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September 14, 2023
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PRESENTED BY
THE TOP
Happy Thursday morning.
News: Two weeks before the House returned from the August recess, Speaker Kevin McCarthy called House Minority Leader Hakeem Jeffries. They were on the phone for nearly an hour.
The premise of the conversation was a mid-recess check-in between the House’s top two leaders. Allies of both men insist the call was cordial.
But Jeffries had a mission. The New York Democrat had heard some alarming chatter from House Republicans and was getting concerned. Demands from McCarthy’s right flank to shut down the government, defund the Justice Department and impeach the president were spreading. Jeffries considered the impeachment threat in particular an act of partisan aggression, according to multiple allies.
On their call, Jeffries cautioned McCarthy — give into these GOP hardliners’ demands at your own risk. Translation: Democrats won’t be there with a lifeline to save McCarthy if he shuts down the federal government or impeaches President Joe Biden.
Now McCarthy is leading his conference on a dual path toward both. And even that may not be enough to help the California Republican keep the speaker’s gavel.
Aides to the two top House members maintain that their relationship can withstand the stress of impeachment, a government shutdown or whatever congressional crisis is coming next. Jeffries told us as much himself.
“We’ll continue to agree to disagree without being disagreeable with each other and find common ground when possible, therefore continuing to work together,” Jeffries said Wednesday. “It remains a positive, forward-looking, communicative relationship.”
Instead, Jeffries insisted, McCarthy’s actions could further fuel the breakdown between the two parties in the House.
“It’s a question about changing the dynamics within Congress and how the House Democratic Caucus interacts with the House Republican Conference,” Jeffries told us.
For his part, McCarthy declared that opening an impeachment inquiry — and the hyper partisan political atmosphere that surrounds such a move — wouldn’t derail his relationship with Jeffries.
“I have a great deal of respect for him,” McCarthy said of Jeffries during an interview Wednesday night. “We’re going to disagree on different issues. I believe based on the information that we have now, the Congress just needs to get more answers. That’s what we’re going about doing.”
More McCarthy:
Yet in reality, McCarthy’s decision to pivot even harder to the right this week, acquiescing to demands that he open an impeachment inquiry, will have far-reaching implications for the House. It could undo months of effort the two men have put into building a more congenial dynamic than the frosty relationship McCarthy had with former Speaker Nancy Pelosi.
Pelosi was notoriously frigid toward McCarthy, even calling him “a moron” on camera last year. This bothered McCarthy so much that he sat down with Jeffries before the new Congress to set a new tone. No public name calling, they said. Both vowed to treat each other respectfully, even when they disagree, according to multiple sources familiar with the meeting.
So far, they’ve stuck to that handshake deal. The two leaders have even worked closely together on some joint initiatives, including standing up the China select committee and pulling together a bipartisan artificial intelligence briefing. Jeffries’ allies see McCarthy as a speaker who would theoretically like to work with Democrats, but has no political space to do so.
Yet that bonhomie is in jeopardy as McCarthy continues to bend to his right flank.
Some of the potential fallout:
India codel: Jeffries isn’t expected to join McCarthy on a planned bipartisan codel to India in early October. Of course, the trip would be postponed anyway if the government is shut down. But allies close to Jeffries say it’s hard for him to go otherwise given McCarthy’s Biden impeachment pursuit.
Government funding: McCarthy has said he won’t put an omnibus on the floor, and GOP hardliners are opposed to any stopgap bill. Even if McCarthy were to entertain a short-term funding bill, Democrats will only back it if it isn’t loaded up with the far-right policies that conservatives are demanding.
McCarthy can only lose just four GOP votes on any bill right now, and he can’t even pass a partisan defense funding measure, as we’ve reported this week. Democratic support will likely be critical to any eventual government funding bill.
Motion to vacate: Senior Democrats previously signaled to us they’d likely help McCarthy if far-right Republicans tried to boot him from the speakership for “being reasonable.”
And Rep. Matt Gaetz (R-Fla.) has repeatedly threatened to file a motion to vacate as soon as next week.
But any potential Democratic assistance to McCarthy on this front evaporated with the start of the impeachment inquiry. Top Democrats, including Jeffries, have decried the effort as “illegitimate.”
News: White House Senior Adviser Mitch Landrieu will speak at the New Democrat Coalition lunch today to provide an update on the implementation of the bipartisan infrastructure law.
— Heather Caygle, John Bresnahan and Jake Sherman
Next week! Punchbowl News founders Anna Palmer and Jake Sherman will discuss news of the day with Ways and Means Committee Chair Jason Smith (R-Mo.) on Wednesday, Sept. 20 at 9 a.m. ET. Smith will also share his priorities for the powerful panel. RSVP here!
GOVERNMENT FUNDING
Conservatives try to cobble together a deal — no matter how unrealistic
Let’s review where things currently stand in funding the government of the most powerful nation on earth.
With 16 days until a government shutdown, the House has passed just one of 12 FY2024 spending bills. Speaker Kevin McCarthy began August recess two months ago by pulling the plug on the Agriculture spending bill. And after the House returned to Washington this week, McCarthy and GOP leaders were forced to pull the plug on the Pentagon’s spending bill.
McCarthy can’t pass a short-term stopgap funding bill because the right wing of the GOP conference says they’ll boot him if he does so. And McCarthy can’t pass an omnibus spending package because he promised not to.
Which leaves us asking what the heck he will do.
To give a sense of the skewed reality that House Republicans are living in, Rep. Chip Roy (R-Texas) has begun to socialize a new plan with the powerbrokers in the House Freedom Caucus. This tentative package would include the Homeland Security and Defense spending bill, alongside H.R. 2, a border security bill that has already drawn a veto threat from the White House. The plan, according to sources familiar with it, would also make DHS funding contingent on certain benchmarks for blocking the flow of migrants at the U.S.-Mexico border.
Of course, none of this would stand a chance of passing the Senate, even if it can get through the House.
At the same time, lines of communication have opened between the HFC and the Republican Main Street Coalition, a group of moderates, to see if there’s a path forward for the House GOP. Leadership is not behind this union and isn’t terribly optimistic that it will lead to anything.
House Majority Whip Tom Emmer and Rep. Guy Reschenthaler (R-Pa.), the chief deputy whip, are expected to act as the front line for whatever this group produces. Oftentimes, that’s more useful than McCarthy getting involved in such talks.
The big challenge here for McCarthy is that he’s dealing with a group of legislative nihilists — lawmakers who don’t much care about a government shutdown and are in no rush to find a solution to the looming funding crisis.
Furthermore, McCarthy’s GOP critics are blocking his path forward while saying it’s the speaker’s fault that nothing is getting done.
“We should have had the topline numbers well before now. It just didn’t happen,” Rep. Ralph Norman (R-S.C.) said. “That’s on leadership.”
“We’re in dire need of a moment of leadership, but it would only require a moment to get things fixed very quickly. It’s not that hard,” added Rep. Dan Bishop (R-N.C.) added. “The question is just whether [leadership] wants to go ahead and get down to business.”
Of course, a shutdown is looming in just over two weeks. And there is a distinct lack of urgency among the right-wingers to avert this outcome.
HFC Chair Scott Perry (R-Pa.) told us on Wednesday that he hadn’t spoken with McCarthy and had no plans to meet with him again.
“We’ve got plenty of time,” Perry told us.
Perry, of course, is wrong. Government funding is close to expiring.
President Joe Biden, for his part, will head to Maryland today to bash Republicans on “MAGAnomics versus Bidenomics,” according to the White House.
And in remarks at a campaign on Wednesday night, Biden suggested that House Republicans are pushing an impeachment inquiry against him as a way to provoke a government shutdown, tying the two issues together.
“Well, I tell you what, I don’t know quite why, but they just knew they wanted to impeach me,” Biden said at the Virginia event. “And now, the best I can tell, they want to impeach me because they want to shut down the government.”
— Jake Sherman, Max Cohen, Mica Soellner and John Bresnahan
WASHINGTON X THE FUTURE
Long road ahead for Senate after first AI forum
All participants of Senate Majority Leader Chuck Schumer’s artificial intelligence forum on Wednesday agreed that the government has a role to play in regulating AI, Schumer told reporters after the first-of-its-kind event.
But that seemed to be where the harmony ended.
Schumer’s goal is to develop legislation to address AI’s innovative potential but also its downsides, and he’s convening these forums to help senators better understand the technology and its possible impact. Schumer has no illusions about how hard this will be.
“We know it’s not going to be easy,” Schumer told reporters after the forum concluded. “We know it’s going to take bipartisanship and coming together, and we know we’re going to have to listen to diverse views. But it is such an amazing potential, but also such an amazing challenge.”
Senators heard a variety of perspectives from big-name tech executives, activists, labor unions and civil-rights leaders. That included highly-anticipated remarks from X and Tesla CEO Elon Musk and Meta CEO Mark Zuckerberg.
According to multiple attendees, Musk and Zuckerberg both made the case for government regulation. Musk specifically said he interacts with government regulators on a regular basis and believes that they’re needed in the AI realm.
“The consequences of AI going wrong are severe, so we have to be proactive rather than reactive,” Musk told reporters as he was leaving the forum.
How that translates into legislative action will be the big question for senators to confront in the coming weeks and months. One idea is for Congress to set up an independent regulatory body.
Sen. Michael Bennet (D-Colo.) said the forum “reinforced that we need a new, independent agency to regulate AI and social media.” Some conservatives are opposed to this concept and believe it would be a slippery slope that could lead to censorship.
Two attendees who asked not to be named said Zuckerberg seemed isolated from the rest of the panelists when he said that the potentially damaging things AI can produce are already searchable online. There was disagreement on this point after some panelists noted that AI can be programmed to do things that can’t be readily found on the internet. A Meta spokesperson declined to comment.
As we previewed Wednesday morning, senators were also openly griping about the format of the forum, which didn’t allow them to ask questions directly of the participants. However, there was strong interest in the event from both sides of the aisle, with around 60 senators attending.
“One thing we know for sure,” Schumer added, “Our work is just beginning.”
— Andrew Desiderio
DOWNTOWN DOWNLOAD
McCarthy’s top K Street ally moves into new office — with lots of GOP lawmakers
Jeff Miller and Speaker Kevin McCarthy have been close friends and political allies for decades. Miller is central to his orbit, helping the speaker’s political operation raise gobs of money to stay in the majority.
Miller’s status in Washington Republican circles was on full display Wednesday night, when he hosted a party to celebrate his firm, Miller Strategies, moving into a new office at 801 Pennsylvania Ave., NW, a building just blocks from the Capitol. The new office is twice the size of Miller Strategies’ old digs.
More than 300 people gathered to fete Miller and his firm, including: McCarthy, Senate Republican Conference Chair John Barrasso, NRSC Chair Steve Daines, NRCC Chair Richard Hudson, Sens. Rick Scott (R-Fla.), Katie Britt (R-Ala.), Ted Cruz (R-Texas), Tim Scott (R-S.C.), Tommy Tuberville (R-Ala.), House Agriculture Committee Chair G.T. Thompson (R-Pa.), House Education and Workforce Committee Chair Virginia Foxx (R-N.C.), House Foreign Affairs Committee Chair Michael McCaul (R-Texas), House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.), House Ways and Means Committee Chair Jason Smith (R-Mo.), House Administration Committee Chair Bryan Steil (R-Wis.) and House Natural Resources Committee Chair Bruce Westerman (R-Ark.).
Notable rank-and-filers in attendance: Reps. Marjorie Taylor Greene (R-Ga.), Jim Banks (R-Ind.), Stephanie Bice (R-Okla.), Jared Moskowitz (D-Fla.) and Garret Graves (R-La.).
Miller Strategies represents companies such as Altria, Anheuser-Busch, Apple, Blackstone, Charles Schwab, Delta Air Lines, GE, Oracle, the PGA Tour, PHRMA and Valero.
— Jake Sherman
THE CAMPAIGN
The Virginia Democratic Party is running a new digital ad warning voters of the stakes in the November state legislature elections. The state Democratic party is returning to the successful 2022 playbook by going all in on abortion rights.
“MAGA Republicans were one vote away from banning abortion in Virginia,” the ad’s narrator says. “Now they want total control to finish the job.”
Virginia’s off-year elections are always seen as a barometer of the national mood. In 2021, Glenn Youngkin’s gubernatorial win over former Democratic Gov. Terry McAuliffe alerted Democrats to weaknesses among suburban voters following Covid-19.
— Max Cohen
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