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Happy Tuesday morning.
Senate Majority Leader Chuck Schumer’s goal for this week is to finish up the annual defense policy bill within 48 hours — between today and Thursday afternoon. This will be an extremely heavy lift, with several additional amendment votes likely on tap.
It could result in the Senate staying in town past its usual Thursday afternoon getaway votes, or punting until they come back from the summer recess in September — though party leaders really want to finish this up before the August break kicks off.
Not only will Schumer have to accommodate amendment requests from multiple senators, he’ll also need to make sure that the more controversial ones don’t pass. If one or more of these proposals are adopted, it could imperil final passage of the NDAA, which is normally an overwhelmingly bipartisan endeavor.
The Senate’s first votes of the week will be tonight on two bipartisan amendments. After that, it’s anyone’s guess as to how many more amendment votes will be necessary to get to final passage.
Let’s run through some of the potential issues we could see play out this week.
GOP hawks: As we’ve reported, there’s a bipartisan desire — particularly among Republicans — for a higher defense spending level than the one agreed to as part of the debt-limit deal.
We’ll be on the lookout this week for attempts to use the NDAA process to circumvent the $886 billion defense spending cap agreed to under the Fiscal Responsibility Act.
Sen. Chris Coons (D-Del.), who chairs the Appropriations subcommittee on the State Department and foreign operations, said last week that a supplemental funding bill will be necessary at the very least for Ukraine. And there are several top Republicans who want to use that as a vehicle to raise the overall defense topline even higher by including non-Ukraine items as well.
Already, Sen. Roger Wicker of Mississippi, the top Republican on the Armed Services Committee, is using the NDAA to block submarine transfers as part of the AUKUS security pact. This is an effort to pressure the Biden administration to request even more defense funding via a supplemental — something that Speaker Kevin McCarthy has effectively ruled out.
Anything that injects momentum in the push for a supplemental defense bill will increase the chances of a serious showdown between McCarthy and Senate Republicans later this year.
Ukraine: Senate Republicans are holding their breath over the possibility of a vote on cutting off military and economic aid for Ukraine. Of course, this wouldn’t come close to passing, but it would once again serve to spotlight the GOP’s fissures on the issue.
And it would come after 70 House Republicans — around one-third of the GOP conference — voted for an NDAA amendment earlier this month that would have ended Ukraine funding.
Top Senate Republicans — especially Minority Leader Mitch McConnell — are trying to avoid a similar scenario. Remember: 11 Republican senators voted against the Ukraine supplemental last year, and the GOP’s Ukraine-skeptical ranks in the Senate have only grown since then.
Separately, Wicker and Sen. Jim Risch (R-Idaho) have an amendment that would boost oversight of both military and non-military aid to Ukraine. This is a lot less controversial but could still face some resistance.
Credit Card Competition Act: Sen. Roger Marshall (R-Kan.) wants a vote on his legislation with Senate Majority Whip Dick Durbin that takes aim at credit-card swipe fees.
This isn’t necessarily germane to the NDAA, but it’s something worth watching as Marshall decides how hard to push for it. It may be complicated by Durbin’s Covid-related absence this week.
One more thing: We’re told that a number of Senate Democrats are expected to head to the floor this week to try to force through the nearly 300 military promotions that Sen. Tommy Tuberville (R-Ala.) is blocking.
There’s not a lot of optimism that the outcome will be any different than the dozen-plus other times that Democrats have tried this on the floor, but it shows that Schumer and his leadership team are looking to keep abortion in the headlines.
Of course, if there’s no movement on the Tuberville blockade before the August recess, these promotions — which include the new chair of the Joint Chiefs of Staff and other high-level positions — will remain on hold until at least September.
Two Biden investigation updates: McCarthy told Sean Hannity last night that the House GOP’s litany of investigations into President Joe Biden were “rising to the level of impeachment inquiry.” This is the strongest signal yet from McCarthy that he’s open to impeaching the president.
McCarthy was referring to allegations — which are unverified — that as vice president, the elder Biden was involved in Hunter Biden’s foreign business dealings. There’s also a new report from Insider that a longtime Democratic donor who purchased some of Hunter Biden’s paintings was appointed to an unpaid federal commission post.
And the Justice Department wrote to House Judiciary Committee Chair Jim Jordan (R-Ohio) to offer multiple dates post-August recess for U.S. Attorney for Delaware David Weiss to testify. Weiss, of course, led the Hunter Biden criminal probe and is at the center of many claims made by two IRS whistleblowers that the investigation was the subject of political interference. Hunter Biden is expected in federal court on Wednesday as part of his plea deal on tax and gun charges.
Also, a clarification: Last week, we reported that House Minority Leader Hakeem Jeffries raised $29 million during the second quarter of 2023, which, in Jeffries’ team’s estimation, was more than McCarthy’s haul.
To be clear, that’s not the full story.
Team Jeffries counts most every dollar raised by the DCCC in his total. McCarthy does not. So, using Jeffries’ math, McCarthy raised closer to $46 million. In short, Jeffries didn’t raise more than McCarthy.
In the future, we’ll work harder to get leadership to show their math when they provide us with fundraising numbers so we can provide you with apples-to-apples comparisons.
— Andrew Desiderio and Jake Sherman
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Right flank pushes culture war, spending fight on ag approps bill
House conservatives are once again flexing their muscle in the GOP’s narrow majority. This time, they’re going to war against the FY2024 Agriculture appropriations bill, pushing dozens of amendments to cut social programs and inject culture war debates into the rural development and farm spending legislation.
There’s just one catch here — the bill was spearheaded by one of their own, Rep. Andy Harris (R-Md.). Harris chairs the Appropriations subcommittee overseeing funding for rural development, agriculture and the FDA.
The fight mirrors a lot of what we’ve already seen in this Congress, as Speaker Kevin McCarthy tries to strike a balance between pleasing conservative hardliners while shielding vulnerable Republicans from tough votes.
There are already threats by Freedom Caucus members to vote against the underlying bill if their demands aren’t met. And with Democrats expected to universally oppose the measure, McCarthy can only lose a handful of Republicans on the floor.
Conservatives have offered amendments to prohibit funding for gender-affirmation surgery and the Agriculture Department’s equity commission. They also want to block the USDA from using federal dollars to fund “woke” courses, books and study guides.
GOP lawmakers are also pushing for additional reductions to the Supplemental Nutrition Assistance Program — food stamps — and deep cuts to rural economic development efforts and the “Food for Peace” program, which sends the United States’ agricultural surplus to needy nations. The Appropriations Committee cut those funds — in some cases significantly — from FY2023 levels, but it isn’t enough for some hardliners.
A source familiar with the HFC’s thinking said the caucus is concerned that the ag funding bill in particular won’t match FY2022 levels, which conservatives believe they can secure for the rest of the GOP-drafted appropriations bills. The proposed ag bill approved by the Appropriations Committee on a party-line vote includes more than $7 billion in rescissions, which HFC members complain aren’t real spending cuts.
Rep. Byron Donalds’ office said the Florida Republican wants to see changes to SNAP and is “not an up or down on anything right now.” Donalds has an amendment with Rep. Josh Brecheen (R-Okla.) to expand work requirements for food stamps. This would cover recipients from 18 to 64 years old.
Rep. Marjorie Taylor Greene (R-Ga.) — recently removed from the HFC — has a number of proposed amendments, including several aimed at barring any federal funding for gender transition or puberty blocking procedures for minors.
Rep. Tom Tiffany’s (R-Wis.) office told us he’s “still reviewing it and looking to see what amendments make it in.” Tiffany has a bipartisan amendment to prevent the USDA from banning flavored milks in schools.
But it’s not just hardliners pushing for changes. Moderate Republicans have also raised concerns about the bill swinging too far to the right and might oppose it on those grounds.
Rep. Marc Molinaro (R-N.Y.), who represents a district won by President Joe Biden, is opposed to the bill in its current form. Molinaro is concerned about the bill’s treatment of mifepristone.
The New York Republican also said he wants to protect food stamps and other USDA programs from deep spending cuts.
“There are several issues I have with the Agriculture appropriations bill,” Molinaro said in a statement. “If it’s brought to the House floor in its current form, I cannot support it and will vote no.”
We’ll continue following these developments this week.
— Mica Soellner
Dems, banks try filling Fed-shaped hole in GOP’s stablecoin bill
The House Financial Services Committee worked through the weekend and on Monday in hopes of getting a bipartisan deal on stablecoin legislation.
The trick is the same as ever: getting both Chair Patrick McHenry (R-N.C.) and ranking member Maxine Waters (D-Calif.) on board with a bill before a crypto-heavy markup happening Wednesday morning.
Since 2022, the two lawmakers have sought a deal to regulate stablecoins — a type of crypto product that’s designed to mimic private money by maintaining a set value.
But there’s at least one major obstacle remaining: the parties can’t decide the role of the Federal Reserve in the new framework.
Here’s the nut: The Republican-led draft empowers state regulators to approve nonbank stablecoin companies while limiting the role of the Federal Reserve. That means state-regulated firms that aren’t banks will have virtually no direct federal oversight.
That regulatory gap is a problem for several Democrats on the committee, including Waters.
“The Feds have got to be involved,” Waters told us. She’s pushed for the Federal Reserve to have “some way of being able to disapprove” a state-level nonbank if it doesn’t pass a certain regulatory threshold.
“We’ve got an open line of communication at this point that’s as healthy as you can get going into a big markup,” McHenry told us last week, adding later: “I would like to have the ranking member’s support. It is my sincere goal and attempt to get her support on stablecoins.”
But with or without Waters’ support, McHenry told us the panel will still mark up a stablecoin bill Wednesday.
Talks on an agreement may come down to the wire. Rep. French Hill (R-Ark.), chair of the panel’s crypto subcommittee, lauded “a member-driven process” with “buy-in from both sides.”
As for a deal, Hill told us late Monday night: “It’s my hope this engagement produces results on Wednesday.”
Now here’s a scoop: Waters’ pitch for the Federal Reserve’s oversight has quiet support from the U.S. banking lobby, according to three unpublished letters obtained by Punchbowl News.
Several trade groups have written to the House Financial Services Committee over the last week to signal serious concerns about the lack of federal oversight for nonbank firms licensed by states.
In a joint letter signed by the American Bankers Association, Consumer Bankers Association and Credit Union National Association, advocates wrote this long sentence:
“The draft’s creation of a state path to license stablecoin issuers without federal oversight invites an exacerbation of potential contradictions in a 51-jurisdiction regime that is ripe for bad actors to take advantage of loopholes and a lack of consistent oversight.”
The Independent Community Bankers of America sent their own letter arguing that under the current draft, federal regulators would lack “critical information needed to assess the safety and soundness of state-qualified stablecoin issuers.”
And the ABA sent a standalone letter with state-level banking groups saying that “federal oversight of banks and stablecoin issuers … is imperative to ensure financial stability and consumer protection.”
And what about the Fed? Chair Jay Powell weighed in on the question in June under questioning from Waters.
“We believe that it would be appropriate to have quite a robust federal role in what happens in stablecoins going forward,” Powell said, “And that leaving us with a weak role and allowing a lot of private money creation at the state level would be a mistake.”
— Brendan Pedersen
News: Congressional Progressive Caucus PAC backs Regunberg in R.I.
News: The Congressional Progressive Caucus PAC is endorsing state Rep. Aaron Regunberg in the crowded Democratic primary for Rhode Island’s 1st District.
The endorsement is a major moment in a primary that has attracted over a dozen candidates to fill former Rep. David Cicilline’s (D-R.I.) seat.
Here’s what the co-chairs of the CPC PAC — Reps. Pramila Jayapal (D-Wash.), Mark Pocan (D-Wis.) and Jamie Raskin (D-Md.) — said in their endorsement statement:
“Aaron Regunberg has dedicated his life to promoting the common good and taking on special interests and it is critical that Congressman David Cicilline’s successor has the record and values necessary to build on his substantial progressive legacy.”
Regunberg’s main competitors in the Sept. 5 primary are Lt. Gov. Sabina Matos, State Senator Sandra Cano, former White House official Gabe Amo, Providence City Councilman John Goncalves and State Representative Marvin Abney.
Matos’ campaign released a poll last month that showed the statewide official leading the field with 22%, but almost half of voters polled were undecided. Regunberg was second in that poll with 9%. Since then, Matos has been engulfed in a scandal surrounding allegations that she relied on forged signatures to get on the ballot. Matos has said an outside vendor is to blame.
The Congressional Hispanic Caucus BOLD PAC has endorsed Matos, while the Congressional Black Caucus PAC recently backed Amo.
— Max Cohen
Kentucky’s Democratic Gov. Andy Beshear is running an ad saying he doesn’t support sex reassignment surgery for children, a claim being made by Republican gubernatorial candidate Daniel Cameron, a close ally of Senate Minority Leader Mitch McConnell.
— Jake Sherman
10 a.m.: President Joe Biden will get his daily intelligence briefing.
11 a.m.: Members of the House Freedom Caucus will speak about the FY2024 spending process.
Noon: Biden will sign a proclamation establishing the Emmett Till and Mamie Till-Mobley National Monument in Illinois and Mississippi.
3 p.m.: Biden will speak about expanding access to mental health care.
3:30 p.m.: Karine Jean-Pierre will brief.
“Senate Committee Presses Leon Black on Epstein Tax Advice,” by Matthew Goldstein
News Analysis: “Netanyahu Scores Another Victory, but at What Price?” by Patrick Kingsley in Jerusalem
“Stock Market Shrugs Off Recession Signals as Rally Builds,” by Karen Langley
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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