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IN THIS EDITION

Inside the fight for committee gavels if House Dems win

The Vault: Adeyemo in Ukraine as US seeks tighter sanctions

Dems go outside to flip a key Orange County House seat

Gonzales narrowly beats back hardline primary challenger

THE TOP

Inside the fight for committee gavels if House Dems win

Happy Wednesday morning.

If House Democrats win the majority in November, they’ll have immediate decisions to make on some of the most important issues facing their caucus — who’ll serve as committee chairs during the 118th Congress.

The sensitivity of these decisions can’t be overstated. They touch on age, race, gender, geographical balance, leadership loyalty and political viability for those who are denied a gavel.

It’s also worth noting that the last time Democrats were in the majority, their top trio of leaders were all octogenarians, as is President Joe Biden. Current House Minority Leader Hakeem Jeffries is only 53. Minority Whip Katherine Clark is 60, while Democratic Caucus Chair Pete Aguilar is a veritable youngster at 44 (he will turn 45 in a couple of weeks.) This is a totally different dynamic than 2022.

And if former President Donald Trump wins on Nov. 5 and House Democrats are somehow still successful — that’s a very big if — this becomes even more important. Republicans are in a very strong position to take the Senate, meaning the House could be Democrats only power base in Washington come January. Thus who runs House committees will be that much more important in taking on Trump.

Let’s look at the top question marks for House Democrats if they’re in the majority. In the other cases, we expect the ranking member to shift over to the chair.

Agriculture Committee: Rep. David Scott (D-Ga.) faces doubts about his future due to his health problems. Scott got through last week’s farm bill markup, yet it was hardly pretty. If anything, Scott’s performance made the succession discussion more urgent.

Scott handily defeated Rep. Jim Costa (D-Calif.) in 2020 for the gavel. Costa doesn’t seem to be making moves to succeed Scott, Democratic insiders say. Rep. Jim McGovern (D-Mass.), who is next in line, seems like he wants to stay at the Rules Committee. So at this point, the preferred option seems to be bringing in Rep. Bennie Thompson (D-Miss.) or someone else to replace Scott, although that leaves a problem for Democrats at Homeland Security (more on that below).

The Congressional Black Caucus will have a major impact here. The CBC — a powerhouse inside the Democratic Caucus — isn’t going to want to give up a gavel.

There’s one other factor worth considering. If a new farm bill is passed during a lame-duck session, which is possible, then it becomes easier for Scott to stay in place. If there’s another extension and the full reauthorization fight is kicked into the next Congress, then it’s harder to see Scott staying in place.

Financial Services Committee: Rep. Maxine Waters (D-Calif.) will be 86 in August. But there’s every reason to believe that Waters — first elected to the House in 1990 — will be the chair in 2025 if Democrats are in the majority.

If for some reason Waters doesn’t do so, then Reps. Nydia Velazquez (D-N.Y.) or Gregory Meeks (D-N.Y.) are seen as potential successors. That would lead to changes at the Small Business or Foreign Affairs panels respectively.

Homeland Security Committee: If Thompson moves over to Agriculture, that leaves an opening for a new Homeland Security chair. Rep. Sheila Jackson Lee (D-Texas) is next in line. Rep. Eric Swalwell (D-Calif.) is No. 3 among Democrats on the panel if SJL can’t or doesn’t take the gavel. Swalwell — a longtime panel vet — is a Democrat that Republicans love to hate, especially over allegations of ties to a suspected Chinese spy. Swalwell denied all wrongdoing, and the House Ethics Committee didn’t find anything either.

Yet this is another instance where the CBC could play a role. There are younger members who could potentially consider a challenge to Swalwell and get support from various factions within the Democratic Caucus, including the CBC.

Judiciary Committee: Rep. Jerry Nadler (D-N.Y.) had his issues with former Speaker Nancy Pelosi, who effectively bypassed the New York Democrat in favor of Rep. Adam Schiff (D-Calif.) during Trump’s first impeachment. But it’s hard to imagine anyone other than Nadler atop the Judiciary Committee with Jeffries as speaker. Nadler was a Jeffries ally early on, and we’d expect to see that loyalty repaid by Jeffries next year.

Natural Resources Committee: Rep. Raúl Grijalva (D-Ariz.) announced he had cancer in April, and the 76-year-old Arizona Democrat isn’t expected back full-time until the fall, if then. Grijalva hasn’t cast a vote on the floor in more than a month.

If Grijalva can’t return as the top Democrat, then Rep. Jared Huffman (D-Calif.) is seen as the successor. There could be a challenge to Huffman from a more junior member, but the California Democrat would likely be able to overcome that.

China Select Committee: This is more a question of whether Jeffries decides to keep this panel in the next Congress rather than who runs it. Our guess is that Jeffries does, and Rep. Raja Krishnamoorthi (D-Ill.) — the current ranking member — will serve as chair.

Krishnamoorthi has forged a good working relationship with Republicans on the select committee, which was the driving force behind the TikTok ban legislation and other measures.

To reiterate — we’re not making a prediction here as to whether Republicans or Democrats will control the House next Congress. We’ll do the same breakdown for the House GOP soon.

— John Bresnahan

June Events! On Wednesday, June 12 at 9 a.m. ET, join us for a conversation with Sen. John Hickenlooper (D-Colo.). Punchbowl News founder Jake Sherman will sit down with Hickenlooper to discuss the news of the day and how AI will impact the future of infrastructure, security, and tourism worldwide. RSVP here!

The Vault: Adeyemo in Ukraine as US seeks tighter sanctions

Treasury Deputy Secretary Wally Adeyemo is in Kyiv this morning to meet with Ukrainian officials, part of a wider effort underway to strengthen the Western alliance’s sanctions against Russia.

Adeyemo, the second-most senior official at the Treasury Department behind Secretary Janet Yellen, will meet with Ukrainian Minister of Finance Serhiy Marchenko. Top of mind for the officials will be efforts to “tighten” sanctions against Russia amid the ongoing war in Ukraine.

Improving the efficacy of Russian sanctions has been a major priority for Yellen and the broader Biden administration for months. Just last week, Yellen met with German bank officials and urged them to “remain vigilant and be more ambitious” when it comes to cutting off Russia’s military-industrial capacity.

That diplomatic offensive will continue this week and culminate with a speech in Berlin from Adeyemo on Friday previewing how the Biden administration plans to bolster sanctions compliance — which banks should probably pay attention to.

Looming over banks in Europe in particular is a December executive order signed by President Joe Biden that authorized Treasury to hit financial institutions with secondary sanctions for facilitating business with the Russian defense sector. Don’t let the name fool you. Secondary sanctions can be a financial death sentence for banks caught in the blast zone.

Adeyemo will argue that Russia’s economic resiliency has partly been “enabled by significant imports of dual-use goods from Chinese firms,” according to a Treasury advisory published on Tuesday.

Adeyemo and Marachenko will discuss Ukraine’s efforts to combat corruption as well, according to a Treasury official. That, of course, will be of interest to the mostly Republican lawmakers who’ve expressed concerns about corruption in Ukraine as Congress sends billions in aid.

And in another meeting with the Office of the President of Ukraine, Adeyemo will discuss efforts to tap into Russian sovereign assets as a way to support the embattled country.

At last week’s G7 Finance meeting, Yellen pushed hard for world leaders to embrace a plan that would use the projected forward earnings on Russian sovereign assets to backstop a larger loan to Ukraine as the invasion grinds into its third year.

— Brendan Pedersen

THE CAMPAIGN

Dems go outside to flip a key Orange County House seat

WESTMINSTER, Calif. — In the heart of Little Saigon, Democrat Derek Tran is being mobbed by Vietnamese-American well-wishers. A group of voters in their 80s are enthused to see a fellow Vietnamese-American running for Congress in a district that has one of the largest Vietnamese populations in the country.

One attendee, however, has a question. “Who’s the candidate?” he asks. Tran’s campaign staff quickly introduced the voter to the candidate, but it’s an illustration of the challenges Tran faces as a political newcomer in his bid to unseat Rep. Michelle Steel (R-Calif.).

Tran — an attorney who co-owns a pharmacy with his wife — came out of obscurity to advance to the general election in California’s competitive 45th District. Democrats believe the newcomer Tran has a shot at beating Steel because of his compelling background as the son of Vietnamese political refugees.

The numbers show there’s an opportunity for a Democratic win, given the right circumstances. President Joe Biden won the district by six points in 2020, its Cook PVI is D+2 and a third of voters aren’t registered with either party.

But knocking off Steel — a prolific fundraiser who boasts a strong ground game in the Orange County district — will be an uphill battle.

Nevertheless, Tran sees vulnerabilities in Steel’s background story. Steel’s parents fled the North Korean Communist regime, but Steel herself moved to the United States to get a higher education.

Speaking to us at the Asian Garden Mall in Westminster, surrounded by references to the 1975 fall of Saigon, Tran said Steel’s story won’t resonate with the Vietnamese community this cycle.

“​​Michelle still tries to run on that she’s a refugee or she tried to flee communism. No, that’s not true at all,” Tran said. “She came to this country for economic gain. That’s not the same as losing one’s country after the fall of Saigon in ‘75 and having no home.”

Although Tran is decidedly not in the top tier of flip opportunities in California, like Will Rollins, George Whitesides, Rudy Salas or Adam Gray, national Democrats are starting to invest in the race.

Tran said the DCCC is funding two outreach campaign offices in the district, in addition to a larger canvassing resource center.

Building an apparatus that will rival Steel’s vaunted on-the-ground operation won’t be easy, however.

Following the spring primary, Steel enjoyed a massive $3 million cash-on-hand advantage over Tran. After spending close to zero to win the primary by hundreds of votes, Tran’s campaign reported just under $200,000 on hand at the end of March.

When we stopped by Steel’s campaign headquarters in Buena Park on Saturday afternoon, a small army of high school volunteers were returning from a canvassing session. Steel is running on a focused economic message. Her “Lower Taxes” and “Stop Inflation” campaign signs are omnipresent in the district.

“Our volunteers just came back from the walk and what we’ve been hearing about is how inflation, gas prices, are high, high,” Steel told us.

Walking through the Source, a Korean mall in the heart of the district, with Steel and her husband Shawn Steel is a clinic in retail politics. The political power couple — Shawn Steel is an influential former California Republican Party chair — greeted store owners and shoppers alike.

In addition to economics, Steel is attacking Democrats on the migrant crisis at the U.S.-Mexico border.

“In my district, 41% of constituents are first-generation immigrants. So they all came here legally. Me too,” Steel said. “They’re really watching who is coming in, and I think we should vet these people before they come in.”

While Tran says House Republicans should embrace the bipartisan Senate border security and immigration deal, Steel brushed that bill off as a bureaucratic mess that won’t solve the issue.

We’ll have much more on the border dynamic in California next week.

— Max Cohen

RUNOFF REPORT

Gonzales narrowly beats back hardline primary challenger

Texas GOP Rep. Tony Gonzales narrowly turned back a challenge from a social media celebrity in a race viewed as a battle between the insurgent right versus the GOP establishment.

Gonzales beat Brandon Herrera in the runoff 50.7%-49.3%. The margin was 407 votes, according to the Texas Secretary of State’s office.

A narrow victory like this should serve as a warning sign for Gonzales that he has work to do with his party’s right flank. He’s been incredibly critical of GOP hardliners, calling Rep. Matt Gaetz (R-Fla.) a scumbag and saying that Herrera was a “known neo-Nazi.”

Herrera got endorsements from Gaetz and Reps. Eli Crane (R-Ariz.) and Chip Roy (R-Texas), who represents a neighboring district and has long feuded with Gonzales.

Gonzales’ district runs from San Antonio to the Texas-Mexico border and is one of the largest in the United States.

The Cook Political Report with Amy Walter rates the seat as solid Republican. Former President Donald Trump won by seven points in 2020 and Gonzales beat his Democratic challenger by 17 points.

Also: Texas House Speaker Dade Phelan won his primary, beating back a challenger supported by Trump. Read more from the Texas Tribune.

— Jake Sherman and John Bresnahan

… AND THERE’S MORE

News: The DCCC added Rep. Josh Harder (D-Calif.) to its Frontline program for vulnerable incumbents. Harder is facing Kevin Lincoln, the GOP mayor of Stockton, Calif., in November.

Rep. William Timmons (R-S.C.), who’s facing a tough primary challenge from state lawmaker Adam Morgan, has a new ad up in his district featuring former President Donald Trump. The 15-second spot has Trump urging voters to support Timmons in the June 11 primary.

The Ken Griffin and Paul Singer backed super PAC American Patriots PAC is continuing its onslaught against Rep. Bob Good (R-Va.). This new spot, running in Charlottesville and Roanoke-Lynchburg, accuses Good of voting to stop paying Border Patrol agents. Trump endorsed John McGuire, Good’s GOP primary opponent, on Tuesday.

The George Washington University has signed up Pillsbury Winthrop Shaw Pittman to lobby on “higher education issues.” Former Reps. Lacy Clay (D-Mo.) and Greg Laughlin (R-Texas) are on the account. GW has been in the crosshairs of late over their handling of a pro-Palestinian encampment on campus.

— Jake Sherman and Max Cohen

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