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March 6, 2023
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THE TOP
Happy Monday morning.
This will be the biggest week of the 118th Congress so far. In many ways, it’s the real kickoff to what’s been a slow year up until now.
The Senate will vote on a high-profile resolution to block D.C.’s new criminal code, while the Foreign Relations Committee takes up a controversial ambassadorial nomination and repeal of the Iraq use-of-force authorizations.
President Joe Biden’s FY 2024 budget proposal will be released on Thursday, intensifying the debt-limit fight. Federal Reserve Chair Jay Powell will go before House and Senate panels to talk about inflation and the economy, and Treasury Secretary Janet Yellen will testify on the president’s budget’s request.
Sen. Bernie Sanders (I-Vt.) wants to subpoena billionaire Starbucks CEO Howard Schultz. Norfolk Southern Corp.’s CEO Alan Shaw will face tough questions from senators on the East Palestine, Ohio, train derailment. And the GOP-run House will push forward on investigating Covid-19’s origins.
Yes, that’s all in just one week. So let’s get to it.
D.C crime vote: The Senate is likely to vote Wednesday on a resolution disapproving of the D.C. City Council’s proposal to revamp the city’s criminal code.
There could be 70-plus senators voting for the GOP-drafted resolution, according to Senate aides. That means more than 20 Democratic senators support the measure, which is being offered by Sen. Bill Hagerty (R-Tenn.) with his leadership’s backing.
This is an enormous setback for the D.C. home-rule movement, the D.C. City Council and Mayor Muriel Bowser. It’s been more than 30 years since Congress took such a dramatic step.
But soaring crime rates in the nation’s capital — including homicides and carjackings — have made this a tough vote for Senate Democrats, especially those up in 2024. Sens. Joe Manchin (D-W.Va.), Tammy Baldwin (D-Wis.) and Bob Casey (D-Pa.) say they’ll vote for the disapproval resolution. Sens. Mark Kelly (D-Ariz.) and Patty Murray (D-Wash.) – both of whom just won reelection in November – are backing it as well.
With Biden saying he’ll sign the resolution – to the consternation of Del. Eleanor Holmes Norton (D-D.C.) and progressive Democrats – a majority of Senate Democrats could end up voting for the measure. In the House, 31 Democrats backed it, including Rep. Elissa Slotkin (D-Mich.), who is running for Senate.
That House vote came the same day that Rep. Angie Craig (D-Minn.) was assaulted in her D.C. apartment building by an alleged attacker with a long history of violent incidents. Don’t underestimate the impact of the Craig incident. Every member and senator thinks about the safety of themselves, their families and their aides while in Washington.
Biden’s budget proposal: The president will travel to Philadelphia on Thursday for a speech on his FY 2024 budget proposal. Like his Philadelphia appearance in September on the “Continued Battle for the Soul of the Nation” or his speech at the DNC Winter meeting just a month ago, Biden is making sure to keep the biggest city in this pivotal 2024 swing state at the top of his travel agenda. Or maybe he just wants a good steak and cheese.
Biden’s plan will reduce the deficit by $2 trillion over 10 years and boost Medicare and Social Security while also not raising taxes on anyone making over $400,000 annually, according to the president and White House officials. It will include a call for new taxes on billionaires and large corporations – with a focus on stock buybacks.
No tax increases will get through a GOP-run House, of course. But the unveiling of Biden’s proposal will start the clock on House Republicans’ own FY 2024 budget plan.
Speaker Kevin McCarthy and House Budget Committee Chair Jodey Arrington (R-Texas) want to return federal spending back to FY 2022 levels while laying out a path to balance the budget.
But that would mean cuts of at least $130 billion in non-defense discretionary spending for FY 2024, and that won’t get through the Democratic-run Senate or win Biden’s signature – if McCarthy and GOP leaders can even pass it through their own chamber.
Arrington has already floated some proposed cuts and policy changes, including reducing spending on climate change programs and instituting new work requirements for federal welfare programs. Republicans also look like they will target Medicaid – which has been expanded dramatically by Obamacare – and other entitlement programs.
The Texas Republican insists that it would be “reckless and irresponsible” to raise the debt limit “without common sense spending controls.” Biden and Democratic leaders have called for raising the debt limit first, and then reaching a spending deal.
FYI: The Treasury Department will put out its monthly statement of the public debt today at 3 p.m. Read about that here.
In the personnel department, former Los Angeles Mayor Eric Garcetti’s nomination to be U.S. ambassador to India will finally see some movement again. The Senate Foreign Relations Committee will vote Wednesday on this nomination. We canvassed the Senate Democratic Caucus last week and it sounds like the party is finally rallying around Garcetti.
Also: Senate Minority Leader Mitch McConnell will appear at a fundraiser for Rep. Jim Banks’ (R-Ind.) campaign for Senate on March 28.
For your information: Here’s a very useful document detailing all of the big political conferences of the year.
– John Bresnahan and Jake Sherman
📅
What We’re Watching
Tuesday: The House Ways and Means Committee has a field hearing in Yukon, Okla., entitled “The State of the American Economy: The Heartland.” The House Intelligence Committee will hold a markup on H.R. 1376, the Covid-19 Origin Act of 2023.
The Senate Armed Services Committee has a hearing on “the posture of United States Special Operations Command and United States Cyber Command in review of the Defense Authorization Request for Fiscal Year 2024 and the Future Years Defense Program.” This hearing will have Gen. Anthony Cotton, the commander of U.S. Strategic Command and Gen. James H. Dickinson, the commander of U.S. Space Command.
The Senate Finance Committee has a hearing examining “tax policy’s role in increasing affordable housing supply for working families.” Senate Banking has a hearing with Federal Reserve Chair Jay Powell.
The Senate Appropriations Committee has a hearing about DOD’s health program. Senate EPW has a hearing about the environmental impact of crypto mining. Senate Banking will have a hearing on the debt limit. Senate Judiciary will have a hearing on “reining in dominant digital platforms, focusing on restoring competition to our digital markets.”
Wednesday: House Oversight will have a hearing on the origins of Covid-19, which includes testimony from Robert Redfield, the former CDC director.
House Financial Services will hear from Powell. The House Foreign Affairs Committee will have a hearing on the fall of Kabul. House Oversight will have a hearing on the need for more resources to fight transnational crime at the border.
House Judiciary will have a hearing on intellectual property and the competition with China. Senate Agriculture will have an oversight hearing on the CFTC with Chairman Rostin Behnam. House Oversight will have a hearing on the Strategic Petroleum Reserve.
The Senate Foreign Relations Committee will hold a business meeting to vote on the nomination of Eric Garcetti to U.S. ambassador to India and other nominations.
The Senate Intelligence Committee will have a hearing on worldwide threats with DNI Avril Haines, CIA Director William Burns, FBI Director Christopher Wray and other intelligence officials.
Thursday: House Homeland Security will have a hearing on the threat posed by the Chinese Communist Party. House Oversight will have an OPM oversight hearing.
House Financial Services will have a hearing on the CFPB. House Science will have a hearing on the FAA. The House Judiciary subcommittee on the weaponization of the federal government will have a hearing on the Twitter Files.
The House Intelligence Committee will have a hearing on worldwide threats with top intelligence officials.
Senate EPW will have a hearing on the train crash in East Palestine, Ohio, with Alan Shaw, CEO of Norfolk Southern. House Foreign Affairs will have a hearing on expanding the Abraham Accords.
Friday: House Judiciary will have a hearing on reclaiming Congress’s power. House Admin will have a hearing on the successes in the 2022 midterm elections with secretaries of state from Florida and Louisiana.
House Ways and Means will have a hearing with Treasury Secretary Janet Yellen. House Oversight will have a hearing entitled: “The Biden Family Investigation: The Department of the Treasury.”
– Jake Sherman
The week ahead in investigations
Here’s a preview of a busy week ahead in the House on the investigation front:
Letter deadlines: House Oversight and Accountability Committee Chair James Comer (R-Ky.) has a number of requests coming due this week covering a variety of probes, from Ukraine oversight to the East Palestine, Ohio, train crash.
| → | As part of the investigation into Hunter and James Biden’s business dealings, Comer requested information from former Serbian politician Vuk Jeremić on any potential communication with the two family members of President Joe Biden. Jeremić has until March 7 to comply. |
| → | Comer is also conducting oversight on U.S. funding to Ukraine. The Kentucky Republican wrote to Defense Secretary Lloyd Austin, Secretary of State Antony Blinken and USAID Administrator Samantha Power seeking information by March 8 on U.S. assistance to Ukraine and conditions imposed on the funding. |
| → | Comer set a March 10 deadline for Transportation Secretary Pete Buttigieg to turn over information to the panel on the department’s reaction to the toxic train derailment on Feb. 3 East Palestine, Ohio. The House Energy and Commerce and Transportation committees are also looking into the incident. |
Letter updates: Comer set a deadline of March 3 for a whole host of key administration players (the Defense Department, State Department, DHS, USAID and National Security Adviser Jake Sullivan) to provide information on the U.S. withdrawal from Afghanistan in August 2021. The House Foreign Affairs and Armed Services committees are also looking into the Afghanistan withdrawal.
Some news on Afghanistan: We obtained a letter from Richard Sauber, special counsel to Biden, instructing the Oversight Committee to circle back with its request for information from Sullivan once the panel deals with the other executive branch agencies.
Sauber also writes that he understands “all of these agencies have already responded to the Oversight Committee in writing, indicating that they intend to respond to your requests in good faith and are gathering documents for production to the Committee.”
The Oversight panel, however, isn’t pleased with the White House response. Comer spokesperson Jessica Collins said the committee “will follow up with the White House soon about Chairman Comer’s request.”
“We have received a small batch of documents from USAID and are working with other agencies to collect their documents. The White House, however, is not cooperating,” Collins added.
We’ll keep you updated on how the White House-Comer dynamic plays out.
Subpoena watch: House Judiciary Committee Chair Jim Jordan (R-Ohio) has subpoenas out to executives at Amazon, Apple, Alphabet, Meta and Microsoft on their content moderation policies. These letters have a March 23 deadline.
Ad watch: Comer is the subject of a new attack ad from progressive group Facts First USA. Comer told Lou Dobbs last week that he wished Beau Biden, the former Delaware attorney general and Biden’s late son, would have been investigated.
Comer later told the Independent his words had been taken out of context. (Read more about the whole situation here.) Facts First USA is running this digital ad, airing in D.C. and Comer’s district, that urges Comer to “stop attacking dead veterans.”
— Max Cohen
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Congress wants crypto legislation but divided on key questions
The latest edition of The Canvass Capitol Hill offers interesting insights into where members of Congress see the future of crypto headed. The survey of senior Hill staffers was conducted in partnership with Locust Street Group Feb. 6-24.
The results show a Congress that wants to legislate on digital assets this year but is split on major questions about the sector – like whether crypto is here to stay or is just a fad.
A bipartisan majority of staffers think Congress will pass crypto legislation this year, but the House is more bullish than the Senate. A total of 44% of Democrats and 40% of Republicans surveyed said a bill will likely pass this year. That’s compared to 34% overall who say it’s unlikely.
But the House is significantly more optimistic about legislation passing this year than the Senate – 46% of House respondents versus 33% in the Senate.
Crypto is the No. 2 industry Hill staffers expect to receive significant scrutiny from the 118th Congress, behind tech.
Big Tech’s expected prominence in congressional hearings shouldn’t be a terrible shock to most policy-watchers at this point. 91% of respondents said they expected tech to receive regular grillings from Congress.
But crypto was the clear runner up, with 53% of Hill staffers expecting painful inquiries targeting the sector. That beat out the airline industry, energy sector, financial sector and more.
Members of Congress are deeply split about crypto’s long-term viability, according to their staff.
We asked Hill staffers about how their bosses view the crypto industry; whether crypto is “part of the economy and is here to stay,” or just “a fad and will fade soon.”
The results are fascinating. Just 38% said crypto would stick around, compared to the 31% who said it was a fad. Another 31% said they didn’t know. Among Republicans, 45% said their bosses believed in crypto’s future.
We think the sheer amount of ambiguity here is a blessing and a curse for crypto. If lawmakers haven’t made up their minds about digital assets, they can be convinced of its merits. But the work it will take to get there could be monumental.
– Brendan Pedersen
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