The Golden Apple – July 30, 2021
| We note with sadness the deaths this week of former Senators Mike Enzi (R-WY) and Carl Levin (D-MI). Enzi, 77, retired at the end of his fourth Senate term last year. During his tenure, he chaired the Health, Education, Labor & Pensions Committee and the Senate Budget Committee. Levin, 87, was the longest-serving Senator in Michigan history, in office from 1979 to 2015. He chaired the Senate Armed Services Committee from 2001 to 2003 and from 2007 to 2015. The country is better for their service. A deal on infrastructure? The Senate voted 66-28 this morning to proceed with consideration of a bipartisan infrastructure package that would provide $550 billion in new spending on a wide range of projects: – $110 billion for roads, bridges, and major projects – $66 billion for passenger and freight rail – $11 billion for highway and pedestrian safety programs – $39.2 billion for public transit repairs – $65 billion for broadband deployment and affordability programs – $17.3 billion for ports and waterways – $25 billion for airports – $55 billion for water infrastructure, including $23.4 billion for the Drinking Water and Wastewater Infrastructure Act – $73 billion for grid reliability and resiliency, clean energy supply chains, critical energy technologies, and energy demonstration projects – $46 billion for resiliency programs, including cybersecurity, waste management, flood mitigation, ecosystem restoration, and weatherization – $7.5 billion for low-carbon and zero-emission fueling infrastructure, including EV charging stations and fueling infrastructure for hydrogen, propane, and natural gas – $7.5 billion for EV and low-carbon school buses and ferries Although the Senate is using the House’s infrastructure bill, HR 3684, as a vehicle, this package is considerably smaller than the one the House passed. Senate Majority Leader Chuck Schumer (D-NY) has said that he wants the Senate to pass both this bill and a budget before the recess scheduled to begin on August 9. House panel digs in to the digital dollar The House Financial Services Subcommittee on National Security, International Development, and Monetary Policy held a hearing this week on “The Promises and Perils of Central Bank Digital Currencies,” exploring the question of whether developing a digital dollar would be necessary for the US to maintain its status as the world’s reserve currency. The Federal Reserve is preparing a white paper on the subject, to be published later this summer. Some Subcommittee members argued that private stablecoins could serve any purpose one might want to use a central bank digital currency (CBDC) for; others worried that China’s digital yuan might become attractive for cross-border transactions. Members on both sides of the aisle showed interest in the possibility of splitting domestic and international approaches to a digital dollar, but the panel of experts who testified said that no one would use a digital currency for cross-border transactions if it had not been proven to work domestically. FTC asks for funding and rulemaking authority At a marathon hearing of the House Energy & Commerce Subcommittee on Consumer Protection and Commerce this week, the five members of the bipartisan Federal Trade Commission answered questions about the agency’s challenges and the potential benefits of sixteen different bills that would change the FTC’s operations. FTC Chair Lina Khan, making her first Congressional appearance in that office, said that the FTC had already been under-resourced before the pandemic, but the surge in COVID-related fraud complaints and the boom in corporate mergers have stretched the Commission to a breaking point. Khan said that both the FTC Autonomy Act, introduced by Subcommittee Chair Janice Schakowsky (D-IL), and the 21st Century FTC Act, sponsored by Rep. Kathy Castor (D-FL), would help the FTC seek civil penalties against lawbreakers and make the FTC rulemaking process easier. Republican Commission members objected to procedural changes Chair Khan has made since taking office, and called for greater transparency and more direction from Congress. Commissioner Rohit Chopra is President Biden’s nominee to direct the Consumer Financial Protection Bureau; his departure will leave the Commission with a 2-2 split between Democratic and Republican members. Senate Banking Committee considers nationwide consumer lending rate cap Yesterday the Senate Banking Committee heard testimony from members of Congress and a variety of stakeholders about a proposal to extend the Military Lending Act’s 36% interest rate cap to all US consumer credit. The proposal has bipartisan sponsorship in the House of Representatives, where Reps. Jesús “Chuy” Garcia (D-IL) and Glenn Grothman (R-WI) have introduced a bill. Rep. Grothman said that he would ordinarily not want the federal government to intervene in the states’ traditional authority over usury laws, but the prevalence of online lending made it necessary. Republican Committee members asked for data on how the Military Lending Act, enacted in 2006 and strengthened by new rulemaking in 2015, had limited access to credit for servicemembers and their families. Menendez urges CFPB to move quickly on LIBOR transition guidance At a hearing on student loan debt before the Senate Banking Subcommittee on Economic Policy this week, Senator Bob Menendez (R-NJ) noted that 3.3 million private student loan borrowers owe about $80 billion in debt tied to LIBOR, a benchmark that will end by 2022. He called for the Consumer Financial Protection Bureau (CFPB) to move quickly on rulemaking about the LIBOR transition, as he’s concerned that lenders will move to a replacement rate that will cost borrowers more. This week’s hearing was the second one Subcommittee Chair Elizabeth Warren has held on protecting student loan borrowers. No Republican members attended the hearing, which featured testimony from New York State Attorney General Letitia James, American Federation of Teachers President Randi Weingarten, and Student Loan Borrower Assistance Project Director Persis Yu. Republican Senators call for audit enforcement on US-listed Chinese companies In the wake of the stock crash for the newly-public Chinese ride-hailing service Didi, seven Republican Senators wrote to Securities and Exchange Commission Chairman Gary Gensler yesterday demanding that the agency enforce last year’s Holding Foreign Companies Accountable Act, which requires that foreign companies traded in the US meet the same audit requirements that apply to American companies. The letter, headed by Senators Dan Sullivan (R-AK) and John Kennedy (R-LA), said that Didi’s IPO “highlights the troubling trend of Chinese companies taking advantage of our capital markets while ignoring the transparency that is required under US law.” They called for the SEC to “get much more serious and focused on US-listed Chinese companies, starting with the full enforcement of the Holding Foreign Companies Accountable Act.” Treasury expands paid-leave tax credit, clarifies that states and localities may use federal funds for vaccine incentives The Department of the Treasury and IRS announced yesterday that eligible employers may claim tax credits equal to employee wages for providing paid time off to employees so that they can take a family or household member to be vaccinated against COVID-19, or stay home to take care of household members recovering from the vaccine. Paid leave tax credits for employee vaccinations have been available since April. Separately, Treasury affirmed that states and localities can use money received through the State and Local Fiscal Recovery Funds (SLFRF) program to provide incentive payments of $100 for every newly vaccinated American. |
| Confirmations, Nominations, Departures |
| The Senate voted 47-34 to confirm Ur Mendoza Jaddou as Director of the US Citizenship and Immigration Services. Ms. Jaddou was chief counsel to USCIS in the Obama administration. The President will nominate Lisa Gomez to be Assistant Secretary of Labor for employee benefits. Gomez is currently chair of the management committee at the New York law firm of Cohen, Weiss, and Simon LLP. The Federal Reserve Board is soliciting applications for its Insurance Policy Advisory Committee (IPAC), a 21-member group of people with “expert insurance perspectives in life, property and casualty, and reinsurance issues.” Members serve three-year terms; the Fed chooses seven new members every year. |
| The Week Ahead |
| The House is in recess until September 7. August 3 at 10 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Oversight of Regulators: Does Our Financial System Work for Everyone?” August 3 at 10 a.m. Senate Committee on the Judiciary holds a hearing on “Student Loan Bankruptcy Reform.” August 3 at 2:30 p.m. Senate Banking Subcommittee on Financial Institutions and Consumer Protection holds a hearing on “Protecting Consumers from Financial Fraud and Scams in the Pandemic Recovery Economy.” August 3 at 2:30 p.m. Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Data Security holds a hearing on “Toxic Marketing Claims and their Dangers.” August 5 at 10 a.m. Senate Banking Committee holds a hearing on the nominations of Julia Gordon, David Uejio, and Solomon J. Greene to be Assistant Secretaries of Housing and Urban Development. . . . But wait, there’s more! We also need to salute the passing of infomercial pioneer and marketing genius Ron Popeil, who died in Los Angeles this week at the age of 86. At least one member of the D.C. office owned a Mr. Microphone, although no one will admit to having bought Hair in a Can. Set it and forget it one last time, sir. |
| The Ellis Insight – Jim Ellis on political news |
| Senate Alaska: Despite the new Alaska election law that allows four individuals to advance from the next statewide primary, thus virtually guaranteeing at least one Democrat will qualify for the general election, none have yet come forward to announce for the Senate race. This, in the face of incumbent Republican Lisa Murkowski posting very poor approval ratings within her own party and faring badly in early ballot test polling. State Sen. Elvi Gray-Jackson (D-Anchorage) has confirmed, however, that she is considering entering the US Senate race. Most are awaiting whether 2020 Independent/Democratic nominee Al Gross will again emerge, but at this point he has yet to portend any indication of forming a new campaign. Dr. Gross raised over $19.5 million for his campaign against Sen. Dan Sullivan (R) but lost the race 54-41% after polling much closer. Georgia: The Associated Press ran a story at the close of last week reporting that Cindy Grossman, ex-wife of former NFL football star and potential Georgia US Senate candidate Herschel Walker, obtained a 2005 restraining order against the retired player four years after their divorce for threatening to shoot her and her boyfriend. Though the reported incidents occurred more than 15 years ago, the stories coming back into focus could certainly have an adverse effect upon whether Mr. Walker decides to run for the Senate. Missouri: Former two-term Missouri Governor Jay Nixon (D), who also was elected four times as the state’s Attorney General after serving in the state Senate, said yesterday that he would not enter the 2022 US Senate campaign. Democrats have been attempting to attract a big-name candidate for the open race but have so far been unsuccessful. In addition to Mr. Nixon saying no, ex-US Senator Claire McCaskill, and State Auditor and 2020 gubernatorial nominee Nicole Galloway have also declined to run. The Nixon decision continues to leave former St. Louis area state Senator Scott Sifton as the Democrats’ top current contender. Pennsylvania: The Capitol Hill newspaper Roll Call reported yesterday that sources close to Rep. Conor Lamb (D-Mt. Lebanon/Pittsburgh) indicate that the Congressman will enter the open US Senate race on August 6th. Rep. Lamb escaped a tough challenge from Republican Sean Parnell in 2018 — Mr. Parnell is also in the Senate race — and his future in the House is uncertain with Pennsylvania losing another congressional seat, which is likely to come from western PA. House IA-1: Freshman Rep. Ashley Hinson (R-Marion) is a former Cedar Rapids news reporter and anchor, as was her probable next general election opponent. State Rep. Liz Mathis (D-Hiawatha), as expected, announced this week that she will enter the 1st District congressional race in what promises to be a highly competitive contest. Iowa’s 1st District appeared as the most Democratic of seats when drawn in the 2011 redistricting, but it has performed in the opposite fashion. After former Rep. Rod Blum (R) won here in 2014, the seat has remained in Republican hands with the exception of Democrat Abby Finkenauer winning in 2018 but losing the district to Ms. Hinson two years later. Former President Trump carried the 1st in both of his campaigns by about a four-percentage point margin. NH-1: Reports are surfacing in New Hampshire that 2020 1st District Republican congressional nominee Matt Mowers, who held Rep. Chris Pappas (D-Manchester) to a 51-46% victory in a district that has only re-elected its incumbent three times since the 2002 election, will return for another run next year and will formally announce his intentions in September. Republicans control the redistricting process in the state and are looking to make the 1st District more favorable for a Republican. Should this happen, Rep. Pappas may forego a re-election run and move toward what may become an open Governor’s race. NY-1: Rep. Lee Zeldin (R-Shirley) has held New York’s 1st Congressional District for four terms but is leaving the House in the next election to launch a gubernatorial effort. Already, five Democrats have announced their congressional candidacies but, curiously, until this week no Republican had come forward for a seat that elects more Republicans than Democrats. Robert Cornicelli, chairman of the Smithtown Republican Party and a retired Army officer, formally announced his congressional candidacy. The open 1st District race is expected to be competitive. NC-11: Afghan War veteran Rod Honeycutt announced his Republican primary challenge to freshman Rep. Madison Cawthorn (R-Hendersonville) in North Carolina’s far western congressional district. He is the fourth Republican to come forward well before next year’s candidate filing deadline. None, however, have any electoral history. From Rep. Cawthorn’s perspective, facing a large field will actually help. North Carolina is a runoff state, but only if the leading candidate fails to reach 30% of the vote. Considering Rep. Cawthorn in the 2020 Republican runoff defeated a Donald Trump-endorsed candidate with 66% of the vote in chief of staff Mark Meadows former district, it becomes clear that the country’s youngest Congressman begins his quest for a second term with strong backing from his political base. OH-11: The Mellman Group, polling for the Democratic Majority for Israel PAC, released their latest results from the OH-11 special election campaign. Voters will complete the primary nomination process on August 3rd, and the Democratic primary winner will be a lock to take the seat in the November 2nd special general election. The candidates are vying to replace Housing & Urban Development Secretary Marcia Fudge (D) who resigned the Cleveland-Akron congressional seat to accept the Biden Administration cabinet post. According to the Mellman data (7/13-17; 400 OH-11 likely Democratic primary voters; live interview), former state Senator and ex-Bernie Sanders for President national co-chair Nina Turner leads Cuyahoga County Councilmember and County Democratic Party chair Shontel Brown, 41-36%, with the other 11 candidates splitting an aggregate 5 percent. This is the closest margin a Democratic poll has detected during the campaign and continues Ms. Brown’s trend of turning the multi-candidate contest into a close two-way battle. OH-15: The pre-primary financial reports are available for Ohio’s 15th District special election that features real action on the Republican side in the battle to replace resigned Rep. Steve Stivers (R-Columbus). State Sen. Bob Peterson’s (R-Sabina) $556,000 leads the way among the 11 active candidates. Ohio Coal Association chairman Mike Carey, who former President Donald Trump is backing, is second with $460,000 in reported receipts. State Rep. Jeff LaRe (R-Canal Winchester) reports only $239,000 raised even after Mr. Stivers launched a relatively substantial independent expenditure on his behalf. None of the others has even reached the $200,000 level in contributions from others. The OH-15 special primary election is August 3rd. SD-AL: Three-term state Rep. Taffy Howard (R-Rapid City) is in the early stages of launching a statewide primary challenge against at-large two-term Rep. Dusty Johnson (R-Mitchell). Ms. Howard, a strong Trump supporter, will be attacking the Congressman from his political right. For his first re-election in 2020, Rep. Johnson faced only a Libertarian Party opponent and secured an 81% victory. In the Republican primary, the Congressman was re-nominated with 77% of the vote, thus making him a very difficult target for 2022. Rep. Johnson remains a prohibitive favorite for re-nomination and re-election. TX-6: Texas state Rep. Jake Ellzey (R-Waxahachie) again defied the political odds as he recorded a stronger vote than predicted and upset favored Susan Wright, widow of deceased north Texas Rep. Ron Wright (R-Arlington), in the double-Republican special runoff election with a 53-47% win in the state’s 6th District. As also predicted, voter turnout was low: 38,994 voters as compared to 78,471 individuals who voted in the jungle primary contest. Such a result is not surprising since Democrats, with no candidate in the race, had little reason to participate. Mr. Ellzey, considerably improving his election day performance and remaining strong in early voting particularly in Tarrant County, the district’s largest population sector, was able to convert the final result from a predicted loss into a victory. Upon his swearing into the House, the Republican Conference will grow to 212 members versus the majority Democrats’ 220. Governor California: The University of California at Berkeley’s Institute for Governmental Studies released their latest Golden State survey (7/18-24; 5,795 CA registered voters; 3,266 CA likely recall election voters; online) and found the ballot test for the September 14th recall election to remove Gov. Gavin Newsom (D) from office is now very tight among likely voters. According to the poll results, 47% of the respondents motivated to cast their ballot would vote to remove Newsom from office while 50% would vote against the recall. The tally is largely due to high enthusiasm among Republican voters, and conversely a low level from Democrats. The Governor’s biggest problem is the pollster’s analysis that Democrats “almost unanimously” believe Gov. Newsom will win the recall election, thus leading to a higher degree of apathy within the sample segment. Illinois: Last week, Gov. J.B. Pritzker (D) announced that he will seek a second term, and this week he is already running commercials. His first media wave targets a trio of areas outside of Chicago with three individual ads each highlighting an area service person and their contribution to fighting COVID. The geographically targeted spots feature individuals from Rochelle, located south of Rockford, the state capital of Springfield, and Belleville, which lies on the Illinois side of the St. Louis suburbs. Gov. Pritzker is favored for re-election, but Republicans are expected to heavily target the race. Nebraska: Former Nebraska Governor Dave Heineman (R), who served two full terms after an initial two years in office when succeeding a resigned state chief executive, confirms that he is considering returning for another run next year. Current incumbent Pete Ricketts (R) is ineligible to run for a third consecutive term. Mr. Heineman said just before the weekend began that he would give launching a new campaign intense thought over the summer and announce his decision “in the Fall.” The early prevailing political wisdom suggests that he will run. New York: State Senator Alessandra Biaggi (D-Bronx), who once worked on Gov. Andrew Cuomo’s staff, confirmed that she is considering opposing the three-term incumbent in the 2022 Democratic primary. With the impeachment proceedings against Mr. Cuomo dragging and will likely not come to conclusion, the election will be the real test if the embattled state chief executive is to run and win a fourth term in office. For the Republicans, US Rep. Lee Zeldin (R-Shirley) is already the officially endorsed Republican candidate. South Carolina: State Senate Majority Leader Shane Massey (R-Edgefield) ended wild political speculation saying yesterday that he will not challenge Gov. Henry McMaster in the 2022 Republican primary. Mr. McMaster assumed the Governorship in 2017 when then-Gov. Nikki Haley (R) was appointed United States Ambassador to the United Nations, and then was elected in his own right in 2018. He is eligible to seek another four-year term under the state’s term limit law and plans to do so. Localities Atlanta: Survey USA went into the field to test the 2021 open Atlanta Mayor’s race (7/20-25; 650 Atlanta adults; 527 registered voters; interactive voice response system and text) and finds none of the ten candidates even reaching the 20% support plateau. Former Mayor Kasim Reed (D), who jumped into the race soon after incumbent Mayor Keisha Lance Bottoms (D) announced that she would not seek re-election, leads the group, but with just 17% support among the registered voters. City Council President Felicia Moore (D) is second with 10%, while the remaining eight contenders all fall under 7% preference. Crime is a top concern. A total of 77% of those questioned categorized crime as a major issue in the city, and an additional 16% labeled it a “minor issue.” |