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July 10, 2023
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PRESENTED BY
THE TOP
Happy Monday morning.
Congress is back! At least the Senate is today. Senators vote tonight at 5:30 p.m. The House returns tomorrow at 6:30 p.m.
Note — there are just 12 legislative days left until the August recess starts, and congressional leaders have a huge agenda, especially on FY2024 spending bills.
President Joe Biden is in London where he’ll meet with British Prime Minister Rishi Sunak (for the sixth time in six months) and King Charles III. Biden will then head to Vilnius, Lithuania, for a critical NATO meeting, and finish his trip with a stop in Finland. Our Andrew Desiderio is in Vilnius with a Senate delegation attending the NATO summit, so we’ll have lots more on this throughout the week.
Senators and members have a big stack of unfinished business on their plates, including spending bills, defense policy, a new farm bill, investigations and more.
The House will take up the FY2024 defense authorization bill later this week. There were nearly 1,400 amendments filed to this bill, and House GOP aides started to go through the amendments over the weekend. How many amendments will be ruled in order is still up in the air, but don’t expect GOP leaders to let rank-and-file members go wild here.
The $886 billion package includes a 5.2% pay hike for service members, hundreds of millions of dollars for “quality of life” improvements, $300 million in new funding for Ukraine, as well as more money to confront China’s growing power in the Pacific.
There’s likely to be a high-profile fight over the Defense Department’s abortion policy. This has become a flashpoint in the Senate as Sen. Tommy Tuberville (R-Ala.) has blocked hundreds of senior level military promotions over the issue. Speaker Kevin McCarthy is looking toward “maximizing” the GOP vote on the NDAA, so House Republican leaders will lean hard into this.
FBI Director Christopher Wray will appear before the House Judiciary Committee on Wednesday. The regularly scheduled oversight hearing is being billed as a chance for members to “examine the politicization of the nation’s preeminent law enforcement agency” under Wray and Attorney General Merrick Garland. Expect lots of questions about the criminal investigations into former President Donald Trump, with Wray fending off as much as he can.
It’ll be a hectic week for financial services policy as well. Republicans led by House Financial Services Committee Chair Patrick McHenry (R-N.C.) are scheduled to host four hearings in three days all about three letters — ESG, the corporate shorthand for environmental, social and governance standards.
Complaining about ESG in the financial sector is one of House Republicans favorite activities these days. The full panel meets on Wednesday to examine “environmental and social policy in financial regulation.” A subsequent trio of subcommittee hearings will then take aim at ESG policy in housing, insurance and the proxy shareholder voting process.
Across the Capitol, Senate Majority Leader Chuck Schumer released a letter on Sunday outlining that chamber’s busy agenda for July:
The Senate Appropriations Committee on Thursday will mark up the FY2024 Legislative Branch, Commerce-Justice-Science, and Financial Services and General Government spending bills. These will be at the level agreed to under the Fiscal Responsibility Act, which House Republicans have rejected. Instead, House GOP leaders are cutting tens of billions of dollars from social spending. So the fall’s big clash over spending gets started in earnest this week. Federal spending runs out on Sept. 30.
There will be a classified all-senators briefing on Tuesday with defense and intelligence officials on how AI is used for national security purposes. Figuring out a congressional response to AI is one of Schumer’s big priorities.
And the Senate Banking Committee will hold an executive session on Wednesday to vote on Biden’s latest Federal Reserve nominees. Fed board member Philip Jefferson has been tapped to be the central bank’s next vice chair. Board member Lisa Cook was nominated to a full 14-year term. Adriana Kugler, a new Fed nominee, currently serves as U.S. executive director of the World Bank.
Speaking of the Fed: Vice Chair for Supervision Michael Barr will speak at the Bipartisan Policy Center this morning to discuss bank capital. Bank regulators are mulling changes to capital rules right now, so these remarks will be closely scrutinized.
Industry and Congress alike are monitoring the process closely. Read this bipartisan letter from Reps. Andy Barr (R-Ky.) and Bill Foster (D-Ill.) that asks Barr and the Federal Reserve to publicly release the results of their capital review when it’s concluded.
— John Bresnahan and Brendan Pedersen
NATO SUMMIT 2023
Senators confront complex political realities at NATO summit
VILNIUS, Lithuania — When a group of six senators landed here late Sunday for the annual NATO summit, they were greeted with Ukrainian flags and a hashtag promoting Kyiv’s entry into the military alliance plastered everywhere across this historic city.
The message of support for Ukraine was solid and well-received, to no one’s surprise. But the thorny dynamic of NATO membership — coming in the form of a long-term security guarantee, given that NATO admittance would mean “World War III,” in the words of National Security Advisor Jake Sullivan — adds a new layer of uncertainty.
And it’s one that this Congress is entirely unprepared to confront.
As President Joe Biden and his counterparts from NATO’s biggest players negotiate a NATO-esque permanent military assistance program for Kyiv, the half-dozen senators here — three Democrats and three Republicans — will be some of his biggest cheerleaders in the effort.
But a long-term security commitment for Ukraine would require congressional buy-in over years’ worth of funding and authorization bills. The current environment on Capitol Hill, and within the GOP, will complicate this push.
“It’s pretty obvious there have been some voices in my party questioning whether we should be involved in this war at all,” Senate Minority Leader Mitch McConnell told us in an interview ahead of the summit.
“I certainly disagree with that and have been highlighting this because I think defeating the Russians in Ukraine is really the most important thing going on in world affairs right now,” McConnell added.
To underscore: The top Senate Republican is saying that a Ukrainian victory is “the most important” global priority. Meanwhile, the Republican speaker of the House, Kevin McCarthy, is consistently shutting down any talk of boosting defense spending.
If Biden’s push for a multilateral, “umbrella-like” security guarantee for Ukraine is to be successful, that would require boosting defense spending well beyond the $886 billion cap for FY2024 — and even higher for successive years.
In an interview with CNN’s Fareed Zakaria, Biden said this would resemble “the security we provide for Israel, providing the weaponry, the needs, the capacity to defend themselves.”
Senate Republicans, who tend to be more hawkish than their House GOP counterparts, would almost certainly go along with this. House Republicans are an entirely different story, as we’ve chronicled. Many of them simply don’t believe Ukraine’s security is a critical American concern.
McConnell is framing this in a way that he hopes GOP lawmakers in the House can get behind: directly tying the outcome in Ukraine to China’s global ambitions. Here’s what he told us:
Speaking with reporters last week, the Senate Foreign Relations Committee’s top Republican, Sen. Jim Risch of Idaho, downplayed GOP divisions over Ukraine. Risch noted that the vast majority of Congress backs continued military and economic aid to the embattled country, and he said the cost of arming Ukraine is much lower than the alternative.
“There’s people talking about the cost of this. This cost is very small compared to what happens if Putin prevails,” Risch said. “If he prevails, Moldova is next, Georgia is after that, then you start talking about NATO countries. Then you’ve got a big price tag on your hands.”
Some conservatives are also calling for increased oversight of the flow of U.S. weapons to Ukraine. Risch said he’s seen first-hand that the idea that equipment is ending up in the wrong hands is “all baloney.”
“Stuff’s going where it’s supposed to go, and it’s going quickly,” said Risch, who noted that the last Ukraine supplemental funding bill had 52 separate oversight provisions. “We’ve got really, really strong oversight.”
Another big theme this week will be burden-sharing. Sen. Dan Sullivan (R-Alaska), one of three Republicans in the Vilnius CODEL, led a letter to Biden last week urging him to call on other NATO members to boost their defense spending to 2% of GDP, as mandated in the alliance’s charter.
“It is important for the president to point out, all those countries are closer geographically to Putin, therefore much more vulnerable to him,” Senate GOP Conference Chair John Barrasso said on Fox News Sunday. “Putin is not going to stop until he is stopped. The president needs to say that loud and clear at NATO this week.”
This is another way for Republican hawks to maneuver the long-term security question — supporting Ukraine while also prodding allies to do more so that the United States doesn’t bear the vast majority of the burden, as it is currently. It’s a delicate balance but something to watch as Biden’s plan for Ukraine’s long-term protection is unveiled.
We’ll have much more from the NATO summit as lawmakers — led by Sens. Jeanne Shaheen (D-N.H.) and Thom Tillis (R-N.C.) — flex their diplomatic muscles and assert their roles in this unique moment in history.
In addition to Shaheen, Tillis and Sullivan, the Senate CODEL includes Sens. Dick Durbin (D-Ill.), Pete Ricketts (R-Neb.) and Angus King (I-Maine).
— Andrew Desiderio
📅
What we’re watching in committees and investigations
Monday: The House Administration Committee will hold a hearing in Atlanta titled “American Confidence in Elections: The Path to Election Integrity Across America.” The House Ways and Means Committee will hold a hearing in Kimball, Minn., on agricultural trade and critical supply chains.
Tuesday: The Senate Armed Services Committee will hold a hearing on the nomination of Air Force Gen. C.Q. Brown to be chair of the Joint Chiefs of Staff. The House Oversight Committee’s coronavirus subcommittee will hold a hearing titled “Investigating the Proximal Origin of a Cover Up.”
The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the PGA-LIV merger. This hearing will feature the PGA Tour COO Ron Price and Jimmy Dunne, a golf powerbroker.
Wednesday: The Senate Armed Services Committee will have a hearing on Gen. Randy George’s nomination to be Army chief of staff. The House Judiciary Committee will have FBI Director Christopher Wray testify for an oversight hearing.
The House Homeland Security Committee will have a hearing on “the flow of fentanyl from the southwest border.” Ways and Means will have a hearing on TANF.
The Senate Banking Committee will have a subcommittee hearing on bank mergers led by Sen. Elizabeth Warren (D-Mass.). The Senate Judiciary Committee will hold a hearing on AI and intellectual property.
Thursday: The House Foreign Affairs Committee will have Special Presidential Envoy for Climate John Kerry testify on the State Department’s climate agenda. The House Judiciary Committee will have FTC Chair Lina Khan for an oversight hearing.
The Senate Commerce Committee will have a hearing on the Coast Guard’s budget with Adm. Linda Fagen, the commandant of the Coast Guard and Master Chief Heath Jones, the master chief petty officer of the Coast Guard.
The House’s select committee on China will have a hearing on U.S. businesses doing business in China.
Also: The Congressional Integrity Project, the liberal group whose goal is to push back on GOP investigations, is out with a new report declaring that Republican probes have fallen flat. The report cites polling that shows some Republicans want the House majority to focus on other pursuits.
The group is also running a digital ad showing prominent Fox News hosts criticizing House Oversight Committee Chair James Comer (R-Ky.).
— Jake Sherman and Max Cohen
THE CAMPAIGN
Sam Brown is running for Senate again in Nevada, looking to topple Sen. Jacky Rosen (D-Nev.) in what will be a hotly contested race in 2024.
Brown, a retired Army captain, ran in the GOP primary in 2022 but lost to Adam Laxalt, who’s not running this cycle. Laxalt lost the general election to incumbent Democratic Sen. Catherine Cortez Masto.
National Republicans are likely to back Brown in the GOP primary against Jim Marchant, a far-right candidate who has echoed former President Donald Trump’s false claims about the 2020 election.
In a statement announcing his run, Brown said:
Brown was injured in Afghanistan in 2008 by a roadside bomb. Brown is expected to make his military service — which includes a Bronze Star and a Purple Heart — a focal point of his campaign.
We have a bunch of fundraising news for you:
House Majority Whip Tom Emmer raised $3.1 million in Q2. Emmer transferred $1.5M to the NRCC in the second quarter, bringing his total transferred to $2.1 million this cycle. Emmer also contributed an additional $300k directly to incumbents and GOP candidates.
House GOP Conference Chair Elise Stefanik raised $2 million for her Team Elise PAC in the second quarter. Stefanik has transferred $1 million to the NRCC this cycle. Stefanik has also raised or donated an additional $1 million directly to candidates to date.
Rep. Ken Calvert (R-Calif.) raised over $900,000 in the second quarter, a significant sum for the endangered Republican who is the target of Democratic campaign groups. Calvert finished Q2 with more than $1.5 million on hand.
Rep. Tony Gonzales (R-Texas) raised over $2 million in the first two quarters of 2023. Now, at the end of the second quarter, the Texan has $1.5 million on hand. Gonzales is facing a number of primary challengers from the right this cycle.
— Andrew Desiderio and Max Cohen
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