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June 2, 2023
Presented by Apollo Global Management
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PRESENTED BY
THE TOP
Happy Friday morning.
In the end, the voting was the easiest part.
The biggest moment so far of the 118th Congress wrapped up lightning-fast by the Senate’s standards and with relatively little drama. And the speedy process was, at least in part, driven by a last-minute GOP push centering on the war in Ukraine.
Late Thursday night, after three hours of futile amendment votes, the Senate passed the bipartisan debt-limit bill — the Fiscal Responsibility Act — by a 63-36 margin. The bill now heads to President Joe Biden’s desk, just days before the June 5 default deadline.
Biden will address the nation from the Oval Office tonight “on averting default and the Bipartisan Budget Agreement,” the White House announced following the Senate’s action.
Biden has been criticized by some lawmakers for not being more active publicly during this months-long debt-limit fight, although he called Thursday’s results “a big win for our economy and the American people.” And it was clearly a win for Biden too. The president can take credit for another bipartisan deal that many thought wasn’t possible.
There was little doubt that the Senate would ultimately approve the legislation, which will extend the debt limit through January 2025 while also cutting spending slightly. With the House clearing the bill by a 314-117 margin on Wednesday, and both Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell backing it, the only question was whether senators would finish up Thursday night or drag out the proceedings through the weekend.
Yet just 17 Senate Republicans ended up voting for the measure, the product of weeks of tense negotiations between Biden and Speaker Kevin McCarthy. Sen. John Barrasso (Wyo.), the No. 3 Senate Republican, opposed it, as did a number of other senior Republicans, despite the fact that McConnell and Minority Whip John Thune backed the measure. All but four Democrats and Sen. Bernie Sanders (I-Vt.) voted for it.
The Senate’s unanimous agreement to move quickly to final passage on Thursday was hatched only after a meeting of GOP defense hawks in McConnell’s Capitol suite. During that gathering, called by Sen. Lindsey Graham (R-S.C.), the group came up with a plan to ensure that Pentagon spending wouldn’t ultimately be capped at $886 billion, as mandated by the debt-limit bill.
Their solution: Get Schumer to commit to moving appropriations bills in time to avoid the debt-limit measure’s mandatory automatic spending cuts, which could adversely impact defense funding. These GOP senators also wanted a guarantee that the Senate would get additional opportunities to steer money to the Pentagon beyond what they see as an inadequate spending cap.
“You can’t make people do things, but you can set it up so that it’s easier for them to get things done,” said Sen. Mike Rounds (R-S.D.), who attended the meeting. “And that’s what we hope was accomplished here.”
It was the issue of Ukraine funding that drove the discussion, according to multiple attendees, as hawkish senators wanted to ensure that additional defense spending needs could be met through a supplemental appropriations package later this year — with Ukraine as the centerpiece.
“What happened was, Mitch, who’s always been strong on defense, was willing to address the problem. And Schumer was willing to address the problem because it’s real,” Graham said. “So the meeting with Sen. McConnell, and eventually Sen. Schumer, led a guy like me to believe that we’re not going to do crazy things like [ending Ukraine funding].”
After the meeting, there was a massive and dramatic huddle around Schumer on the Senate floor during which the group pushed him on their plan. Sen. Kyrsten Sinema (I-Ariz.) helped broker the language of the public commitments Schumer was going to make. Over a period of four hours, Sinema was line-editing the statements and shuffling between leadership offices. The Senate was then able to begin voting on amendments and, ultimately, pass the debt-limit bill within a remarkable three-hour span.
Schumer ultimately agreed to give these assurances on defense because Democrats insisted on mentioning non-defense emergency spending possibilities, such as disaster relief and the fentanyl crisis.
Here’s Schumer during his 11 p.m. press conference Thursday:
Of course, most of the GOP defense hawks ended up voting against the bill. But securing these assurances from Senate leaders was practically the only thing they could do without dragging out the voting schedule and, in turn, potentially sparking a debt default.
We’ll have a lot more on the fallout from the debt-limit deal in coming days and weeks.
— Andrew Desiderio and John Bresnahan
THE NEXT BATTLE
Coming attractions: House vs. Senate on a defense supplemental
The deal GOP senators secured to speed up votes on the debt-limit bill is going to be a tough pill to swallow for the Republican-controlled House of Representatives.
A group of Republican hawks in the Senate won a commitment from leadership that the chamber would consider a supplemental spending bill for the Pentagon at some point this year. Having Congress enact a supplemental is pretty standard practice. But the goal of this effort is to get around what many senators see as a shortfall in defense spending that was capped at $886 billion in the bipartisan debt-limit bill.
Meaning the Senate is already looking for an out on the Fiscal Responsibility Act before the ink is even dry on the bill.
But the focus of this new funding — mainly Ukraine, but also Israel and China — is going to be difficult, if not impossible, for the House to pass under the current Republican majority.
“I’m going to leave it up to Kevin McCarthy to see if he wants to help defeat Putin,” Sen. Lindsey Graham (R-S.C.) told us. “I mean, he’s been pretty good… But is the Republican Party going to be the party that bails out [Russian President Vladimir] Putin? I hope not.”
The House GOP, as a whole, is much less supportive of U.S. aid for Ukraine than their Senate Republican counterparts. Some House GOP lawmakers have even called for cutting off Ukraine funding entirely. This puts enormous pressure on Kevin McCarthy, especially with the threat of being ousted from the speakership.
But Republican senators are adamant about this funding, especially with Ukraine’s highly anticipated counteroffensive set to begin soon. Sen. Mike Rounds (R-S.D.) put a finer point on it:
The reality here is that Congress was probably always going to have to consider a supplemental Pentagon funding request at some point this year. GOP senators told us they believe the Biden administration was already planning to ask for more Ukraine funding anyway.
That means the debt-limit bill “won’t be the last opportunity” for Congress to address the defense topline, Sen. John Cornyn (R-Texas) said.
— Andrew Desiderio and Jake Sherman
PUNCH POWER MATRIX
— Max Cohen
PRESENTED BY APOLLO
Apollo and Athene create retirement solutions for millions of Americans. Learn more.
THE MONEY GAME
News: Josh Riley, a Democrat running for a chance at a rematch against Rep. Marc Molinaro (R-N.Y.), has raised more than $500,000 since launching his campaign on April 11. This is an impressive early haul for Riley, who lost to Molinaro by less than 2 points in November.
Molinaro represents a district that voted for Joe Biden in 2020, and the incumbent will be a top Democratic target in 2024.
Happy Hour: If you’re a Frontline Democrat, chances are Rep. Frank Pallone (D-N.J.) is someone you’ll be seeing a lot in the coming months. On June 22, Pallone is hosting a happy hour fundraiser for seven Frontliners at the DCCC headquarters.
The members benefiting from the event: Democratic Reps. Nikki Budzinski (Ill.), Angie Craig (Minn.), Dan Kildee (Mich.), Mary Peltola (Alaska), Kim Schrier (Wash.), Emilia Sykes (Ohio) and Gabe Vasquez (N.M.).
Check out the invite here. Tickets range from $500 to attend as an individual to $10,000 to host the event.
— Max Cohen
Capitol Hill sets sights on diversity data
The House Office of Diversity and Inclusion will launch two key studies next month looking into the diversity of Capitol Hill staff. But the move comes as efforts to hire more people of color face headwinds in a divided government.
Starting in July, the House ODI will examine both staff pay and demographics, according to sources familiar with the office’s work.
Still, a tough path lies ahead for the House ODI’s efforts with Republicans in control of the chamber. The issue divides the Republican Party and has become a top target in culture-war battles across the country, including in Congress.
For instance, GOP appropriators view restructuring the ODI as a “conservative priority” that would save “millions of taxpayer dollars.”
House ODI Director Sesha Joi Moon told us the office “remains committed” to ensuring “the level of representation within the congressional workforce achieves parity with the national population – especially in senior-level positions.” That includes making data on diversity more accessible.
We’ll continue to report on this as our platform, The Punch Up, explores the debate over racial equity in the United States and efforts to address it on Capitol Hill.
Earlier this year, one of the new House GOP majority’s first moves was to ax a Financial Services subcommittee on diversity and inclusion.
House Republicans also passed a bill targeting the Biden administration’s ESG policy for retirement investments. The legislation cleared the Democratic-controlled Senate but Biden vetoed it.
One senior House GOP aide said Republicans have a messaging problem when it comes to the issue, a big reason the party lags behind Democrats on staff diversity. But Republicans have made some strides in recruiting more diverse candidates, particularly in the House, in recent years.
“What I’ve seen in the past few years, every single time the GOP party grows into understanding where to grow the voters, that affects the staff in a positive way,” the aide said.
Rep. Mike Garcia (R-Calif.) acknowledged his party’s diversity problem. “It’s a challenge,” Garcia said, adding that it’s important to have different perspectives on legislation.
Many conservatives, however, dismiss the idea of considering demographics when hiring.
“I’m a big believer in putting the best player in, coach,” said Rep. Tim Burchett (R-Tenn.). “I don’t look at a box I’m checking if someone applies to our office.”
Congress overall has become more diverse in recent years, with the 118th Congress the most diverse in U.S. history. But that’s not reflected in office staff.
Just 18% of top House non-custodial employees are people of color, an October 2022 study from the Joint Center for Political and Economic Studies found. In offices of white Democratic lawmakers, 14.8% of top staff are racial minorities. Republicans have a longer way to go — just 5.1% of top GOP staffers are people of color.
For Congress to be more representative, at least 40% of its staff would have to be people of color, said LaShonda Brenson, a senior researcher at JCPES.
While Congress is still far from resembling America, some lawmakers are working to create pipelines for people from different backgrounds to come work on Capitol Hill.
Rep. Al Green (D-Texas) said prioritizing a diverse staff has made him a better legislator.
“It’s important because different points of view are what emanate from diversity and you want all the points of view considered when you’re making decisions,” said Green, who hired the first Pakistani-American woman to serve as a chief of staff in Congress.
Across the Capitol, Senate Democrats will release their annual diversity report in July.
— Mica Soellner
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Presented by Apollo Global Management
Learn how Apollo is rethinking retirement income to last the modern lifespan. Think It New.