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May 5, 2023
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PRESENTED BY
THE TOP
Happy Friday morning. And happy Cinco de Mayo!
We’re going to dive into a SWOT analysis this morning of Speaker Kevin McCarthy and President Joe Biden for the upcoming debt-limit fight.
We should point out one very interesting dynamic in this standoff. The White House is befuddled by McCarthy and has no idea what his strategy is or what he’s trying to achieve. The disconnect between the two sides is alarming given the looming default deadline.
There’s a great example in the Washington Post this week. The White House was hoping outside groups and pro-business trade associations could convince McCarthy and House Republicans to back off any debt-limit brinkmanship. But it’s been a half-dozen years since House Republicans truly paid attention to these organizations. And some of them sided with McCarthy anyway. That’s what we mean by disconnect.
Let’s dive in.
Speaker Kevin McCarthy
Strengths: McCarthy has developed a complex this Congress — the California Republican feels like he’s being underestimated at every turn. Many doubted McCarthy would ever become speaker. He did, of course, although barely. Then the White House and Capitol Hill Democrats openly scoffed at McCarthy’s efforts to pass a debt-limit bill. That was a major motivation for McCarthy as he muscled a bill through the House.
In doing so, McCarthy spent some political capital. But he’s also built up a reservoir of goodwill, especially with conservatives. House and Senate Republicans feel as if McCarthy has been reasonable on the debt limit. He hasn’t drawn any red lines and he’s practically begged Biden to negotiate.
Perhaps McCarthy’s biggest strength is that he has Senate Republicans behind him. If the White House thinks they can split Senate Minority Leader Mitch McConnell from McCarthy, they’re sorely mistaken.
McConnell has no interest in being involved in these negotiations at this point and is more than willing to play a supporting role here. There are two reasons why. If McConnell is seen as the lead player in the talks, hardline House Republicans will bolt. Plus, Senate Republicans will back whatever can get through the far-more-conservative House.
One last thing — and this should be required reading for senior White House aides — McCarthy isn’t looking for some global agreement to reshape U.S. society. He wants a budget caps deal, some spending cuts and permitting reform.
What you see is what you get with McCarthy right now. He’s not going to put a bill on the floor that will pass with a few dozen House Republicans and all the Democrats. He’s going to be really hesitant to split the spending-cut portion of any compromise from a debt-limit extension. And he’s not going to pass a “clean” debt-limit bill (although there are different ways to view clean). Those are his bottom lines.
Weakness: To state the obvious, McCarthy has little room to maneuver. His four-seat margin is miniscule. Plus, the House Republican Conference has shifted seismically during the last year. He’ll need a deal that can garner close to half of his conference. And to those saying he wants to keep his speakership — yes, that’s true!
One of the weaknesses for everyone involved in this negotiation is time. The calendar is everyone’s enemy. This should not be underestimated.
Opportunities: McCarthy has taken pains during this debt-limit drama to avoid threats or red lines. He’s thirsty for a deal — and everyone seems to be missing out on how much flexibility that gives Democrats. The main thing McCarthy is going to insist on is no clean debt-limit boost.
Threats: No. 1: A deal that doesn’t win conservative support could end McCarthy’s speakership. We’re not saying that it will, but it can. No. 2: We can’t overstate this: There are plenty of House Republicans who don’t believe that default would be catastrophic.
President Joe Biden
Strengths: The White House and House Republican leaders seem to agree on one thing: the GOP will get blamed if the U.S. government defaults on its $31 trillion-plus debt. Congress is a widely-disliked institution, the presidency somewhat less so. The White House also has a bulldog in Senate Majority Leader Chuck Schumer, who is willing to attack while Biden hangs back.
Weaknesses: The White House’s unfamiliarity with McCarthy and the House GOP conference is truly surprising to us. It’s a significant liability and could result in problems later on.
The more the White House says that they want a clean debt-limit increase, the more dug in House Republicans get. It’s anathema to GOP lawmakers to lift the debt limit without concessions. It wasn’t so under former President Donald Trump, that’s true. But politicians aren’t ideologically consistent.
Opportunities: We can imagine a situation in which a debt-limit deal is a political positive for Biden. He’s clearly tacking to the middle — he just sent 1,500 troops to the U.S.-Mexico border — and an agreement that pares back federal spending shows he understands that the gigantic national debt is unsustainable.
And remember: Biden is a dealmaker. It’s the hallmark of his long, long political career. If there’s a deal to be had, Joe Biden will find a way.
Threats: The push for a clean debt-limit hike is undermined by the fact that the Senate can’t pass one at this point. There aren’t 60 votes for it. We’ve seen practically no waffling from Senate Republicans.
The other threat to Biden is the calendar. We’re rapidly approaching June and potential default.
– Jake Sherman and John Bresnahan
BEHIND THE SCENES
What Schumer and Jeffries said privately about the debt limit
News: Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries held a private call with key members of the Democratic coalition on Thursday night, urging them to keep pressing Republicans to pass a clean debt-limit hike.
Groups on the call included the League of Conservation Voters, Climate Power, SEIU, VoteVets, Center for American Progress, UnidosUS, the National African American Clergy Network and others.
Jeffries, who is in his first legislative brawl as House Democratic leader, cited former Speaker Nancy Pelosi’s favorite Abraham Lincoln quote: “Public sentiment is everything — with it, nothing can fail, without it, nothing can succeed.”
Jeffries also implored the groups to try to keep public support on Democrats’ side and “hopefully get some more reasonable Republicans into a better position to do the right thing by the American people.”
Schumer, who privately has been the leading figure suggesting Speaker Kevin McCarthy’s House Republican Conference will eventually fold and pass a clean debt-limit hike, told the group that this is a far different situation than the 2011 showdown. Twelve years ago, then Speaker John Boehner and former President Barack Obama tangled over the federal government’s borrowing cap, eventually crafting a large-scale deficit reduction package.
“A whole bunch of hard right congressmen have told McCarthy they are not negotiating, that it’s this proposal or nothing,” Schumer said. “And of course, that’s unacceptable. That leads to default.”
In reality, just a handful of House Republicans have actually taken this position and those lawmakers won’t be part of any coalition that passes a final agreement.
Here’s more from Jeffries:
– Jake Sherman, Heather Caygle and John Bresnahan
THE SENATE
Bernie resurrects minimum wage hike — with little chance of passage
Sen. Bernie Sanders (I-Vt.) unveiled legislation Thursday to raise the federal minimum wage to $17 per hour over a five-year period.
It’s the latest example of Sanders using his HELP Committee gavel to spotlight issues he’s championed for decades — even ones that don’t have enough support to pass.
The last time the Senate voted on a minimum wage hike — to $15 per hour — eight Democrats opposed it. That was in 2021. Sanders thinks this time will be different.
“I think the country has changed on this issue,” Sanders told us, noting that even some red states have voted to increase the minimum wage. “If I’m the average member of Congress and I’m looking around me, I say this is a popular issue. And I think that’s more the case now than it was two years ago.”
The federal minimum wage currently sits at $7.25 per hour and was last updated in 2007. Most lawmakers agree it should be raised, but there’s no consensus on the exact number or how it should be implemented.
We caught up with many of the Senate Democrats who opposed the wage hike two years ago. Some of them, such as Sens. Chris Coons (D-Del.) and Angus King (I-Maine), told us they only voted against that proposal – which was considered as part of the massive American Rescue Plan – because it got rid of the tipped wage.
King said he’d be open to backing the $17 proposal if it didn’t eliminate the tipped wage, and some other Democratic senators who opposed the $15-per-hour rate indicated the same thing.
“I think we should raise the minimum wage,” Sen. Jeanne Shaheen (D-N.H.) said. “I voted against the bill before because I had concerns about its adverse effect on one particular industry. I think there are ways to deal with that.”
Sen. Jon Tester (D-Mont.) said “things have changed from when [Sanders] introduced the $15, I just have to think about how it impacts rural communities.”
Sen. Joe Manchin of West Virginia, the most vocal opponent among Democrats, said “Everybody knows where I stand” when we asked him about Sanders’ new proposal.
Sanders’ bill will, unsurprisingly, face unanimous GOP opposition. Sen. Susan Collins (R-Maine), who sits on the HELP Committee, said she supports a minimum wage hike but $17 is too “steep.”
But at least one Republican, Sen. Josh Hawley of Missouri, agrees with Sanders — to a point.
Here’s what Hawley told us:
The Senate HELP Committee is scheduled to mark up the new Sanders proposal on June 14. It’s unlikely to overcome a GOP filibuster and has virtually no chance in the Republican-controlled House.
“There’s a lot of work to be done, but we’re starting it,” Sanders said.
— Andrew Desiderio and John Bresnahan
STEIL GUIDE
Steil plots his next move at House Admin
Rep. Bryan Steil (R-Wis.) is only in his third term in Congress, but he’s already wielding the gavel of one of the most important, if underrated, panels — the House Administration Committee.
Just five months into the job, Steil has already had an impact. He spurred President Joe Biden to fire the Architect of the Capitol, Joe Blanton, in February amid corruption allegations. And Steil joined with other top House Republicans to push back against the criminal indictment of former President Donald Trump.
Steil’s panel isn’t high-profile like the House Judiciary and Oversight committees. But the House Administration Committee’s sprawling jurisdiction touches everything from overseeing daily House operations to federal elections.
Now, Steil wants to focus on “depoliticizing” the U.S. Capitol Police and Capitol Hill security systems. In fact, Steil talks about “depoliticizing” a lot. This mostly means undoing what Democrats did under former Speaker Nancy Pelosi and Rep. Zoe Lofgren (D-Calif.), who chaired the House Administration Committee before him.
“We have an opportunity to depoliticize the security apparatus of Capitol Hill,” Steil told us in an interview. “Under the previous speakership, there was a lot of politicization of the security structure, in particular of the House side.”
Security and operations changed dramatically on the Hill during the Covid pandemic and in the aftermath of the Jan. 6 insurrection. For example, Pelosi installed magnetometers around the House chamber.
Those are now gone with Republicans in charge. Speaker Kevin McCarthy also replaced the House Sergeant at Arms. Steil said he wants to ensure security officials remain nonpartisan.
Steil, who represents former Speaker Paul Ryan’s old district, has other items on his agenda too. Steil wants to hold field hearings in areas that he believes have strong election laws, as well as places where Republicans claim things went awry in 2020.
Steil also wants to “modernize” the House by making it more effective for lawmakers to attend committee hearings without having them overlap with others.
“The way we operate, in many ways, is because that’s how we’ve always done it,” Steil said. “Nobody’s ever put together a de-conflicting schedule for committee hearings.”
Rep. Greg Murphy (R-N.C.), who sits on the Admin Committee under Steil, said the chair has been “very collaborative” and “open to new ideas” from rank-and-file members.
“He has really been a hawk on accountability,” Murphy said.
Steil’s counterpart, Ranking Member Joe Morelle (D-N.Y.), said he hoped both of them can continue to find common ground on issues. Morelle named Blanton’s firing as an example of bipartisan success.
“Chairman Steil has been keeping a steady pace of committee business, and I expect him to continue this effort,” Morelle said in a statement. “I look forward to continuing our work together to make our democratic institutions stronger, enhance Capitol security, safeguard our elections, and support the American people.”
Steil also praised Morelle, despite an early scuffle the two had regarding a hearing on a ballot shortage in a Pennsylvania county during last November’s midterm elections. Republicans argued the session was necessary due to claims that thousands of voters were impacted. Democrats complained that Steil overstepped an investigation by local authorities and less than 100 voters faced a significant problem.
Steil acknowledged there’s bound to be partisan friction at times with Morelle but chalked it up to being part of the job.
“I’ve known him since the first day I arrived on Capitol Hill and we have a good rapport,” Steil said. “That doesn’t mean we’re not going to utilize the committee to identify problems that have occurred where the Democrats might not like that we are identifying a problem.”
— Mica Soellner
Cups is the Capitol’s best dining experience, staffers say
For our core Hill audience, grabbing coffee or lunch in the Capitol is the highlight of the day. And according to staffers, Cups — the Senate institution famous for coffee, sandwiches and an Asian-themed buffet — is the Capitol’s best dining experience.
Our survey of top Hill aides found that a whopping 40% of staffers believe Cups is the best place to dine in the Capitol. Cups is located in the basement of the Russell Senate Office building and has been serving customers for almost 20 years.
Respondents were asked to choose their favorite from a selection of 11 spots — Cups, Dirksen Cafeteria, Steak ‘n Shake, Au Bon Pain, House carryout, Rayburn Cafeteria, &Pizza, Senate carryout, the Refectory, Subway and Dunkin’ Donuts.
Dirksen came in second with 12% support, followed by Steak ‘n Shake with 11% and Au Bon Pain with 10%.
Over at Punchbowl News, food and drink is of the utmost importance. We’ve paved the way on our Bagel Caucus coverage. Expect more coverage on this front.
— Max Cohen
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Presented by Apollo Global Management
One size rarely fits all. That’s why Apollo provides custom capital solutions designed to help companies achieve their ambitious business goals. Think Credit New