The Golden Apple – April 23, 2021

Senate moves toward comprehensive China legislation
Senate work continued this week toward a massive package of bipartisan legislation that sets forth strategic, economic, and diplomatic responses to China’s challenges to US and global security. The Senate Foreign Relations Committee voted out its Strategic Competition Act, which includes diplomatic, financial, and military measures to strengthen international alliances, push back against predatory economic behavior, and boost American competitiveness in science, technology, and infrastructure. A day after the Senate Foreign Relations Committee acted, the Senate Finance Committee heard from a panel of experts about the challenges of aligning US corporate goals in China with national security interests, and the urgent need for more information about Chinese corporate and investment activity in the United States. The Finance Committee is developing its own legislation that will be combined with other committees’ work into a proposal that may reach the Senate floor as early as next month.
 
Senate Finance debates tax changes
On Tuesday the Senate Finance Committee had the first of what Chairman Ron Wyden (D-OR) said would be several hearings on how to improve equity in economic opportunity through the tax code. Wyden said that policymakers need better information about how tax laws affect different demographic groups; the IRS does not collect information about taxpayer race, ethnicity, or gender. Senator Richard Shelby (R-AL), the Committee’s ranking member, argued that the tax code reflects existing disparities but does not create them, and that many proposed changes would actually be regressive, particularly the proposal to repeal the cap on deductions for state and local taxes (SALT). With President Biden expected to discuss new tax laws in an address to Congress next week, Shelby said that any changes must be bipartisan. The Committee has already scheduled two additional hearings on the subject for next week.
 
Four Cabinet secretaries make their pitch for the AJP 
The process of negotiating an infrastructure bill began in earnest this week as the Secretaries of Transportation, Commerce, and Housing and Urban Development and the Administrator of the Environmental Protection Agency appeared before the Senate Appropriations Committee to discuss the American Jobs Plan (AJP). Chairman Patrick Leahy (D-VT) said this was only the first hearing on the AJP, and that they would be asking for testimony from the Secretary of Energy and other agency heads at future hearings. Ranking member Senator Richard Shelby (R-AL) criticized the scope and expense of the AJP, and later in the week, senior Republicans unveiled their own infrastructure plan, which calls for $568 billion in investments over a five-year period. At Tuesday’s Appropriations hearing, Senator Joe Manchin (D-WV) asked the Cabinet panel which part of each agency’s plan was most likely to win bipartisan support. HUD Secretary Marcia Fudge said it would be bringing existing public housing units up to code. Commerce Secretary Gina Raimondo said it would be the $50 billion investment in the CHIPS for America Act, which the Senate should vote on next month. EPA Administrator Brian Regan said it would be the proposed $111 billion investment in state-of-the-art water infrastructure, while Transportation Secretary Pete Buttigieg said it would be the plan’s surface transportation investments.
 
HUD proposes $68.7 billion budget for FY 2022 
The Department of Housing and Urban Development is asking for a 15 percent increase in discretionary spending for the coming year, which Secretary Marcia L. Fudge said would send “a strong message about what we value.” Appearing before the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies on Wednesday, Fudge said that the increase would go toward expanding the Housing Choice Voucher program, the Home Investment Partnership program, and Sections 202 and 811 housing for seniors and people with disabilities. Asked to identify a single top priority, however, Fudge said the agency’s most urgent need is reauthorization of the Community Development Block Grant-Disaster Relief (CDBG-DR) program.
 
Supreme Court says FTC cannot seek monetary relief for consumers
The Supreme Court ruled yesterday that the Federal Trade Commission (FTC) has no statutory authority to seek restitution or disgorgement on behalf of customers harmed by unfair or deceptive acts or practices. The unanimous decision in AMG Capital Management, LLC v. Federal Trade Commission overturned a 9th Circuit ruling that upheld the FTC’s order for $1.27 billion in restitution and disgorgement from a payday lender. “Section 13(b) [of the Federal Trade Commission Act] does not explicitly authorize the Commission to ob­tain court-ordered monetary relief, and such relief is foreclosed by the structure and history of the Act,” Justice Stephen Breyer wrote. All four current members of the Federal Trade Commission appeared before the Senate Commerce Committee on Tuesday to urge Congress to clarify the FTC’s redress authority under Section 13(b). While giving the FTC authority to seek monetary remedies has bipartisan support in Congress, the Committee’s ranking member, Senator Roger Wicker (R-MS) said that he wants to make sure they are fairly assessed, and that legitimate businesses have adequate notice about practices the FTC considers unfair.
 
SBA will partner with fintechs to distribute restaurant relief funds 
This week the Small Business Administration (SBA) announced guidelines for the Restaurant Revitalization Fund (RRF) created by the American Rescue Plan Act, to distribute $28.6 billion to the small restaurants hit hardest by pandemic shutdowns. The program provides restaurants, bars, and other food and beverage service businesses with funding equal to their pandemic-related revenue losses, up to $10 million per business and up to $5 million per location. Loans are forgivable as long as businesses use the fund for eligible purposes by March 11, 2023. For the first time, SBA is partnering with point-of-sale (POS) providers Clover, NCR Corporation, Square, and Toast to help restaurants apply for the RRF. Restaurants may be able to apply through their point-of-sale provider or use their provider to assemble required documentation. The SBA welcomes queries from other point-of-sale service providers interested in participating in this program.
 
Tenants can hold debt collectors liable for illegal evictions under CFPB interim rule 
The Consumer Financial Protection Bureau (CFPB) issued an interim final rule this week to support the federal eviction moratorium established by the Centers for Disease Control and Prevention (CDC). The rule requires debt collectors to notify tenants in writing about their rights under the moratorium and prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction. Debt collectors who fail to comply may be prosecuted by federal agencies or state attorneys general for violations of the Fair Debt Collection Practices Act (FDCPA), and tenants may bring private lawsuits against them. “No one should be evicted from their home without understanding their rights, and we will hold accountable those debt collectors who move forward with illegal evictions,” said CFPB Acting Director Dave Uejio.
Confirmations, Nominations, Departures
Rep. Steve Stivers (R-OH) announced this week that he will leave office on May 16 to become President and CEO of the Ohio Chamber of Commerce. Stivers, serving his fifth term in Congress, is ranking member of the House Financial Services Subcommittee on Housing, Community Development, and Insurance.

President Biden nominated J. Nellie Liang to be an Under Secretary of the Treasury and Benjamin Harris to be an Assistant Secretary of the Treasury.

The President nominated former US Rep. Gwen Graham to be Assistant Secretary of Education for Legislation and Congressional Affairs.

SEC Chairman Gary Gensler has appointed Alex Oh to be Director of the agency’s Division of Enforcement. Oh, most recently a partner at Paul, Weiss, Rifkind, Wharton & Garrison, was an Assistant US Attorney for the Southern District of New York, where she served on the Securities & Commodities Fraud Tax Force and the Major Crimes Unit.
The Week Ahead
April 27 at 10:00 a.m. Senate Committee on Finance holds a hearing on “Climate Challenges: The Tax Code’s Role in Creating American Jobs, Achieving Energy Independence, and Providing Consumers with Affordable, Clean Energy.”
 
April 27 at 10:00 a.m. Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Data Security holds a hearing on “Curbing COVID Cons: Warning Consumers about Pandemic Frauds, Scams, and Swindles.”
 
April 27 at 1:00 p.m. House Energy & Commerce Subcommittee on Consumer Protection and Commerce holds a hearing on “The Consumer Protection and Recovery Act: Returning Money to Defrauded Consumers.”
 
April 27 at 2:30 p.m. Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth holds a hearing on “Creating Opportunity Through a Fairer Tax System.”
 
April 28 at 10:00 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “The Reemergence of Rent-a-Bank?
 
April 28 at 12:00 noon House Financial Services Subcommittee on Oversight & Investigations holds a hearing on “Examining the Role of Municipal Bond Markets in Advancing — and Undermining — Economic, Racial, and Social Justice.”
 
April 28, time TBD President Biden addresses a joint session of Congress, with most members attending virtually. Senator Tim Scott (R-SC) will deliver the Republican response.
 
April 29 at 10:00 a.m. Senate Banking Committee holds a hearing on “The Dignity of Work.”
 
April 29 at 12:00 noon House Financial Services Subcommittee on Diversity and Inclusion holds a hearing on “Closing the Racial and Gender Wealth Gap through Compensation Equity.”
 
April 29 at 1:30 p.m. House Ways and Means Subcommittee on “Advancing US Economic Competitiveness, Equity, and Sustainability Through Infrastructure Investments.”
 
April 30 at 10:00 a.m. The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee holds a public meeting.
The Ellis Insight – Jim Ellis on political news
SENATE
California: Appointed California Sen. Alex Padilla (D) has earned endorsements of 40 of the state’s 42 US House members and senior Senator Dianne Feinstein (D). The two federal office holders who have not endorsed are Reps. Ro Khanna (D-Fremont) and Maxine Waters (D-Los Angeles). Mr. Khanna is reportedly still deciding whether to run for the Senate himself, while Rep. Waters’ spokesperson indicated that the Congresswoman would “soon” be endorsing Sen. Padilla. The seat comes in-cycle in 2022.
 
Georgia: Pressure is intensifying on University of Georgia former football star Herschel Walker (R) to run for the Senate next year to oppose incumbent Raphael Warnock (D). Both Rep. Buddy Carter (R-Pooler/Savannah) and former US Ambassador Randy Evans are indicating they would step aside for Mr. Walker if he were to enter the Senate race. Should he not, both stated they would consider becoming candidates themselves. For his part, Mr. Walker is non-committal. One problem: Walker lives in Texas.
 
North Carolina: After last week saying he was considering entering the open US Senate race, Lt. Governor Mark Robinson (R) said this week that he would not become a candidate. Former Governor Pat McCrory (R) announcing his own candidacy could well have influenced Mr. Robinson’s decision. Also in the GOP race is former US Rep. Mark Walker. Rep. Ted Budd (R-Advance) is a probable candidate likely to soon announce his statewide bid. Sen. Richard Burr (R) is not seeking re-election.

HOUSE 
CA-21: Soon after his 1,522-vote loss to Rep. David Valadao (R-Hanford/Bakersfield), defeated Rep. T.J. Cox (D-Fresno) indicated he would return in 2022 for a re-match. Such may not be the case, however. This week, Mr. Cox announced that he is converting his campaign committee into a PAC to help the Democratic Party and would not be raising money for himself, at least in the short-term. A spokesman said the move does not mean Mr. Cox won’t run in 2022, and that final decisions will be made after redistricting is settled.
 
FL-20: State Rep. Bobby DuBose (D-Ft. Lauderdale) became the tenth Democrat and second state legislator to enter the special election campaign to replace the late Rep. Alcee Hastings (D-Delray Beach). Also in the race is state Senator Perry Thurston (D-Ft. Lauderdale). Two sitting Broward County Commissioners and one former Palm Beach County Commissioner have also announced their congressional candidacies. Gov. Ron DeSantis (R) has yet to set the special election calendar.
 
IA-3: US Rep. Cindy Axne (D-Des Moines), who was one of only nine congressional winners to record less than 50% of the vote last November and says she is open to running statewide in 2022, has drawn her first congressional opponent of significance for the coming campaign. Former four-term state Representative Mary Ann Hanusa (R-Council Bluffs) announced that she will enter next year’s congressional race. 
 
Ex-Rep. David Young (R), who lost to Ms. Axne in both 2018 and 2020 by small margins, has yet to say whether he will again become a candidate. Regardless of whether Rep. Axne runs for Senate, Governor, or re-election, the 3rd District will host another competitive political contest in 2022.
 
MN-2: Tyler Kistner (R), the Marine Corps Reserve officer who held Rep. Angie Craig (D-Eagan) to a 48-46% tight win last November, filed a 2022 campaign committee with the Federal Election Commission late this week signaling that the re-match between he and Rep. Craig will soon be underway. We can expect another highly competitive campaign here next year.
 
OH-15: Ohio US Rep. Steve Stivers (R-Columbus) announced this week that he won’t run for the Senate, and he’s leaving the House, as well. Rep. Stivers said he is resigning from Congress on May 16th to become President and CEO of the Ohio Chamber of Commerce. The Congressman had an impressive 1st quarter fundraising haul (almost $1.4 million) that suggested he was gearing up for a Senate contest, but now his plans have obviously changed. 
 
Within a day of the Stivers announcement, State Senator Bob Peterson (R-Fayette County), who represents all or parts of five of the 15th Congressional District’s twelve counties, said that he will enter the replacement special election contest. On the heels of Sen. Peterson’s announcement, state Rep. Brian Stewart (R-Ashville) followed with his own declaration of candidacy. For the Democrats, Athens Mayor Steve Patterson confirms that he is also considering entering the special election campaign.
 
NY-23: Former Defense Department official Andrew McCarthy (R) says he will enter the open 23rd District race to replace retiring Rep. Tom Reed (R-Corning). Mr. McCarthy indicated he would have challenged Rep. Reed in the Republican primary even if the Congressman had decided to seek re-election, so his plan was always to run for the House in 2022. The 23rd CD, however, is undoubtedly on the short list to be eliminated since reapportionment will cost New York at least one congressional seat. The 23rd is the least populated of the state’s 27 current congressional districts.
 
WA-4: 2020 Washington Republican gubernatorial finalist Loren Culp, the former police chief of Republic, WA, which is not in the 4th Congressional District, announced that he will challenge Rep. Dan Newhouse (R-Sunnyside/Yakima) in the 2022 jungle primary. Also in the race are state Rep. Brad Klippert (R-Kennewick) and businessman Jerrod Sessler (R). Rep. Klippert not reporting any money raised for the campaign in the first quarter of 2021 may have spurred Mr. Culp into becoming an active candidate. 
 
Washington has a jungle primary system, so it is possible that two Republicans could advance into the general election. Mr. Culp lost the Governor’s race to incumbent Jay Inslee (D) 56-43%, but he did carry the 4th District. Rep. Newhouse is one of ten Republicans to vote in favor of impeaching ex-President Donald Trump after the January 6th US Capitol insurrection. Nine of the ten already have 2022 Republican opposition.


GOVERNOR
Florida: Former US Rep. Gwen Graham (D-Tallahassee), who served one term in the House before becoming a victim of the court-imposed 2015 redistricting order and then ran unsuccessfully for Governor in 2018, has been appointed as Assistant US Secretary of Education for Legislation and Congressional Affairs. The move likely eliminates her from the 2022 Governor’s race, a campaign for which she was rumored to be considering. 

The Graham federal appointment further cements state Agriculture Commissioner Nikki Fried as the leading early Democratic contender to challenge Gov. Ron DeSantis (R) next year.
 
Georgia: Former DeKalb County CEO and state Representative Vernon Jones, who switched from the Democratic Party to the Republicans and became a vocal African American supporter of ex-President Donald Trump, announced that he will challenge Gov. Brian Kemp in next year’s Republican primary. With the conservative base seemingly turning against Gov. Kemp over the election controversy, this campaign could develop into a major challenge, especially if Mr. Trump were to publicly support Mr. Jones.
 
Maryland: John B. King (D), former President Barack Obama’s final Education Secretary, announced that he will join the open 2022 Governor’s contest in seeking the Democratic nomination. So far, state Comptroller Peter Franchot, former Prince Georges County Executive and 2018 gubernatorial candidate Rushern Baker, non-profit corporation executive Ashwani Jain, and policy executive Jon Baron are the officially announced Democratic candidates. Republican Gov. Larry Hogan is ineligible to seek a third term.
 
New York: Former Westchester County Executive and 2014 New York Republican gubernatorial nominee Rob Astorino, saying he would be “the adult in the room,” announced yesterday that he will again run for Governor next year. In 2014, a Republican landslide year nationally, Gov. Andrew Cuomo (D) defeated Mr. Astorino, 53-39%. 

Also in the Republican race are US Rep. Lee Zeldin (R-Shirley/Long Island), and Lewis County Sheriff Mike Carpinelli. Rep. Tom Suozzi (D-Glen Cove/Long Island) is considering challenging Gov. Cuomo in the Democratic primary if the incumbent avoids impeachment and chooses to seek re-election.
 
Ohio: Dayton Mayor Nan Whaley (D), who was for a short time a Democratic gubernatorial candidate in 2018 before withdrawing when Richard Cordray returned to the state to run, announced that she will enter the 2022 primary with the goal of challenging Gov. Mike DeWine (R) in the general election. Mayor Whaley was first elected in 2013 and re-elected in 2017. Prior to serving as Mayor, Ms. Whaley won two four-year terms on the Dayton City Commission (Council). 
 
Other potential Democratic gubernatorial candidates are Cincinnati Mayor John Cranley and Columbus City Attorney Zach Klein. After the Whaley announcement, Mr. Cranley was quoted as saying her entry does not affect his plans and he will announce for Governor in the coming weeks.
 
South Carolina: Democratic former Congressman Joe Cunningham, who lost his Charleston anchored seat after just one term, has filed documents to run for the Democratic gubernatorial nomination in hopes of challenging Gov. Henry McMaster (R) next year. Mr. Cunningham has yet to make a public announcement, but the filing clearly suggests that he is planning on making the race.
 
Texas: The University of Texas at Tyler recently conducted an extensive poll for the Dallas Morning News (4/6-13; 1,126 TX registered voters; 290 live interviews; 836 online responses) and among the many questions put before the respondents was a ballot test featuring Gov. Greg Abbott (R), who is preparing to run for a third term, and actor Matthew McConaughey (D). The latter man confirms he is considering running and describes his philosophy as “aggressively centric.” 
 
According to the poll results, Mr. McConaughey would lead Gov. Abbott 45-33% while 22% said they would prefer another choice. While celebrities often perform better than politicians in early campaign polling, the fact that Gov. Abbott only records 33% in any poll suggests that he is losing some of the luster he enjoyed during most of his Governorship. 

It remains to be seen if Mr. McConaughey actually becomes a gubernatorial candidate, but the early numbers and demographic shifts in the state suggest that the 2022 Texas Governor’s campaign could be one of interest.

STATES
Nevada: Legislation to convert the Nevada primary to a top two jungle system similar to what Louisiana, California, and Washington use appears dead for this session. The bill failed to meet a mandatory legislative deadline, thus indicating that it will not be heard before the legislature adjourns.
 
Washington, DC: On a straight party line vote of 216-208 with two Democrats and four Republicans not voting, the House passed HR 51 that would grant statehood to the District of Columbia. The bill must overcome a filibuster in the Senate before going to President Biden’s desk for signature. The House vote saw no member of either party breaking ranks.
 
A state can be added to the Union through the normal legislative process. Under the Constitution no new state can form, however, from territory currently existing within a state. Furthermore, no current states may merge to become a different state. 
 
Wisconsin: A bipartisan bill in the Wisconsin state Senate would, if passed, institute a Top Five jungle primary to replace the current closed partisan nomination system. In this instance, all candidates would be placed on the same ballot with the top five finishers, regardless of party identification, advancing into the general election. It is unclear whether the legislation has a legitimate chance of being enacted into law.