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March 7, 2023
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PRESENTED BY
THE TOP
Happy Tuesday morning.
The Senate is headed towards a vote on the GOP’s D.C. crime bill Wednesday. But it’s hard to overstate how much frustration there is behind the scenes from top House Democrats over the debacle.
Democratic members feel they were blindsided by the White House on the issue, particularly when President Joe Biden announced last Thursday that he’d sign a GOP-drafted resolution disapproving of changes to the D.C. criminal code if it reached his desk.
House Minority Leader Hakeem Jeffries had no idea Biden was going to support the resolution until the president announced it to Senate Democrats in a closed-door lunch. A White House liaison reached out to a top Jeffries aide at the same time – while House Democrats were huddling at their annual retreat in Baltimore – to share the news.
Biden had traveled to Baltimore the night before to meet with House Democrats. They weren’t told about Biden’s upcoming statement, Democrats said.
The White House maintains that the president never said he’d veto the resolution, pointing to the Feb. 6 Statement of Administration Policy that only harshly criticizes the GOP resolution.
White House Press Karine Jean-Pierre noted last Friday that the SAP indicated the White House was “opposed” to GOP resolution, but there was no explicit veto threat.
Jeffries, for his part, notably declined to criticize Biden about the flip-flop during a Sunday interview on CNN.
Yet talk to House Democratic leaders and top aides in private and they tell a much different story.
House Democrats say the White House indicated to them – if it didn’t explicitly state – that Biden would veto the GOP disapproval resolution. That’s why party leaders worked to limit the number of Democratic defectors when the House voted Feb. 9 on the measure – thus ensuring they were under the threshold for overriding a presidential veto. Democratic leaders whipped everyone but Battleground Democrats on the measure.
These Democratic sources also said that it was clear Senate Democrats – facing a brutal 2024 map – were going to have a much tougher time on this vote than their House counterparts. White House officials were aware of House Democratic whip counts.
To make matters worse, Biden highlighted reduced penalties for carjackings in a tweet explaining his position last Thursday. Now, the 173 House Democrats who voted against the GOP resolution look like they support reducing carjacking penalties at a time when crime is skyrocketing in D.C., aides and lawmakers complained to us.
“Of course,” Senate Majority Whip Dick Durbin quipped Monday when asked if the White House could have handled this better.
“They gave a signal that led the House Democrats to take certain actions and the president then took a different position when he came to the Senate — speaks for itself,” Durbin added.
Until now, the White House and Hill Democrats were on a good run after an at-times tense relationship last Congress. Democratic leaders complained privately about being surprised or blindsided multiple times by the White House during the last two years.
The latest flare-up comes as a top White House aide, Shuwanza Goff, decamped to go work for a lobbying firm. The loss of Goff, a former senior House Democratic staffer who was also close with Speaker Kevin McCarthy, was a huge blow to the White House legislative affairs operation.
And it comes as Biden and Capitol Hill Democrats enter a critical stretch of high-stakes negotiations on the debt limit and federal spending with McCarthy.
Now, of course, following Biden’s comments, the floodgates have opened for Senate Democrats on the disapproval resolution. With the D.C. City Council withdrawing the criminal code changes, a range of Democrats from Sen. Ben Ray Luján (D-N.M.) to Sen. Tim Kaine (D-Va.) have said they plan to support the measure.
Not everyone is happy, however. Progressive Sen. Elizabeth Warren (D-Mass.) called the decision to move forward with the vote “just a way to try to stomp on D.C.”
Senate Majority Leader Chuck Schumer wouldn’t say how he plans to vote when entering the Capitol Monday night, instead reiterating plans for a floor vote Wednesday.
“[Republicans] have a right to bring it up but there’ll be a vote on Wednesday,” Schumer said. “We’re discussing it as a caucus.”
Breaking Biden Medicare news this morning:
The White House just released Biden’s proposal to extend Medicare’s solvency by 25 years – from 2028 to 2053. These provisions will be included in Biden’s FY 2024 budget proposal, which will be unveiled on Thursday. Here are the details.
Biden will call for an increase in the Medicare tax rate for incomes above $400,000 annually from 3.8% to 5%; close loopholes in existing Medicare taxes; and expand the number of prescription drugs that Medicare can negotiate price cuts on. This last move would save $200 billion over 10 years, the White House estimates.
This document was just released before our AM edition went out this morning. We expect to see more such proposals from the White House in coming days.
– Heather Caygle and John Bresnahan
Ready. Set. RSVP! Punchbowl News founders Anna Palmer and Jake Sherman will interview House Financial Services Committee Chair Patrick McHenry (R-N.C.) on Tuesday, March 28, at 9 a.m. ET about news of the day and his priorities for the committee. RSVP here!
INVESTIGATION NATION
One month in, Dems sharpen attacks on GOP investigations
After a month of House GOP-led investigations into President Joe Biden’s administration, the Democrats tasked with pushing back are trying out a new, more aggressive approach to responding to those probes. Surprised by what the minority sees as substance-free pursuits, Democrats are going after GOP leaders and bashing the Republican investigations in sharper terms.
“It’s a lot harder to run an investigation than it is to poke holes in one,” said Rep. Dan Goldman (D-N.Y.), a former Trump impeachment counsel who sits on both the Oversight and Weaponization of the Federal Government panels. “It’s a lot harder to find facts and evidence to support conspiracy theories than it is to come up with the conspiracy theories.”
Last Friday, Weaponization Subcommittee Ranking Member Stacey Plaskett (D-V.I.) went toe-to-toe with House Judiciary Committee Chair Jim Jordan (R-Ohio), arguing the Ohio Republican is neither “professional” nor “an honest broker.”
Plaskett’s letter to Jordan lamented that she found out about an upcoming “Twitter Files” hearing via social media. Frustration over a lack of information-sharing, a common refrain among Democrats we spoke with, is bubbling to the surface. Judiciary Committee Republicans insisted to us they followed proper notice protocols on the hearing.
“That’s not how Congress works,” Plaskett told us. “If you really want to be involved in investigating, if you want us to work together, why would you not tell me that beforehand?”
Off the Hill, Democratic outside group Facts First USA even aired an ad attacking House Oversight and Accountability Committee Chair James Comer (R-Ky.) in his home district.
House Democrats who sit on the top investigative panels are increasingly willing to conclude that House Republicans simply aren’t doing a good job.
“There is no strategy. [Republicans are] disorganized. They’re in disarray. These hearings have proven not to be effective,” Rep. Jared Moskowitz (D-Fla.), a member of the Oversight panel, told us. “They’re terrible at this.”
Rep. Joe Neguse (D-Colo.), the chair of the House Democratic messaging arm, summed up the Democratic stance on Republican investigations this way: “I don’t think there’s much to respond to. It’s a lot of noise that we’re hearing, but very little, if any, substance.”
House Democrats are also deploying another way to counter-message GOP probes: Bring it back to former President Donald Trump.
While Republicans have focused on Hunter and James Biden’s business dealings, Oversight Committee Ranking Member Jamie Raskin (D-Md.) has called for an investigation into Trump son-in-law Jared Kushner’s business with Saudi Arabia.
“Republicans that are trying to make points on Joe Biden have zero credibility, because at every single solitary turn, they have forgotten that Donald Trump did it first,” Moskowitz said.
To be sure, Democrats bashing Republican investigations is hardly surprising. And many of these investigations are in their infancy, with more twists and turns to come.
But the Democratic shift in rhetoric has been particularly abrupt. On Feb. 8, Plaskett told us Jordan was “one who does follow the rules, at least within the confines of a hearing.” Just three weeks later, the Virgin Islands Democrat sent the letter accusing Jordan of being unprofessional.
— Max Cohen
CRYPTO COLLAB
McHenry, Torres reintroduce crypto tax reform bill
News: A bipartisan group of lawmakers will revive a push today to reform crypto tax reporting provisions that date back to 2021’s bipartisan infrastructure law.
The primary focus of the Keep Innovation in America Act, co-led by House Financial Services Committee Chair Patrick McHenry (R-N.C.) and Rep. Ritchie Torres (D-N.Y.), is narrowing the definition of a crypto “broker” for tax purposes. It’s a tweak to crypto regulations first introduced and passed through the Infrastructure Investment and Jobs Act.
When the infrastructure bill’s text became public in 2021, the crypto sector was shoved into its first major political fight – a fight they’d eventually lose. Advocates said at the time that the law’s treatment of digital assets would saddle non-financial firms – such as crypto miners and certain software providers – with “impossible-to-fulfill reporting requirements.”
The revived crypto bill from McHenry and Torres would address that and also go further by sharply limiting the federal government’s ability to define what a “digital asset” is. The IIJA gave the Treasury Department broad discretion to define crypto, and the Keep Innovation in America Act would limit that power
McHenry said in a statement that the bill would rectify “misguided policy and regulatory overreach [that] threatens to push this dynamic industry – and its potential benefits – overseas.”
Torres, one of the crypto sector’s top Democratic allies on Capitol Hill, said it would provide “much-needed legal and regulatory clarity to help cement our continued place as the global leader in crypto technology and innovation.”
Returning sponsors of the bill include Reps. Warren Davidson (R-Ohio), Ro Khanna (D-Calif), Darren Soto (D-Fla.), Eric Swalwell (D-Calif.) and House Majority Whip Tom Emmer. Joining them for the first time are Reps. French Hill (R-Ark.), who now serves as the chair of the House Financial Services subcommittee on digital assets, and David Schweikert (R-Ariz.)
We recommend treating this package as a litmus test for crypto’s political support in Congress. Passing these fairly modest changes would hand sector advocates a much needed policy win after months of financial collapse and an increasingly adversarial legal outlook.
– Brendan Pedersen
PRESENTED BY ALIBABA
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THE CAMPAIGN
Kelly travels to Montana to boost Tester
Sen. Mark Kelly (D-Ariz.) traveled to Montana this weekend to help his endangered Senate Democratic colleague, Jon Tester.
Senate Democrats are facing a brutal map in 2024 and Kelly’s assistance for Tester is an example of how the party is trying to protect its red-state incumbents.
Kelly told us he anticipates doing similar events in the future for other Senate Democrats up for reelection this cycle. “My plan is to take a close look at my schedule and try to help out where I can,” Kelly said.
Of course, Kelly is no stranger to winning tough elections. The Navy veteran unseated Sen. Martha McSally (R-Ariz.) in 2020 and defended his seat two years later against Blake Masters.
The Arizona Democrat’s message to his Democratic colleagues: Know your state.
“Every race is different. You got to figure out what you have to offer in this job and then figure out the needs of your state and understand your state really, really well,” Kelly said. “I’m not an expert on other states, but I’m going to be there to help if I can.”
– Max Cohen and John Bresnahan
DOWNTOWN DOWNLOAD
| → | Charles Schwab and Co., has hired 1607 Strategies to lobby on “financial services issues.” |
| → | Equifax has hired Jackson Lewis to lobby on “legislative issues related to E-Verify and Form I-9.” |
– Jake Sherman
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