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May 17, 2023
Punchbowl News Presents
Introducing Tech – our newest policy vertical. From high-profile interviews with industry influencers & policymakers to key lobbying updates, Punchbowl News Tech will be your go-to for timely technology insights.
PRESENTED BY
THE TOP
Happy Wednesday morning.
It’s often said in Washington that personnel is policy. And for the first time in the debt-limit talks, President Joe Biden has enlisted two of his most experienced — and trusted — aides to take control of a negotiation that has been dangerously stuck in neutral for a week.
Steve Ricchetti, counselor to the president, and Office of Management and Budget Director Shalanda Young will now represent the White House in talks with Speaker Kevin McCarthy’s team and one of the California Republican’s top allies, Rep. Garret Graves (R-La.).
Initial discussions began Tuesday night, with full-scale negotiations set to kick off this morning, we’re told.
But ignore any happy talk for a minute. McCarthy, Ricchetti, Young, Graves and White House Legislative Affairs Director Louisa Terrell have a very difficult task ahead of them. They need to find a deal that can pass Congress in the next 15 days. To do that, they’ll have to come up with a framework over the next few days. This is a massive lift that will require deft negotiating, cooperation from all sides and incredible flexibility on behalf of our national political leadership. Basically everything that Congress hasn’t done at all this year and traditionally isn’t very good at.
McCarthy said that he’s “not more optimistic” about getting a deal, but he did allow that at least negotiators have “a format, a structure.”
A lot of this will fall on Ricchetti, who has had Biden’s ear for more than a decade, and Young, a former Democratic staff director of the House Appropriations Committee. They have to take control of a process that many think has gone awry. Democrats say privately they always knew this pair would play the lead role for the White House.
McCarthy keeps saying that a deal isn’t hard to put together — and there’s some truth to it. Both Republicans and Democrats privately concede that a final agreement will probably include spending caps, the reclamation of unspent Covid money and permitting reform.
A key for Republicans is allowing McCarthy to negotiate directly with the White House without Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries being in the room. While no deal can happen without Schumer and Jeffries, senior Republicans wanted McCarthy to nail down a deal with the White House first.
But there’s still much that needs to be decided if and when a deal happens.
No. 1: How long will the debt-limit hike last? This is an important question which was barely raised in the closed-door negotiations. Keep in mind that House Republicans’ Limit, Save, Grow Act would lift the debt limit by $1.5 trillion or until March 31, 2024.
Sources close to the talks expect any debt-limit boost to run well into 2025. Neither Biden nor Hill leaders want to deal with this issue again during this Congress.
Remember, however, that in the House GOP bill, Republicans cut more than $4.8 trillion in spending. So if Democrats want to hike the debt limit until 2025, McCarthy is going to demand a lot in return.
Here’s how McCarthy put it Tuesday: “I think anytime somebody wants to raise the debt ceiling more, show me where you want to save more.”
No. 2: How will any compromise bill move through Congress? Will the debt-limit portion of any agreement and the spending cuts move separately? Do the cuts need to be signed into law before the debt limit? Will the House or Senate vote first? These are all questions that have been bouncing around leadership circles.
It seems almost certain that the House will vote first on this package. Anything that McCarthy and House Republicans can accept will be approved by Senate Republicans.
Politically, there are many dynamics about this negotiation that strike us as curious. Biden and Democrats spent months saying they wouldn’t negotiate over any increase of the debt limit, only to seemingly reverse that position when it was clear that Republicans wouldn’t relent.
Indeed, Tuesday represented a turning point for Biden and Democratic congressional leaders.
Following the White House meeting, both Schumer and Jeffries acknowledged that such negotiations were the only path to avoiding a default. Earlier in the day, Schumer said the ongoing talks were “separate but simultaneous to our responsibility to avoid default.”
Here’s Schumer after the meeting:
That’s far from “McCarthy needs to pass a clean debt-ceiling hike.”
And Biden, speaking at an event after the Big Four meeting, said that “policy differences between the parties should not stop Congress from avoiding a default.”
It’s becoming clear that the Democratic rank-and-file in both chambers may have to be prepared to accept spending cuts in order for this all to work. The fact that spending caps are even a part of the discussion now is concerning to Democrats, whose position all along was “pass a clean debt-limit bill.” Already, some Democratic senators have said they won’t support a debt-limit increase that includes these types of cuts — if Biden ultimately agrees to them.
There’s also strong resistance among progressives to additional work requirements for social welfare programs, something McCarthy and House Republicans are pushing hard. This issue will need to be finessed very delicately in order not to unravel the negotiations.
— Jake Sherman, Andrew Desiderio and John Bresnahan
Today: Rep. Nancy Mace (R-S.C.) will join Punchbowl News Founder and CEO Anna Palmer and Financial Services Reporter Brendan Pedersen at 9 a.m. ET for a conversation about innovative approaches to job creation, economic growth and sustainability. RSVP to tune in!
ETHICS BEAT
Santos expulsion resolution vote expected today
The House is expected today to take up a privileged resolution calling for a vote to expel indicted Rep. George Santos (R-N.Y.) from Congress, according to multiple GOP lawmakers and aides.
The resolution, introduced by Rep. Robert Garcia (D-Calif.) on Tuesday, would need a two-thirds majority vote in the House in order expel Santos, the controversial freshman lawmaker. That means at least 70 Republicans would have to get on board with booting Santos out of his seat.
But Speaker Kevin McCarthy is hoping to delay any expulsion vote altogether — giving vulnerable Republicans an off ramp — by moving to refer the resolution to the House Ethics Committee.
It’s unlikely that enough House Republicans would back expulsion under those circumstances, especially with only a four-seat majority and a competitive seat up for grabs if Santos is kicked out.
As we first reported in the PM edition Tuesday, House Minority Leader Hakeem Jeffries will oppose McCarthy’s effort to push the resolution off.
But Jeffries also told us he has no plans to whip the vote, calling it an individual decision for every Democrat.
“This is a vote of conscience, where Democrats are going to have to make a decision based on what they believe is the right thing to do,” Jeffries told us. “But I do not support any effort to divert accountability.”
Still, we would be surprised if any Democrats support McCarthy’s effort to refer the matter to the Ethics Committee, which could delay or even kill it. The Ethics Committee announced it was investigating Santos back in early March.
It’s particularly a tough vote for vulnerable New York Republicans, who for months have been calling on Santos to resign.
Democrats think they have the political upper hand here. Either endangered Republicans vote against their leadership and with Democrats, or they vote with McCarthy and likely face a barrage of TV ads from Democrats accusing them of being hypocrites.
We reached out to several GOP members in the New York delegation, including Reps. Nick Langworthy, Nicole Malliotakis, Mike Lawler, Nick LaLota, Anthony D’Esposito and Brandon Williams, but didn’t get a response. Rep. Marc Molinaro (R-N.Y.) declined to comment on the record.
Rep. Andrew Garbarino (R-N.Y.) declined to comment because he’s a member of the Ethics Committee.
Rep. Tony Gonzales (R-Texas), who previously called for Santos’ expulsion, also didn’t respond to a request for comment.
Rep. Nancy Mace (R-S.C.), who has publicly declared that Santos should have resigned when he first came to Congress, told reporters she didn’t support the resolution.
Rep. Max Miller (R-Ohio), one of the few House Republicans who have called on Santos to resign outside of the New York delegation, said he wouldn’t support an expulsion resolution while the investigation is pending.
“To expel a member from the House before the completion of pending investigations is inconsistent with principles of due process,” Miller said. “We should let the process work.”
Santos, for his part, dismissed the expulsion resolution as just another political attack from Democrats. Santos still plans to run for reelection, though McCarthy has publicly said he won’t back him.
Santos was charged last week with 13 federal criminal counts of fraud, money laundering and making false statements. He pleaded not guilty.
— Mica Soellner, Max Cohen, Heather Caygle and John Bresnahan
THE HOUSE MAJORITY
Police resolution reveals GOP shift on law enforcement
Late last year, incoming House Majority Leader Steve Scalise wrote to his colleagues about a package of 11 “ready-to-go” bills that GOP leaders planned to bring to the House floor in the first two weeks of 2023.
Among the list was a resolution expressing opposition to “dangerous efforts to defund and dismantle the Nation’s law enforcement agencies.” Fast forward to this week, and the concurrent resolution is being brought to the floor to coincide with National Police Week — with an important tweak.
Instead of “the Nation’s law enforcement,” the resolution the House will vote on this week is now tailored to “local law enforcement.”
This is just the latest episode in what’s become a trend for Republican leaders as they try to navigate with a four-vote majority.
After rolling out an ambitious legislative agenda, the GOP conference has frequently gotten bogged down by intra-party squabbles and divisions. And proposals initially billed as easy wins — like the immigration and border security package the House passed last week — are subject to major changes and months of delays before GOP leaders can lock down the votes to pass them.
House Judiciary Committee Democrats tried multiple times during a markup last week to insert language into the resolution to extend the anti-defund sentiment to federal law enforcement. But Judiciary Republicans struck down the amendments, claiming they weren’t germane. The House Parliamentarian’s office didn’t agree with that assessment, according to emails we reviewed.
Aides from Rep. Ken Buck’s (R-Colo.) office — the sponsor of the police resolution — said the changes in text were meant to reflect that local law enforcement were the ones mainly affected by progressive calls to defund the police in 2020. Massive protests opposing police brutality swept the nation that summer following the murder of George Floyd by Minneapolis police officers.
But the political reality is much more complicated. There’s growing Republican distrust — particularly in the House — toward federal law enforcement agencies. House Judiciary Committee Chair Jim Jordan (R-Ohio) is helming a subcommittee investigating the alleged weaponization of the federal government against conservatives.
And that distrust has only intensified in recent weeks.
Former President Donald Trump called on Republicans to “defund the FBI and DOJ” last month after being indicted by the Manhattan district attorney. And on Monday, House Republicans jumped on Special Counsel John Durham’s report sharply criticizing the FBI’s Russia-Trump probe as evidence of widespread wrongdoing inside the agency.
But while Democrats have been hammering Republicans on the lack of support for federal cops this week, GOP members we spoke to didn’t seem incredibly bothered by the shift in language.
“The only people that think the FBI is just a scrappy, little upstart organization that really needs more funding is apparently the House Democrats,” Rep. Kelly Armstrong (R-N.D.) told us. “Here’s what I’ve recognized in my entire career dealing with the FBI: They’re very well resourced and they will continue to be very well resourced.”
Scalise said that the Durham report shows that the FBI “needs to do their job cleaning house” and demanded “accountability” for “dirty cops.”
Rep. Andy Biggs (R-Ariz.), who has long called to defund the FBI before Trump’s missive on social media, cited the Durham report as another reason to discredit the agency.
“There is a reason that people are scrutinizing our federal police apparatus,” Biggs said.
More moderate Republicans in Democratic-leaning districts also shrugged off the resolution’s omission, though they expanded the definition of law enforcement to be broader than just local police forces.
“I stand with law enforcement. I always have,” Rep. Marc Molinaro (R-N.Y.) told us.
Rep. Juan Ciscomani (R-Ariz.) said police “at every level” need support from their political leaders, though he acknowledged “every agency should be kept accountable for their actions.”
— Max Cohen and Mica Soellner
PRESENTED BY AMERICAN BEVERAGE ASSOCIATION
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DOWNTOWN DOWNLOAD
The American Chamber of Commerce in Shanghai has hired Crowell & Moring to lobby on “[i]ssues related to US-China trade.”
— Jake Sherman
THE CAMPAIGN
Are you interested in parting ways with anywhere between $500 and $5,000 tonight? If so, Rep. Dwight Evans (D-Pa.) is throwing himself a birthday fundraiser which will feature House Minority Leader Hakeem Jeffries and House Democratic Caucus Chair Pete Aguilar.
Is Rep. Scott Peters (D-Calif.) more your speed? Cool. He’s hosting a “Wine Wednesday” for between $500 and $2,500.
— Jake Sherman
PRESENTED BY AMERICAN BEVERAGE ASSOCIATION
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Punchbowl News Presents
Introducing Tech – our newest policy vertical. From high-profile interviews with industry influencers & policymakers to key lobbying updates, Punchbowl News Tech will be your go-to for timely technology insights.
Read our first Tech Quarterly now