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PRESENTED BY

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

THE TOP

Good Monday morning, everyone. Former Sen. Bob Dole (R-Kansas), a World War II veteran who served in Congress from 1961 to 1996, died at 98 yesterday. Dole was the 1996 GOP nominee for president and the 1976 nominee for vice president. Dole served as Senate majority leader from 1985 to 1987, and again in 1995 and 1996. He was Senate minority leader for eight years, and he also chaired the Senate Finance Committee.

Dole was a sharp partisan who Democrats dubbed a “hatchet man” early in his congressional career. Yet after he left politics, Dole was widely admired for his friendships with one-time rivals, as well as his work for veterans and the disabled. Dole is one of those rare pols whose reputation improved once he was out of office.

Read the NYT obit about Dole. Also, check out this lead from our friend David Rogers. Rogers covered Congress for the Wall Street Journal and Politico for many years. This Rogers story from Russell, Kan., is from Aug. 15, 1988, and we think it captures Dole — and Rogers’ amazing grip on the Senate and its characters:

RUSSELL, Kan. — Like the outcroppings of bleached stone in the prairie grass, there is a hardness to this land, and it shows in Russell’s native son, Senate Majority Leader Robert Dole.

In the evening dusk in his old back yard, the Kansas Republican can still find the weathered metal hook he used to exercise his wounded right arm after World War II. Returning to address his former high school, he seems to speak of his own powerful ambition to chase the flat horizon and grasp the dreams that lie beyond.

"You’ve come from a very special place," he tells the graduating class in the crowded gym. "The horizon is out there somewhere, and you just keep chasing it, looking for it, working for it . . . to make your mark not only on Kansas but America.” … 

Under this hardness, though, are a vulnerability and compassion. Crippled by war, Mr. Dole can quote Job without embarrassment. He rages at the treatment of the handicapped. He reminds the GOP, as he did at its 1984 convention, that it is also the party of Lincoln. "His ambitions help people more than hurt them," says House Ways and Means Committee Chairman Dan Rostenkowski, an Illinois Democrat.

There were no details about Dole’s funeral arrangements available on Sunday. However, we expect there will be discussion of Dole lying in state in the Rotunda, similar to fellow war heroes Sens. John McCain (R-Ariz.) and Daniel Inouye (D-Hawaii). President Joe Biden, who served in the Senate with Dole for 23 years, ordered flags at half staff on federal buildings.

Welcome to the second week of December

This week Congress will be wrestling with the National Defense Authorization Act and the debt limit. We’ll be focusing on how party leaders navigate the annual defense policy bill — there were lots of discussions over the weekend — and we’ll be even more interested in hearing whether they try to attach the debt limit to the package, which our reporting tells us is a tough sell.

Remember: The debt limit needs to be lifted by Dec. 15, according to Treasury Secretary Janet Yellen. The experts at Wrighston ICAP suggest the real “X date” is sometime in January, but Yellen’s statement will be the one getting the most attention from lawmakers. More on this in a minute.

But first let’s talk about our latest edition of The Canvass, our project with the Locust Street Group which anonymously polls senior staffers on Capitol Hill. We’ll be releasing our “Year in Review” this month, but we have a fascinating November survey for you this morning — and much more for Premium subscribers throughout this week. 

→ 2022 priorities: 61% of respondents told us that supply chain issues will be a top focus of Congress in 2022. 62% of Republicans say that, and 60% of Democrats. Of course, it becomes much more difficult to legislate in an election year. But Democrats tell us they are feeling the heat on supply chain slowdowns, and there will be pressure on the leadership to take action.

→ Leadership: Now this is interesting. A majority of aides on both sides of the aisle say that their party may need to replace their leadership in 2023. We’re a long way away from this, but we’ve never seen such widespread sentiment on this topic. We’ll let the graphic below speak for itself. It is truly fascinating. 

Reminder: We’ll talk to Rep. Suzan DelBene (D-Wash.), chair of the New Democrat Coalition, on Wednesday at noon eastern about the state of childhood poverty and the impact of the Child Tax Credit and the Earned Income Tax Credit. RSVP here. 

THIS WEEK

Legislative items for your radar

Congressional leaders had a lot on their plate last week. But when you think about it, all they did was solve the easiest issue: government funding. With passage of a continuing resolution, federal agencies will remain open until Feb. 18 while House and Senate appropriators try to hash out a year-long funding bill. Or what’s left of it anyway.

We don’t expect any real action on FY 2022 spending bills until the Build Back Better Act debate is over. Republicans want more money for defense spending, and they’re refusing to budge on what they call Democratic “poison pills,” like getting rid of the Hyde Amendment. There’s been no movement on these issues for a while. And now both the chair and ranking member of the Senate Appropriations Committee are retiring, which is another factor in this standoff.

With the threat of a government shutdown averted, the biggest issues facing Congress are the debt limit — which has to be dealt with very soon, as in this week — and the National Defense Authorization Act, another must pass bill that got hung up in the Senate last week.

Senate Majority Leader Chuck Schumer wants to finish work on BBB by Christmas, which is also a huge lift and becoming more difficult every day.

Medicare sequestration cuts kick in on Jan. 1 unless Congress acts, so this is another pressing matter for lawmakers. These are automatic cuts required under the 2011 Budget Control Act. Congress suspended them until Dec. 31. So this requires some quick action.

Let’s take a look at these issues:

→ NDAA and the debt limit: We’re going to consider the NDAA and debt limit together because House and Senate leaders are thinking about pairing them. The House is considering separate votes on the NDAA and debt limit, and then merging the two before they send that package onto the Senate.

The top Democrats and Republicans on the House and Senate Armed Services committees have been scrambling since last week to finish a bipartisan compromise NDAA bill by today. It would go to the floor by the end of this week, and would be considered in conjunction with the debt limit, although they’re formally separate.

Our friend Connor O’Brien of Politico talked to House Armed Services Committee Chair Adam Smith (D-Wash.) over the weekend about possible add-ons to the NDAA, including the debt limit and Medicare sequestration: "What I told the speaker was if something comes up on that, let me know, but my job right now is to get you a product by Dec. 6 … If leadership decides … to try to use this for something else, then we’ll have that discussion when we get there."

Now this is a risky strategy, as we said before, with potential pitfalls on both the right and left. 

House Minority Leader Kevin McCarthy has been clear that House Republicans won’t back the NDAA with the debt limit attached. But what if Democrats added the $24 billion being sought by the Armed Services Committee? And if the NDAA is separate from the debt limit technically, will that make a difference for Republicans? Can they vote for the bill then?

On the left, the Squad and other progressives don’t support the additional defense funding. In fact, they’d like to see Pentagon and overall defense spending cut. But what if this includes the debt limit, and their vote is needed to raise the borrowing cap in the face of overwhelming GOP opposition? That’s a difficult question.

On the Senate side, Minority Leader Mitch McConnell is holding “productive” talks with Schumer on the debt limit, although he’s not showing his hand, as usual. But could McConnell get 10 GOP votes for an NDAA-debt limit-Medicare sequestration bill? Based on what happened last time with Senate Republicans, that would seem very tough. But again, McConnell hasn’t shown his hand yet, so we’re not sure how he will play this.

Do Schumer and McConnell have a backup plan if this fails? Maybe a short-term debt limit increase while Democrats use reconciliation for a longer-term increase? 

→ BBB: There was a lot of heat last week among Senate Democrats on BBB, but it doesn’t appear if there was a lot of actual progress toward passing a bill. Both Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have raised doubts about whether the package can be finished this year. And there’s no resolution on the state and local tax deduction (SALT) or immigration, two critical topics.

But House Democrats are getting louder in their calls for the Senate to get moving. And we expect to see the White House lean in harder. Also expect discussions about — and maybe even decisions from — the Senate parliamentarian about what Democrats can include in the package under the chamber’s arcane rules.

Rep. Suzan DelBene (D-Wash.), chair of the New Democrat Coalition, is calling for the Senate to pass the BBB before the end of December, when the Child Tax Credit included in the American Rescue Plan expires. DelBene and the NDC have strongly backed this provision.

Here’s DelBene:

“Our members stood united in passing the Build Back Better Act last month and now it is time for the Senate to act before the expanded Child Tax Credit payments expire at the end of December. American families cannot afford to lose this critical middle-class tax cut, which has cut child poverty in half and helped millions of families afford childcare, pay their bills, and put food on the table.”

“This holiday season our constituents want results, and New Dems are ready to deliver. Congress must finish the job and advance the Build Back Better Act to President [Joe] Biden’s desk so American families, workers, and communities have the opportunity to succeed in the New Year.”

→ Prescription drugs: President Joe Biden will talk about prescription drugs today. Here’s a bit from the White House this morning:

"The President will deliver remarks on the unprecedented economic benefits of the Build Back Better plan will mean for Americans taking prescription drugs. Right now, Americans pay the highest prices in the world – often 2 to 3 times as much as citizens in other developed countries.

"The Biden Administration, through the Build Back Better economic plan, will take historic action to lower the prices of drugs and hold drug companies accountable while deterring future price increases.

"Before delivering remarks, POTUS with meet with two young women who suffer from diabetes and whose lives are made much harder – unnecessarily – by the fact that even though insulin was invented a century ago and costs only a few dollars to make, its cost has skyrocketed in recent years, often to over $1,000. Under BBB, insulin will be capped at $35 a month.

Reminder: The Senate comes back into session today. The House returns tomorrow.

WALL ST. X WASHINGTON

Patrick McHenry and Tim Ryan’s crypto fix

You’ll probably remember that the $1 trillion bipartisan infrastructure legislation included new reporting requirements for cryptocurrency transactions that, to put it mildly, raised the hackles of the digital asset world.

The new infrastructure law requires trades worth more than $10,000 to be reported, and it also could force brokers to collect more information about trades for the IRS. These are designed as anti-money laundering provisions. But they bought widespread complaints from crypto traders as impractical and unduly burdensome.

Rep. Patrick McHenry (R-N.C.), the top Republican on the Financial Services Committee, and Rep. Tim Ryan (D-Ohio), who is running for the Senate, have a new proposal to alter these requirements. The legislation has the backing of the Blockchain Association, the Crypto Council for Innovation and the Association for Digital Asset Markets. 

The legislation redefines “broker” and clarifies Congress’s intent in the digital asset space.

Here is the bill and here is McHenry’s one pager.

We’ve said this before, but the crypto world is going to have a lot of work to do with Congress for many reasons. Number one, they lost this massive battle in the infrastructure bill. McHenry is the top Republican on Financial Services and in tune with modern financial technology. But losing on crypto reporting requirements was a big deal, and underscores the need that the industry needs to get serious with Washington or will get swamped by Congress and federal regulators.

On Wednesday, the Financial Services panel — chaired by Rep. Maxine Waters (D-Calif.) — will hold a hearing on crypto with some of the industry’s big players, including executives from Coinbase, FTX, Bitfury Group and Circle.

Here’s McHenry: “The choice is simple, either the next generation of the internet will be deployed in the U.S., or not. Poorly constructed digital asset reporting requirements in the Infrastructure Investment and Jobs Act threaten to push innovators and entrepreneurs overseas. The Keep Innovation in America Act is the bipartisan fix to ensure these standards are compatible with how this new technology actually works. I’m glad to partner with Congressman Ryan, and our colleagues on both sides of the aisle, to foster innovation here at home.”

DOWNTOWN DOWNLOAD

We’ve been tracking some of the entities signing up lobbyists to try to get a piece of the $1 trillion infrastructure law. Two more this morning: the cities of Forest Grove and Carlton, Ore., have inked contracts with CFM Strategic Communications to seek funding for “transportation, economic development, water infrastructure, public safety and other community services.” Neither cities had lobbyists in the past. 

FRONTS

MOMENTS

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

1 p.m.: Jen Psaki will brief. 

2 p.m.: Biden will speak about prescription drugs.

The week ahead: Tuesday: Biden will speak with Russian President Vladimir Putin. “The leaders will discuss a range of topics in the U.S.-Russia relationship, including strategic stability, cyber, and regional issues. President Biden will underscore U.S. concerns with Russian military activities on the border with Ukraine and reaffirm the United States’ support for the sovereignty and territorial integrity of Ukraine.”

Wednesday: Biden will travel to Kansas City, Mo., to discuss the new infrastructure law. Thursday and Friday: Biden will host the Summit for Democracy.

CLIP FILE

NYT

→ News Analysis: “Witty and to the Point, Dole Embodied ‘Shared Values’ in Washington,” by Sheryl Gay Stolberg

→ “What Does the U.S. Owe Separated Families? A Political Quandary Deepens,” by Jeremy Peters and Miriam Jordan

WaPo

→ “Former senator David Perdue to challenge incumbent Brian Kemp for Georgia governor,” by David Weigel, Amy B. Wang and Amy Gardner

→ “Seven days: Following Trump’s coronavirus trail,” by Ashley Parker and Josh Dawsey

WSJ

→ “China Seeks First Military Base on Africa’s Atlantic Coast, U.S. Intelligence Finds,” by Michael M.  Phillips

AP

→ “Turning outrage into power: How far right is changing GOP,” by Brian Slodysko

→ “Fauci says early reports encouraging about omicron variant,” by Gene Johnson

Politico

→ “’Absolute liars’: Ex-D.C. Guard official says generals lied to Congress about Jan. 6,” by Betsy Woodruff Swan and Meridith McGraw

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Editorial photos provided by Getty Images