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June 8, 2023
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THE TOP
Happy Thursday morning.
News: Plenty of ink has been spilled this week on a small group of House conservatives who’ve accused Kevin McCarthy of breaking promises he made during the weeklong, 15-vote push to become speaker back in January. This Republican-on-Republican clash has paralyzed the House and led to questions about the viability of the current GOP leadership.
We had a chance to speak at length Wednesday afternoon with McCarthy’s No. 2, House Majority Leader Steve Scalise, about the situation. It was a fascinating conversation.
We asked Scalise if McCarthy had broken any promises to conservatives.
Scalise’s reply provides insight into the current state of the House GOP leadership. The short answer — it’s not good.
Here’s how Scalise responded: “I don’t know.”
As McCarthy wrestles with conservatives over the lingering anger from the debt-limit vote, Scalise clearly feels as if he has been on the outside looking in. Scalise wasn’t involved in the negotiations that made McCarthy the speaker. Nor was he part of the McCarthy-led talks that resulted in the Fiscal Responsibility Act.
Instead, McCarthy relied on Reps. Garret Graves (R-La.) and Patrick McHenry (R-N.C.). Graves, of course, is a member of Scalise’s Louisiana delegation. McHenry was once Scalise’s chief deputy whip, but their relationship has frayed in recent years, partially due to the North Carolina Republican’s close relationship with McCarthy.
Scalise said in the interview that McCarthy is still viable as speaker of the House.
But the House majority leader noted repeatedly that there is “a lot of anger on a lot of sides of our conference.”
A No. 1 having friction with their No. 2 is a tale as old as time in House leadership. McCarthy and Scalise have a long relationship — the pair met as young College Republicans — and their interactions have always been professional. But there’s no doubt some bad blood between the two men.
Scalise considered running against McCarthy for Republican leader in 2019, but ultimately decided against it — something we cataloged at length in a book we wrote. And again, McCarthy tapped Graves and McHenry for the most sensitive negotiations of the last few months, leaving Scalise aside.
Which brings us to the episode this week.
McCarthy’s allies blame Scalise for the drama over the last few days. They claim Scalise’s handling — or mishandling — of a gun-rights resolution by Rep. Andrew Clyde (R-Ga.) sparked the conservative uprising.
Here’s the story: For the last few months, Scalise and the leadership have been working on getting the votes for Clyde’s proposal barring ATF’s ability to regulate pistol braces. This was a tough vote for the leadership, as some GOP moderates had no interest in supporting it.
That problem was exacerbated during the debt-limit debate, when Clyde and other conservatives voted against the rule for the Fiscal Responsibility Act. Democratic votes were needed to pass the procedural motion. Some moderate Republicans vowed to vote against any bill offered by conservatives who tried to take down that rule.
McCarthy allies say that Scalise fumbled the episode, which fueled the furor this week. McCarthy himself blamed Scalise Wednesday. Conservatives claim Clyde was “threatened” by someone in leadership over his vote on the Fiscal Responsibility Act rule.
Scalise, for his part, told Clyde that he wanted the bill on the floor next week — and declared that it will come up Tuesday. It’s not clear that it can pass, although Scalise told us he has been working on building support for the measure for weeks.
Scalise noted that on Tuesday, when conservatives were derailing the rule on the gas-stove bills — the beginning of this ongoing stalemate — “the speaker wasn’t on the floor when all this was blowing up.”
Here’s Scalise talking about what happened:
This is noteworthy on several levels. Scalise is disavowing any role in causing or fixing the current problem.
And the Louisiana Republican is putting this all on the record. That’s a sign of how deep the discord extends between top House Republicans.
McCarthy and Scalise sent lawmakers home last night with no resolution to the GOP crisis. The House will come back on Monday, with McCarthy continuing to seek a deal with his conservative flank before then.
Democrats, for their part, were left shaking their heads in disbelief, noting that nothing like this had happened under former Speaker Nancy Pelosi.
McCarthy was asked at a news conference Wednesday night if his leadership team was all on the same page.
“Oh yeah,” McCarthy responded.
The Coverage:
| → | CNN: “Tensions simmer in House GOP as party leaders squabble over hardliners’ demands,” by Melanie Zanona and Manu Raju |
— Jake Sherman and John Bresnahan
TODAY: You can still RSVP to join us in person or on the livestream today at 9 a.m. ET for our conversation with Vice Chair of the Senate Appropriations Committee Susan Collins (R-Maine). Punchbowl News Founder and CEO Anna Palmer and Senior Congressional Reporter Andrew Desiderio will discuss national security and foreign relations with Collins.
THE SENATE
Senators press Sunak on Ukraine as Congress lacks path for new aid package
When British Prime Minister Rishi Sunak met with Senate leaders on Wednesday, there was overwhelming agreement that Ukraine will need more military assistance this year.
The only problem? Lawmakers from the United States — by far the largest contributor to Ukraine’s effort to fight off a Russian invasion — have no idea how it will get done. There currently is no path in Congress for an aid package for Kyiv, and the senators’ message to Sunak was clear — European nations need to share more of the burden.
It’s a dire state of affairs as Ukraine’s military is on the precipice of a major counteroffensive against Russia, one that could determine whether the West continues funding Kyiv altogether.
“It’s a problem — a serious problem — that hopefully we will find some way over the course of the year to address,” a stone-faced Senate Minority Leader Mitch McConnell said Wednesday.
At the center of it all is a clash between McConnell and Speaker Kevin McCarthy over Pentagon funding. As we’ve reported, McConnell views the defense cap mandated in the debt-limit bill as “totally inadequate” to support Ukraine and counter China in the Indo-Pacific, while McCarthy is vowing to quash efforts to circumvent the $886 billion cap.
This could be further complicated by McCarthy saying he’s open to House appropriators potentially writing spending bills lower than the mandated caps, as GOP hardliners have been demanding. It’s a different story entirely in the Senate.
“When it comes to giving [Ukraine] weaponry and technology and training, all the things they need to defeat the Russians, I think there’s a strong majority in the Senate for that,” said Senate Minority Whip John Thune (R-S.D.), who participated in the meeting with Sunak.
Indeed, there would likely be a few issues getting a Ukraine-focused supplemental bill through the Senate this year. There’s also enough support in the House. But McCarthy is loath to put anything on the floor that divides his conference — and it’s not clear that a majority of House Republicans would back it, a key barometer for the speaker.
There’s broad agreement that the Biden administration will likely come to Congress at some point this year with a request for more Ukraine funding, including the authority to transfer weapons and equipment from existing U.S. stockpiles. But until McConnell and McCarthy can resolve their differences over defense spending, a Ukraine-centric package isn’t getting through Congress.
“Ukraine hopes to see extra funding,” Sen. Deb Fischer (R-Neb.), who opposed the debt-limit bill because of the defense cap, told us. “I will be interested to see how it’s done.”
Democratic leaders insist they’ll do everything they can to help pass new Ukraine funding if and when the White House asks for it. Sen. Jack Reed (D-R.I.), the chair of the Senate Armed Services Committee, told us he doesn’t think it’s possible to fund Ukraine’s war effort while staying below the $886 billion cap.
“We’re going to be very much stressed to fulfill requirements internally within the Department of Defense” without a Ukraine supplemental, Reed told us. “If we lose in Ukraine, we lose everywhere.”
— Andrew Desiderio
Vance brings culture war heat to credit card reform
A small bipartisan group of lawmakers is reviving a push to reshape the credit card industry. One of their newest boosters wants to kick things up a notch.
Lawmakers led by Sens. Roger Marshall (R-Kansas) and Dick Durbin (D-Ill.) reintroduced the Credit Card Competition Act Wednesday. There’s a companion bill in the House by Reps. Lance Gooden (R-Texas) and Zoe Lofgren (D-Calif.) Read the latest version of the text here.
This is a fight about how credit card companies charge fees. The bipartisan proposal would require card issuers to offer a choice of at least two payment networks in electronic transactions, which the merchant lobby argues would lower costs for businesses and consumers. That would be a significant change from the current environment, where electronic card payments are dominated by Mastercard and Visa.
But we think it’s significant the effort now has the support of Sen. J.D. Vance (R-Ohio), who is critical of Mastercard and Visa’s “duopoly” and the impact it has on the business sector. Vance is also trying to harness the winds of culture war to buoy the effort among conservatives.
In passionate remarks outside the Capitol, Vance accused Visa by name of trying to use its significant power to “stick their nose in the social policy of this country.”
This was a loose callback to an older episode of conservative outrage from 2022, when payment companies including Visa, Mastercard and American Express considered the implementation of a special retail code for gun purchases. The companies abandoned the effort in March.
But we should also note that Vance is a member of the Senate Banking Committee. He represents a state with one of the country’s largest financial sectors. That means his support for the Credit Card Competition Act puts him on a collision course with a powerful Ohio constituency.
The bill represents a significant threat to a major profit source for many banks. Even though passage of the bill remains a longshot, bank advocates issued letters opposing “any introduction” of legislation “that would impose network routing requirements on credit cards” hours before lawmakers had actually reintroduced the Credit Card Competition Act.
Vance acknowledged that disconnect with Ohio bankers in an interview Wednesday afternoon:
There’s also the question of just how much sway the culture war angle will have in this particular fight, which pits two of Washington’s most powerful and deep-pocketed lobbies against one another.
We caught up with Sen. Thom Tillis (R-N.C.) Wednesday evening. Even though the North Carolina Republican was sharply critical of the payment companies’ efforts to impose a gun retail code last year, he still appeared to have issues with the thrust of the Credit Card Competition Act.
Suffice to say this bill has a long way to go before it has even a decent shot at passing either chamber, which lawmakers acknowledged Wednesday. But that doesnt mean Vance won’t be able to deliver bankers heartburn from his committee perch.
“It’s a tough road ahead of us,” Marshall said at the press conference Wednesday. “But I think J.D. [Vance] being on the banking committee — we’ll be there fighting.”
— Brendan Pedersen
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CONTEMPT CORNER
Comer calls off Wray contempt vote
House Republicans are pressing pause on their contempt proceedings against FBI Director Christopher Wray.
After Wray pledged to allow all House Oversight Committee members to review a critical document Chair James Comer (R-Ky.) subpoenaed for, Comer announced he was postponing a planned Thursday panel vote to hold Wray in contempt of Congress.
Comer is following up on claims made in an internal FBI document from 2020. The FD-1023 document contains unverified bribery allegations against then-Vice President Joe Biden. On Monday, Comer and Ranking Member Jamie Raskin (D-Md.) viewed the document in camera at a secure facility on the House side.
“Allowing all Oversight Committee members to review this record is an important step toward conducting oversight of the FBI and holding it accountable to the American people,” Comer said in a statement.
Comer had demanded that Wray turn over the document to the Oversight Committee. And the Kentucky Republican scheduled a 9 a.m. committee hearing today. The panel was set to vote on holding Wray in contempt of Congress for failing to fully comply with the subpoena.
But Speaker Kevin McCarthy saw the situation in different terms, instead focusing on the fact that Wray only allowed the top two Oversight members to view the document.
“[Wray] needs to show [the FD-1023] to every Republican and every Democrat on the committee. If he is willing to do that, then there’s not a need to have contempt,” McCarthy said Wednesday evening. And that’s exactly what happened.
Democrats have labeled Comer’s investigation a political ploy aimed at harming Biden’s reelection chances.
“Holding someone in contempt of Congress is among the most serious actions our Committee can take and it should not be weaponized to undermine the FBI,” Raskin said in a statement.
— Max Cohen
IMPLEMENTATION NATION
Hoyer urges colleagues to tout 117th Congress wins
Implementation is the name of the game for House Democrats frustrated at a lack of action in the current divided Congress. Rep. Steny Hoyer (D-Md.), the head of the Regional Leadership Council, leaned into that message in a “Dear Colleague” letter sent to Democrats on Wednesday.
Hoyer touted a new website — Invest.gov — that “features crucial data on the progress we have made to implement the transformational legislation we enacted last Congress.” Hoyer cites the American Rescue Plan, the Bipartisan Infrastructure Law, the CHIPS Act and the Inflation Reduction Act, “much of which passed with little or no Republican support.”
Read the letter here.
— Max Cohen
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