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THE TOP
What’s next for government funding
Happy Monday morning.
Welcome back. The Senate is back today and the House returns tomorrow. Washington will jolt into action on a whole host of legislative and political priorities.
First off, some internal business: We have a new website design, a new newsletter design and the inaugural edition of The Sunday Vault — our Washington x Wall Street lookahead — came out last night. We’re making our news more readable and accessible. All of these changes were made with our most loyal readers in mind.
One cool thing: At the top of the newsletter, you’ll see a list of what you can find in this edition. Those links are clickable — they’ll take you directly to the section mentioned.
Now onto the news: Speaker Mike Johnson and Senate Majority Leader Chuck Schumer came to an agreement on FY2024 spending. As we’ve been reporting for a week or so, the deal makes minor tweaks to the Fiscal Responsibility Act, last spring’s debt-limit agreement between former Speaker Kevin McCarthy and President Joe Biden. That deal, of course, was the beginning of the end for McCarthy.
Here’s Johnson’s “Dear Colleague” and Schumer’s statement with House Minority Leader Hakeem Jeffries. We sent both out to Premium members Sunday afternoon.
The details: The Schumer-Johnson deal, hashed out mostly by aides, keeps the FRA nearly completely intact. Most importantly, a roughly $69 billion “side deal” by Biden and McCarthy remains in place.
Johnson was able to score two policy victories of note — both of which we scooped last week. Congress will accelerate a $10 billion IRS funding cut from FY2025 to FY2024. The new agreement also rescinds $6.1 billion in Covid-relief funds.
Overall spending comes in at $1.659 trillion. There’s $773 billion for non-defense discretionary spending and $886 billion for defense.
In sum, Johnson was able to secure $16 billion in additional savings for FY2024. But he got very little else. He’s already facing sharp criticism from the right.
Now onto the politics and substance. Remember that four appropriations bills — Agriculture, Energy and Water, MilCon-VA and Transportation-HUD — expire in 11 days. The rest of federal spending expires Feb. 2. So Congress is working on an extremely compressed schedule.
The big question over the coming days is how lawmakers will be able to pass funding legislation that codifies this budget agreement while averting a partial or total government shutdown.
Let’s get into it:
1) Both sides claim a win.
Johnson can point to the IRS and Covid-related cuts as he tries to sell the deal to conservatives. More on that below.
For his part, Schumer ensured that even with these cuts, the non-defense topline remained in line with the FRA and the “side deal” stayed in place at $773 billion. “It’s a good deal for Democrats and the country,” Schumer told his colleagues on a Sunday night call.
2) Johnson will have big problems with conservatives.
Let’s be clear here: Johnson is the only Republican majority leader in town. The White House and Senate are controlled by Democrats. And House Republicans will be down to a two-vote margin soon. So Johnson’s leverage is minuscule.
But conservatives didn’t elect Johnson to be McCarthy. They elected him to be the conservative firebreather he was as chair of the Republican Study Committee.
That Johnson — the one that existed from 2017 until the fall of 2023 — would’ve probably rejected this agreement. The House Freedom Caucus said the deal was “even worse than we thought.”
Now how about all of those red-meat “culture war” provisions that are included in the House’s GOP-only spending bills?
Johnson noted in his “Dear Colleague” letter that the agreement allows House Republicans to “fight for the important policy riders included in our” FY2024 bills. That means Johnson will still push for poison-pill provisions that will never pass muster with the Democratic-controlled Senate.
Already, Democrats are vowing to resist these efforts. Schumer and Jeffries said they “made clear” to the speaker that “Democrats will not support including poison pill policy changes in any of the twelve appropriations bills.” Senate Republicans are likely to back this too.
One other thing is clear too: House Republicans will never pass a rule for any of the spending bills. Everything will need to move on suspension, meaning House GOP leaders need Democratic support.
3) This reduces the chances of a shutdown.
Could there still be a shutdown? Sure. There are less than two weeks until the first tranche of spending bills expires. So much can happen in that timeframe.
A partial shutdown — covering the four Jan. 19 spending bills — is much more likely than a full government shutdown. Everything depends on how fast the House and Senate can process the bills after sorting out the “poison pill” issue. That remains to be seen, including which chamber goes first, when and how. Will party leaders sync the two deadlines together? Will they pass a CR? Stay tuned.
4) It leaves the border standoff — and Ukraine — unresolved.
Importantly, this agreement is silent on the ongoing negotiations surrounding a border-security package to ride alongside Biden’s supplemental funding request for Ukraine and Israel.
Sen. James Lankford (R-Okla.), the lead GOP negotiator, said on “Fox News Sunday” that the bipartisan Senate group will “hopefully” be able to release legislative text for the border component this week. The negotiators’ goal is to brief senators on Tuesday about the tightly-held talks.
Lankford also had a tacit message for Johnson: Don’t reject our agreement out-of-hand. Lankford said the House can “work to improve it” or acknowledge that it “makes real progress on the border… and then keep going for more.” Lankford will meet with the House Republican Study Committee on the issue.
— Jake Sherman, Andrew Desiderio and John Bresnahan
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First Mayorkas impeachment hearing, Hunter Biden contempt vote this week
House Republicans will move forward this week with both the start of impeachment hearings on Homeland Security Secretary Alejandro Mayorkas and a contempt vote for Hunter Biden, signaling a new phase in the election-year political battle with the White House and Democrats.
While no Cabinet official has been impeached in nearly 150 years, a House floor vote to remove Mayorkas from office seems very likely later this month or in early February. And as far as we can see right now, it’s likely to pass.
House GOP moderates seem OK with voting to oust Mayorkas, and there may be some vulnerable Democrats who either back the move or skip the vote. If he’s impeached, Mayorkas will face a Senate impeachment trial. He’s almost certain to be acquitted by the Democratic-run Senate, yet this isn’t an easy vote for Senate Democrats up for reelection in 2024.
As we told you last month, the House Homeland Security Committee, chaired by Rep. Mark Green (R-Tenn.), will take the lead on Mayorkas’ impeachment starting with Wednesday’s hearing. Another hearing is possible next week. The Judiciary Committee, which normally would handle any impeachment proceedings, is focusing on the inquiry into President Joe Biden.
Green has signaled for months that he was ready to impeach Mayorkas, even fundraising off it way back in April. Republicans assert that the Biden administration has lost “operational control” of the U.S.-Mexico border, violating federal law. That will form the central argument in seeking Mayorkas’ removal.
“The legislative branch writes the laws and the executive branch executes those laws. They don’t get to pick and choose which laws,” Green said on Fox News. “And clearly Secretary Mayorkas has basically forced his immigration policy on the country against the laws passed by Congress.”
Mayorkas’ aides and Democrats counter that impeaching the secretary is a political stunt that does nothing to resolve the ongoing border crisis.
“There is no valid basis to impeach Secretary Mayorkas, as senior members of the House majority have attested, and this extreme impeachment push is a harmful distraction from our critical national security priorities,” Mayorkas spokesman Mia Ehrenberg said in a statement.
While there have been a record number of undocumented migrants encountered at the U.S.-Mexico border in 2023, U.S. Customs and Border Patrol is also intercepting more fentanyl and removing noncitizens at a very high rate, DHS noted in public statements. And the White House requested $14 billion in additional border security funding in a supplemental request that has been stalled on the Hill for months in partisan fights over both the border and Ukraine.
Mayorkas is involved in the bipartisan Senate talks over changes to border security and immigration policy that have included some major concessions by the Biden administration, especially on asylum policy. There’s no agreement yet, however, and there may not be one. Speaker Mike Johnson has signaled he wants to negotiate directly on this issue with the White House, very likely the only way a border deal could pass the House.
In the other impeachment probe — the House GOP investigation into Biden — Republicans are turning their focus to the president’s son this week.
Flashback to December: Hunter Biden ignored a congressional subpoena to appear for a closed-door deposition to answer questions about his business dealings and any involvement his father had in these activities. The younger Biden and his lawyers pressed for a public hearing.
As a result, House Judiciary Committee Chair Jim Jordan (R-Ohio) and Oversight Committee Chair James Comer (R-Ky.) are holding separate markups on Wednesday on a contempt resolution aimed at Hunter Biden.
Although Hunter Biden has offered to publicly testify, Comer and Jordan say this isn’t acceptable and still represents defiance of a lawfully issued subpoena.
Elsewhere in the Biden investigation, Republicans are framing this month as the time to hear from their top witnesses.
Speaking on Fox News on Sunday, Jordan said he believes a number of key witnesses will appear in January — most notably predicting James Biden will appear. The brother of the president has been in contact with the GOP for months now over a potential date to testify without nailing down a time.
— John Bresnahan and Max Cohen
Weekday mornings, The Daily Punch brings you inside Capitol Hill, the White House, and Washington.
📆
What we’re watching
Tuesday: The Senate Intelligence Committee has a closed intel briefing. The House Rules Committee will meet to prepare a number of bills for the floor.
Anthony Fauci, the former head of the National Institute of Allergy and Infectious Diseases, will sit for the first day of his two-day transcribed interview in front of the Select Subcommittee on the Coronavirus Pandemic.
Wednesday: House Homeland Security will have a hearing on how DHS Secretary Alejandro Mayorkas’ “Failed Leadership Has Impacted the States.” House Oversight and the Judiciary committees will both mark up a resolution holding Hunter Biden in contempt of Congress.
Senate Homeland Security and Governmental Affairs will hold a hearing on “harnessing AI to improve government services and customer experience.” The Senate Judiciary Committee will hold a hearing on AI and the future of journalism.
Thursday: House Oversight will hold a hearing on the “risks of progressive ideologies in the U.S. military.” Senate Energy and Natural Resources will hold a hearing on federal electric vehicle incentives. Deputy Secretary of Energy David Turk and Deputy Secretary of Treasury Wally Adeyemo will testify.
— Jake Sherman
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PUNCHBOWL NEWS FAMILY
Dave Clarke joins Punchbowl News!
Some news about Punchbowl News: Dave Clarke is joining Punchbowl News. We’re so excited for this.
Dave is going to be running our policy coverage, including The Vault. That includes our Washington x Wall Street report, which launched Sunday night and will be part of a new subscription service integrated into our Premium editions. Sign up for The Vault here.
If you’ve worked in some of the big Washington journalism institutions, you almost certainly know Dave. And if you read The Washington Post or Politico over the last decade, you’ve benefited from his skill.
Dave was at the Post for almost nine years, where he most recently ran the 202 newsletter franchise. He was also the Congress editor and edited the Post’s White House coverage during the Trump presidency. Before that, Dave was financial services editor at Politico for several years and previously covered banking and economic policy as a reporter for Reuters and CQ.
Dave’s first day is today.
In honor of his first day and our foray into policy coverage, we invite you to subscribe to Premium Policy: The Vault. Don’t miss a day of our reporting, sign up here today or reach out to discuss team plans and discounts.
— Jake Sherman and Heather Caygle
… AND THERE’S MORE
Sen. John Cornyn (R-Texas) is continuing to raise boatloads of cash for Senate GOP incumbents and candidates. According to a source familiar with his political operation, Cornyn has raised $11.5 million so far this cycle. That figure includes $5.33 million for the NRSC. His joint fundraising committee, the Cornyn Victory Committee, was formed last cycle, during which Corynn was the top Senate GOP fundraiser outside of Senate Minority Leader Mitch McConnell and the NRSC chair at the time.
Rep. Juan Ciscomani (R-Ariz.) raised $540,000 in the fourth quarter of 2023 and has $2.1 million on hand.
Rep. Mike Lawler (R-N.Y.) raised $3.3 million in 2023, including $700,000 in Q4, his team announced. He has more than $2.5 million on hand.
Andy Blunt is the new CEO of Husch Blackwell Strategies. HBS has 10 offices, more than 70 employees and more than 300 clients.
U.S. Steel has hired K&L Gates to lobby on their proposed “combination with Nippon Steel Corporation.” The merger has drawn criticism from a variety of elected officials.
SFA Fund, a super PAC supporting Nikki Haley, has a new ad out in New Hampshire that makes the point that, if elected, the former South Carolina governor will have a mandate. In the spot, Haley says she defeats President Joe Biden by 17 points in head-to-head polls.
— Jake Sherman, Andrew Desiderio and Max Cohen
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NRF 2024: Retail’s Big Show is the world’s largest retail trade show.
MOMENTS
ALL TIMES EASTERN
8 a.m.
President Joe Biden will receive his daily intelligence briefing.
9:40 a.m.
Biden will depart New Castle, Del. en route to Charlestown, S.C., arriving at 11:15 a.m. Karine Jean-Pierre and John Kirby will gaggle aboard Air Force One en route to South Carolina.
12:30 p.m.
Biden will deliver remarks at a political event in South Carolina.
4:40 p.m.
Biden will depart Charleston en route to Dallas, arriving at 7:15 p.m.
8:05 p.m.
Biden will pay his respects to the late Rep. Eddie Bernice Johnson (D-Texas).
9:30 p.m.
Biden will depart Dallas en route to Joint Base Andrews, arriving at 12:05 a.m. Biden will return to the White House at 12:25 a.m.
CLIPS
NYT
“From Lebanon to the Red Sea, a Broader Conflict With Iran Looms”
— David E. Sanger and Steven Erlanger in Berlin
NYT
“Pressure Builds on Pentagon to Explain Timeline of Austin’s Hospitalization”
— Helene Cooper and Eric Schmitt
WaPo
“Blinken visits UAE, Saudi Arabia on Middle East tour in bid to avert wider war”
— Rachel Pannett
WaPo
“Boebert’s ex-husband calls police after fight with congresswoman”
— Mariana Alfaro
WSJ
“Lawmakers Push to Defuse China’s Dominance of Older-Generation Chips”
— Asa Fitch
AP
“Israel says Hezbollah struck sensitive air traffic base in the north and warns of ‘another war’”
— Julia Frankel in Jerusalem, Samy Magdy in Cairo and Najib Jobain in Rafah, Gaza Strip
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Every January, NRF convenes the most extraordinary retail industry leaders and partners in New York City for its annual conference and expo. NRF 2024: Retail’s Big Show will be bigger and better than ever with 40,000 people from 6,200 brands and 100 countries. Attendees will have access to 1,000 exhibitors highlighting the latest innovative solutions for retailers and 450 speakers discussing emerging trends, challenges and opportunities facing the industry. Session topics will include using AI-enabled search and language models to change the way we shop, combating retail crime, building a stronger supply chain and creating a profitable and circular retail industry. Retail leaders will connect with more than 1,100 students at the NRF Foundation Student Program, and the industry will celebrate visionary individuals shaping retail’s future at the NRF Foundation Honors. Learn more about NRF 2024: Retail’s Big Show.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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