML restrictions, to which they responded: “Absolutely.”
Warren is pushing a distinct reform package with Sen. Roger Marshall (R-Kan.) and other senators, but the point remains: There is some real momentum starting to build behind money laundering reform in Congress.
— Brendan Pedersen
PUNCHBOWL NEWS EVENTS
Did you miss our event yesterday with Senate Minority Whip John Thune?
Thune talked about the 2024 elections, Ukraine funding, government spending and more. You can watch the full recording here:
JOB MOVES
Marc Short, a longtime top aide to former Vice President Mike Pence, is joining P2 Public Affairs as a senior adviser. P2 is led by Phil Cox.
Short will remain co-chair of Advancing American Freedom, Pence’s non-profit.
— Jake Sherman
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