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May 12, 2023
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PRESENTED BY
THE TOP
Happy Friday morning.
News broke Thursday night that the debt-limit meeting between President Joe Biden and the Big Four scheduled for today had been canceled.
The reason: The Biden administration’s negotiators and top leadership aides, who met for two hours on both Wednesday and Thursday, simply haven’t made enough progress to kick a menu of policy options up to the principal level.
It’s not that the staff-level negotiators — who we’ll list below — haven’t gotten anywhere. They’ve taken some modest steps in the right direction.
But several participants in the negotiations put it this way to us last night: If they were at this stage in the talks in February, everyone would be bullish that a deal is possible. However, as it’s only 20 days to a potentially catastrophic default for the U.S. government, they’re truly behind the eight ball.
Here’s what’s going on behind the scenes. On Wednesday, the first day of talks between aides to Biden, Speaker Kevin McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell, the two sides thumbed through the Limit, Save, Grow Act passed by the House. Republicans explained the areas they wanted to cut and why. This was essentially a “table-setting” phase for the talks.
But the two sides haven’t narrowed down the policies they might want to include in a debt-limit or spending-cut package. They haven’t determined which committees or offices would be responsible for negotiating legislative language. They’re still working through getting clarity on a whole host of policy areas.
Topics that have been discussed include permitting reform, spending caps and rescinding unspent Covid funds. Republicans are pushing new work requirements for federal social welfare programs, but that seems far less likely to happen.
We’re truly getting down to crunch time. Remember: It takes a week to get something through the Senate. It will probably take a week to get a bill through the House as well. So a deal needs to be in place during the next few days in order to pass by June 1. The negotiators have not talked at all about how to move the bill through Congress.
Aides on both sides of the aisle have complained that there are too many people involved in the talks for there to be a deal, at least right now.
Here is who has been negotiating the last few days:
White House: Louisa Terrell, director of legislative affairs, and Aviva Aron-Dine, the deputy director of the National Economic Council.
McCarthy: Dan Meyer, chief of staff; John Leganski, deputy chief of staff for floor operations; Brittan Specht, deputy chief of staff for policy.
Jeffries: Gideon Bragin, executive director; Zoë Oreck, policy director; Alex Urry, senior policy adviser.
McConnell: Cindy Herrle, senior adviser; Scott Raab, deputy chief of staff for policy.
Schumer: Meghan Taira, legislative director; Raymond O’Mara, policy director; Beth Vrabel, budget counsel.
Letters, Letters, Letters: Schumer has a new Dear Colleague urging Democratic senators to “implore our Republicans colleagues: Take Default Off the Table.”
This a sign of how frustrated some members are with the situation: Rep. Abigail Spanberger (D-Va.) is calling on CAO to block member pay until Congress raises the debt limit.
And the center-right Main Street Caucus is out with a new letter to Biden reminding the president a clean debt-limit increase isn’t feasible for House Republicans.
— Jake Sherman and Heather Caygle
Happening next week! Rep. Nancy Mace (R-S.C.) will join Punchbowl News Founder and CEO Anna Palmer and Financial Services Reporter Brendan Pedersen on Wednesday, May 17 at 9 a.m. ET for a conversation about innovative approaches to job creation, economic growth and sustainability. Make sure you RSVP!
THE LEADER
Scalise: GOP border bill puts ‘real pressure on the Senate’
House Republicans did something on Thursday that they’d struggled to achieve in past majorities — passing a major border security and immigration bill.
Moving the Secure the Border Act, H.R. 2, through the House was critical for Speaker Kevin McCarthy, House Majority Leader Steve Scalise and other top Republicans. With Title 42 ending and a huge wave of migrants expected at the U.S.-Mexico border — a political and humanitarian crisis for President Joe Biden — House Republicans were able to lay down a key marker.
Senate Democrats and the White House have both expressed strong opposition to the House Republican measure, although Scalise and senior GOP lawmakers argue that may change if the situation at the southern border gets worse.
In an interview on Thursday, Scalise acknowledged how tough it’s been for Republicans to do anything on immigration, even going back to the Donald Trump era, when the GOP controlled Congress and the White House.
“Immigration policy has always been complicated to achieve,“ Scalise admitted.
Scalise also bashed Democrats for having “opened the border and created problems, and they’ve never passed bills to fix them.”
Yet House Republicans have struggled throughout this Congress to get 218 votes to pass anything.
Scalise declared back in December that Republicans would have “ready-to-go” bills on border security in place when they took over, promising legislative action within weeks.
But by mid-January, moderate House Republicans balked at supporting Rep. Chip Roy’s (R-Texas) border security bill. Roy and fellow GOP Rep. Tony Gonzales (Texas) began openly sniping at each other over the proposal. Gonzales even threatened to vote against the leadership debt-limit plan because he was so unhappy over the Roy measure.
And in late March, McCarthy asked Judiciary Committee Chair Jim Jordan (R-Ohio) to delay a planned markup because of continued infighting among rank-and-file Republicans.
Even this week, McCarthy, Scalise and House Majority Whip Tom Emmer scrambled to lock down the votes as a number of Republicans threatened to derail the legislation over various concerns. This included fears over the impact of the E-Verify program on farm workers. Another flashpoint was designating criminal cartels as “foreign terrorist organizations” and whether that would spur new asylum claims. Leadership was forced to make small tweaks to the bill, despite saying repeatedly it had no intention of doing so.
Scalise admitted that because of the Republicans’ razor-thin margin, any internal conflicts must be resolved before any legislation reaches the floor. Scalise made this clear to committee chairs:
In the end, only two House Republicans voted against the measure — Reps. John Duarte (Calif.) and Thomas Massie (Ky.). No Democrats backed it.
Despite the loud opposition from Democrats, Scalise asserted that House Republicans’ ability to pass their proposal has shifted the debate in Washington over immigration and border security. He compared it to what House Republicans have done on the debt limit by passing their own bill while Senate Democrats have done nothing.
“If Chuck Schumer wants to hide out, and other Democrats want to hide out, they’re going to start hearing from people back home, especially as Title 42 expires and the problem gets dramatically worse,” Scalise said. “The public is going to be watching this vote very carefully, and I think it’s going to put more pressure on the Senate to take action.”
— John Bresnahan
THE HOUSE
Raskin’s Oversight role gives him pause for Senate run
Rep. Jamie Raskin (D-Md.) says he’s been “bombarded and besieged” with calls from fellow progressives urging him to run for Senate. But as Raskin mulls whether to seek higher office, his position as the top Democrat on the House Oversight and Accountability Committee is giving him pause.
Does Raskin want to forfeit a chance at being an influential House committee chair to become a freshman senator — and in the minority at that?
When we caught up with Raskin Thursday evening, he didn’t sound like a man ready to leave the House behind.
“The truth is I love the work on the Oversight Committee,” Raskin told us. “A bunch of the new members are people who I went to campaign for and then recruited to come on to Oversight. And I’m just thrilled by the work they’re doing.”
This dynamic was echoed by the freshman progressives on the panel, who describe Raskin in adulatory terms.
“He’s an incredibly talented man,” Rep. Becca Balint (D-Vt.) said. “I would love to keep him on Oversight because he’s an incredible leader for us.”
“It’s whatever he wants to do, but I selfishly want him to stay on the committee so we can see him become chair,” Rep. Maxwell Frost (D-Fla.) said. “We need talent in the House,” Rep. Jared Moskowitz (D-Fla.) said adding that he’ll support Raskin in whatever he decides.
In our conversation, Raskin made clear he was keenly aware of the stakes ahead of the 2024 election. Raskin’s chief nemesis — former President Donald Trump — is the GOP presidential frontrunner. And Trump seems determined to settle scores with all his critics if he returns to the White House. Here’s Raskin:
We followed up: This seems like a reference to Trump being president and Raskin leading Oversight, right?
“Perish the thought 1,000 times, but yeah,” Raskin said.
“I’ve spoken to senators who used to be in the House who are happy about the choice they made. But I’ve also spoken to some who might have ended up as chairs on the House side who might be wistful,” Raskin added.
The four-term Democrat has also heard from many people urging him to run for retiring Sen. Ben Cardin’s (D-Md.) seat.
Leading progressive Reps. Mark Pocan (D-Wis.) and David Cicilline (D-R.I.) told us they’ve both pushed Raskin to run. Pocan said he’d be “an amazing senator.” And Cicilline said Raskin would be an “extraordinary member” of the Senate.
Raskin has said he’s taking the month of May to mull his decision over. A major factor: Raskin shared in April his cancer was in remission after receiving chemotherapy treatment.
While Raskin waits, Rep. David Trone (D-Md.) — who Raskin bested in a competitive 2016 House primary — and Prince George’s County Executive Angela Alsobrooks have already declared for the seat.
“I’m taking it very seriously,” Raskin said of his decision, before adding he had nothing more to share on the timing for any announcement.
— Max Cohen
PRESENTED BY CHEVRON
At Chevron, we’re developing and expanding renewable fuels that can help reduce the lifecycle carbon emissions of transportation fuels.
CRYPTO CORNER
Inside the House’s shifting crypto landscape
Bipartisanship is out. Joint committee-ism is in. The House just isn’t what it used to be for crypto.
We’re a far cry from the 117th Congress, when it looked like senior members of both parties on the House Financial Services Committee could get to a deal on stablecoins. But don’t take your eye off the ball — stuff is still happening.
Start with this week’s rare joint hearing between crypto-focused panels on the House Financial Services and Agriculture committees. We didn’t hear a ton of news, but we don’t think you should discount the significance either.
Remember that if Congress is going to legislate on broad questions for the crypto sector anytime soon, it’s going to require these committees to play along.
As chair of the Financial Services Committee, Rep. Patrick McHenry (R-N.C.) oversees the Securities and Exchange Commission. Meanwhile, Agriculture Committee Chair Glenn Thompson (R-Pa.) oversees the Commodities Futures Trading Commission. The consensus those two leaders find now could set up years of negotiations going forward.
“It’s been a pretty remarkable process so far,” said Rep. Dusty Johnson (R-S.D.), who chairs the crypto-focused subcommittee on the agriculture side. “The extent to which committee staff and committee leadership have been working together – it’s not normal in this town.”
But even if the committee chairs are working together, lawmakers on the panels are drifting further apart.
Senior Financial Services Democrats such as Reps. Maxine Waters (Calif.) and Stephen Lynch (Mass.) have become increasingly skeptical in recent weeks about the need for the kind of big picture reforms that crypto advocates want. When you hear lawmakers talk about “market structure reform,” they’re talking about how the SEC and CFTC should split oversight of the sector.
And Rep. Ritchie Torres (D-N.Y.), one of the House Financial Services Committee’s most supportive members on crypto, wasn’t optimistic about where legislative efforts currently stand:
The relationship between Republicans and Democrats on Financial Services has deteriorated somewhat since the GOP side announced it was drafting a new stablecoin bill — to the surprise of Democrats.
“They drafted their bill without input on our side,” Lynch told us Thursday night. “There might be a couple of Democrats that have signed onto this, but it was a partisan effort.”
Republicans argue that their unreleased revamp of the law will be based on the product Waters and McHenry worked on through 2022.
This doesn’t mean there isn’t any bipartisan interest in crypto. There is. Torres isn’t on an island. We’ve heard recent support for the crypto sector from Reps. Wiley Nickel (D-N.C.), Jonathan Jackson (D-Ill.) and others.
But the problem is that senior House Democrats know a GOP-only bill won’t go very far with Senate Democrats and the White House.
“That bill is going to go nowhere in the Senate,” Lynch argued. “The president is not going to sign that bill.”
Johnson, meanwhile, argued that Republicans shouldn’t — and won’t — wait for “the magic number that somebody envisions to signify true bipartisanship” before introducing significant crypto legislation:
Lawmakers and aides are so far hesitant to guess when we might see market structure legislation come out from the two committees. We think it will take a while. But we expect more movement on stablecoins as soon as next week. The House Financial Services Committee will host a hearing next Thursday to discuss how “legislation will help stablecoins achieve their promise.”
— Brendan Pedersen
DOWNTOWN DOWNLOAD
Tropicana Brands Group, the fruit juice company, has registered an in-house lobbyist for the first time. Adam Christopher will lobby on “[i]ssues related the production and distribution of juice and other beverages; H.R.1750/ S.103, the Defending Domestic Orange Juice Production Act; Farm Bill reauthorization.”
– Jake Sherman
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