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Happy Wednesday morning.
If you work at the DCCC or you’re camped out in House Minority Leader Hakeem Jeffries’ second-floor Capitol office, the current state of the Republican Conference probably has you salivating.
No. 1: House Republicans are on a path to force a government shutdown this fall. If you talk to senior GOP leadership figures privately, they’ll admit this. At some point between now and the end of 2023, the rift inside the House Republican Conference will be so deep and profound that there’s little chance that they can avert a “lapse in appropriations,” aka a government shutdown.
The party disagrees internally on spending levels, policy priorities and riders — just to name a few differences. And this is even before engaging with Democrats or the White House.
The strategy at this point for the House GOP leadership is try to pass the toughest bills it can, and then get into a negotiation with the Senate. But just listen to Rep. Bob Good (R-Va.), a leader in the far-right House Freedom Caucus, describing the upcoming funding fight. He’s in no mood to compromise.
“We’re going to pass a good Republican bill out of the House and force the Senate and the White House to accept it.”
This approach almost never works. See 2013 and 2018 as prime examples. But this is the mood inside the HFC, especially after the debt-limit deal. There’s little goodwill or appetite to compromise.
House conservatives are already rebelling against Republican-crafted spending bills — even when a Freedom Caucus member helped write the measure. Putting four HFC members on the Appropriations Committee was supposed to help avoid this scenario.
Yet there’s serious concern that the GOP leadership won’t be able to bring the FY2024 Agriculture appropriations package to the floor this week because it doesn’t go far enough for the right on cutting spending.
Leaving their weekly meeting on Tuesday night, HFC members were mum regarding where they are on the appropriations process.
HFC Chair Scott Perry (R-Pa.) told us there’s “a little confusion or a lot of confusion” on appropriations at the moment, but didn’t elaborate any further. OK then!
No. 2: When Republicans finally get their spending bills to the floor, the divisions won’t end. For instance, GOP lawmakers will be forced to vote for changes to critical nutrition programs, including food stamps, as part of the debate over the ag funding bill. These cuts won’t be supported by the Senate or White House. Which means Speaker Kevin McCarthy and GOP leaders will be asking vulnerable House Republicans to take tough votes that could come back to haunt them in 2024.
No. 3: At the same time, House Republicans are likely — if not certain — to impeach President Joe Biden. McCarthy said Tuesday that the “only way” Republicans could investigate their claims against Biden, the IRS, the Justice Department and the FBI is if they open an impeachment inquiry into Biden. Oversight Committee Chair James Comer (R-Ky.) is openly speculating whether Biden accepted bribes from Ukrainian figures tied to Hunter Biden. The younger Biden is scheduled to be in court today as part of his federal plea deal on tax and gun charges, an agreement that House Republicans are trying to block.
Now keep in mind, even if the House impeaches Biden, the Democratic-controlled Senate will ultimately acquit him. But this process — and the political fallout — will dominate Capitol Hill for months.
And again, vulnerable House Republicans will be asked to take tough votes that could rebound against them down the road.
“We will strongly oppose any effort to either launch an impeachment inquiry or go down the rabbit hole of promoting conspiracy theories related to President Joe Biden,” Jeffries told us Tuesday.
Here’s how DCCC Chair Suzan DelBene views it: “Republicans continue to highlight that they are extreme. They aren’t interested in governing, and there’s no leadership. It’s terrible for the American people.”
NRCC Chair Richard Hudson, who is charged with protecting the GOP’s five-seat majority, said he still thinks Republicans have the political advantage. Hudson said the party is “hopeful” they won’t have a shutdown. And the sixth-term member doesn’t think it’s a “foregone conclusion” that Republicans will impeach Biden.
“We gotta keep moving forward,” Hudson said of House Republicans. “We got to keep finding out where 218 is in our conference to demonstrate we know how to govern.”
Yet the twin specter of a government shutdown and Biden’s impeachment loom for House Republicans in coming months.
What Mayorkas will say today: DHS Secretary Alejandro Mayorkas will be in front of the House Judiciary Committee this morning for what’s expected to be a very difficult hearing. Judiciary — and House Republicans more broadly — blame Mayorkas for what they describe as a treacherous situation at the border.
We got a hold of some of Mayorkas’ testimony. Here’s what he plans to say about the border:
“Our approach to managing the border securely and humanely, even within our fundamentally broken immigration system, is working. Unlawful entries between ports of entry along the southwest border have consistently decreased by more than half compared to the peak before the end of Title 42.
“Under President Biden’s leadership, we have led the largest expansion of lawful, safe, and orderly pathways for people to seek humanitarian relief under our laws, at the same time imposing tougher consequences on those who instead resort to the ruthless smuggling organizations that prey on the most vulnerable.
“We secured the first increase in Border Patrol Agent hiring in more than a decade and our campaign to disrupt and dismantle human smuggling networks has resulted in the arrest of nearly 14,000 smugglers.”
— Jake Sherman, John Bresnahan and Mica Soellner
RSVP: Join us on Thursday, July 27 at 8:45 a.m. ET for a conversation with Rep. Beth Van Duyne (R-Texas). We’ll discuss the role of private capital in supporting small businesses, jobs and the economy. RSVP here! It’s the first event in our two part series, “Investing in Small Business.”
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GOP senators bridge Ukraine divide with push for oversight of U.S. aid
News: The Republican Party’s competing factions on U.S. aid to Ukraine clinched a rare agreement this week on an amendment to the annual defense policy bill.
GOP senators who differ dramatically on sending military aid to Ukraine came together on a proposal that would stand up a new office dedicated to auditing U.S. assistance to Kyiv and regularly updating Congress.
It’s unclear if the amendment will get a vote. But proponents are optimistic because it was included in a list of amendments that the Senate leadership is considering offering on the floor this week.
And given the rare GOP unity and Democrats’ openness to it, there’s a real possibility that this could pass — whether the vote is held at a majority or 60-vote threshold.
Sen. Josh Hawley (R-Mo.), who has consistently opposed U.S. assistance for Ukraine, worked with Sens. Jim Risch (R-Idaho), Roger Wicker (R-Miss.) and John Kennedy (R-La.) on an amendment to the National Defense Authorization Act that would authorize $10 million for an office of around 30 staffers to conduct full-time Ukraine oversight.
The amendment allows the president to decide who leads the office; it could be an existing inspector general or someone new. And it requires regular reporting to Congress.
“The billions of dollars in spending on Ukraine needs real oversight,” Hawley told us. “This is a step in the right direction.”
Risch and Wicker — the top Republicans on the Foreign Relations and Armed Services committees respectively — have long insisted there’s more than enough oversight of U.S. aid to Ukraine. But the two have been open to efforts to centralize it. Congress has authorized more than $100 billion in both military and non-military assistance for Ukraine since the start of Russia’s invasion in February 2022.
“We’ve got like 54 different [oversight] enterprises going on over there, all kinds of IG types that are looking at that,” Risch said. “But most people are willing to say, ‘Well, we can always do a little bit more.’ And I think that’s where we ended up.”
Kennedy’s involvement stemmed from a separate proposal he’d introduced with Sen. Kyrsten Sinema (I-Ariz.) on Ukraine aid oversight.
“We’ve spent over $100 billion in Ukraine. I’ve been very supportive of that,” Kennedy told us. “But the money didn’t just fall from heaven. It came out of people’s pockets.”
Kennedy added that Wicker and Risch “wanted to soften up our proposal, and we have resisted that but we have reached some middle ground.”
The effort came together relatively quickly, with Hawley approaching Wicker and Risch and looping in Kennedy last week, according to a person familiar with the talks. Hawley had forced a vote on an independent inspector general for Ukraine aid as part of the Senate’s debate last year on legislation to repeal the Iraq war authorizations. That vote failed in part because it wasn’t directly related to the underlying bill.
In many ways, this is a difficult vote for senators. For those who back more aid for Ukraine, it risks validating the position of Hawley and other Ukraine skeptics who have called for a different approach to U.S. foreign policy. On the flip side, it’s tough to make the case against more oversight, even if those calling for it are on the opposing side of the issue.
It’s possible that the Senate will vote on a competing amendment from Sen. Rand Paul (R-Ky.) this week as a “side-by-side” with the Hawley-Risch-Wicker-Kennedy proposal. Paul’s amendment would appoint John Sopko, the IG for Afghanistan Reconstruction, and his existing team to handle Ukraine oversight.
— Andrew Desiderio
IN THE STATES
Hochul, Cooper talk state of play, 2024
LOS ANGELES — New York Gov. Kathy Hochul and North Carolina Gov. Roy Cooper joined Punchbowl News founder Anna Palmer on stage Tuesday at the Westin Bonaventure for the Democratic Governors Association summer policy conference. The confab brought together more than 300 operatives, fundraisers and donors ahead of the 2024 election.
Top takeaways from the conversation:
– Strike watch: Both Hochul and Cooper said they stand with the actors and writers in the strike that has brought Hollywood to a standstill. “We’re there to support them,” Hochul said, noting that she’d met with union leaders in New York.
A separate hotel workers strike forced the DGA to move locations for the conference. The meeting was originally supposed to be held at the Beverly Hilton, where hotel employees have been taking part in walkouts.
— Redistricting: Both North Carolina and New York face big issues when it comes to redistricting. Cooper said the system is broken and noted he’s in favor of “independent redistricting commissions in every single state.” While Hochul acknowledged the ongoing legal challenges to the New York congressional map, the former House member said she was very optimistic of what will happen in the courts. Hochul also noted that she’d raised $1.5 million for the coordinated committee to help elect Democrats in New York.
— Cooper’s future: Cooper, who is term-limited out of the governorship after two terms, was noncommittal about his political future. Instead, Cooper said he was focused on winning North Carolina for President Joe Biden, getting North Carolina’s Attorney General Josh Stein elected as governor and breaking the Republican supermajority in the state legislature during his remaining time in office.
Marshall signals progress on credit card reform push
News: Sen. Roger Marshall (R-Kan.) appears to be backing off threats to hold up the NDAA in order to force a vote on his credit-card fee reform proposal with Senate Majority Whip Dick Durbin.
Senate Republican leaders ran a hotline Tuesday afternoon for an amendment list that didn’t include Marshall’s proposal. Several GOP senators had previously placed a hold on the Durbin-Marshall credit card bill during the amendment process. That number has dwindled a bit in recent days, we’re told, but it only takes one objection.
For his part, Durbin — who is absent this week due to a Covid-19 diagnosis — doesn’t want to tie up the defense policy bill with the Credit Card Competition Act.
Here are three significant developments:
No. 1: Marshall’s staffers have continued to tell K Street that their boss will object to moving ahead on the NDAA, effectively derailing the process, if he doesn’t receive a vote on the credit card fee proposal.
Last week, after we first reported that Marshall had threatened to hold up the NDAA proceedings, the Kansas Republican issued a statement saying he had “no desire” to obstruct the must-pass defense package.
But as of Tuesday, the message from his camp to downtown was that Marshall was willing to grind out a hold if getting a vote on CCCA was possible.
No. 2: Marshall is keeping his options open. When we caught up with Marshall on Tuesday night, we asked directly if he was planning to block the NDAA debate. The Kansas Republican refused to answer.
“We’re trying to figure out a path forward,” Marshall said. “We’re negotiating right now, and I’m not going to negotiate in the press.”
A couple hours later, however, Marshall sent us this statement:
“Today, we were given assurances that the Credit Card Competition Act will be given a vote this Congress. Swipe fees, the Visa-Mastercard duopoly and the Wall Street banks that back them are price-gouging American families at a rate seven times higher than the E.U. That will soon end.”
The reference to “assurances” could be a sign that Marshall has backed off. But we’re not going to say that definitively until a consent agreement is reached.
No. 3: Some GOP operatives are already targeting Marshall at home over his support of credit card fee reform. The attack ad effort, directed at local Kansas Republicans, is coming from a new 501(c)(4) called the “Conservative Accountability Foundation.”
The mailer being sent out by the group isn’t remotely subtle, accusing Marshall of working with Democrats to “take away your credit card rewards points.” It features a Pride flag and a rainbow version of Target’s logo — “Marshall’s bill gives them billions” — as well as a Chinese flag. You can find the full mailer here.
Brent Robertson, Marshall’s chief of staff, responded in a statement, saying: “When low-rent DC grifters come out of the woodwork with a big bank-funded (c)4 like this, we know we’re doing something right for the working family.”
— Brendan Pedersen, Andrew Desiderio and Heather Caygle
As Fed eyes another hike, fewer lawmakers want to weigh in
The Federal Reserve is widely expected to increase the federal funds rate by another 25 basis points this afternoon — a move that may be remembered as the central bank’s last major step to quash pandemic-era inflation, if the recent strong U.S. economic data holds.
As the inflation picture has improved, some lawmakers have become more reluctant to hold court on how exactly the Fed handles inflation. Sen. Steve Daines (R-Mont.) gave us a good snapshot after we asked about it.
“Oh, I’m not on the Board of Governors,” Daines said.
Other Republicans are more circumspect, though they still want to give the Fed political cover if harder decisions on inflation are needed down the line. Here’s Sen. Thom Tillis (R-N.C.):
“I’m going to leave it to the Fed. They’ve got to live up to their mandate. They’ve got to get inflation under control. … We can’t foist that mandate on them and not let them use whatever tool they think is necessary.”
But other GOP lawmakers, particularly in the House, have few quibbles about asking the Fed to keep on the pressure if that’s what the central bank thinks it must do.
Rep. Bill Huizenga (R-Mich.) said he believed the pause in rate hikes in June “might have been despite the data,” adding that the Fed has “has got to live with the bed they’ve created. The problem is that all of America is paying the price for it.”
Democrats have increasingly aligned in asking the Fed to hold off on hikes as inflation shows signs of slowing. Sen. Mark Warner (D-Va.) told us back in March that a “pause would be appropriate” for interest rates. Now, with the June pause behind us, Warner said he had “concerns” about more hikes.
“I actually do worry about a quarter point increase, whether you’re on the credit side or in commercial real estate,” Warner said. “I have concerns. I feel like we could probably be over” with hikes.
“I wish we could have stayed with the pause for another month,” Warner said, “but I’m feeling this from the cheap seats.”
— Brendan Pedersen
9 a.m.: President Joe Biden will get his intelligence briefing.
10 a.m.: House Majority Leader Steve Scalise, House Majority Whip Tom Emmer, House Republican Conference Chair Elise Stefanik and other House Republicans will brief reporters after their closed party meeting.
10:15 a.m.: House Democratic Caucus Chair Pete Aguilar, Vice Chair Ted Lieu, DPCC Chair Joe Neguse and Rep. Grace Meng (D-N.Y.) will brief reporters after their party meeting.
12:15 p.m.: Senate Majority Leader Chuck Schumer, Sens. Ron Wyden (D-Ore.), Debbie Stabenow (D-Mich.) and Tina Smith (D-Minn.) will hold a news conference on the Inflation Reduction Act.
1 p.m.: Karine Jean-Pierre will brief.
2 p.m.: Senate leaders will talk to reporters after their closed-party lunches.
Analysis: “Savvy politician or ‘hostage’? Netanyahu’s uncertain role in judicial push,” by Steve Hendrix in Jerusalem
“Elon Musk’s Rebranded Twitter Cuts Ad Prices,” by Suzanne Vranica and Patience Haggin
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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