The Golden Apple – March 26, 2021
| Big Boat is Stuck It was a busy week in Washington. A really busy week. The President had his first press conference. The Secretary of the Treasury and the Chairman of the Fed testified twice, on opposite sides of Capitol Hill. The Secretary of Transportation spent more than five hours talking to a House committee about infrastructure. Immigrants gathered at the border, North Korea tested some missiles, another COVID vaccine faced approval delays. But most of us spent more time than we should have following the adventures of the Ever Given, the 1,312-foot container ship stuck in the Suez Canal. In case you have not been following this story, we are glad to share this children’s version from the website Defector, which made us laugh very hard: Oh No! Big Boat is Stuck. (We know it’s really not a laughing matter for millions around the world, and we hope the situation is quickly resolved.)Yellen, Powell are optimistic about recovery In virtual appearances before the House Financial Services Committee and the Senate Banking Committee this week, Secretary of the Treasury Janet Yellen and Federal Reserve Board Chairman Jerome Powell said this was a hopeful time, but a daunting one. “We should be clear-eyed about the hole we are digging out of,” Secretary Yellen said. Despite rapid recovery in many sectors, the economy is still down about 10 million jobs from pre-pandemic levels. Chairman Powell downplayed concerns about inflation; although some price pressures are already emerging, the Fed doesn’t expect them to be large or persistent. Republican and Democratic lawmakers on both sides of the Hill urged Secretary Yellen to address the backlog in IRS processing and enforcement, and suggested that the filing date postponement to May 17 should apply to first-quarter estimated payments as well.Momentum builds for action on infrastructure Between the expiration of the FAST Act in September and the Biden administration’s vow to “build back better,” it seems almost certain that some form of infrastructure legislation will pass this year. Secretary of Transportation Pete Buttigieg told the House Committee on Transportation & Infrastructure yesterday that this is “the best chance in any of our lifetimes to make a generational investment in infrastructure.” Full economic recovery will require a national commitment to “fix and transform” our infrastructure, Buttigieg said, because the status quo poses rising threats to our competitiveness and national security. The Administration’s infrastructure priorities include clearing the backlog of repairs needed to existing infrastructure and improve public transit and mobility options, improving transportation reliability and safety, addressing major inequities, improving air quality, and tackling the climate crisis.Yellen, Buttigieg expect tax increases, changes In their separate appearances before Congress this week, Secretary of the Treasury Janet Yellen and Secretary of Transportation Pete Buttigieg said that some form of tax increase will probably be necessary to support government investments in infrastructure and human capital. Yellen told Senator Thom Tillis (R-NC) that said she believed that President Biden’s suggestion of restoring the 28% corporate tax rate was appropriate, and that she did not believe the US corporate tax rate had had a substantial impact on investment spending in the US. Buttigieg said that the move toward electric vehicles would require a change in the funding model for the Federal Highway Trust Fund, possibly away from a fuel tax and toward a vehicle-miles-traveled formula. User fees, taxation, and borrowing are the only ways to pay for infrastructure, he said, so the Administration will likely propose some combination of the three. Reps. Daniel Webster (R-FL) and Salud Carbajal (D-CA) added the option of creating a federal infrastructure bank, a government-sponsored enterprise that would funnel private capital into these projects.House panel discusses ACA expansion, short-term plans Tuesday marked the 11th anniversary of the passage of the Affordable Care Act, and the House Energy & Commerce Subcommittee on Health held a virtual hearing to discuss whether and how to make permanent the temporary expansions of coverage and eligibility included in the American Rescue Plan. Beginning on April 1, even more individuals and families will be eligible to buy health insurance through the ACA marketplace, and prices will fall, making more coverage available to those already in the system. Idaho Department of Insurance Director Dean Cameron argued against sweeping prohibitions on short-term plans, describing actions Idaho has taken to make enhanced short term insurance plans available to its residents. Committee Republicans stressed the need to preserve individual choice, and warned against efforts to create a one-size-fits-all, government-controlled healthcare program.SEC raises flags on SPACs As special purpose acquisition companies (SPACs) become increasingly popular vehicles for emerging companies to become public without the traditional initial public offering (IPO) process, the Securities and Exchange Commission (SEC) has taken notice. Earlier this month, the SEC issued an investor alert warning investors not to put money into SPAC just because celebrities are doing so, even if those celebrities are professional investors. SPAC sponsors’ economic interests may differ from shareholders’, the SEC said, and SPAC sponsors generally acquire equity at more favorable terms than investors in an IPO or subsequent open-market investors get. Separately, this week we’re seeing reports that the SEC’s enforcement division has sent letters to at least four Wall Street banks asking for information about their SPAC dealings. For now, these letters are voluntary requests, not investigative demands.SEC creates web page on climate, ESG information Citing investor demand, the SEC asked for public comment last week on how companies can best disclose “consistent, comparable, and reliable” information about their climate-related risks. This week the Commission launched a web page that collects all of the SEC’s guidance, rulemaking, and enforcement activities related to climate, environmental, social, and governance (ESG) risks. Acting SEC Chair Allison Herren Lee said the web page is also response to increased investor demand, and will provide an overview of how climate and ESG intersect with the SEC’s broader regulatory framework. |
| Confirmations, Nominations, Departures |
| The Senate confirmed Adewale O. (Wally) Adeyemo as Deputy Secretary of the Treasury by voice vote. The Senate voted 68-29 to confirm Martin J. (Marty) Walsh as Secretary of Labor. Rep. Tom Reed (D-NY) announced that he will not seek a seventh term, nor will he run for Governor should Governor Andrew Cuomo resign. |
| The Week Ahead |
| Both House and Senate are in district work periods until April 13. Barring unforeseen major events, the Golden Apple will not appear on April 2, but will return on April 9. March 31 at 3:00 p.m. The Financial Stability Oversight Council (FSOC) will hold its first meeting since Secretary of the Treasury Janet Yellen, who chairs the Council, took office. The meeting will include both open and executive sessions, and will stream online here. April 1 The American Rescue Plan Act’s changes to the ACA insurance eligibility guidelines and coverage take effect, and the Healthcare.gov open enrollment process begins. |
| The Ellis Insight – Jim Ellis on political news |
| SENATE Alabama: Earlier in the month, six-term Alabama US Rep. Terri Sewell (D-Birmingham) indicated that she was considering entering the open 2022 US Senate race after incumbent Richard Shelby (R) announced his retirement. Late this week, Rep. Sewell issued a statement saying she will not run for the Senate but will seek a seventh term in the US House. As Alabama’s lone Democratic House member, her district will survive even if the state loses a congressional seat in reapportionment. Georgia: The OnMessage polling firm, conducting an independent survey of a potential Republican Senatorial primary (3/14-15; 600 GA likely Republican primary voters; live interview), finds former Congressman Doug Collins leading the field of potential Republican candidates who may enter the race to oppose Sen. Raphael Warnock (D) next year. According to the OnMessage results, Mr. Collins would command 35% support, eight points better than former University of Georgia and NFL football great Herschel Walker. Former Sen. Kelly Loeffler (R), who lost the January runoff race to Rev. Warnock, would trail both potential contenders with 22% support. Missouri: Missouri Attorney General Eric Schmitt toward the end of the week announced his entry into the open US Senate race one day after former Governor Eric Greitens declared his own candidacy for retiring Sen. Roy Blunt’s (R) seat. Other Republicans are expected to become candidates. Ex-Gov. Greitens, who resigned from office after a sex scandal and indictment forced him to do so, is attempting a political comeback. The indictments did not stick since it came to the surface that the St. Louis County prosecutor violated procedure and the charges were subsequently dropped. The sex scandal, however, will still be part of any future campaign. North Carolina: North Carolina’s Meredith College polled the Tar Heel State Democrats to test the upcoming open Senate race. The survey (3/12-15; 699 NC registered voters) found no one even reaching the 15% threshold, suggesting the race begins in wide open fashion. Former state Supreme Court Chief Justice Cheri Beasley and state Sen. Jeff Jackson (D-Charlotte) are tied at 13% apiece. Former state Sen. Erica Smith, who ran for the US Senate in 2020, follows with 11% support, and microbiologist Richard Watkins trails at the 3% mark. HOUSE AL-5: With Alabama Rep. Mo Brooks (R-Huntsville) soon to formally announce his bid for the Senate, we see the first of what will likely be many would-be successors for his congressional seat coming forward. Madison County Commission chairman Dale Strong (R) formally declared his federal candidacy at the end of the week. Madison County, which houses the city of Huntsville, is the largest of the 5th District’s five counties housing just under half of the entire CD population base. AZ-2: State Rep. Randy Friese (D-Tucson), the surgeon who saved the life of Arizona Rep. Gabrielle Giffords (D) when she was tragically shot in 2011, as expected announced his congressional candidacy yesterday. His goal is to succeed retiring US Rep. Ann Kirkpatrick (D-Tucson). Already in the Democratic primary is state Sen. Kirsten Engel (D-Tucson), who declared her congressional candidacy earlier in the week. Many analysts pegged Dr. Friese as the heir apparent to the congressional seat even before Rep. Kirkpatrick was elected in 2018. LA-2: As expected, state Sens. Troy Carter (D-New Orleans) and Karen Carter Peterson (D-New Orleans) advanced to an April 24th runoff after placing first and second in last Saturday’s special jungle primary election. The winner will succeed resigned Rep. Cedric Richmond (D-New Orleans) who left the House to accept an appointment in the Biden Administration. Sen. Carter finished first as expected with 36% of the total vote. A total of 15 candidates were on the jungle primary ballot. Sen. Peterson barely captured second place, just a point and one-half ahead of Baton Rouge community activist Gary Chambers, Jr. (D). The double-Democratic runoff assures the party of holding the seat once the special election concludes. A total of 94,546 people voted in the special primary, including about one-third who cast early ballots. LA-5: In the second Louisiana special election, this one to replace the late Rep-Elect Luke Letlow (R) who tragically passed away after winning the general election runoff and before assuming office, the result produced no surprise. Julia Letlow (R), the Congressman-Elect’s widow, easily won the seat outright, capturing 65% of the vote over eleven opponents. Turnout was almost 31% higher than when Luke Letlow won the seat in the December 5th runoff. In this district, just over 35% of the people voted early. NY-23: Upstate New York Rep. Tom Reed (R-Corning) announced this week that he will not be running for re-election next year, or any other office. Previously, he began taking steps for a statewide run for Governor including hiring field people. A MeToo accusation was brought against him late last week, and this likely precipitated his move to leave politics at the end of the current Congress especially when his announcement included an apology for his past behavior. Mr. Reed was originally elected in 2010 and took a six-term limit pledge, which also ends in the current term. PA-7: Kevin Dellicker (R) a tech company owner, former gubernatorial aide, and National Guard officer, launched an exploratory committee late last week to determine if he will enter the Republican congressional primary with hopes of challenging Rep. Susan Wild (D-Allentown) next year. Former Lehigh County Commissioner and business owner Lisa Scheller (R), who held the incumbent to a 52-48% re-election victory in 2020, is also considering seeking a re-match. Depending upon how redistricting changes this Allentown-Bethlehem-Easton CD, the 2022 congressional contest could well become highly competitive. President Biden defeated ex-President Trump here 51-47%. Four years earlier, Hillary Clinton scored a 49-48% win. RI-2: Former state Rep. Bob Lancia (R) who lost to veteran Rep. Jim Langevin (D-Warwick) last November only managed to obtain 42% of the vote. Nevertheless, Mr. Lancia announced that he will return in 2022 for a re-match. Opposing Rep. Langevin may not be his biggest problem, however. Rhode Island looks to lose one of its two seats in reapportionment, meaning he will likely face 1st District Rep. David Cicilline (R-Providence) in an at-large US House race. Rep. Langevin, apparently looking to avoid a primary with Rep. Cicilline in which he would be cast as the underdog, is reportedly considering running for Governor. TX-34: Five-term Texas Rep. Filemon Vela (D-Brownsville) announced that he will not seek re-election next year, becoming the second Democrat to declare such plans. Last week, Rep. Ann Kirkpatrick (D-AZ) declared that the current term will be her last in the House. The move comes as a surprise but does coincide with Mr. Vela recording the lowest victory percentage (55%) of his ten-year congressional career in last November’s election. GOVERNOR California: California-based Probolsky Research released a new poll for what will likely be a recall election against Gov. Gavin Newsom (D). According to the survey (3/16-19; 900 CA registered voters; live interview, online, email, and text) the Governor would survive the special vote. Among those considered likely voters, 35% would vote “yes” to recall the Governor versus 52.5% who would “no,” thus allowing him to remain in office. Interestingly, when the entire survey response universe is calculated, the gap narrows. From all 900 people surveyed, the Governor’s retain margin would decline to 46-40%. Of those voting to retain, 84% said their vote is definite. Among the recall supporters, a similar 82% say their desire to see a new Governor elected is similarly definite. Additionally, billionaire and former presidential candidate Tom Steyer (D) is reportedly polling to see if he would have a chance of being elected Governor should incumbent Gavin Newsom (D) fall in the recall election. It is likely that Mr. Newsom’s greatest threat to losing the recall vote is seeing a strong Democratic replacement candidate entering the race. Whether Mr. Steyer is that Democratic candidate remains to be seen. Florida: Last month, Mason-Dixon Polling & Research released their statewide Florida survey (2/24-28; 625 FL registered voters; live interview) giving Gov. Ron DeSantis (R) a 51-42% lead over state Agriculture and Consumer Services Commissioner Nikki Fried (D). Yesterday, St. Pete Polls released the state’s most current data. Their latest numbers (3/22-24; 1,923 FL likely voters; online) finds the two potential partisan candidates, Gov. DeSantis and Commissioner Fried, tied at 45% apiece. Pennsylvania: Pennsylvania US Rep. Dan Meuser (R-Dallas), who was re-elected to a second term with 66% of the vote this past November from his largely rural central/eastern Pennsylvania congressional district, confirms that he is considering entering the open race for Governor next year. While nine Democrats and five Republicans have already announced their Senate campaigns, just one person has done so for Governor: Montgomery County Commissioner Joe Gale (R). Many potential candidates from both parties are considering running, however, including Attorney General Josh Shapiro, who appears to be the leading potential gubernatorial candidate. Gov. Tom Wolf (D) is ineligible to seek a third term. STATES California: Gov. Gavin Newsom (D), in order to replace resigned Attorney General Xavier Becerra (D), appointed state Assemblyman Rob Bonta (D-Oakland) to fill the position. Mr. Becerra resigned his statewide post to accept an appointment as Health & Human Services Secretary in the Biden Administration. Early reports suggested that Rep. Adam Schiff (D-Burbank) was lobbying for the AG appointment, but obviously Gov. Newsom chose to follow a different direction. Indiana: During the week, Indiana Attorney General Todd Rokita (R), a former US Congressman and Senate candidate, said he will file a constitutional lawsuit against the Democrats’ HR-1 legislation should the bill become law. If such occurs, it is clear that Mr. Rokita will have a great deal of company pursuing similar legal action. Wyoming: On a vote of 15-14, the Wyoming state Senate defeated a bill that would have created a partisan nomination runoff system to guarantee a winning candidate has majority support. If no candidate reached the 50% threshold in the primary election, a secondary vote would later be conducted between the top two finishers, a common procedure in many southern states. The original bill was thought to be aimed toward at-large Rep. Liz Cheney (R-Wilson/Jackson), who has drawn multiple Republican opponents since her highly publicized vote for ex-President Trump’s second impeachment. Once an amendment was adopted to have the legislation take effect after the 2022 election, much support dissipated. This, and the cost argument associated with running a second election proved to be the key points that led to the bill’s close defeat. CITIES Boston: Boston Mayor Marty Walsh (D) won Senate confirmation as the new US Labor Secretary earlier in the week, meaning a forthcoming resignation from his current position. City Council President Kim Janey (D) now becomes interim Mayor, which should give her a major boost for the regular election campaign later this year. Earlier, Gov. Charlie Baker (R) decided not to call a special election to replace Mr. Walsh since the regular election occurs in 2021. The Governor’s move allows Ms. Janey to assume the Mayor’s position on an interim basis. |