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PRESENTED BY

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

THE TOP

Happy Thursday morning.

Let’s call this “The Week That Wasn’t.” 

Party leaders on Capitol Hill and White House officials came into this week eyeing two bipartisan deals: One on an omnibus spending package that could be passed before the Feb. 18 government funding deadline, the other a harsh sanctions package to deter Russia from invading Ukraine.

The Senate will leave town today with neither done. Both issues are extraordinarily time sensitive. There are just 15 days until federal agencies run out of money. And Russia has more than 100,000 troops massed at Ukraine’s doorstep.

Let’s start with government funding. Leaders were hopeful for at least an agreement on a “topline number” so that appropriators could start drafting the 12 annual spending bills. But it doesn’t look like anything is going to happen at this point, as the difference between the two parties – especially as far as House Republicans are concerned – is just too great.

Now, there’s not going to be a government shutdown. That’s not really in play. Yet the failure to reach a deal on an omnibus spending  package means Congress will have to pass a continuing resolution to keep federal agencies open beyond Feb. 18. And a number of Donald Trump-era policies remain in place, which is extremely frustrating to progressives, who wonder why this is happening with a Democratic majority on the Hill and a Democratic president in the White House.

The outstanding issues are “parity” between defense and non-defense spending, as well as policy riders. Republicans are seeking parity in any increase in spending between social programs and the Pentagon, while Democrats refuse to agree to that condition. There’s also continued haggling over riders, including the Hyde Amendment, which bars the use of federal funds for abortions.

We’ve heard from several sources that Rep. Kay Granger (Texas), the top Republican on the House Appropriations Committee, is especially unhappy with the current state of negotiations and would be “just as happy to walk out,” said a source familiar with the situation. Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Appropriations Committee, would be willing to strike a deal, but not at any cost. Shelby has been clear for months on what his conditions are.

So with just over two weeks to go until the federal government hits the funding deadline, Congress isn’t anywhere on an omnibus. Meaning another CR is increasingly likely. We’ll note here that the Pentagon has never been funded by full-year CR, and the top military brass have warned this would hurt both readiness and weapons programs.

Also, without an omnibus deal in hand, it will be tough – if not impossible – for Congress to approve additional Covid relief funding or a disaster relief package. So there are a lot of ripple effects here. 

Over on the Senate side, there was a lot of interest in crafting a bipartisan package to sanction Russia over its threatened invasion of Ukraine. Senate Foreign Relations Committee Chair Robert Menendez (D-N.J.) and Sen. Jim Risch (R-Idaho), ranking member on the panel, made a joint TV appearance on CNN on Sunday to talk about their desire to reach an agreement that would demonstrate U.S. resolve to challenge Russia. Menendez said the two sides were on the “one yard line” and very close to striking a deal on the “mother of all sanctions” bills.

Four days later, the two sides are still on the one-yard line, or maybe even have lost some yardage, if you’ll allow us to continue with the inappropriate football analogies. It looks as if the Senate will adjourn for the week without having reached any consensus on this issue.

Senate Republicans are split among themselves between the “Hit-Russia-with-more-sanctions now” faction and those who don’t want to do anything because they believe President Joe Biden has badly mishandled the crisis. Democrats want to impose some sanctions now, but then punish Russia with a lot more economic restrictions after any military action, which doesn’t make sense to their GOP counterparts.

The Nord Stream 2 pipeline controversy continues to divide the parties as well. Republicans have been pushing for sanctions on the project for months, while Democrats – under pressure from the White House, which in turn is under pressure from the German government and other European allies – have refused to go along with that.

There was some major U.S. action on this issue, of course, but it didn’t involve Congress. President Joe Biden announced the deployment of 3,000 U.S. troops to Romania and Poland, two NATO allies increasingly worried about the “revisionist” Russian neighbor.

And top Biden administration officials will hold classified briefings on the Ukraine situation today for members and senators. The briefers will include Secretary of State Antony Blinken, Defense Security Lloyd Austin, DNI Avril Haines, Homeland Security Department Alejandro Mayorkas and senior officials from Treasury, Commerce and USAID.

One more note: While Risch is still negotiating with Democrats over the Russia sanctions package, he’s releasing a blistering report this morning on the botched U.S. withdrawal from Afghanistan last year by the Biden administration. You’ll be able to get the report here. This is an excerpt from the executive summary of the report, which is entitled “Left Behind”:

​”The Biden Administration ignored numerous intelligence reports about the potential for a speedy Taliban takeover of Kabul, decided to abandon Bagram Air Base, disregarded dissent cables from the State Department (State), failed to plan an evacuation until it was too late, and in the process, abandoned tens of thousands of Afghan partners. The administration did not make a decision on evacuations from Afghanistan until a National Security Council Deputies Committee meeting on August 14, mere hours before the fall of Kabul.

"One of the most important roles of the U.S. government is for the protection of American citizens overseas. The Biden Administration failed to properly plan for an evacuation despite countless warning signs that a Taliban takeover was imminent. The U.S. government failed to even account for the number of people who would need to be evacuated, let alone for how this evacuation would occur.”

Mark your calendars: Our first in-person editorial conversation of 2022 is just two weeks away. Join us on Wednesday, Feb. 16 at 9 a.m. EST for a conversation with Commerce Secretary Gina Raimondo on American innovation and U.S. leadership in science and research. RSVP today! We hope to see you there. 

EXPLORE THE ARCHIVE

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NOMS, NOMS, NOMS

Senate Banking holds highly anticipated hearing on three Fed noms

The Senate Banking Committee will hold a hearing today on three of President Joe Biden’s nominees for the Federal Reserve Board of Governors – Sarah Bloom Raskin, Lisa Cook and Philip Jefferson. Raskin would also serve as the vice chair for supervision within the Fed, a powerful regulatory post.

The Banking Committee session comes at a pivotal moment for the Fed. The U.S. government has poured trillions of dollars into bolstering the economy during the Covid-19 pandemic. Yet supply chain problems have helped spur inflation to its highest level in 40 years. Amidst this, Biden has tapped Jerome Powell for another term atop the central bank. The president has also sought to install new Fed board members with much more diverse backgrounds favored by progressive groups that make up the Democratic base.

Under Powell’s leadership, the Fed is expected to start raising interest rates next month, with the only question being how high they’ll go and how fast.

Raskin – whose husband is Rep. Jamie Raskin (D-Md.) – has repeatedly criticized the oil and gas industry, arguing that government investments should be into go into renewable energies instead. These comments have upset corporate officials and conservative pundits, and more importantly, their allies in the Senate Republican Conference.

Raskin has an extremely impressive resume, including a previous stint on the Fed board, and she can count on strong backing from progressives, who want to see a more activist role by the Fed. Raskin spent five years as Democratic counsel to the Senate Banking Committee during the 1990s, and she later served as Maryland’s top bank regulator. Raskin was confirmed by the Senate to the Fed Board of Governors in 2010 and as deputy secretary of the Treasury Department in the Obama administration in 2014. Both of those votes were unanimous. Raskin is currently a professor at Duke University.

Raskin’s criticism of the oil and gas industry – motivated by her concern over climate change – is what riles Republicans. In a May 2020 op-ed in the New York Times, for instance, Raskin urged the Fed not to offer financial support to fossil fuel companies during the pandemic. “The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries – not prop up and enrich dying ones,” Raskin wrote.

In interviews, several Republicans on the Banking Committee, including Sen. Pat Toomey of Pennsylvania, the ranking member,  complained that Biden was trying to “politicize the Fed” by naming Raskin to the central bank’s board, among other moves.

“My biggest concern is the frequent, very explicit examples where Sarah Bloom Raskin has repeatedly advocated that financial regulators in general, and the Fed in particular, allocate credit from the fossil fuel industry,” said Toomey, “Now, I would be opposed to the Fed allocating credit in any fashion to or from anyone. There’s nobody I think they should subsidize, there’s nobody I think they should punish, because that is not their role.”

Toomey also plans to press Raskin about “her work for Reserve Trust, a non-bank financial technology company that received special access to the Fed’s payments system while she was serving as a director,” according to The Hill.

Sen. Kevin Cramer (N.D.), another Banking Committee Republican, was even more blunt on Raskin: “Short of a confession and a public pledge of repentance by [Sarah] Bloom Raskin, it would be hard for me to justify voting for her. But I plan to give her the opportunity.”

Sen. Sherrod Brown (D-Ohio), the Banking Committee chair, noted that most of the GOP attacks “will be aimed at Raskin, although they talk about Cook too.”

Raskin is clearly aware of the GOP criticism and will aim to head it off. Raskin’s opening statement for today’s hearing asserts she’ll be guided by existing federal law in her decision-making at the central bank:

“As created by Congress, the role of Vice Chair of Supervision requires consultation with other Governors of the Federal Reserve, the Fed’s expert staff, the banks themselves, and other 3 experts about the extent to which financial institutions are identifying, analyzing and managing their risks. The role does not involve directing banks to make loans only to specific sectors, or to avoid making loans to particular sectors. And the role exists within the laws passed by Congress that govern the Federal Reserve and its responsibilities.”

Cook, currently a professor at Michigan State University, may have some problems with Republicans as well, especially over her lack of experience on monetary policy. But Cook will likely be confirmed in the end. And her confirmation would be historic; no Black woman has ever served on the Fed’s board of governors. 

Jefferson, a professor at Davidson College, seems poised to gain some GOP support on the Banking panel, according to interviews with GOP senators. Jefferson would only be the fourth Black man to serve on the Fed board if confirmed.

Brown is planning to hold confirmation votes in the Banking Committee on Feb. 15 for Powell, Lael Brainard as vice chair, and Raskin, Cook and Jefferson. Democrats would then move the nominees quickly to the Senate floor. Powell’s term as chair technically expires on Feb. 5, but both sides say that’s not an issue with the Senate ready to approve him for another term.

THE MONEY GAME

What Democrats are ponying up to their party

We got our hands on the DCCC’s end-of-year dues sheet. This details who is giving to the party committee, how much they’re giving and how much cash members have in the bank. This info is scrutinized closely by party leaders, committee chairs and rank-and-file members. Here it is. 

Our takeaways:

→ Pelosi is still the cash cow for House Democrats: Speaker Nancy Pelosi donated $5.4 million to the DCCC and has raised $118 million. Pelosi has raised and given $4.6 million to vulnerable House Democrats.

→ Leadership laggards: Rep. Cheri Bustos (Ill.), the former DCCC chair, isn’t running for re-election, has not paid any dues and has only raised $1,500 of the $600,000 she is expected to raise. House Transportation and Infrastructure Chair Peter DeFazio (Ore.), who is also retiring, has paid zero dues and raised just $15,000 of the $300,000 he is asked to raise.

→ Impressive frosh: Rep. Sara Jacobs (Calif.), a DCCC national chair, has given $350,000 of her $750,000 in dues and has raised $666,500 of her $750,000 goal.

→ Big money check in: Here’s how the biggest fundraisers in the Democratic Party stack up. Rep. Josh Gottheimer (N.J.), who has $12 million on hand, hasn’t paid any dues. Gottheimer is a “Frontliner,” meaning he holds a swing seat.  Rep. Alexandria Ocasio Cortez (N.Y.) has also paid nothing in dues. Rep. Raja Krishnamoorthi (Ill.), who has $9.4 million on hand, has paid $200,000 to the DCCC, which exceeds the $175,000 he owes in dues. Rep. Katie Porter (Calif.), who has $16 million on hand, paid all of her $175,000 in dues.

→ Seth MacFarlane, the creator of “Family Guy,” contributed $10,800 to Rep. David Cicilline’s (D-R.I.)  victory fund.

ODDS AND ENDS

→ House Majority PAC, the House Democratic super PAC, has hired CJ Warnke as communications director and Carrie Resnick as research director. Warnke worked for The Hub Project and Sen. Gary Peters’ (D-Mich.) re-election campaign. Resnick was research director for Terry McAuliffe’s gubernatorial campaign. 

→ Harman International Industries, the parent company of Harman Kardon, has signed the S-3 Group to lobby on “[a]uto, technology and consumer electronics issues, such as semi-conductor shortage, supply chain, autonomous vehicles and data privacy.”

FRONTS

MOMENTS

8 a.m.: President Joe Biden and Vice President Kamala Harris will come to the Capitol for the National Prayer Breakfast in the Capitol Visitor Center.

9:50 a.m.: Biden will head to Andrews for a trip to New York. He will arrive in Queens at JFK at 10:45 a.m. and in Manhattan by 11:10 a.m.

10 a.m.: House Oversight will hold a hearing with former Washington Football Team employees. 

12:15 p.m.: Biden will join Attorney General Merrick Garland, New York Mayor Eric Adams and New York Gov. Kathy Hochul at NYPD headquarters for a gun violence meeting. … Speaker Nancy Pelosi will hold her weekly news conference.

2:30 p.m.: Biden, Garland, Adams and Hochul will go to a public school in Queens to discuss “community violence intervention programs with local leaders.”

4:20 p.m.: Biden will leave Manhattan and fly to Queens, where he’ll travel back to Andrews.

6:05 p.m.: Biden will arrive at the White House.

CLIP FILE

NYT

→ “White House Moves to Reset Relationship With Police Leaders,” by Katie Benner, Zolan Kanno-Youngs and Charlie Savage

→ News Analysis: “Is Biden’s Strategy With Putin Working, or Goading Moscow to War?” by David Sanger

→ “A ‘Master Class’ in Gerrymandering, This Time Led by N.Y. Democrats,” by Nick Fandos, Luis Ferré-Sadurní and Grace Ashford

WaPo

→ “Putin claims Ukraine crisis is over Russia’s future, but that rings with Cold War brinkmanship,” by Robyn Dixon in Moscow

→ “Russia tries to cast Western-backed Ukraine as aggressor, suggests disputed peace deal as path forward,” by Steve Hendrix in Kyiv and Rachel Pannett in Sydney

→ “At least 13 killed in northern Syria after U.S. counterterrorism operation, local first responders say,” by Sarah Dadouch in Beirut and Kareem Fahim in Istanbul

WSJ

→ “CNN Employees Grill WarnerMedia CEO Over Jeff Zucker’s Departure,” by Ben Mullin

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