The Archive
Every issue of the Punchbowl News newsletter, including our special editions, right here at your fingertips.
Join the community, and get the morning edition delivered straight to your inbox.
March 24, 2023
Presented by Wells Fargo
At Wells Fargo, we cover more rural markets than many large banks, and nearly 30% of our branches are in low- or moderate-income census tracts. What we say, we do. See how.
PRESENTED BY
THE TOP
Happy Friday morning. Go UConn!
President Joe Biden and Speaker Kevin McCarthy are nowhere in their negotiations over raising the debt limit.
House Budget Committee Chair Jodey Arrington said Thursday he’s drafting a “deal sheet” that Biden must sign off on before House Republicans agree to raise the debt limit. Arrington is postponing release of a FY 2024 budget proposal, a move that’s already being panned by the White House.
“President Biden has produced a detailed budget that reduces the deficit by $3 trillion over the next decade while continuing to invest in America, and House Republicans should do the same so everybody can truly see how the numbers add up,” White House Deputy Press Secretary Andrew Bates said.
The standoff is raising concerns among Senate Republicans in particular, who worry about the lack of a contingency plan if there’s no agreement soon between Biden and McCarthy.
Some GOP senators believe that the longer this drags on, the more likely it becomes that they’ll have to accept a clean debt limit hike in order to stave off a catastrophic default on the $31.4 trillion national debt. The closer default looms, the more pressure there is on Congress to act hastily, these senators argue.
“The president needs to reconvene the speaker of the House and get the negotiations going,” said Sen. Susan Collins of Maine, the top Republican on the Appropriations Committee.
In general, Senate Republicans have viewed their role in the debt limit talks as secondary. Senate Minority Leader Mitch McConnell has said McCarthy should take the lead for Hill Republicans given that his conference controls its chamber. Yet that support has its limits, especially if there’s no substantial progress once spring turns to summer.
“At some point, both sides will have to get serious. Nobody wants to see a default. And if I’m the Biden administration, I certainly don’t want that on my watch,” Senate Minority Whip John Thune (R-S.D.) told us. “And that should provide at least some incentive for them to be at the table and to see what they can accomplish.”
Here’s Sen. Mike Rounds’ (R-S.D.) take — with a warning for his House counterparts:
The “X date” for default hasn’t been clearly defined yet. Treasury Secretary Janet Yellen says the federal government can pay its bills though early June. CBO projects sometime between July and September. But global financial markets are liable to start buckling long before that if they see a real possibility of a default. And with a banking crisis already rattling investors’ nerves, this has made some on Capitol Hill nervous.
Senate Republicans have been cautious not to undermine McCarthy in this showdown up until now, even though they’re clearly worried about where this all ends up.
“Our leader has suggested that it ought to be something negotiated by the House, by the speaker,” said Sen. Mitt Romney (R-Utah). “I don’t want to talk about Plan B when Plan A is still on the table.”
More Romney:
Democrats, meanwhile, are sticking to their position that there should be a clean debt-limit hike and that House Republicans should present their plan for spending cuts.
Senate Majority Leader Chuck Schumer in particular has been beating that drum.
“They don’t have 218 votes to put it together,” Schumer told us. “In the past, when the House has been unable to do something, the Senate has decided. But the first step, since it’s McCarthy who’s the one playing brinksmanship, is for him to put out his plan. We’re waiting for it.”
There are other options in case Biden and McCarthy can’t reach an accord, yet none of them are easy. One is a discharge petition initiated in the House, which would require the support of all 213 House Democrats and a handful of Republicans. This is something House Minority Leader Hakeem Jeffries suggested Thursday at a news conference isn’t in the cards quite yet.
And in the Senate, there’s precedent for raising the debt limit by a majority vote instead of subjecting it to the filibuster. In late 2021, McConnell cut a deal with Democrats that effectively allowed them to raise the debt limit on their own. It required 10 Republicans to vote with Democrats on a bill lowering that threshold temporarily from 60 votes to a simple majority.
So, in theory, there’s a way to do this without House GOP leadership. But Senate Republicans much prefer a negotiated McCarthy-Biden agreement to raise the debt limit.
“It’s hard to get people serious about negotiating until you get up closer, when there’s a little bit more pressure that starts to build,” Thune said, predicting a “midsummer exercise” on the nation’s borrowing limit. “That doesn’t mean we should take it to the brink.”
— Andrew Desiderio, John Bresnahan and Heather Caygle
TIKTOK FALLOUT
News: Warner-Thune TikTok bill gains momentum after House hearing
TikTok CEO Shou Chew’s disastrous congressional appearance on Thursday has injected new momentum into a White House-backed Senate bill that could lead to a significant crackdown on the Chinese-owned social media platform.
We’re told that the Senate Commerce Committee is expected to mark up the bipartisan legislation from Sens. Mark Warner (D-Va.) and John Thune (R-S.D.). This bill would create a process to review and take action against foreign technology companies operating in the United States.
Warner, who chairs the Senate Intelligence Committee, has been trading phone calls with Speaker Kevin McCarthy over the legislation. Warner told us he expects there will soon be a House companion to his bill. And McCarthy told us he wants to craft a compromise proposal that can garner broad support in both chambers.
“I think you can have a bipartisan bill on this,” McCarthy said.
Chew’s appearance before the House Energy and Commerce Committee only served to harden the bipartisan concerns about TikTok. This runs from national security risks to data security to the app’s effects on minors.
Here’s Warner’s impression of the House hearing with Chew, which he predicted will spur new support for his bill with Thune:
Other lawmakers have advocated a different approach on TikTok. Warner’s GOP counterpart on the Intelligence Committee, Sen. Marco Rubio of Florida, has a bill that bans TikTok outright. This also has bipartisan support, including from fellow Intelligence Committee member Sen. Michael Bennet (D-Colo.).
The Warner-Thune proposal, however, is designed to address foreign technology threats long term.
“There are other bills out there that ban TikTok, and I’d be fine with that,” Thune told us. “But it’s not just TikTok. There are other platforms, apps, technologies at some point that we’re going to have to deal with.”
The White House has expressed support for the Warner-Thune bill, and an impressive bipartisan roster of senators has signed onto it as well. Lawmakers who favor taking action against TikTok saw Chew’s testimony as a boost to their efforts.
“Hearings like this are important for just driving public attention — and also getting answers. I mean, this guy hasn’t had to answer questions under oath,” said Sen. Josh Hawley (R-Mo.), who also supports a ban. “As the public gets to hear those answers, and frankly as lawmakers hear the answers, you could see the reaction among committee members in real-time. They were horrified.”
The Coverage:
| → | NYT: “Biden’s Options on TikTok Narrow After Beijing Pushes Back,” by David McCabe and Chang Che |
| → | WaPo: “TikTok faces uncertain future after 5-hour congressional thrashing,” by Cat Zakrzewski and Jeff Stein |
| → | WSJ: “TikTok Fight Rocks U.S.-China Relations,” by Ryan Tracy, John McKinnon and Georgia Wells |
— Andrew Desiderio, John Bresnahan, Heather Caygle and Jake Sherman
INVESTIGATION NATION
Oversight steps on Energy and Commerce’s toes
The House Oversight and Accountability Committee has launched so many investigations that they were bound to step on someone’s toes.
They did.
Earlier this week, the Oversight Committee launched a probe into the ongoing infant formula shortage – which is squarely in the purview of the Energy and Commerce Committee. In addition, Oversight announced an investigation into the Department of Energy’s spending. This is also in E&C’s wheelhouse.
The infant formula probe came as a surprise to Rep. Brett Guthrie (R-Ky.), who chairs Energy and Commerce’s health subcommittee. Guthrie told us he didn’t get a heads up on the hearing ahead of time. Guthrie sought out his fellow Kentuckian, Oversight Chair James Comer, on the floor Wednesday to ask him what exactly he was up to.
“We just want to make sure that we coordinate what they investigate and if we need to move forward with legislation,” Guthrie said. And he took a dig at Rep. Lisa McClain (R-Mich.), who chairs the Oversight subcommittee holding the baby formula hearing.
Check this out:
McClain’s office noted to us she is a mother, not a grandmother yet. Here’s a McClain statement:
Guthrie later walked back his criticism of McClain after we informed her office of those initial comments. Guthrie said he “misspoke when talking about Representative McClain’s personal experience with the baby formula crisis and apologized in person to her.”
An Oversight spokesperson noted the panel had been investigating the “botched” FDA response to the infant formula crisis since last year. Here’s more:
These concerns about the panel’s activities aren’t new, to be sure. Earlier this month, we reported on how the wide range of probes Oversight launched had been raising some eyebrows inside the GOP conference.
– Max Cohen and Jake Sherman
ICYMI: THE LEADERS
Don’t miss our first interviews with leaders guiding their local economies
Have you read all three profiles of The Leaders yet? Here are the highlights from our first three interviews:
| → | Oklahoma Gov. Kevin Stitt (R) is pushing to grab a slice of the country’s renewable energy revolution in a state known for its oil and gas. |
| → | Atlanta Mayor Andre Dickens (D) touts his city’s “thriving” economy, but he wants to ensure its growth is enjoyed by everyone there. Dickens is wooing tech companies and other businesses and convincing them to set up shop across the city. |
| → | Rep. Emilia Sykes (D-Ohio) views the Northeast Ohio area as pivotal to reviving manufacturing in the United States. The 37-year-old lawmaker also sees new opportunities for technological innovation in the state’s agriculture sector. |
Catch up on all three before our last profile drops next week!
PRESENTED BY THE AMERICAN INVESTMENT COUNCIL
62% of the investments that private equity makes are in small businesses, with 46% in companies smaller than 100 people.
PUNCHBOWL NEWS EVENTS
Missed our conversation with Rep. Rosa DeLauro (Conn.), top Democrat on the House Appropriations Committee, Thursday? Catch up on the full event below.
… AND THERE’S MORE
News on DCCC, Taiwan Caucus leadership
We have two tidbits of news for you on leadership positions in the DCCC and the bipartisan Congressional Taiwan Caucus.
The DCCC has announced its full leadership team, featuring the members who will play critical roles in fundraising and coalition building for the House Democratic campaign arm. A note here: Tons of members — over 30 in total — are involved in this expansive leadership team.
Some notable positions: Reps. Rosa DeLauro (D-Conn.), Joe Neguse (D-Colo.) and Lauren Underwood (D-Ill.) are the DCCC’s national finance chairs. Rep. Colin Allred (D-Texas) is the national Frontline chair. Check out the full list here.
The Congressional Taiwan Caucus is back with a new leadership team this Congress. Support for the U.S. ally has become a rare bipartisan flashpoint in a deeply polarized House.
The caucus, which focuses on strengthening the U.S.-Taiwanese partnership, will be led by Reps. Andy Barr (R-Ky.), Mario Diaz-Balart (R-Fla.), Gerry Connolly (D-Va.) and Ami Bera (D-Calif.).
“With the Chinese Communist Party increasing aggression toward Taiwan, it is more important now than ever that we renew our commitment to support a free and sovereign Taiwan,” Barr, a member of the China select committee, said in a statement. Connolly called it a “critical moment” for the U.S.-Taiwan relationship.
The caucus is one of the largest in the House. Last Congress, it reported having 229 members. Both parties have sought to zero-in on the growing threat Beijing has posed around the globe.
– Mica Soellner and Max Cohen
PRESENTED BY THE AMERICAN INVESTMENT COUNCIL
Check out the States and Districts Report for Private Equity.
Crucial Capitol Hill news AM, Midday, and PM—5 times a week
Join a community of some of the most powerful people in Washington and beyond. Exclusive newsmaker events, parties, in-person and virtual briefings and more.
Subscribe to Premium
The Canvass Year-End Report
And what senior aides and downtown figures believe will happen in 2023.
Check it outEvery single issue of Punchbowl News published, all in one place
Visit the archive
Presented by Wells Fargo
Wells Fargo has donated ~$2 billion over the last five years to help build a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and other community needs. What we say, we do. See how.