The Archive

IN THIS EDITION

White House, Democratic leaders pressure members on Israel bill

Schumer-led bipartisan group releases ‘roadmap’ for AI regulation

Alsobrooks defeats Trone despite his massive spending

The Vault: A viewer’s guide to some rocky bank regulator hearings

THE TOP

White House, Democratic leaders pressure members on Israel bill

Happy Wednesday morning.

News: Top White House officials are privately working to shore up Democratic support as House Republicans push a bill denouncing President Joe Biden over withholding some weapons from Israel.

It’s all part of a broader effort to limit Democratic defections on the Israel Security Assistance Support Act, which is set to come to the House floor Thursday. The GOP-drafted legislation calls on the Biden administration to “utilize all congressionally appropriated funds for security assistance for Israel as Congress intended.”

This is in response to Biden’s announcement that the United States would stop the delivery of 3,500 heavy aerial bombs while Israeli forces press their offensive in the southern Gaza city of Rafah. Republicans argue that Biden shouldn’t interfere with Israel’s campaign to defeat Hamas, despite heavy Palestinian civilian casualties. The legislation condemns the Biden administration’s decision to pause the delivery of the large-scale bombs to Israel.

House Democratic leaders are whipping against the legislation, arguing that it “infringes” upon Biden’s ability to conduct foreign policy.

The White House released a Statement of Administration Policy threatening a Biden veto. It uses the same language in criticizing the measure as Democratic leaders, arguing it would “undermine the President’s ability to execute an effective foreign policy.”

Perhaps most importantly, the White House announced a weapons package for Israel worth more than $1 billion. It includes tank and mortar ammunition, as well as utility vehicles. The Wall Street Journal first reported the move. Inside the Democratic caucus, this was seen as giving cover for some pro-Israel Democrats to vote against the GOP bill.

Behind the scenes, National Security Adviser Jake Sullivan, Deputy National Security Adviser Jon Finer and various NSC officials are calling House Democrats, urging them to vote no. The State Department is expected to make calls as well, according to sources familiar with the matter. We’ve seen similar lobbying efforts earlier this year on various other national security measures.

The concerted blitz from party leaders and the White House seems to be working. Democratic leadership aides predicted roughly a dozen rank-and-file Democrats would vote for the measure. Earlier in the week, senior Democrats worried they’d lose dozens of members on this vote, a major rebuke of Biden’s handling of the Gaza crisis.

Progressives are already upset with Biden over his support for Israel despite more than 30,000 Palestinians killed in the conflict, which began following the Oct. 7 terror attacks by Hamas.

Yet none of this is going to stop Republicans from moving forward, according to Speaker Mike Johnson, House Majority Leader Steve Scalise and other top Republicans.

“I think it’s important for us to express again the will of Congress on the matter, so I don’t think we’ll be changing what we do on the legislation,” Johnson said.

More from Johnson in response to the White House veto threat:

Here’s Scalise:

Senior House Democrats counter that the GOP measure — a companion version has been introduced by Sen. Tom Cotton (R-Ark.) — is all about politics. Republican leaders are seeking to drive a wedge between Democrats, not help Israel, they contend.

“That vote has nothing to do [with] policy,” said Rep. Adam Smith (D-Wash.), ranking member of the House Armed Services Committee.

“It’s what I expected… [Biden] made it very clear that he was going to need to make sure that Israel has the right to defend itself,” Smith added.

“There’s major problems in this resolution,” said Rep. Jared Moskowitz (D-Fla.), who is strongly pro-Israel. “It goes beyond this particular conflict, there’s all sorts of different precedent we would set for the future. I’m also aware this thing is dead [in the Senate].”

Sneak Peek: House Republicans will meet today at the Capitol Hill Club for a political conference meeting. GOP leaders plan to discuss how backing Israel is a uniting issue for House Republicans while it continues to divide Democrats.

News: Scalise will announce in conference today that he’ll match up to $1 million in member donations to the NRCC. It’s the third cycle in a row Scalise has made the offer to House Republicans.

This is well beyond what’s expected of Scalise as majority leader. And it helps rank-and-file lawmakers keep more money in their pockets while also keeping the NRCC flush.

— John Bresnahan, Mica Soellner and Jake Sherman

Correction: We initially said the Israel bill would be on the House floor Wednesday. The bill will come to the floor Thursday. We regret the error.

Join Punchbowl News Texts! Get the breaking news directly from the Capitol to your phone. Only the info you need when you need it. For Premium members only — sign up today!

WASHINGTON X SILICON VALLEY

Schumer-led bipartisan group releases ‘roadmap’ for AI regulation

A bipartisan quartet led by Senate Majority Leader Chuck Schumer unveiled an ambitious multi-year roadmap this morning for congressional action on artificial intelligence, proposing multi-billion-dollar investments over several years.

The group — which includes Sens. Mike Rounds (R-S.D.), Martin Heinrich (D-N.M.) and Todd Young (R-Ind.) — compiled a list of dozens of recommendations for what Schumer says will be a committee-driven process in the Senate.

In a briefing with reporters Tuesday evening ahead of the plan’s release, Schumer hinted at potential floor action as soon as this year, vowing the Senate will advance legislation as it’s ready rather than wait for a mega-bill to come together.

“What we expect is that we would have some bills that certainly pass the Senate… by the end of the year,” Schumer said. “It won’t cover the whole waterfront. There’s too much to cover and things are changing [so quickly].”

But Schumer did not make a firm commitment on legislative action this calendar year with the election less than six months away and the overall appetite for bipartisanship waning. Schumer said the roadmap is intended to last well beyond the current Congress.

“We’re not going to hold up the committees that are moving more quickly to wait for one massive bill,” Schumer said. “It’s going to be ongoing into the next Congress. Whatever happens in the election — the fact that we’re bipartisan will allow us to continue.”

The details: The roadmap includes dozens of recommendations for Senate committees as they go about drafting legislation on everything from job displacement to intellectual property rights to national security threats.

It also recommends the enactment of a data privacy bill. Sen. Maria Cantwell (D-Wash.) and Rep. Cathy McMorris Rodgers (R-Wash.) recently introduced a comprehensive data privacy package, but it’s unclear whether it will advance.

Some sections of the roadmap are more specific than others — and that was deliberate, the senators said.

For example, Schumer said election security is “one of the highest priorities” given the proximity to the 2024 elections. Schumer noted that the Senate Rules Committee is marking up election-related AI legislation later today, including a bipartisan bill requiring that political ads using AI feature a disclaimer. There are other proposals addressing so-called deepfakes.

But the election security section of the roadmap is particularly vague, suggesting there’s not as much agreement among members of the working group.

The cost: The price tag is steep. The group recommends spending up to $32 billion per year over the next several years as part of the framework. Rounds sought to push back on the inevitable objections from members of his own party who won’t like big new government spending at a time when the federal deficit is already high.

Making these investments now, Rounds argues, will save billions in health care costs, especially with the potential for AI to help cure chronic illnesses.

“We’re going to upgrade the old message of ‘you could be penny wise and pound foolish’ — in this case, may very well be, ‘you could be billions wise and trillions foolish,’” Rounds said.

Schumer intends to meet with Speaker Mike Johnson about the framework in the coming weeks, and their staffs have already held preliminary discussions. Johnson and House Minority Leader Hakeem Jeffries recently stood up a bipartisan AI task force.

— Andrew Desiderio

Alsobrooks defeats Trone despite his massive spending

Here are our top takeaways from primary day in Maryland, West Virginia and Nebraska.

Alsobrooks embarrasses Trone. Rep. David Trone (D-Md.) spent tens of millions of dollars in his own cash and still lost the Maryland Senate Democratic primary badly. Prince George’s County Executive Angela Alsobrooks ended up beating Trone by more than 10 points.

Alsobrooks — who secured nearly all major statewide endorsements — now has the chance to be the first Black woman elected to the Senate from Maryland.

NRSC favorites breeze through their primaries. In two states where Republicans are seeking to flip blue seats — West Virginia and Maryland — the NRSC-blessed candidates easily won. Former Maryland Gov. Larry Hogan and West Virginia Gov. Jim Justice both defeated more right-wing challengers. Hello Sen. Babydog.

Elfreth defeats Dunn. State Sen. Sarah Elfreth defeated former U.S. Capitol Police Officer Harry Dunn in the Democratic primary in Maryland’s 3rd District. Dunn raised more money than some Senate candidates and had top-tier endorsements, including former Speaker Nancy Pelosi. But Elfreth had local union support and benefited from AIPAC’s super PAC ad spending.

McClain Delaney knocks off Vogel. April McClain Delaney, the wife of former Rep. John Delaney (D-Md.), is one step closer to heading to Congress. She won the 6th District Democratic primary over state legislator Joe Vogel in Trone’s current seat.

Mixed day for the Moore dynasty. While Shelley Moore Capito’s (R-W.Va.) son Moore Capito lost his gubernatorial primary, her nephew Riley Moore won the 2nd District primary.

Bacon moves to the general. Rep. Don Bacon (R-Neb.) soundly defeated a right-wing primary challenger and will face Democrat Tony Vargas in the toss-up general election.

— Max Cohen

The Vault: A viewer’s guide to some rocky bank regulator hearings

The hottest ticket in financial services politics today? Rayburn 2128 at 10 a.m., and it’s not close.

FDIC Chair Martin Gruenberg will appear before the House Financial Services Committee this morning. He’ll be joined by Federal Reserve Vice Chair for Supervision Michael Barr and acting Comptroller of the Currency Michael Hsu. Regulators will head to the Senate for Round 2 tomorrow.

As we’ve written elsewhere, we expect these hearings to revolve largely around the FDIC. Last week’s independent investigation from the law firm Cleary Gottlieb corroborated widespread reports of sexual harassment and discrimination first reported by the Wall Street Journal in 2023. The investigation also documented Gruenberg’s sharp temper with staff.

Tuesday night, we had two scoops: the House Democratic plan to defend Gruenberg, and Sen. Tim Scott’s (R-S.C.) phone call with the FDIC chair in which Scott told Gruenberg to resign.

Even before this week, a lot of Democratic lawmakers suggested the hearings today and tomorrow could be make-or-break for the embattled bank regulator. Most top Republicans in this space have already called for Gruenberg to resign. At stake is the Biden administration’s ability to finalize much of its financial agenda.

But there’s other stuff: As bad as things look for Gruenberg, plenty of lawmakers will have broader policy questions for the regulators assembled today. A lot of them will be familiar to readers of The Vault.

Expect the Fed’s Barr to be peppered with questions about Basel III capital reform. Jointly issued by the prudential bank regulators last year, the banking industry mounted a mighty campaign against the proposal to increase large banks’ capital requirements.

Barr said in his prepared testimony that he expects there will be “a set of broad, material changes to the proposal” before it is finalized. How exactly those changes come about is an open question. We expect Republicans to grill Barr on whether the Fed and other regulators have decided to finalize a modified version of last year’s proposal versus going back to the drawing board and restarting the reform effort.

Democrats will have their own policy priorities, changes to the Community Reinvestment Act, what regulators are doing to guard against climate risk in the financial system and the risks of the proposed Capital One and Discover mega-merger.

— Brendan Pedersen

THE CAMPAIGN

News: Senate Majority PAC is running a new digital ad hitting Wisconsin Republican Senate candidate Eric Hovde as a threat to seniors. The spot highlights Hovde’s descriptions of nursing home residents as on death’s door. The ad also mentions a recent lawsuit ensnaring Hovde’s bank as responsible for negligence in a nursing home the bank partially owns.

Hovde is set to face incumbent Sen. Tammy Baldwin (D-Wis.) in a race that the NRSC feels can be competitive in November. Hovde, a wealthy self-funder who has never held political office, has cleared the primary field.

— Max Cohen

MOMENTS

CLIPS