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September 20, 2023
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THE TOP
Happy Wednesday morning.
OK, let’s start with a quick recap of what happened in the House Tuesday. Then we’ll look forward and talk about what Speaker Kevin McCarthy may do next.
First, House Republicans were forced to pull the plug on a procedural vote for a 30-day stopgap funding measure to keep the federal government open past Sept. 30 because they didn’t have the votes.
Just hours later, the Republican leadership team suffered another embarrassing defeat on the floor when five conservative GOP lawmakers crossed the aisle to vote with Democrats to bring down the rule for the Pentagon’s spending bill.
All in all, Tuesday was a bad day for McCarthy and House Republicans.
So what’s next?
Based on our reporting, there are three general directions McCarthy can take with government funding: the “kitchen sink approach,” the bipartisan path or do nothing at all. Within those categories, there’s varying degrees of action or inaction.
We’re only going to focus this morning on McCarthy’s path to avoid a shutdown on Oct. 1, the immediate crisis House Republicans face. Remember that Congress still has to come together on a full year of funding at some point.
The “kitchen sink” approach: If you know McCarthy and the House Republican Conference, you’ll understand that, right now, the speaker has just one real option to get a continuing resolution through the chamber.
McCarthy needs to take all of the conservatives’ demands and lump them together into one 30-day funding bill. Ignore how far-fetched or illogical these proposals are and accept what they represent — a means to an end.
Rep. Ralph Norman (R-S.C.) told us that he’d vote for a CR if McCarthy committed to a $1.47 trillion cap on discretionary spending and a schedule for the 11 remaining FY2024 appropriations bills to be considered on the floor during that 30-day stretch (Note: MilCon-VA has already passed the House). The topline number will be ignored by the Senate, but why not throw it in there to get a CR across the finish line?
Embracing this approach solves McCarthy’s immediate challenge, although it leaves him with other problems.
The short-term gain is proving he can pass something. The medium-to-long term problem is that once the Senate gets this bill, it will likely strip out many of the House Republicans’ provisions and send a revised bill back to McCarthy. Then McCarthy will likely have a 30-day funding package that includes billions of dollars in Ukraine aid and disaster relief.
At that point, McCarthy can make the argument to his colleagues that House Republicans need to return to the reality of divided government and avert a shutdown. Or not — we believe a shutdown is likely. This will be a difficult position for the speaker.
BTW: Another weakness here is that there’s no guarantee that McCarthy will be able to pass a CR even if he loads it up with House GOP priorities. There are a number of House Republicans — Reps. Matt Gaetz (Fla.), Matt Rosendale (Mont.), Ken Buck (Colo.), Andy Biggs (Ariz.), Dan Bishop (N.C.) and Tim Burchett (Tenn.) — who may vote no no matter what McCarthy does.
The bipartisan approach: If this were “The West Wing,” McCarthy would walk into the Problem Solvers Caucus and hash out a deal to avert a shutdown (He’d also be talking to President Bartlet!) Yet this is real life, not a TV show. And yes, McCarthy could easily pass a CR with a big bipartisan majority.
But this approach would likely threaten McCarthy’s hold on the speaker’s office. Gaetz is already leaving copies of his motion to vacate in bathrooms around the Capitol. If McCarthy partners with Democrats, Gaetz may want to move the motion from the loo to the floor.
Nothing: What if McCarthy can’t pass anything? What if House Republicans are so irreparably split that they simply cannot get any funding bill over the finish line? This is a reality that Washington needs to start facing. McCarthy says he’ll keep the House in as long as needed to get something done, but what if there’s simply nothing that the leadership can get across the floor?
For the record, House GOP moderates and conservatives met Tuesday night in House Majority Whip Tom Emmer’s office to try to find a path forward. Time is short. There are 11 days until a shutdown. And the House is out Monday for Yom Kippur.
Senate approps update: It remains unclear whether the Senate will be able to move forward with amendment votes on the $280 billion minibus.
Sen. Susan Collins (R-Maine) indicated Tuesday she was nearing a “breakthrough” with Sen. Ron Johnson (R-Wis.) after he objected to amendments last week. Johnson said he’d drop his objection if the Senate held a vote on the Preventing Government Shutdowns Act.
Collins seemed amenable and said she’d run a hotline on the measure to see if there are objections. But as of late Tuesday night, the Senate was still scheduled to vote on suspending the rules to move forward with amendments. This requires 60 votes and then a second vote at a two-thirds threshold.
— Jake Sherman, John Bresnahan and Andrew Desiderio
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McHenry keeps his cards close, options open on SAFE banking
The Senate Banking Committee will take up cannabis banking in a markup happening one week from today. But how the reform would fare in the Republican-led House – as always – remains an open question.
So we checked in with House Financial Services Committee Chair Patrick McHenry (R-N.C.), whose panel would receive any cannabis banking reforms that pass the Senate.
McHenry told us he hasn’t had any conversations with Senate Democrats about cannabis reform yet, saying he’d “look forward to seeing their markup.”
But the North Carolina Republican had this to say when we asked if he’d be open to that chat afterward:
Let’s be clear: McHenry’s not really a fan of the Secure and Fair Enforcement Banking Act, which would formally clear banks to work with state-legal cannabis firms. We can’t say that baseline opposition has shifted.
What has changed, however, is the legislative environment between the two banking-centric committees.
Both panels have been busy during the 118th Congress, albeit with wildly different priorities. Senate Banking Committee Chair Sherrod Brown (D-Ohio) has cleared legislation that would introduce new accountability standards for bank executives, while McHenry has moved dozens of bills over the past year covering crypto, business capital formation and more.
So McHenry seems to be acknowledging the political reality of split government here: if any banking bills are going to make it to President Joe Biden’s desk anytime soon, the chambers will have to talk to one another.
Speaking of the Senate: We have our initial glimpse of the upper chamber’s latest take on cannabis banking reform.
First things first, the bill’s acronym has a new letter: the Secure and Fair Enforcement Regulation Banking Act, or SAFER Banking Act.
We obtained a new memo, first reported by Politico’s Natalie Fertig, that circulated among senators and staff this week and breaks down the changes. Read the document here.
Some of the most significant changes revolve around Section 10 of the bill, which had been the subject of recent negotiations between Senate Majority Leader Chuck Schumer, Sens. Jack Reed (D-R.I.), Steve Daines (R-Mont.) and Cynthia Lummis (R-Wyo.).
This part of the bill centers on banks’ ability to decline working with more controversial businesses, like firearms manufacturers, oil and gas firms or reproductive health clinics.
Meanwhile at the Federal Reserve: Chair Jay Powell will announce the U.S. central bank’s next move — or lack thereof — on monetary policy today at 2 p.m. Analysts widely expect the Fed to hold rates steady.
The key development for policymakers across Washington will be how exactly the Fed adjusts its economic forecast for the months ahead. We’ll have more in the Midday and PM newsletters today.
— Brendan Pedersen
INVESTIGATION NATION
Garland on House Judiciary hot seat
Attorney General Merrick Garland is coming before the House Judiciary Committee today at a particularly perilous moment for the Justice Department.
To recap: House Republicans are threatening to slash the department’s funding, a government shutdown is looming and a critical part of the impeachment inquiry hinges on allegations the Justice Department is “weaponized” against conservatives. Here’s what to expect today.
The Republican attack: House Judiciary Committee Chair Jim Jordan (R-Ohio) told us he plans to press Garland on Special Counsel David Weiss’ investigation into Hunter Biden. Of course, Hunter Biden’s actions are forming the basis of the House Republican impeachment inquiry into President Joe Biden.
Republicans have accused Justice Department officials of interfering in Weiss’ criminal investigation into Hunter Biden while also claiming that Weiss himself wasn’t aggressive enough in pursuing charges against the president’s son. Although Weiss has insisted in correspondence to congressional Republicans that he had full independence over the probe, the GOP will likely hammer Garland on allegations of political interference.
Garland is extremely unlikely to delve into any details of the Hunter Biden case, however. Garland will likely say he is restrained in what he can divulge as Weiss is running an active investigation.
Other issues sure to come up: Special Counsel Jack Smith’s investigation into former President Donald Trump and the FBI’s treatment of school board protests and Catholic churches.
Garland’s pushback: One of Garland’s main assets may be his measured demeanor. The former federal judge is the opposite of a flamethrower. He’s unlikely to lose his cool and get into a shouting match with any Republicans.
But Garland, for his part, will strongly push back against GOP charges that DOJ is politically weaponized to support Biden and his family, according to his prepared remarks. He’ll also vigorously defend DOJ employees from GOP attacks.
“Our job is not to take orders from the president, from Congress, or from anyone else, about who or what to criminally investigate,” Garland will say in his opening statement.
“As the president himself has said, and I reaffirm here today: I am not the president’s lawyer.”
“I will also add that I am not Congress’ prosecutor,” Garland will note as well.
The Democratic support role: Democrats will lob friendly questions to Garland, according to committee sources, asking the attorney general to highlight the negative effects of a government shutdown on the DOJ. Plus, Democrats are likely to tee up Garland to rail against efforts by GOP members – including Jordan – to cut DOJ funding.
“Extreme MAGA Republicans have poisoned our vital oversight work,” Ranking Member Jerry Nadler (D-N.Y.) will say in his opening statement.
Nadler will also lament Republicans for “attack[ing] Special Counsel Weiss—who was appointed by Donald Trump—for not being hard enough on Hunter Biden.”
— Max Cohen
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PUNCHBOWL NEWS EVENTS
Missed our event Tuesday with Rep. August Pfluger on 5G leadership and spectrum policy? We’ve got you covered. Click here to watch the full recording.
THE SENATE
Tuberville plunges Senate into morass with latest military blockade move
Sen. Tommy Tuberville (R-Ala.) is trying something new with his unprecedented blockade of military promotions amid a wave of internal GOP frustration — forcing a vote to get around his own roadblock.
As we scooped in the PM edition, multiple GOP senators confronted Tuberville during the Republican lunch Tuesday about his strategy on the military holds and what it would ultimately achieve. Sen. Todd Young (R-Ind.) spoke up first, followed by Sens. Mitt Romney (R-Utah) and Joni Ernst (R-Iowa). (Tuberville’s spokesperson Steven Stafford later disputed that characterization of their interactions).
Tuberville then revealed to the group that he plans to trigger a rarely-used Senate rule to force a floor vote on one of the upper-echelon nominees he’s blocking — Gen. Eric Smith, President Joe Biden’s nominee to serve as commandant of the Marine Corps.
This sets up a key test for Senate Majority Leader Chuck Schumer and Senate Democrats, who have insisted that they won’t use floor time to approve the promotions Tuberville is blocking. But it’s also a sign that Tuberville is getting enough pressure from his fellow Republicans that he felt like this was his best option to keep his critics at bay — many of whom have been calling on Schumer to put some of the stalled promotions on the floor for votes.
Tuberville on Tuesday gathered the requisite signatures for a cloture petition, a mechanism that allows the minority party to circumvent the majority leader for confirmation votes. In this case, Tuberville is forcing a vote on a nominee, Smith, for whom he’s blocking unanimous consent, making the move even rarer.
Republicans believe Tuberville’s move allows them to force a vote at a simple-majority threshold to shelve the Senate’s pending business — the minibus appropriations bill — and move forward with Smith’s nomination. That initial vote would occur one legislative day after Tuberville files the petition.
Schumer can try to jam up the floor to delay any cloture vote, but ultimately he can’t stop it from moving forward, according to a Senate GOP leadership aide.
The petition’s signatories include some of the more conservative GOP senators. No member of Senate GOP leadership signed onto it.
Senate Minority Leader Mitch McConnell has expressed reservations privately about using a cloture petition, arguing it could come back to haunt Republicans if and when they’re back in the majority. McConnell has also publicly said he disagrees with Tuberville’s blockade as a way to reverse the Pentagon’s abortion policy.
There’s uniformity among Senate Republicans on the Pentagon’s abortion policy. They believe it’s illegal for the Defense Department to reimburse servicemembers for travel costs if they cross state lines to seek an abortion.
— Andrew Desiderio
… AND THERE’S MORE
News: EMILYs List, the pro-abortion rights group dedicated to electing Democratic women, is endorsing Allyson Muñiz Damikolas in California’s 40th District. The seat is currently represented by Rep. Young Kim (R-Calif.) and the district voted for President Joe Biden in 2020.
— Max Cohen
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