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IN THIS EDITION

All eyes on Johnson’s next funding move

The Vault: Marshall cuts credit card ad with merchants coalition

Senate Republicans reveal 2025 China plans

ICYMI: Future Of Defense Aviation, The Legislative Landscape

THE TOP

All eyes on Johnson’s next funding move

Happy Thursday morning.

At the outset of September, House Republican leaders told us they were going to spend the weeks before the election dividing Democrats and uniting the GOP.

But in forcing a vote on a six-month CR with the SAVE Act — a move that failed badly on the House floor Wednesday night — Speaker Mike Johnson succeeded in spending a week dividing his party and lessening his already minuscule leverage with the Senate.

And now, just 12 days before a potential government shutdown, Johnson and House Republicans are back at square one. Their opening salvo fell flat. And they’re running out of time.

Here’s what Johnson had to say just moments after 14 GOP lawmakers ignored his entreaties and voted against the CR package:

The Louisiana Republican now has a choice to make. Will he cut a deal with Democrats and the White House on a mid-December stopgap funding bill with some anomalies? Or will he try once again to pass a CR on GOP votes alone? Johnson has to act quickly here or he could stumble into a politically disastrous government shutdown five weeks before Election Day.

Across the Capitol. Senate Majority Leader Chuck Schumer is expected to begin his own moves on a bipartisan CR. Schumer may file cloture on a legislative vehicle for a bipartisan funding bill as soon as today. That cloture vote would take place on Monday.

What happens after that is uncertain. If the Senate — which is scheduled to come in on Monday for a rare week-long session — goes first on the CR, then it likely wouldn’t finish floor action on the bill until the following weekend absent some time agreement.

But if the Senate does pass a bill, Johnson and House Republicans would then be faced with having to take that CR at the last minute or face a shutdown starting at midnight on Sept. 30. Remember that former President Donald Trump is calling for a shutdown unless Congress accepts the SAVE Act.

Despite Trump’s stance, there’s rampant speculation in House Republican leadership circles that Johnson will acknowledge reality, cut a deal with Democrats and release a clean CR later this week. The House would then vote on it early next week, pass it with a mix of Republican and Democratic votes (maybe even a majority of Democratic votes) and then leave town until after the election. In fact, this is what Johnson’s leadership team wants him to do.

This is really Johnson’s only logical play. The problem for Johnson is that he wasn’t able to unite the small Republican minority around his funding plan. This leaves him with little leverage to make demands in negotiations with Democrats and the Senate. And he doesn’t have much — if any — time to try to pass another all-Republican funding bill.

Furthermore, Johnson has taken a shutdown off the table. Moderate and vulnerable Republicans would never go for it anyway.

“This is his show,” Appropriations Committee Chair Tom Cole (R-Okla.) told us. “And certainly we’re supporting what he’s trying to accomplish. But, again, I’ll wait to work with my leadership and go from there.”

Timing complications. There may be an effort in the Senate to revive the SAVE Act — which requires proof of U.S. citizenship to register to vote in federal elections — as an amendment vote.

“I never signal in advance what procedural maneuvers I might undertake,” said Sen. Mike Lee (R-Utah), who has been very supportive publicly of Johnson’s CR package. “That would certainly be one on the table that I’d consider.”

Yet Democrats are confident Lee or other conservative Republicans can’t get 60 votes to overcome a filibuster. In fact, Senate Democrats would be happy to have this vote if it helps vulnerable senators like Jon Tester of Montana. So it’s unclear if this will happen.

And Sen. Rand Paul (R-Ky.) is expected to demand a vote on an amendment to cut spending, as he normally does with CRs. This won’t get 60 votes either.

But the main takeaway here is that this will take some time. And Congress doesn’t have a lot of time. Decisions have to be made — and quickly.

One more thing: We also expect the Senate to try today to voice-vote a House-passed bill to address a looming $3 billion funding shortfall for veterans’ benefits. The House passed the bill by voice vote earlier this week. The Senate is scheduled to leave town for the weekend this afternoon.

— Jake Sherman, John Bresnahan, Melanie Zanona and Andrew Desiderio

TODAY: Punchbowl News founder and CEO Anna Palmer will sit down at 9 a.m. ET for a conversation with Rep. Stephanie Bice (R-Okla.). They’ll discuss news of the day, the state of play, legislative landscape and key players central to defense aviation. RSVP to join us virtually!

The Vault: Marshall cuts credit card ad with merchants coalition

The Senate’s top Republican sponsor of a bill targeting the credit card industry recorded a radio advertisement paid for by the Merchants Payments Coalition, a retail industry advocacy organization.

In an ad recorded for and run on former Fox News personality Tucker Carlson’s The Tucker Podcast, Sen. Roger Marshall (R-Kan.) calls on Americans to “call your senator today and demand they pass the Credit Card Competition Act.”

That bill — supported by retailers, opposed by banks and co-sponsored with Sen. Dick Durbin (D-Ill.) — would require card companies to allow retailers another choice of payment network in credit card transactions besides Visa and Mastercard.

“Every time you use your credit card, they charge you a hidden fee called a swipe fee, and they’ve been raising it without even telling you,” Marshall says. “This hurts consumers and every small business owner.”

It’s unusual for a senator to cut an ad paid for by an advocacy group — even if it’s about their bill. We don’t think there’s anything technically wrong with doing so. We checked in with multiple people familiar with the process surrounding the ad, and they said Marshall was not paid for his appearance.

But there is something a little funny about that senator asking the public to call his colleagues to support some legislation. We asked Marshall about the advertisement Wednesday afternoon, and the Kansas Republican referred us to his office.

“I’m not sure what ads you’re talking about,” Marshall said. “I’m not paying for them or anything.”

And don’t miss: The Vault Quarterly, hitting your inboxes later this morning. Our Premium Policy: The Vault community gets Washington x Wall Street intel every day with deep analysis integrated into their Midday and PM newsletters, the Sunday Vault, exclusive interviews and breaking news alerts. Join The Vault community to stay in the know.

— Brendan Pedersen and John Bresnahan

THE SENATE

Senate Republicans reveal 2025 China plans

News: Senate Republicans are unveiling their counter-China priorities for 2025, as the GOP looks to win the Senate majority and, in turn, the Foreign Relations Committee gavel.

Sen. Jim Risch (R-Idaho), who’s slated to become the panel’s chair if Republicans take control, is releasing a legislative roadmap Thursday for cracking down on China’s global influence, first shared with Punchbowl News.

Countering the Chinese Communist Party is one of the few legislative goals that unites both parties. Despite that bipartisanship, Congress has few major achievements to point to beyond the potential Tik Tok ban. Risch said Congress has “failed” to act in several areas and vowed Republicans will go big on China through his STRATEGIC Act.

“This legislation takes strong positions to safeguard U.S. and allied interests and provides actionable provisions that will help us in our strategic competition with China,” Risch told us. “We cannot wait for more reports and studies — it is time to start implementing policies.”

The legislative package, which has the support of a wide swath of the Senate GOP Conference, includes measures like antitrust reform to crack down on China’s predatory economic behavior as well as a boost in overall U.S. support for Taiwan.

It also makes changes to the Foreign Agents Registration Act by removing certain exemptions for foreign adversaries. And it takes aim at Beijing’s harassment and abuse of U.S. diplomats in addition to its efforts to use Western think tanks and universities for malign purposes.

On top of that, the bill includes an authorization for new infrastructure investments and provisions aimed at preventing Chinese drones from deploying in the Middle East.

The effort is one of many ways Republicans are laying the groundwork for a potential majority. For example, GOP senators are already plotting strategies for the 2025 tax fight.

Senate Majority Leader Chuck Schumer has also taken a particular interest in China policy. Schumer, who’s long been a China hawk, tasked his committee chairs earlier this year with developing bipartisan legislation in a number of jurisdictions but said at the time that it’s more of a long-term effort.

— Andrew Desiderio

FUTURE OF

ICYMI: Future Of Defense Aviation, The Legislative Landscape

The second segment in our series, The Future of Defense Aviation, laid out the legislative prospects for the nation’s aero-defense capabilities.

As we wrote earlier this week, Congress controls the funding for the nation’s defense. Lawmakers work year-round to pass the annual National Defense Authorization Act and the Pentagon spending bill for each fiscal year.

This year, Congress is expected to finalize the NDAA and the Pentagon spending bill during an end-of-year legislating sprint.

Read more about the legislative landscape for the nation’s air defense sector here and listen to the accompanying podcast here.

— Andrew Desiderio

… AND THERE’S MORE

Money Game news: Former House Majority Leader Steny Hoyer is giving $1 million to House Majority PAC, the top House Democratic-aligned super PAC, according to sources familiar with his effort.

Hoyer has long been one of his party’s most prolific fundraisers and that hasn’t stopped, even as he stepped away from leadership this Congress. The longtime Maryland Democrat told us he’s determined to see House Minority Leader Hakeem Jeffries as speaker next Congress.

— Rep. Tony Gonzales’ (R-Texas) Hispanic Leadership Trust has doled out $1.3 million to Hispanic Republicans in the House. The group will be sending canvassers to battleground districts in Arizona, Oregon, California, Colorado and Texas to help Reps. Lori Chavez-DeRemer (R-Ore.), Juan Ciscomani (R-Ariz.), David Valadao (R-Calif.), John Duarte (R-Calif.), Monica De La Cruz (R-Texas) and Gabe Evans in Colorado.

FIFA News: FIFA representatives are briefing Hill staffers on Thursday about the security and safety preparations for the upcoming Club World Cup in 2025 and World Cup in 2026. The briefing is aimed at Congressional Soccer Caucus leaders and members who represent host cities. FIFA President Gianni Infantino visited the Hill earlier this year to meet with key stakeholders, a first for any FIFA president.

Ad watch: Democrat Derek Tran’s campaign is running a new ad, shared first with Punchbowl News, that attacks Rep. Michelle Steel (R-Calif.) by accusing her of supporting a national abortion ban with no exceptions. Steel rescinded her co-sponsorship of the Life at Conception Act in March and told us in May she’s pro-life with exceptions for rape, incest and the life of the mother.

— Max Cohen

MOMENTS

CLIPS