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March 28, 2023
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THE TOP
Happy Tuesday morning.
The Senate is mired in a rare standoff over routine military promotions — and there’s no end in sight.
Sen. Tommy Tuberville (R-Ala.) is single-handedly blocking the promotions of military commanders assigned to key jurisdictions in the Indo-Pacific, Middle East and NATO. He’s doing this in order to compel the Pentagon to reverse a February policy directive that gives servicemembers increased access to abortion service. This includes granting administrative leave and paying for associated travel costs.
Democrats say Tuberville’s move is jeopardizing U.S. national security. And even some of Tuberville’s fellow Senate Republicans told us they’re uncomfortable with the tactic he’s employing. This is despite the fact that they agree with him on overturning the Defense Department’s abortion policy — one they complain amounts to taxpayer funding of abortions.
We caught up with Tuberville on his way to Senate votes Monday evening:
These military promotions are typically processed without fanfare through the Senate Armed Services Committee, which Tuberville sits on. And many of the 160 military promotions he’s blocking are for key roles in theaters with active conflicts.
Tuberville’s fellow Republicans on the Armed Services panel echoed his view that health care-related policies should be dictated by Congress via the annual defense policy bill, not through executive fiat. At the same time, these Republicans suggested they’re uncomfortable with Tuberville’s decision to use essential and non-controversial military promotions as leverage in a policy fight.
“Clearly, on the DoD policy, I absolutely agree with Sen. Tuberville,” said Sen. Roger Wicker of Mississippi, the top Republican on the Armed Services Committee. “That said, there are a lot of military positions that need to be filled. And so we’re working with leadership and Sen. Tuberville to see what can be resolved.”
Sen. Deb Fischer (R-Neb.), the panel’s No. 2 Republican, was more blunt: “It’s a tactic that he chose to use. He has that right as a senator. It’s not one that I would use.”
It’s common for senators to use the chamber’s rules to extract concessions from the executive branch — and from their own leadership. Sen. Ted Cruz (R-Texas) did this in 2021 when he blocked State Department nominees — including ambassadorships — to push the Biden administration to sanction the Nord Stream 2 pipeline.
This time around, Democrats are warning of real-world consequences for Tuberville’s blockade. For the past two weeks, Sen. Michael Bennet (D-Colo.) has been tussling with Tuberville on the Senate floor over this issue. And on Monday, Senate Majority Leader Chuck Schumer spoke out for the first time, accusing Tuberville of politicizing the military and damaging national security.
“The senator from Alabama’s hold of hundreds of routine military promotions is reckless, it damages the readiness of our military, and puts American security in jeopardy,” Schumer said. “If every single one of us objected to the promotion of military personnel whenever we feel passionately or strongly about an issue, our military would simply grind to a halt.”
Sen. Jack Reed (D-R.I.), the Armed Services Committee chair, told us he fears Tuberville’s move will cause a “severe disruption of the military at the highest levels.” In many cases, Reed added, the military officers up for promotions have to leave their post when their term expires. This puts them on the sidelines until their promotions are approved.
“That will have long-term and very bad consequences for the military,” Reed told us. “This has to be resolved quickly.”
There is no indication that the logjam will break anytime soon. And Republicans are cheering on Tuberville’s efforts.
“I think what they’re doing is illegal. I don’t think they have the authority to do this,” Sen. Lindsey Graham (R-S.C.) said of the Pentagon. “Basically they’re setting a policy to give people leave, to use taxpayer dollars, which I think runs afoul of existing law.”
Meanwhile, Democrats are digging in. Sen. Jeanne Shaheen (D-N.H.) led a group of three dozen senators on Monday urging the Pentagon to maintain its abortion policy, in particular the provision on administrative leave for troops who seek an abortion or other reproductive care.
Tuberville spoke with Defense Secretary Lloyd Austin on the phone last week about his blockade and indicated that he won’t back down unless Austin rescinds the abortion directive. Tuberville is also seeking to hold all civilian Pentagon nominees in the meantime.
Tuberville will get another chance to speak with Austin about the issue later this morning when the secretary appears before the Armed Services Committee to discuss President Joe Biden’s FY 2024 defense budget request.
— Andrew Desiderio and John Bresnahan
Today: Punchbowl News founders Anna Palmer and Jake Sherman sit down with House Financial Services Chair Patrick McHenry (R-N.C.) at 9 a.m. ET. They’re going to discuss news of the day, as well as his priorities as chair of the Financial Services panel. It’s not too late to RVSP here!
LEADERSHIP NOTEBOOK
TikTok and the House’s energy package
News: Sen. Josh Hawley (R-Mo.) plans to seek unanimous consent on the floor this week to pass legislation banning TikTok from operating in the United States. The Missouri Republican told us Monday evening that “this is the moment to act” after what he called an “unbelievable” hearing last week with the app’s CEO, Shou Zi Chew, who faced a bipartisan grilling in the House Energy and Commerce Committee.
It’s possible that Sens. Mark Warner (D-Va.) and John Thune (R-S.D.) may offer their competing proposal, the RESTRICT Act, which creates a review process that could lead to the banning of foreign tech threats. This could lead to nothing passing the Senate by the Easter recess. We’ll see how this plays out on the floor as early as Wednesday.
Quick House note: While we were reporting Monday in the Capitol, we started to sense some nervousness in the House Republican leadership about H.R. 1, the party’s signature energy package.
Leadership sources tell us that they’re worried that Northeastern GOP moderates could vote against the package. Remember, with a five-vote majority, Republicans don’t have much room for error. Republicans will talk about their floor strategy this morning in their regular closed-door conference meeting.
The House Rules Committee adopted the rule for H.R. 1 on Monday. A list of 37 amendments was also made in order. You can read it all here.
Remember: President Joe Biden said he would veto H.R. 1. But Republicans will try to force Biden to accept policy items – such as permitting reform – during negotiations over the debt limit and federal spending.
– John Bresnahan and Jake Sherman
THE LEADERS
Today, our fourth and final profile of The Leaders is officially live! We profiled Rep. Nancy Mace (R-S.C.), who spoke with us about South Carolina’s emerging industries, cannabis reform, federal regulation and more. Check it out today!
BANKING BULLETIN
An almost casual viewer’s guide to this week’s bank hearings
The nation’s top bank regulators will testify before Congress today and Wednesday, launching some of the most anticipated hearings on financial policy in years. The issue on everyone’s minds: The health of the U.S. banking system following two dramatic failures earlier this month.
Senior officials from the Federal Reserve, Treasury Department and Federal Deposit Insurance Corp. will appear before the Senate Banking Committee this morning. They’ll head over to the House Financial Services Committee on Wednesday.
The panel – which includes the Fed’s Michael Barr, vice chair for supervision; Nellie Liang, Treasury’s under secretary for domestic finance; and FDIC Chair Martin Gruenberg – constitutes some of D.C.’s heaviest hitters on financial policy.
Lawmakers we’ve talked to are laser focused on what federal regulators did or didn’t do to prevent the collapses of Silicon Valley Bank and Signature Bank.
Let’s start with the regulators’ testimony. You can read Barr’s here, Gruenberg’s here, and Liang’s here.
Gruenberg is a longtime regulator who took over at FDIC in January. His testimony offers a detailed accounting of the events leading up to the failures of SVB, Signature and even Silvergate Bank, which collapsed largely due to its overexposure to crypto.
Gruenberg also made some news: The FDIC is undertaking “a comprehensive review of the deposit insurance system” following these bank failures. Several lawmakers have recently suggested potential changes to current law, which caps out coverage at $250,000 per bank, per account holder today.
Barr, in shorter remarks, will say what many policymakers have suspected: The Fed is mulling “what more can and should be done so that isolated banking problems do not undermine confidence in healthy banks” and the financial system at large. That will likely mean tougher regulations.
But Barr will also take aim at Congress, identifying discrete ways the bipartisan 2018 deregulatory banking bill may have undermined the supervision of Silicon Valley Bank. That will be music to the ears of progressives such as Sen. Elizabeth Warren (D-Mass.), who strongly opposed the changes.
Here’s Barr:
Senate Banking Committee Chair Sherrod Brown (D-Ohio) will seize on that argument in his own opening statement. Here’s a preview:
Republicans, meanwhile, are focused on the mistakes of both bank management and their supervisors. A spokesperson for Sen. Tim Scott (R-S.C.) said the committee’s top Republican “will focus on … a three-part failure caused by bank mismanagement, supervisory neglect, and the Biden administration’s inflation crisis.”
But not all Senate Republicans are strictly opposed to legislative tweaks to bank supervision. Sen. Mike Rounds (R-S.D.) told us Monday night that he’ll want to ask Barr how deep the Fed’s internal review of its own supervision would go first. Rounds also wants to ask whether “the tools that we provided you are adequate for oversight.”
Sen. Tina Smith (D-Minn.) echoed that view, telling us that she was “interested in hearing whether [Barr] thinks that he has the regulatory capacity to address these challenges.”
One last thing: We expect several lawmakers this week to ask regulators about the role of social media in the panic that led to the collapse of these banks. The $42 billion in deposits that rushed out of SVB in less than 48 hours was historically large and breakneck fast.
But we don’t expect to hear about too many solutions to that particular issue this week. SVB’s collapse was unusual for a key reason besides its extremely online customer base. Gruenberg will tell lawmakers this morning that “the ten largest deposit accounts at SVB held $13.3 billion” – a remarkable amount of concentration for a bank of its size.
– Brendan Pedersen
PRESENTED BY META
THE LEAGUE X CONGRESS
NFL seeks help from Congress to counter drone incursions
The National Football League is pressing Congress for new legislation on drones, which have become a growing problem for teams nationwide.
There were more than 2,500 drone incursions over stadiums during NFL games in 2022, nearly double the previous year.
League officials believe the problem will get dramatically worse unless Congress grants state and local law enforcement agencies the authority to “mitigate” these flights – meaning deploy technology that prevent drones from entering sensitive airspace during games. This issue was discussed during the NFL’s annual league meeting this week in Phoenix.
All NFL stadiums will be able to track drones this year. That’s up from only eight last year, according to Cathy Lanier, the former chief of the D.C. Metropolitan Police Department who now serves as the NFL’s chief security officer. But the league can’t do anything to prevent drones from flying over stadiums unless Congress acts, Lanier said:
“Our concern is a security and safety-related issue,” added Kenneth Edmonds, a top NFL lobbyist. “Policymakers talk about the ‘careless, clueless and the criminal.’ But [Lanier] talked about how you can’t necessarily wait to make that distinction in real time.”
Edmonds noted that the legislative fix the NFL is seeking would also cover other critical infrastructure, including airports.
The Senate Homeland Security and Governmental Affairs Committee passed a bill by Sens. Gary Peters (D-Mich.) and Ron Johnson (R-Wis.) on this issue during the last Congress, but it stalled out before receiving a floor vote.
Peters and Johnson were able to pass a one-year extension of the Homeland Security Department’s authority to counter “unmanned aerial systems” for certain facilities and federal assets. But both senators said broader legislation needs to be enacted.
“We’re working in a bipartisan, bicameral way. Hopefully we’ll get it soon,” Peters told us. “It has to get done.”
“It’s a real serious issue,” Johnson said. “I’ve been pushing to give law enforcement the authority to deal with this. It’s complex… Anything we can do to move the football forward, to use the analogy.”
– John Bresnahan
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Presented by Apollo Global Management
Learn how Apollo is rethinking retirement income to last the modern lifespan. Think It New.