The Archive

IN THIS EDITION

Inside Johnson’s shift in strategy on government funding

Hunter Biden’s turn on the hot seat

Prospects dim for a full Senate Mayorkas trial

Raising a glass to Premium Policy: The Vault

More Dems raise concerns on mortgage disparity at Navy Federal

THE TOP

Inside Johnson’s shift in strategy on government funding

Happy Wednesday morning.

With few options and the shutdown clock ticking, Speaker Mike Johnson is trying to do what he can to shift the dynamics of the government funding debate.

For the first time, Johnson is making explicit to Democrats and the White House that he’s willing to shut down federal agencies unless he has a global agreement – of sorts – on all 12 FY 2024 appropriations bills.

Here are the basics of what Johnson is proposing:

→	Johnson has offered to shift existing government funding deadlines from March 1 and March 8 to March 8 and March 22.

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But Johnson is only willing to do that if he has an agreement with Democrats on the four bills due to expire on March 1 – Agriculture, Energy and Water, MilCon-VA and Transportation-HUD – plus two other measures, Interior and Financial Services and General Government. Those six bills would be extended to March 8 under this plan.

→	The remaining six bills would be extended until March 22. This group includes some of the thorniest spending measures, such as Defense, Homeland Security and Labor-HHS.

“Any CR would be part of a larger agreement to finish a number of appropriations bills, ensuring adequate time for drafting text and for members to review prior to casting votes,” Johnson Press Secretary Athina Lawson said in a statement.

In this offer, Johnson also is making an explicit threat – if the Louisiana Republican doesn’t have a bipartisan agreement in hand by Friday, he’s not willing to pass a short-term CR to avert a shutdown. Johnson will let government funding lapse starting at midnight Friday. Four bills expire at that point.

For their part, Democrats were cautiously optimistic about these latest developments.

“We’re making good progress,” Senate Majority Leader Chuck Schumer repeated several times as he left the Capitol on Tuesday night.

A short-term CR – and that’s what this is – makes sense in several ways. It would allow appropriators more time to finish drafting six complex bills; it would eliminate the threat of a partial government shutdown on Super Tuesday, March 5, as 15 states and one territory cast presidential primary votes; and most importantly, all federal agencies would be open on March 7, when President Joe Biden gives his State of the Union address.

There are a few dynamics driving Johnson’s decision-making process here:

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Johnson and the rest of the Big Four – Schumer, Senate Minority Leader Mitch McConnell and House Minority Leader Hakeem Jeffries – don’t have an agreement to avert a shutdown. And after Tuesday’s “intense meeting” in the Oval Office with Biden, it wasn’t entirely clear the quartet could achieve that.

→	If Johnson went to House Republicans and asked them to pass another clean CR without a detailed plan to end this funding crisis, he could lose his job. A big part of Johnson’s maneuvering here is self preservation.

Remember: These kinds of course changes have become a hallmark of Johnson’s speakership. Plans shift drastically without much notice. Lawmakers are often settling into one strategy when the entire scheme changes. It’s neck snapping.

Even if Democrats do go along with this plan, GOP conservatives may see this as a ploy to buy more time on bills that they will end up rejecting anyway. The House Freedom Caucus and its Senate Republican counterparts may renounce this plan and vote against it. But it could pass anyway with Democratic votes and a pocket of Republican votes.

None of this changes the overall dynamic that House Republicans aren’t likely to notch any real policy wins in these funding bills. That’s going to drive the hardline conservatives nuts. Will that end Johnson’s speakership? Stay tuned.

In reality, Republican conservatives want a yearlong CR that automatically will cut spending across the board. Most of those cuts would fall on non-defense domestic spending rather than the Pentagon or military programs. GOP conservatives argue Democrats care more about those programs anyway. So the political price for Republicans is pretty low, they claim.

But Johnson has very few options here that don’t involve triggering a government shutdown, and it’s already five months into FY 2024. Johnson cut a deal with Schumer on topline spending seven weeks ago. Yet the two parties – especially House Republicans – have dragged out fights over abortion, guns, and social spending in crafting final bills.

The challenge that Johnson faces is that the rest of the Big Four and the White House are negotiating on these bills as if they were an omnibus – because they sort of are. But Johnson and House Republicans are strongly opposed to any hint of a giant year-end omnibus.

So Johnson is stuck shifting bills between dates and trying to create smoke to obfuscate the fact that party leaders and the White House are doing exactly what they always do – crafting 12 bills behind closed doors and jamming them through Congress very late in the process.

The House comes back into session this evening. House Republicans will meet Thursday morning, their first get-together in a couple weeks.

– Jake Sherman and John Bresnahan

Tomorrow’s Event: Sens. Mark Warner (D-Va.) and Todd Young (R-Ind.) will join Punchbowl News founder Anna Palmer and senior congressional reporter Andrew Desiderio for an interview on news of the day and AI policy. RSVP now to join the conversation at 9:30 a.m. ET in-person or on the livestream.

Hunter Biden’s turn on the hot seat

As the House Republican impeachment inquiry into President Joe Biden faces growing questions over its legitimacy and path forward, GOP investigators will finally get to press Hunter Biden on his business dealings today.

The president’s son will face a full day of questions during a closed-door deposition before the House Oversight and Judiciary panels. Republicans are investigating whether Joe Biden improperly acted while in office to benefit his family’s financial deals. To date, the GOP hasn’t found any conclusive evidence of impeachable offenses.

Today’s session also marks the biggest moment so far during the impeachment probe for Oversight Committee Chair James Comer (R-Ky.) and Judiciary Committee Jim Jordan (R-Ohio), who’ve led the investigation.

There are three major dynamics we want to flag:

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Hunter Biden is the president’s son. And of all the people likely to accuse Biden of impeachable offenses, Hunter Biden is far from the top of the list. This is an obstacle for GOP investigators, similar to what we saw with James Biden’s testimony last week. The same family members who have the most information on their business dealings are going to strongly deny that Joe Biden engaged in any high crimes and misdemeanors.

→	Hunter Biden is currently under federal criminal indictment by Special Counsel David Weiss for allegedly falsifying a gun purchase form and avoiding taxes. These indictments mean Hunter Biden is likely going to refuse to answer many questions today.

House Republicans agreed that the interview will not be videotaped, and both sides have pledged to make the transcript available to the public as quickly as possible.

→

A major revelation from the impeachment inquiry has been witnesses testifying that Hunter Biden placed then-Vice President Biden on speaker phone during business meetings. We’ll be watching to see how the younger Biden addresses these conversations during today’s questioning. To be clear, the witnesses have added that these conversations never touched on the details of any deals.

The outside game: The Congressional Integrity Project, a progressive outside group, is running a multi-pronged Hill campaign calling on Republicans to drop their impeachment inquiry. The group is launching a new website, rolling out a mobile billboard outside of the deposition room and has a new digital ad.

CIP is seizing on the arrest and indictment of an FBI informant who alleged a Biden bribery plot. The informant, Alexander Smirnov, is accused of making up a claim that Joe and Hunter Biden received millions of dollars from Ukrainian energy company officials. This has dealt a major blow to the House GOP impeachment inquiry.

— Max Cohen

THE SENATE

Prospects dim for a full Senate Mayorkas trial

Senate GOP leaders on Tuesday endorsed a full impeachment trial for Homeland Security Secretary Alejandro Mayorkas, even as it appeared that the chamber is on track to bypass a trial entirely.

So far, moderate and red-state Democrats are supportive of a motion to dismiss the impeachment articles, and at least one GOP senator is warm to the idea. All it takes to skip a full trial is a simple majority Senate vote, meaning Democrats don’t even need Republicans as long as they stick together.

But for Senate Minority Leader Mitch McConnell and his deputy, Minority Whip John Thune, the decision to call for a full trial keeps conservatives at bay. More than a dozen Senate conservatives signed onto a letter pressuring McConnell to do everything in his power to ensure the proceedings play out fully.

“I believe the Senate needs to hold a trial,” said Thune, who has expressed interest in becoming GOP leader. He added that the Senate needs to “determine whether these are impeachable offenses.” McConnell later echoed Thune’s view on the issue.

Next steps: It’s important to note that Senate Majority Leader Chuck Schumer hasn’t yet said how he intends to handle the matter. But Schumer reiterated on Tuesday that he sees the House’s impeachment effort against Mayorkas as “absurd.”

Some Republicans agree. At least one, Sen. Mitt Romney (R-Utah), indicated on Tuesday that he could support a motion to dismiss the articles. That would give Democrats a buffer in case one of their members opposes scrapping the trial.

In recent weeks, other Senate Republicans — including Thune — have questioned the wisdom of pursuing Mayorkas’ removal from office. Some GOP senators have said they’re worried that the impeachment process has become “weaponized” instead of an extraordinary sanction that is only used in the most serious of cases.

And others, like Sen. James Lankford (R-Okla.), have noted that even if Mayorkas is convicted and thrown out of office — which won’t happen — that does nothing to solve the myriad problems at the U.S.-Mexico border.

Timing in limbo: The House’s impeachment managers aren’t likely to even present the articles to the Senate until Congress gets past the ongoing government funding crisis.

Once the articles are presented, senators are sworn in as jurors in a court of impeachment. At that point, senators can offer a motion to dismiss the articles or to refer them to a trial committee. These would all be at a simple majority threshold.

— Andrew Desiderio

COCKTAILS & CONVERSATIONS

Raising a glass to Premium Policy: The Vault

Last night, we hosted our first Premium Policy: The Vault event in D.C. at the Sazerac House! We gathered our Vault community from across the Hill, the administration and K Street for an evening of cocktails and conversations. Punchbowl News’ Dave Clarke, our policy editor for The Vault, gave remarks as well. Thank you, as always, to Elizabeth Wise and Laura Pinsky of Sazerac for hosting us.

Raising a glass: Rohit Chopra and Allison Preiss of the Consumer Financial Protection Bureau; Dylan Peachey of the House Ways and Means Committee; Erica Handloff of the Senate Budget Committee; Amanda Critchfield of the Senate Finance Committee; Stephanie Penn of Senate Minority Leader Mitch McConnell’s office; Al Mottur of Brownstein Hyatt Farber Schreck and Tom Manatos and Bijan Mehryar of Block.

Also joining us: Penny Lee and Miranda Margowsky of the Financial Technology Association; Ian McKendry of U.S. Bank; Stacy Day and Amanda Slater of Mastercard; Paul Thornell of Mehlman Consulting; Greg Lowman of Fidelity Investments; Taylor Holmes, Edwina Avbuere, and Jessica Kwon of Wells Fargo; Lauren Belive, Robert Grant, Sam Dreiman, and Susan Hendrick of Ripple; Kurt Ritterpusch of EY; Garrett Hawkins of the Institute of International Bankers and more!

More Dems raise concerns on mortgage disparity at Navy Federal

News: The chorus of congressional Democrats hammering the country’s largest credit union over allegations of discriminatory practices is growing. This time, New Democrats and the Congressional Hispanic Caucus are jumping in.

Led by Democratic Reps. Norma Torres (Calif.), Emilia Sykes (Ohio) and Nanette Barragán (Calif.), lawmakers demanded that potentially discriminatory mortgage practices be addressed, according to a pair of letters we obtained. These letters were sent to the Navy Federal Credit Union, as well as a battery of financial regulators.

The Navy Federal Credit Union has found itself under a bright spotlight since late 2023, when a CNN report found significant disparities in the credit union’s mortgage approvals for Black and white borrowers.

The letter from Torres, Sykes and Barragán addressed to Navy Federal CEO Mary McDuffie asked the credit union to ensure “access to opportunity as a basic moral and legal principle of fairness” and asked for an in-person meeting to discuss further.

And to the regulators – including National Credit Union Administration Todd Harper, Attorney General Merrick Garland, Department of Housing and Urban Development Secretary Marcia Fudge, and Consumer Financial Protection Bureau Director Rohit Chopra – the members asked for a “thorough fair lending examination and investigation of these alleged disparities.”

Congress has already been active on this issue. McDuffie met with members of the Congressional Black Caucus to discuss earlier this month.

Navy Federal spokesperson Wes Shaw said in a statement that the credit union “is committed to serving each and every one of our members fairly, and we work daily to help expand economic opportunity and access to credit for our diverse community of members.”

Meanwhile at the IRS: The agency is moving on crypto. It’s bringing in two new hires from crypto world amid efforts to crack down on tax evasion via digital assets.

Raj Mukherjee, who was global head of tax at a private blockchain software tech company, and Seth Wilks, who’s worked at crypto tax firms, are joining the IRS as executive advisors, the agency announced. The IRS added it’s working on compliance in “emerging areas” as it spends extra dollars from Democrats’ Inflation Reduction Act tagged for enforcement.

– Brendan Pedersen, Max Cohen and Laura Weiss

THE CAMPAIGN

News: Prince George’s County Executive Angela Alsobrooks’ second ad of her Senate campaign touts her experience fighting for education, health care and the new FBI headquarters.

The spot plays up the candidate’s last name by listing Alsobrooks’ accomplishments and visions for the future.

Angela will “also stand up for a woman’s right to choose,” one Marylander says in the ad.

Alsobrooks is running against Democratic Rep. David Trone (Md.) in the Senate primary. Alsobrooks boasts big name statewide endorsements, such as Gov. Wes Moore, Sen. Chris Van Hollen (D-Md.) and Rep. Steny Hoyer (D-Md.).

— Max Cohen and Mica Soellner

MOMENTS

CLIPS