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January 1, 2024
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PRESENTED BY
THE TOP
Happy Monday morning. Happy New Year. Today is a one-edition day. Punchbowl News Midday, PM and The Daily Punch will be back beginning tomorrow.
Coming this Sunday: We’re launching our weekly edition of The Vault Sunday. We couldn’t be more excited! Our weekly look ahead at Washington x Wall Street will be captained by Brendan Pedersen and Laura Weiss. Subscribe to The Vault by clicking here. Subscribers will also get Vault content in the Midday and PM editions throughout the week.
Now let’s get to work.
Topline spending update: The House and Senate have yet to reach an agreement on a topline spending figure for FY2024, even as the first funding deadline hits in a few weeks.
And we’re told that House GOP leaders are making new demands as part of the ongoing talks.
Welcome to the second session of the 118th Congress. Same as it ever was.
House Republicans want to accelerate IRS funding cuts from FY2025 to FY2024 ($10 billion in each year). Remember, these cuts were agreed to as part of the bipartisan debt-limit deal, the Fiscal Responsibility Act.
House GOP leaders also want to rescind previously allocated Covid response funds.
None of this is particularly surprising, but it’s a new wrinkle. There hasn’t been a lot of progress over the last couple of weeks. And conservative House Republicans back the across-the-board spending cuts mandated under the FRA if there’s no deal.
Because Congress doesn’t have a deal in place by Jan. 1 – today – the Pentagon’s budget is temporarily set to $850 billion while non-defense spending is $739 billion. This is the $1.59 trillion total you hear being talked about. OMB will have to figure out how much needs to be cut to align with this limit, although there is no sequestration yet.
Democrats — as well as Senate GOP appropriators — are holding firm that the topline figure should be in line with the FRA, as well as the side-deal hammered out by Sens. Patty Murray (D-Wash.) and Susan Collins (R-Maine), chair and vice chair of the Senate Appropriations Committee. There’s also $14 billion in emergency spending, $8 billion of which would be for the Pentagon, that was agreed to on top of the FRA.
The framework under discussion wouldn’t include any agreement on “poison-pill” amendments — politically charged provisions that often tank spending bills.
Before the break, Collins reiterated that the topline should be the Fiscal Responsibility Act numbers plus the side-deal, “following the Senate’s lead.”
Collins sought to blunt criticism from the right that the Senate’s approach is too heavy-handed on spending, noting that the non-defense bills approved by the Senate Appropriations panel are less than a 1% increase from the prior year. The 4.2% defense increase is “very much needed” given the threat landscape worldwide, Collins added.
Speaker Mike Johnson’s office didn’t reply to multiple requests for comment. But this framework was confirmed by multiple sources in the Biden administration, House and Senate Democrats and GOP leadership in both chambers.
Border talks update: If the government funding morass weren’t complicated enough, it’s becoming increasingly likely that Congress may have to pair it with the border security and foreign aid package that’s still being negotiated.
With just a handful of legislative days remaining before the first Jan. 19 government-funding deadline — and another two weeks until the Feb. 2 deadline — finding floor time in the Senate for all of this will be close to impossible.
We’re told that negotiators from the Senate, White House and Homeland Security Department, including the principals, met virtually several times over the holiday break. Separately, Johnson is heading to the border this week.
Negotiators reported steady progress — surprise! — but not much else. They’ll continue to meet this week, though the Senate isn’t back in session until next Monday.
Au Revoir, Kevin: Former Speaker Kevin McCarthy’s last day in Congress was Sunday. There are now 220 Republicans in the House, 213 Democrats and two vacancies. The California Republican was the third shortest-serving speaker of the House in U.S. history, holding the gavel for just 270 days.
McCarthy has a ton of political cash that he can spend on practically anything besides directly enriching himself. His Majority Committee PAC, or MC PAC, has $4 million on hand, while his reelection campaign committee – McCarthy for Congress – has $10.6 million. McCarthy may have to give some money back to donors but expect this kitty will help fund his political operation going forward.
— Jake Sherman, Andrew Desiderio and John Bresnahan
WASHINGTON X THE WORLD
Dems slam Biden for bypassing Congress on Israel weapons transfers
When Congress went home for the holidays, it left Israel — its strongest ally in the Middle East — in the midst of a war without any additional aid from the United States.
But the Biden administration has been looking to maintain the flow of weapons to Israel in part by invoking an emergency authority that waives Congress’ ability to approve or reject the sale or transfer of weapons to a foreign nation. The administration did this twice in December, including on Friday.
And now, top Democratic senators who were already criticizing Israel’s military operations in Gaza are slamming the Biden administration for sending new arms to Israel in a way that bypasses the normal congressional review process.
The dynamic to watch this month is whether this will lead Congress to try to split Israel funding from the Ukraine-centric foreign aid package. Senate Majority Leader Chuck Schumer has resisted this in the past.
But the pushback inside the Senate Democratic Caucus is something to keep an eye on. They clearly want to force a public debate on this issue — a debate that’s effectively shut down by the administration’s invocation of emergency authorities.
“Unnecessarily bypassing Congress means keeping the American people in the dark,” said Sen. Tim Kaine (D-Va.), who has sought for years to restore Congress’ role in executive war powers. “We need a public explanation of the rationale behind this decision — the second such decision this month.”
Similarly, Sen. Chris Van Hollen (D-Va.) said the administration’s decision “undermines transparency and weakens accountability,” adding: “The public deserves answers.”
Sen. Peter Welch (D-Vt.) said in a statement Sunday night that the specific munitions being sent to Israel have “been used to devastating effect in Gaza, contributing to the death and injury of countless civilians and the displacement of an estimated 2 million people.”
“The war in Gaza has generated immense controversy and concern in the United States and around the world,” Welch added. “The president should follow the established procedure of submitting his arms sales recommendations to Congress for prior approval.”
The Trump administration often used this same provision to circumvent Congress’ role in approving arms sales, prompting similar condemnations from Democrats.
These senators have long spoken out against efforts to shelve Congress’ authority on matters of war and peace. They’ve also been part of a group of Democrats that has criticized Israel’s military operations in Gaza following Hamas’ terrorist attacks on Oct. 7.
The Democratic senators argue that the Israeli military hasn’t done enough to limit civilian casualties and prevent a humanitarian crisis in Gaza. And the larger group, which includes Kaine, Van Hollen and Welch, recently introduced an amendment to President Joe Biden’s supplemental foreign-aid request that would condition future aid to Israel — as well as other nations — on that country’s adherence to U.S. law and international laws of armed conflict.
There’s another important dimension here. The Defense Department said in a statement announcing the sale that Secretary of State Antony Blinken “has determined and provided detailed justification to Congress that an emergency exists that requires the immediate sale” of the weapons to Israel.
The weapons include “M107 155mm projectiles and related equipment for an estimated cost of $147.5 million,” per the Pentagon.
This comes as Israel faces a growing threat from Lebanon and Syria, where there are fears that Iran-backed Hezbollah militants could soon join in the conflict. The latest U.S. weapons sale could be an effort to shore up Israel’s defenses in the event of an attack from Hezbollah, whose forces are much more sophisticated than those of Hamas.
— Andrew Desiderio
PRESENTED BY NATIONAL ASSOCIATION OF LETTER CARRIERS
Unfair pension obligations cost the Postal Service a shocking $3 billion in 2023. Let’s stop the raid.
THE MONEY GAME
Congress is still out. Head to Vail to hang with House Dems.
The House and Senate aren’t in until next week. What a perfect time to raise money in tony resorts around America.
A bunch of House Democrats are in Vail, Colo., this week to pick up cash and, presumably, enjoy what central Colorado has to offer.
Rep. Jim Himes (D), the pride of Southern Connecticut, and Democratic Rep. Seth Moulton of Massachusetts both have trips to Vail this weekend at The Sebastian Hotel.
On Jan. 6, Rep. Salud Carbajal (D-Calif.) and Rep. Joe Neguse (D-Colo.) will pick you up at the Four Seasons in Vail for a “snowmobiling activity.” Think you’ll work up a good appetite snowmobiling with Neguse and Carbajal? Yeah, agree. Head to La Bottega for lunch with Rep. Jason Crow (D-Colo.).
That’s quite the lineup for a Colorado weekend.
– Jake Sherman
DOWNTOWN DOWNLOAD
FujiFilm has signed up Akin Gump to lobby on “[s]upport for biopharmaceutical manufacturing in the U.S.”
Anheuser-Busch has inked two new lobbying firms. They signed up Langley Consulting and Schertz Strategies to lobby on “[i]ssues involving agriculture in general, including Farm Bill and tax.” Matt Schertz was the staff director of the House Agriculture Committee.
Roku, the streaming platform, has signed up Tidal Basin Advisors to lobby on “[i]ssues related to the technology industry, including competition in the digital and streaming marketplaces.”
PhRMA has signed up YC Consulting and Yong Choe to lobby on “PBM Transparency/Reforms and Lowering Prescription Drug Prices.” Choe worked for the Republican Study Committee.
– Jake Sherman
THE CAMPAIGN
Rep. Jerry Carl (R-Ala.) is locked in a tight member-on-member primary against Rep. Barry Moore (R-Ala.). We’ve written a good deal about the back-and-forth between the two Alabama Republicans. But this is interesting.
Carl is using taxpayer money to urge constituents to call his office if they need anything. This is perfectly legal. Franking is a key part, and a big benefit, of being an incumbent. The ad is running in Mobile, Ala., and Pensacola, Fla.
– Jake Sherman
PRESENTED BY NATIONAL ASSOCIATION OF LETTER CARRIERS
Biden needs to fix the problem. Let’s stop the raid.
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