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PRESENTED BY

BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN
WITH MAX COHEN AND CHRISTIAN HALL

THE TOP

Happy Wednesday morning.

Late Tuesday, the House Democratic leadership released the America COMPETES Act, a 2,900-page bill aimed at boosting U.S. high tech research and manufacturing, with a heavy focus on the semiconductor industry. The bill is here, the Democrats’ analysis is here and the Democrats’ fact sheet is here. 

This bill is long – don’t curl up in bed with it, it may put you to sleep – but it’s quite important. Congress sees this as the main legislative vehicle to combat China’s rise.

The White House tells us that getting a compromise between this bill and the Senate-passed USICA is a huge priority for them. They say it will help ease supply chain disruptions, boost American competitiveness and enhance national security by finally re-shoring the semiconductor industry. 

And let’s be completely frank: This White House needs a win. 

Commerce Secretary Gina Raimondo is one of the leads here for the administration, so we thought it would be useful to catch up with her on the policy and politics about getting this bill through Congress.

Here’s a banner headline out of that conversation. Raimondo told us that Congress “can’t wait until April, May” to pass something. It has to do it in February or March.

“There’s no reason to [wait]. We have broad agreement. The House has been working really hard. We know the issues. It’s gotta happen. There’s no need for delay. Let’s do it. Let’s do it. It’s time.”

In other words, the House and Senate need to resolve their differences at the same time they look for a big government funding deal and try to revive the barely-alive Build Back Better Act.

Quite frankly, a USICA compromise seems way more likely than a BBB deal at this point.

Check out the interview:

Here are some interesting thoughts from Raimondo: 

→ House and Senate differences: “[The House and Senate] agree on the bones of the bill. They agree on the urgency. So that is why I’m so optimistic because what they agree on outweighs what they disagree on. I’ll also say from my recent phone calls with Speaker Pelosi, she’s deeply engaged. She is working hard with her committee chairs. And it’s a number of committees. This is a complex bill to problem solve. So there’s an agreement that there have to be big investments in basic research. There may be different ways to get there. There seems to be very good agreement around the $52 billion emergency appropriation for chips. I think there’s agreement around the need to have this bill help America compete and compete vis-a-vis China, there may be differences for exactly how to do that.”

→ Why this should be an imperative for members of Congress: “Chips are in everything you can find. I mean, literally your car, your phone, your exercise equipment, your washer, your dryer, your everything, your computer, the ability to have this interview. It’s actually unique, in a way, as a product, if you think about it, how ubiquitous it is. We saw the inflation numbers come out a couple of weeks ago, not where we want them to be. A third of those inflation numbers were due to the increased prices in cars and used cars. That is directly related, primarily, to the lack of chips. And it’s getting worse. There’s 2,000 chips in electric vehicles, about 600 in a traditional vehicle. And that’s why I’m saying ‘Guys, we got to get this done. Every day we wait is a day we can’t afford.’”

What Republicans are saying

No surprise here, the House GOP isn’t in favor of the America COMPETES Act. Last June, 134 Republicans voted for a bill to bolster the National Science Foundation and Energy Department. That was supposed to be the House’s negotiating position. So Republicans feel like they got the rug pulled out from under them. 

Here’s part of Rep. Michael McCaul’s (R-Texas) take on the Democratic bill. McCaul is the ranking member on the House Foreign Affairs Committee. Needless to say, he’s not happy:

“We have been in talks with House and Senate committees of jurisdiction for weeks, trying to put together a bipartisan bill that could pass Congress. Rather than allowing those talks to play out, Speaker Pelosi and House Democrats have decided to torpedo the chance of a bipartisan, bicameral bill to confront the generational threat posed by the Chinese Communist Party.”

You can read the rest of McCaul’s statement here.

NEW YEAR. NEW SITE.

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Make sure to check it out – we hope you love it as much as we do!

WASHINGTON AND THE WORLD

GOP offers some support on sending U.S. troops to Eastern Europe, Baltics

President Joe Biden’s foreign policy moves – especially in the wake of the disastrous U.S. withdrawal from Afghanistan last summer – get little if any support among House and Senate Republicans.

Now, with Biden considering the deployment of thousands of U.S. troops to Eastern Europe and the Baltic nations as a counter to Russia’s threatened invasion of Ukraine, some House and Senate Republicans are backing the idea. Grudgingly backing, to be precise. But backing Biden for now.

These Republicans complain that Biden moved far too slowly to counter Russian President Vladimir Putin, they bash the White House for blocking sanctions on the Nord Stream 2 pipeline project and they suggest Biden’s handling of the Afghanistan exit led – in part – to the current crisis. 

Another large faction of Republicans, however, reject the potential U.S. troop deployment and suggest Biden may blunder into an unwinnable war with Russia over Ukraine. To be clear, Biden isn’t sending any troops to Ukraine and the chances of a direct U.S.-Russian military confrontation remains low.

Let’s look at what’s being said on the GOP side of the aisle as Biden faces a huge foreign policy challenge.

Senate Minority Leader Mitch McConnell told reporters this in Kentucky on Tuesday:

“So my advice to the president and his team from the very beginning was let’s do the following things and do them now. Both ground to air, Stinger missiles. The weapons that also can be used against tanks into Ukraine now. Forward deploying additional NATO troops, including some of our own into Poland, Romania, the Baltics now — not after an incursion. I read that the president was huddled at Camp David Sunday with his team and what I’ve been hearing since then is encouraging. That they’re prepared to take steps before an incursion not afterwards. I’ve not been near the news this morning, so I’m not sure what additionally may have occurred. But it appears to me the administration is moving in the right direction.”

House Minority Leader Kevin McCarthy declined to comment.

Sen. Jim Risch (R-Idaho), ranking member of the Senate Foreign Relations Committee, was interviewed by Larry Kudlow on Fox Business Tuesday afternoon. Here’s Risch:

“You don’t put 8,500 troops on the ground to face 110,000 Russian troops. But there is benefit in sending the 8,500 to bolster the NATO allies over there and show them we mean business, we got their back. Look, NATO isn’t going to invade into Russia, it’s not going to happen. There’s a lot of those counties – the Baltic states – if it wasn’t for NATO, if it wasn’t for us, [Putin] would be marching in there too. He wants to put [the Soviet Union] back together. But because we do have NATO, that stops it.”

Rep. Michael McCaul (R-Texas), ranking member of the House Foreign Affairs Committee, said this Monday on CNN: 

“I think it helps, and I’m glad the administration is finally listening. We’ve been urging them to do these joint exercise-operations with NATO and these NATO countries like Poland, the Baltic states, Romania, Bulgaria. That would be a showing of deterrence. Prior to this, it’s been very passive deterrence.

“With respect to the 8,500 troops, remember, it’s very conditioned on NATO requesting it. Secondly, only until after an invasion. Your analyst talked about [Ukrainian] President Zelensky, his frustration is whether you’re talking about the sanctions [on Russia] or these joint exercises on Russia’s western flank, it’s all predicated on after an invasion. [Zelensky] thinks it should be done before, to prevent an invasion from happening in the first place.”

Sen. Jim Inhofe (R-Okla.), ranking member of the Senate Armed Services Committee, tweeted this on Monday: “What Putin is doing is unprecedented. All options need to be on the table – especially bolstering the Eastern flank of NATO as I’ve called for. I urge @POTUS to do this – AND take all possible measures to support Ukraine’s defense and deter Russia.”

Sen. Todd Young (R-Ind.), a member of the Foreign Relations Committee, told us during a Punchbowl News event Tuesday that U.S. troops should be sent to Eastern Europe “without delay.” More Young:

“I think whatever can be done to establish deterrence needs to be done in short order. It’s unclear, because Vladimir Putin is very good at being unclear and unpredictable, when an invasion might occur, and to the extent we can, A) arm the Ukrainians to deter such an invasion and B) position our forces in neighboring countries, allied countries, to lend further deterrence.”

Rep. Brian Mast (R-Fla.), an Afghanistan combat veteran who serves on the Foreign Affairs Committee, posted his on his blog Tuesday:

Putin’s biggest dream is to restore the glory of the Union of Soviet Socialist Republics. Ukraine is just the first step. And the only thing that Putin fears is Ukraine becoming a member of NATO because he knows that NATO’s commitment to defend all member states would quickly crush that dream.

This much is clear: if the United States doesn’t put a stop to the ambition of Putin, he won’t stop with Ukraine. He’ll continue to swallow up the countries around Russia until he’s restored the Soviet Union.

President Biden must step up and lead from the position of strength.  After all, the world is safest when America is strongest.

Rep. Mike Gallagher (R-Wis.), who serves on the House Armed Services Committee, tweeted on Monday: “How many more embassies do we need to evacuate before President Biden realizes his foreign policy isn’t working?” 

Rep. Greg Steube (R-Fla.), a member of the Foreign Affairs Committee, tweeted on Monday: “So we abandon Afghanistan (where we still have citizens stuck and left billions in military equipment) and now we are going to send troops to the Ukraine? For what? So Hunter Biden can make more money from Burisma?” 

STATE OF THE ART

Both parties agree: Michelle Obama is a winner

We’ve noticed a new trend – Both Republicans and Democrats are using Michelle Obama in campaign solicitations. Although how they do it is vastly different.

At least twice in recent days, the National Republican Senatorial Committee has sent out fundraising solicitations with the suggestion – backed up by exactly nothing, as far as we can tell – that the former first lady is looking at a run for president of the United States. 

Here’s one example from Jan. 24:

And another from Jan. 23 – the section on the left is the email and the right is the splash page the email leads to.

Of course, time and time again, Obama has said she has no interest in running for president. That doesn’t stop the speculation, though. Someone looks at the polls, sees Michelle Obama is really popular with Americans, and then jumps to the conclusion she has to run for office. Conservative podcaster Joe Rogan recently suggested she may seek the White House, although we’re pretty confident that he doesn’t have a read into the Democratic primary landscape.

Democrats have gotten in on the action as well, although they’re using her words to raise money for their cause. Republicans are using the phony prospect of Michelle Obama running to scare GOP donors into ponying up money. This one is from the Democratic Governors Association.

THE BIDEN AGENDA

Five Senate Democrats turn up the heat on Child Tax Credit in BBB

Democratic Sens. Michael Bennet (Colo.), Cory Booker (N.J.), Sherrod Brown (Ohio), Raphael Warnock (Ga.) and Ron Wyden (Ore.) are urging President Joe Biden and Vice President Kamala Harris to ensure the expanded Child Tax Credit remains intact in any updated Build Back Better package.

The letter from the five senators is the latest sign of how highly some Democrats value CTC extension in the face of public skepticism from Sen. Joe Manchin (D-W.Va.). Manchin scuttled BBB negotiations in December over inflationary concerns and has repeatedly called for a work requirement for families receiving CTC benefits.

“The expanded CTC is a signature domestic policy achievement of this administration, and has been an overwhelming success,” the senators write in the letter. “We are deeply grateful for your leadership on the historic CTC expansion, and we stand ready to work with you to extend this critical investment in American families and children as part of the Build Back Better package.”

The passage of the American Rescue Plan paved the way for families to receive six monthly CTC payments. The BBB package that passed the House in December featured a provision to renew the CTC. 

But with that deal stalled, the last time expanded CTC payments were sent out was on Dec. 15.

Here’s more from the letter:

“This policy is not only transformative, but popular. Support for the expanded CTC has averaged nearly 60 percent since the first round of payments, and support for making the program permanent among recipients has averaged 73 percent since July. 

"The consequences of failing to extend the CTC expansion are dire, particularly as families face another wave of the COVID-19 pandemic. Without the expanded credit, nearly 10 million children will be thrown back into or deeper into poverty this winter, increasing the monthly child poverty rate from roughly 12 percent to at least 17 percent. After historic progress, it is unacceptable to return to a status quo in which children are America’s poorest residents and child poverty costs our nation more than $1 trillion per year. Raising taxes on working families is the last thing we should do during a pandemic.”

PUNCHBOWL NEWS EVENTS

Anna talks to Sen. Todd Young about USICA, election reform and Ukraine

Missed our conversation with Sen. Todd Young (R-Ind.)? Watch the full interview, plus our fireside chat with Micron Executive Vice President Manish Bhatia.

NOMS, NOMS, NOMS

Senate Budget to take up Shalanda Young’s nomination for OMB director

The Senate Budget Committee will hold a hearing Feb. 1 on the nomination of Shalanda Young to be the director of OMB, Sen. Bernie Sanders (I-Vt.), the panel’s chair, announced on Tuesday.

The Budget Committee will also consider Nani Coloretti’s nomination to be deputy director.

If confirmed, Young will be the first Black woman to hold this post. Young, former staff director at the House Appropriations Committee, has been serving as “acting director” of OMB since last year. She has strong backing from Speaker Nancy Pelosi and other top House Democrats, who have urged President Joe Biden to tap Young as OMB director ever since Neera Tanden withdrew her nomination last March. Biden finally did so on Nov. 24.

→ Former President Donald Trump said last night he would endorse Morgan Ortagus for a House seat in Tennessee. You probably know Ortagus. She’s a former spokesperson for Mike Pompeo who also serves in the U.S. Navy Reserves. Ortagus is mulling a run for a newly drawn Republican seat in Nashville. Rep. Jim Cooper (D-Tenn.) announced his retirement Tuesday and the GOP is heavily favored win this district.

House GOP leadership is quite excited about the prospect of an Ortagus candidacy. They believe she is a strong voice on national security issues. Ortagus is also a woman, which is something the party needs. Ward Baker, the former executive director of the NRSC and a big figure in Tennessee politics, is involved in Ortagus’ campaign.

→ Speaker Nancy Pelosi announced Tuesday she would run for re-election to a 19th House term. She did this on the same day that Cooper announced his retirement, marking 29 House Democrats who won’t seek to return in 2023. Will Pelosi serve in the next Congress? We have no idea. But for now, she is saying she’s running for re-election. 

→ Former Sen. Max Baucus (D-Mont.) has donated $50,000 from his campaign account to the Max S. Baucus Institute at the University of Montana.

FRONTS

MOMENTS

10:15 a.m.: President Joe Biden and Vice President Kamala Harris will get their intelligence briefing.

11 a.m.: The Covid-19 team will brief reporters.

1 p.m.: Biden will meet with CEOs on the BBB. CEOs and corporate leaders attending include:

→ GM’s Mary Barra

→ Salesforce’s Marc Benioff

→ TIAA’s Thasunda Brown Duckett

→ Ford’s Jim Farley 

→ Siemens’ Barbara Humpton 

→ Cummins’ Tom Linebarger

→ HP’s Enrique Lores

→ Etsy’s Josh Silverman

→ Microsoft’s Brad Smith

→ Corning’s Wendell Weeks

2 p.m.: Jen Psaki will brief.

3:30 p.m.: Biden will sign an executive order on military sexual harassment.

CLIP FILE

NYT

→ “Cawthorn Challenge Raises the Question: Who Is an ‘Insurrectionist’?” by Jonathan Weisman

→ “Where Is Germany in the Ukraine Standoff? Its Allies Wonder,” by Katrin Bennhold in Berlin

WaPo

→ “Federal prosecutors examine slates that offered Trump electoral votes in states Biden won in 2020,” by Matt Zapotosky

WSJ

→ “U.S. Plans Sanctions, Export Controls Against Russia if It Invades Ukraine,” by Kate O’Keeffe and Gordon Lubold Follow in Washington and Laurence Norman in Berlin

AP

→ “Biden’s big test: Proving he can rally allies against Putin,” by Aamer Madhani and Zeke Miller

Politico

→ New Jersey political consultant Sean Caddle pleads guilty in murder-for-hire plot,” by Matt Friedman

→ “Federal judge rejects challenge to ‘weighty and urgent’ Jan. 6 committee,” by Kyle Cheney

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Editorial photos provided by Getty Images