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July 6, 2023
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THE TOP
Happy Thursday morning.
News: Senate Minority Leader Mitch McConnell told us this week that the United States shouldn’t sell advanced American fighter jets to Turkey until Ankara ends its blockade of Sweden’s NATO accession.
In an interview ahead of next week’s NATO summit in Vilnius, Lithuania, McConnell backed Senate Foreign Relations Committee Chair Bob Menendez’s (D-N.J.) hold on the proposed sale of F-16s to Turkey. McConnell’s position helps ratchet up congressional pressure on a U.S. ally that has stood in the way of a historic expansion of the Western military alliance.
“I’m one of those who are not in favor of the F-16 sale to Turkey until the admission of Sweden gets behind us,” McConnell said in an interview Wednesday. “We had anticipated that would happen in Vilnius.”
Securing Sweden’s accession to NATO has been a top priority for the United States in the run-up to next week’s summit, seeing it as yet another symbol of strength for the West amid Russia’s war in Ukraine. But Turkey’s objections over unrelated matters are preventing Sweden’s formal admittance, which requires ratification from all NATO members.
NATO Secretary-General Jens Stoltenberg is convening top officials from Sweden and Turkey later today in Brussels in a last-ditch effort to break the impasse ahead of the summit.
Here’s what President Joe Biden said about the hold-up on Wednesday after meeting with Swedish Prime Minister Ulf Kristersson at the White House:
While the Biden administration has insisted that the F-16 sale and Turkey’s approval of Sweden aren’t connected, we scooped on Tuesday that the State Department is now actively working Menendez over his objections to the sale with the hope that it could prompt Turkey to relent on Sweden’s NATO admittance. Menendez is one of four lawmakers with the power to prevent certain military sales.
Menendez’s office declined to comment on McConnell’s support for the New Jersey Democrat’s position. Menendez has previously said Turkey’s human-rights record as well as its encroachments into Greek airspace are also reasons for his opposition to the F-16 sale. McConnell, though, is focused squarely on Ankara’s foot-dragging when it comes to Sweden.
McConnell’s backing here is notable as the Biden administration tries to potentially dangle the F-16 sale as a bargaining chip for NATO expansion. McConnell sees a larger NATO as one of the best ways to counter Russian aggression.
“But for the expansion of NATO, the Russian threat would be significantly more ominous to us,” McConnell said, noting that he was in the Senate when former Soviet states applied for NATO membership after the fall of the Berlin Wall. “The suspicion was that the Russians would not permanently change, and that certainly has been borne out over the intervening years.”
The GOP leader also backed Menendez’s counterpart on the Foreign Relations Committee, Sen. Jim Risch (R-Idaho), in his decision to block an arms sale to Hungary. That government is also holding out on approving Sweden’s NATO entry as a way to buttress Turkey’s position.
McConnell said Risch’s move is an appropriate use of Congress’ authority over weapons sales, adding: “This could all be solved if Turkey and Hungary do the right thing in Vilnius.”
A half-dozen senators will be heading to Lithuania for the NATO summit next week — something we’ll be closely tracking. Expansion of the alliance and continuing support for Ukraine will be at the top of the agenda.
— Andrew Desiderio
Congratulations!!!!! Punchbowl News co-founder Rachel Schindler and David Malton, a principal at Intermediate Capital Group, got married July 3 in Aurora, N.Y. A big congratulations to the couple from the entire Punchbowl News family.
Update: Join us as Punchbowl News founder and CEO Anna Palmer interviews Ranking Member of the House China Select Committee Raja Krishnamoorthi (D-Ill.) on Thursday, July 20 at 12 p.m. ET. This conversation, presented by Exiger, will focus on the race to protect and modernize the national supply chain. RSVP now! Please note, the time and location for this event have been updated.
CONSERVATIVE CORNER
House Freedom Caucus embraces internal dissensions
The House Freedom Caucus is finding unity in disunity even as it prepares to elect a new leader later this year.
As the ultra-conservative group expands and elevates younger and more diverse members, there’s been more head-butting in its ranks. The current internal division is a far-cry from the united front under Rep. Jim Jordan (R-Ohio) and then-Rep. Mark Meadows (R-N.C.) that helped oust then-Speaker John Boehner in 2015.
Sure, HFC members have collectively created headaches for GOP leadership this year — from the speaker vote showdown in January, the debt-limit fight to the recent standoff that halted action on the House floor. But its ongoing internal battles have divided members, especially those who remain closer to leadership.
The group most recently held a vote to boot Rep. Marjorie Taylor Greene (R-Ga.) from its camp over her support for leadership — especially Speaker Kevin McCarthy — and public strife with HFC. While Jordan has also become a leadership ally, he’s been afforded more leeway by fellow conservatives.
Still, some in the right caucus view these disagreements as healthy and not entirely detrimental to the group’s mission.
“Unity and conformity are two different things,” Rep. Michael Cloud (R-Texas) told us. “If everybody thought the same, then you have a lot of duplication that’s unnecessary. So, I see that as a strength.”
Under the leadership of Rep. Scott Perry (R-Pa.), the HFC is now at its largest size ever and must cater to a multitude of boisterous personalities as it seeks to reinvent itself after four years of being in the minority. Members have struggled to unify behind several issues, including whether to defund federal law enforcement agencies or what the threshold should be for impeaching Cabinet members.
“Chairman Perry has got a challenging assignment,” Rep. Bob Good (R-Va.), told us. “It’s like herding cats when you’re herding members.”
There are also rivalries among more high-profile members vying for the public spotlight on conservative airwaves.
Perry, who represents a more purple district, is often overshadowed by higher-profile members such as Reps. Chip Roy (R-Texas), Dan Bishop (R-N.C.) and Byron Donalds (R-Fla.) who have hogged the right-wing news networks.
Two former aides to HFC members predicted Roy could be the next chair of the group when it votes later this year. It’s unclear when the election will take place but all chairs are subjected to single terms that last two years. Roy is currently HFC policy chair.
Good said Perry is leading the caucus during a tumultuous time. But the clout yielded to the group has allowed members outside of deep red districts to move further to the right. That puts Perry in a binder. His seat is listed as a potential pickup by the House Democrats’ campaign arm.
“He’s in a competitive district where it leans his way but not overwhelmingly,” Good said of Perry. “He has to work hard for reelection each year.”
Despite some dissent, interviews with six HFC members showcase the collective goal of securing deep spending cuts, though priorities are different for individuals.
The group’s messaging will become especially pivotal in the upcoming FY2024 appropriations battles. The HFC is expected to have heightened influence with a handful of members sitting on the Appropriations Committee.
HFC members are willing to wage war to secure their fiscal priorities, even if it means causing a government shutdown. That’s likely to anger more moderate House Republican colleagues in the middle and provide fodder for House Democrats to paint HFC members as extreme obstructionists.
Rep. Ben Cline (R-Va.), who sits on the Appropriations Committee, said having more HFC members on the panel allows conservatives to have an inside role on controlling Congress’s purse strings.
“We share a vision for reigning in wasteful government spending and re-focusing on the core functions of the government,” Cline told us. “There are more of us on Appropriations now than there have ever been and that gives us a little bit more insight into the process and how to influence the process.”
— Mica Soellner
EMPIRE STATE HEADACHE?
An expensive Democratic primary awaits in a critical New York swing seat
Democrats have been fixated on winning back New York’s 17th District ever since Republican Rep. Mike Lawler knocked off the sitting DCCC Chair Sean Patrick Maloney last fall. The defeat of the House Democratic campaign arm leader — even amid better-than-expected midterms for Democrats — was an embarrassing reminder of the party’s collapse in New York’s suburbs and exurbs.
But before Democrats can turn to defeating the vulnerable GOP incumbent, a competitive primary between former Rep. Mondaire Jones (D-N.Y.) and Liz Whitmer Gereghty awaits.
Jones has been forecasting a political comeback in NY-17 for months and finally made his move official on Wednesday. But Gereghty, a first-time politician who is also Michigan Democratic Gov. Gretchen Whitmer’s sister, has shown fundraising strength and raked in an impressive $400,000 during the first quarter.
Democratic campaign operatives we spoke to still believe Jones is the favorite in the primary, given his high name recognition after representing swaths of the current 17th District in the last Congress. But the expensive primary may sap resources for a must-win election for Democrats looking to flip the House blue.
In an interview Wednesday, Lawler blasted Jones as “a guy who voted 97% of the time with AOC” and who “supported the ‘defund the police’ movement in 2020.” He added that Jones supports New York’s “disastrous cashless bail laws.”
Here’s some news: The Lawler team tells us they raised more than $900,000 in the second quarter and have $1.49 million on hand. Lawler has raised $1,776,000 this cycle and campaign aides predicted they’ll finish the year with more than $2.5 million on hand.
Jones’ launch video notably featured a police officer saying that Jones “funded the police.” It was a clear sign his camp recognizes that messaging around crime and backing the police will play a major part in the race. Issues concerning crime, bail reform and homelessness dominated the New York gubernatorial election in 2022. Then-Rep. Lee Zeldin’s (R-N.Y.) campaign was credited with boosting GOP congressional bids in Long Island and exurban New York.
Lawler also criticized Jones’ decision to leave behind the suburban New York district to run in the New York City-based 10th District primary in 2022. Of course, Jones was a significant casualty of the brutal 2022 redistricting process in New York and saw his district combined with Maloney’s.
“When challenged, he ran away and moved to Brooklyn,“ Lawler said. “His constituents will treat him with the same disrespect that he showed them while serving.”
Meanwhile, the endorsement race is heating up. EMILYs List and Elect Democratic Women — two important Democratic groups whose goal is to increase female representation in Congress — are backing Gereghty. Notably, Elect Democratic Women is chaired by Rep. Lois Frankel (D-Fla.) and has a number of sitting members of Congress on its board.
On Jones’ side, the LGBTQ+ Victory fund backed him shortly after his campaign announcement.
— Max Cohen
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Fed minutes show hawks still in charge, pause or no
Several senior officials at the Federal Reserve pushed for another hike last month, despite ultimately voting to hold interest rates steady, according to June’s Federal Open Market Committee meeting minutes.
The latest minutes released yesterday from FOMC, which you can read here, revealed that “several” Fed officials would have supported another interest rate hike of 25 basis points in June. These notes are closely scrutinized by Wall Street for hints on how the Fed could approach monetary policy in the months ahead.
To review: the FOMC voted unanimously last month to keep rates steady while anticipating at least two more hikes before the end of 2023. It was the first time the Fed chose not to hike after 10 consecutive increases.
So the split on display in the FOMC’s minutes is noteworthy. These minutes are the closest thing the public gets to an inside look at sensitive central bank deliberations, as direct transcripts take years for the Fed to publish.
Here’s a key excerpt:
The Fed has long tried to present a unified front on major monetary policy decisions, making public dissents a rarity. So we’re not surprised to only hear about disagreements now and in broad strokes.
More importantly, this document is the latest sign the Fed is girding for the fight against inflation to drag on. That’s something Fed Chair Jay Powell and other governors have been hammering for months but one Wall Street hasn’t always been keen to listen to.
There was at least one encouraging takeaway from the minutes. FOMC officials widely believed the U.S. banking sector is on better footing after this spring’s instability, calling it “sound and resilient.”
But the Fed is still worried about how interest rate risk will affect banks in coming years. Credit is expected to get tighter in the months to come, which could drag down the U.S. economy as a whole. Also, commercial real estate weakness could be an issue. Otherwise, things are just peachy.
— Brendan Pedersen
… AND THERE’S MORE
News: The New Democrat Coalition Action Fund, the political arm of the center-left group, is endorsing Tony Vargas in his comeback bid to defeat Rep. Don Bacon (R-Neb.). The endorsement is a key sign that crucial Democratic election players are uniting behind Vargas’ rematch effort.
In 2022, Vargas — a state senator — lost to Bacon by 2.6 points. The district voted for President Joe Biden in 2020 by six points.
“I’m proud to be endorsed by the NewDem Action Fund because they align with my approach to leadership: pragmatic & data-driven,” Vargas said in reaction to the endorsement.
— Max Cohen and Jake Sherman
Bipartisan support for TikTok ban wavers
Just more than half of senior Capitol Hill staffers (55%) say their boss supports banning TikTok in the United States, according to our latest survey, The Canvass.
Support for legislation to block the social media platform is more popular amongst Republicans than Democrats. Our findings for this month show that the majority (73%) of Republicans would back banning TikTok and only 38% of Democrats are in agreement. In April, there was more GOP support (82%) for banning the app compared to just 31% of Democrats.
TikTok has long faced heavy scrutiny from both sides of the aisle. The company’s CEO, Shou Zi Chew, appeared for a contentious hearing in Congress this spring. In early March, Senate Minority Whip John Thune and Sen. Mark Warner (D-Va.) introduced a bill that would require the Commerce Department to evaluate and identify foreign technology companies that have a presence in the United States. At the same time, Sen. Marco Rubio (R-Fla.) was pushing legislation that would outright ban TikTok.
Both Republicans and Democrats on the House Energy and Commerce Committee also signaled they were skeptical of the Chinese social media app during Chew’s testimony. Lawmakers across the panel took shots at Chew and quickly dismissed his proposal for Project Texas, TikTok’s $1.5 billion initiative to keep the app alive in the United States.
But while TikTok has been banned on federal government devices, the push for a full U.S. ban has stalled out. It’s not clear that Congress will tackle issues concerning the social media app in the future.
Interested in being a part of our survey? The Canvass provides anonymous insights each month from top Capitol Hill staffers and K Street leaders on key issues facing Washington. Sign up here if you work on K Street. And click here to sign up if you’re a senior congressional staffer.
— Donna Baeck
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