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February 24, 2023
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PRESENTED BY
THE TOP
Happy Friday morning.
Our “Leader Look” today focuses on the Senate, where Majority Leader Chuck Schumer and Minority Leader Mitch McConnell face very different challenges in the months ahead.
With the debt-limit deadline looming in the background, Schumer will have some tough choices to make in the near-term about the Senate schedule. Meanwhile, McConnell has a lot to think about outside of the chamber’s day-to-day grind.
We’ll start with McConnell.
1) The never-ending Rick Scott drama. McConnell handily defeated Sen. Rick Scott (R-Fla.) in the GOP leader race back in November, but that contest is still dragging on in proxy form months later. McConnell has effectively joined President Joe Biden in condemning Scott’s “12-point plan” that would sunset all federal legislation, even suggesting recently that Scott’s reelection could be in jeopardy. This kind of language is unheard of for a party leader. That prompted Scott to hit back at McConnell, mentioning the Kentucky Republican by name after updating the plan to include an exemption for Social Security and Medicare. The pair also got into a public tiff over Scott losing his seat on the Senate Commerce Committee.
2) One eye on the debt limit. McConnell is in a highly unusual position when it comes to the debt-limit negotiations — at least as far as those talks are even happening.
McConnell has been at the center of nearly every major budget compromise in recent memory, but this time he’s sitting on the sidelines. That’s because he’s deferring to Speaker Kevin McCarthy to make a deal with Biden, which McConnell believes will be necessary in order to clinch an agreement that can pass both chambers and win a presidential signature. Yet some senators have suggested they want McConnell ready to swoop into the talks in the event that McCarthy and Biden get nowhere. We’ll be watching McConnell’s every move on this subject during the next few months.
3) And the other eye on 2024. It’s no secret that Republicans under-performed in the 2022 midterms, and it’s the source of the dispute between McConnell and Scott. But the NRSC under Sen. Steve Daines (R-Mont.) is already taking a different approach than Scott did, which is a relief for McConnell. If Republicans can recruit solid general-election candidates in winnable races — especially the red states Democrats are defending — then McConnell could be on a path to reclaiming the majority leader title. In the meantime, he’s meeting with some candidates but in a low-profile way.
And now Schumer.
1) Tough floor choices. Schumer will have to decide fairly soon on whether he’ll burn valuable floor time on Biden’s nominee for U.S. ambassador to India, Eric Garcetti. The Senate Foreign Relations Committee could vote on his nomination as early as next week. Several GOP senators have said they’ll object to a time agreement on Garcetti, citing concerns about his handling of sexual misconduct claims in his LA mayoral office.
Spending time on Garcetti’s nomination means taking time away from confirming judicial nominees, which is Schumer’s priority for this Congress. He’ll also have to figure out when to vote on legislation repealing the decades-old Iraq War authorizations, which he’s promised to do.
2) D.C. disapproval resolution. There isn’t much Schumer can do to block passage of a House GOP-led measure to reverse an overhaul of the D.C. criminal code. The controversial changes to the D.C. code come amid a surge in crime in the nation’s capital and across the country. Thirty-one House Democrats joined Republicans in voting for the measure. The disapproval resolution only needs a simple majority in the upper chamber too, so Republicans just have to convince a few moderate and red-state Democrats to side with them.
The big question for Schumer is whether he’ll try to whip against the resolution in order to prevent it from reaching Biden’s desk. The measure would present a major conundrum for the president. Democrats generally oppose getting involved in internal D.C. matters (most of them want it to be a state, after all), but blocking the disapproval resolution could backfire in 2024 campaigns, where several Democrats are on the ballot in red states.
3) Staying on message. If you’ve watched Schumer at all during the last few months, you know that he’s exhibited extraordinary message discipline when it comes to the debt limit. He isn’t wavering from the Democratic position that the debt limit should be raised without “hostage-taking.” Schumer has held a number of press conferences for the sole purpose of highlighting the types of spending cuts Republicans could seek as part of the talks. Democrats — and Schumer in particular — view this as a winning message, and they’re going to continue trying to squeeze House Republicans.
— Andrew Desiderio
PUNCH POWER MATRIX
— Max Cohen
CRYPTO COLLAPSE CONT.
Latest SBF indictment alleges a ‘bipartisan’ campaign finance nightmare
A beefed-up indictment against former crypto mogul Sam Bankman-Fried sheds new light on what the Justice Department says was a fraudulent scheme to direct tens of millions of dollars in campaign contributions to both Republicans and Democrats.
Released on Thursday, the superseding indictment unsealed by Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York listed 12 criminal counts against Bankman-Fried, a bump up from eight in December. The former CEO of crypto exchange FTX pleaded not guilty to the federal charges last year.
But for us – and for Punchbowl News readers – the most interesting allegations in the revised indictment revolve around campaign contributions. Federal prosecutors tallied more than 300 allegedly improper contributions adding up to tens of millions flowing to both parties.
This is significant. Up until now, Bankman-Fried has largely been styled as a Democratic-leaning megadonor – to the delight of Republicans. The former exec has since said he took steps to obscure Republican contributions, but the complaint presents a clearer picture of how that allegedly transpired.
Here’s a key excerpt from the indictment, which you can read in full here:
Prosecutors allege that Bankman-Fried relied on an encrypted, auto-deleting Signal chat titled “Donation Processing” to coordinate whose name would be attached to specific campaign contributions. And importantly, “the money used to make these political donations … included funds that had been deposited by FTX customers,” the complaint alleges.
This is nightmare fuel if you happened to be a campaign finance director for a congressional candidate during the 2022 cycle. The complaint puts a finer point on that, writing that Bankman-Fried’s scheme “caused false information to be reported by campaigns and PACs to the FEC, which had the result of impairing and impeding the FEC’s reporting and enforcement functions.”
So far, the fallout from this scandal on Capitol Hill has been uneven. A number of lawmakers quickly returned or donated contributions connected to FTX. Others stressed returning the funds was a matter of personal discretion.
We might see more movement on this front during the next week or so, however. FTX’s bankruptcy proceeding is ongoing, and representatives for FTX’s debtors asked many campaigns and committees to return funds by next Tuesday, Feb. 28. And while that ask was voluntary, the debtors suggested they might take such campaigns to court “to require the return of such payments, with interest.”
– Brendan Pedersen and Max Cohen
PRESENTED BY ALIBABA
Explore how Fender, based in Hollywood, California, hit record sales in China. These sales support jobs and wages in the U.S.
THE MONEY GAME
McCarthy to appear with leading moderate Fitzpatrick
Speaker Kevin McCarthy will hold a March 29 fundraiser for Rep. Brian Fitzpatrick (R-Pa.), the co-chair of the Problem Solvers Caucus and a leading House GOP moderate.
Also at the event will be Ways and Means Committee Chair Jason Smith (R-Mo.). Fitzpatrick is a member of the tax-writing panel, as well as the Intelligence Committee. Tickets are going for between $500 and $2,500.
Fitpatrick has cemented himself as one of the crucial players in the narrow House Republican majority. He was one of the “Only Kevin” figures during the speaker vote and has formed a useful alliance with newly elected moderates from New York.
March will be a busy month for Fitzpatrick. He’s also holding a fundraiser at the Bruce Springsteen concert March 27 at Capital One Arena. And another event March 1 at the Journey concert.
– Jake Sherman
2024
Nadler leads N.Y. Dems backing the state’s convention bid
News: Democrats from the high-powered New York delegation are lining up behind New York City’s bid to host the 2024 Democratic National Convention. Rep. Jerry Nadler (D-N.Y.), along with 16 of his congressional colleagues, are writing today to urge President Joe Biden to choose NYC over Atlanta or Chicago.
The letter, which enjoys the support of Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, argues New York is the perfect place for Biden to hail the accomplishments of his first term.
“We know COVID deprived you of a full-nominating convention in Milwaukee,” the New York delegation wrote to Biden. “2024 is an opportunity to stand strong in renomination with all the pomp and circumstance you deserve, at a location just one Amtrak ride away from your home state and earliest supporters.”
The New Yorkers also include this notable dig at Atlanta’s bid:
Just like Chicago’s bid, the New York delegation also highlights the state’s union bona fides. “Our state is also a bastion for workers’ rights,” the N.Y. lawmakers write.
Also: The first GOP presidential debate will be held this August in Milwaukee, Republican National Committee Chair Ronna McDaniel said in a message to members on Thursday. This will coincide with the RNC’s annual summer meeting.
The details are still fluid on that event, including who can participate. The RNC will add more debates between that first one and its 2024 convention. Republicans also still have to decide which TV networks it will partner with during debates.
— Max Cohen and John Bresnahan
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