|Debt ceiling looms as fiscal year ends|
Speaker of the House Nancy Pelosi (D-CA) vowed at a press conference yesterday that Congress will keep the federal government open and prevent a default on federal debt. The House of Representatives approved a continuing resolution with a debt limit suspension on Tuesday with a party-line vote. The bill would fund the government’s operations until December 3, and would suspend the debt ceiling until December 16, 2022. The Senate will vote on this measure next week, but it is expected to fail. Pelosi said yesterday that the House will pass a separate continuing resolution “and continue the conversation about the debt ceiling,” in order to make sure that the government doesn’t shut down on September 30. Meanwhile, six former Secretaries of the Treasury wrote to House and Senate leadership “to express our deep sense of urgency” about the need for Congress to raise the debt limit. Former Secretaries Michael Blumenthal, Hank Paulson, Robert Rubin, Tim Geithner, Larry Summers, and Jacob Lew said that “even a short-lived default” could create damage here and abroad that “would be hard to repair.”
House approves cannabis banking as part of NDAA
Proving that Congress can, in fact, act on a bipartisan basis, the House approved the National Defense Authorization Act (NDAA) yesterday by a vote of 316-113. Amendments to the bill included dozens of unrelated measures, including the SAFE Banking Act, sponsored by Rep. Ed Perlmutter, which would prohibit federal banking regulators from penalizing financial institutions that provide services to legitimate cannabis-related businesses. The House has already passed the SAFE Banking Act on its own five times; including it in the NDAA will make it part of the House-Senate conference on their two versions of defense funding bills. Perlmutter Tweeted Tuesday that the bill “will strengthen the security of our financial system and keep bad actors like cartels out,” and “will reduce the risk of violent crime in our communities.”
Saule Omarova is Biden’s choice for Comptroller
President Joe Biden announced yesterday that he will nominate banking law expert Saule T. Omarova to be Comptroller of the Currency. With a Ph.D. in political science as well as a law degree, Omarova is considered one of the nation’s leading academic experts on the regulation of systemic risk and structural trends in financial markets. She currently teaches at Cornell University, where she is Director of the Program on the Law and Regulation of Financial Institutions and Markets of Cornell’s Jack Clarke Institute for the Study and Practice of Business Law. Omarova spent time in private practice with the Financial Institutions Group of Davis, Polk, & Wardwell, and served as a Special Advisor for Regulatory Policy to the Under Secretary of the Treasury for Domestic Finance from 2006 to 2007. If confirmed, she would be the first woman and the first person of color to serve as Comptroller. Senator Pat Toomey (R-PA), ranking member of the Senate Banking Committee, has already expressed “serious reservations” about the nomination, calling Omarova’s views “extreme leftist ideas.”
House hearing highlights bipartisan support for consumer privacy framework
House Financial Services Committee Chairwoman Maxine Waters (D-CA) joked on Tuesday that it might be the first time she’d ever agreed with Rep. Blaine Luetkemeyer (R-MO) about anything. The occasion was a FinTech Task Force hearing on protecting consumers’ rights to their own financial data, which called for financial service providers and their third-party vendors to move away from screen scraping and toward applications (APIs) that give consumers explicit information about the data they’re sharing, how they can limit that data, and how it will be used. While the Consumer Financial Protection Bureau’s pending rulemaking on Section 1033 of the Dodd-Frank Act will offer consumers some protection, Task Force members agreed on the need for a more comprehensive approach to consumer data privacy. Witnesses described the problem of information overload as the overwhelming volume of disclosure requirements leads consumers to approve terms and conditions that go far beyond anything they might actually want. The CFPB solicited comments on an advance notice of proposed rulemaking on Section 1033 late last year; the comment period closed on February 4, but the agency has not announced its next move.
Toomey presses Gensler for regulatory clarity on cryptocurrency
In his role as ranking member of the Senate Banking Committee, Senator Pat Toomey sent Securities and Exchange Commission Chair Gary Gensler a list of questions today to clarify the agency’s regulatory policies around emerging technologies, specifically cryptocurrencies and stablecoins. Earlier this week, Gensler repeated his description of crypto tokens—the term he prefers to “cryptocurrency”—as “a highly speculative asset class” in an interview with the Washington Post’s David Ignatius. Gensler said that the sector was “rife with fraud and abuse and hucksters,” and compared crypto tokens to the wildcat banks of the 19th century, whose economic chaos led to the creation of the Office of the Comptroller of the Currency. Earlier today, Senator Toomey called China’s crackdown on cryptocurrency “a big opportunity for the US,” and said that cryptocurrency was “arguably the most exciting innovation in finance in decades.”
|Confirmations, Nominations, Departures|
|The Senate voted 64-34 to confirm Lily Lawrence Batchelder as an Assistant Secretary of the Treasury.|
President Biden nominated Claudia Slacik to be a member of the Securities Investor Protection Corporation.
|The Week Ahead|
|September 27 at 9:30 a.m. The Asset Management Advisory Committee (AMAC) of the Securities and Exchange Commission holds a virtual public meeting.|
September 28 at 10 a.m. House Financial Services Subcommittee on Diversity & Inclusion holds a hearing on “Access Denied: Eliminating Barriers and Increasing Economic Opportunity for Justice-Involved Individuals.”
September 28 at 10 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “CARES Act Oversight of the Treasury and Federal Reserve: Supporting an Equitable Pandemic Recovery.” Secretary of the Treasury Janet Yellen and Federal Reserve Board Chairman Jerome Powell will testify.
September 29 at 10 a.m. House Financial Services Subcommittee on Consumer Protection and Financial Institutions holds a hearing on “The Future of Banking: How Consolidation, Nonbank Competition, and Technology are Reshaping the Banking System.”
September 29 at 10 a.m. Senate Committee on Commerce, Science, & Technology holds a hearing on “Protecting Consumer Privacy.”
September 30 at 10 a.m. House Committee on Financial Services holds a hearing on “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response.” Secretary of the Treasury Janet Yellen and Federal Reserve Board Chairman Jerome Powell will testify.
September 30 at 10 a.m. House Committee on Transportation and Infrastructure holds a hearing on “Assessing the Federal Government’s COVID-19 Relief and Response Efforts and Their Impact — Part II.”
September 30 at 10 a.m. Senate Banking Committee holds a hearing on the nominations of Todd Harper to the Board of the National Credit Union Administration, Judith DelZoppo Pryor to be First Vice President of the Export-Import Bank of the United States, and Owen Edward Herrnstadt to the Board of the Export-Import Bank.
|The Ellis Insight – Jim Ellis on political news|
Arizona: The OnMessage survey research firm, polling for the Advancing Arizona Forward organization that supports Attorney General Mark Brnovich (R) for the US Senate, released the ballot test results from the September 9-12 Arizona statewide poll (sample size and methodology not publicized). The study finds Mr. Brnovich, twice elected Attorney General but ineligible to seek a third term, taking a commanding lead in the GOP primary.
According to the OnMessage numbers, Mr. Brnovich enjoys a 41-6-5-4% lead over venture capitalist Blake Masters, businessman Jim Lamon, and retired Arizona National Guard Adjutant General Mick McGuire. The eventual Republican nominee will face freshman Sen. Mark Kelly (D) in the general election.
Colorado: The co/efficient polling organization surveyed the Colorado electorate, testing Sen. Michael Bennet (D) against former US Olympian Eli Bremer (R). The survey (9/9-12, but released earlier this week; 742 CO likely voters) finds Sen. Bennet leading Mr. Bremer by a 40-32% count. It is unsurprising that Sen. Bennet holds a definitive lead at this point in the cycle, but his 40% support figure is much lower than one would expect for a 12-year Senate incumbent.
Iowa: Selzer & Company, Iowa’s most accurate pollster, went into the field for the Des Moines Register newspaper (9/12-15; 805 IA adults; 620 IA likely voters; live interview) and found seven-term Sen. Chuck Grassley (R) in strong position against former US Rep. Abby Finkenauer (D). The ballot test gave the Senator a 55-37% advantage over Ms. Finkenauer with a 47:40% positive to negative job approval ratio. Sen. Grassley has said he will make a decision about seeking an eighth six-year term by November 1st.
Ohio: State Sen. Matt Dolan (R-Chagrin Falls) made his US Senate exploratory official this week in announcing that he would become an open seat statewide candidate. Sen. Dolan is also a minority owner of the Cleveland Indians baseball team, which has apparently disqualified him from obtaining former President Donald Trump’s support. Mr. Trump said in reference to Sen. Dolan’s candidacy, “Anybody that changes the name of the once storied Cleveland Indians to the Cleveland Guardians should not be running for the United States Senate representing the great people of Ohio.”
Wisconsin: Clarity Campaign Labs tested the Wisconsin electorate (9/8-11; 756 WI likely voters; live interview and interactive voice response system) and found Sen. Ron Johnson (R) and Lt. Gov. Mandela Barnes (D) tied in an early 2022 general election pairing. Both candidates pulled 43% support. Sen. Johnson has not yet committed to running for a third term, but promises a decision “in the Fall.”
Indiana: The Indiana congressional redistricting map cleared the state House of Representatives with all but three of 70 Republicans supporting the bill. The 29 Democrats were unanimously opposed to a map that will likely return the current seven Republicans and two Democrats to Washington for most of the decade. The state Senate soon begins consideration of the new map.
The big change is making the central state 5th District, that was becoming marginal, much more Republican. This will help freshman Rep. Victoria Spartz (R-Noblesville) become more politically secure. She won her first election in November with a 50-46% victory margin. Former President Trump carried the seat in 2020 with only a 50-48% count. The new boundary lines are estimated to now make this a 57% Republican district.
NM-2: Last week, freshman state Sen. Siah Correa Hemphill (D-Silver City) confirmed that she was considering a bid against freshman Rep. Yvette Herrell (R-Alamogordo) but now has announced that she will not run for Congress next year. Political reports suggest the Democratically controlled legislature will attempt to draw the 2nd District more favorably for their party, thus making the seat more competitive.
This plays favorably for Las Cruces City Councilman Gabe Vasquez, who is already picking up major endorsements, such as the one from US Sen. Martin Heinrich (D), and now appears to be the leading Democratic candidate.
NY-19: Republican leaders for the two election cycles have been trying to convince Dutchess County Executive Marc Molinaro (R) to challenge Rep. Antonio Delgado (D-Rhinebeck) in New York’s Upstate 19th District. It appears the leadership has now convinced him. Mr. Molinaro filed a 2022 congressional committee with the Federal Election Commission. It remains to be seen, however, how the 19th CD’s new configuration will unfold.
OH-16: Two-term Ohio US Representative Anthony Gonzalez (R-Rocky River) announced late last week that he would not seek a third term, thus avoiding a tough primary with a Trump-endorsed opponent. Rep. Gonzalez was one of ten House Republicans who supported impeaching the then-President as a result of the January 6th US Capitol invasion, and since that time he and Mr. Trump have been in a feud. Rep. Gonzalez indicated he wants to spend his political time helping to deny Mr. Trump again becoming President, while the former national chief executive was claiming victory over one of the ten targeted GOP impeachment votes.
Maine: Though former Gov. Paul LePage (R) has not yet declared his 2022 gubernatorial candidacy, things are already moving in his direction. Late in the week, moderate Sen. Susan Collins (R) announced that she will support the conservative Mr. LePage, thus going a long way to unite all factions of the Maine GOP behind his unofficial candidacy. It is apparent that Mr. LePage, who served the maximum two consecutive terms as Governor, will return for a 2022 campaign, and he is already the clear favorite to advance into the general election. His eventual opponent, Gov. Janet Mills (D), is preparing to seek a second term.
Michigan: The Trafalgar Group released their new survey of the Michigan electorate (9/13-15; 1,097 MI likely voters; live interview, interactive voice response system, online, and text) and finds retired Detroit Police Chief James Craig (R), for the first time, leading Gov. Gretchen Whitmer (D). The ballot test gave the former Chief a 50-44% advantage.
The Strategic National firm also tested the Governor’s race (9/18-19; 600 MI likely voters) and saw Ms. Whitmer holding just a 47-46% lead over Mr. Craig. The Strategic National poll appears slightly skewed toward Republicans because the number of sampled blacks is low and Republicans high according to the statewide demographic scale.
New Jersey: After National Research, Inc. earlier this week released their survey (9/13-16; 600 NJ likely voters; live interview) showing former state Assemblyman Jack Ciattarelli (R) pulling to within three points of Gov. Phil Murphy (D), 45-42%, Monmouth University counters with their new poll (9/16-20; 804 NJ registered voters; live interview), posting the incumbent back to a 51-38% advantage. These are wide spreads, obviously, meaning one is an outlier. This race could get interesting as we head toward a November 2nd finish.
Pennsylvania: Former Chester County Chamber of Commerce president, ex-Lt. Governor and congressional aide Guy Ciarrocchi, who has lost previous electoral campaigns, announced his gubernatorial candidacy at the beginning of the week. He joins former Congressman Lou Barletta, Montgomery County Commissioner Joe Gale, two state Senators, and a Harrisburg lobbyist in the GOP field. Democrats are expected to coalesce around Attorney General Josh Shapiro. Gov. Tom Wolf (D) is ineligible to seek a third term.
Rhode Island: In early March, Rhode Island Lt. Governor Dan McKee (D) was sworn in as the state’s new chief executive when then-Gov. Gina Raimondo (D) resigned to become US Commerce Secretary. It was believed that the new incumbent would have a major fight to keep his position in the 2022 Democratic primary, which, as one of the last in the cycle, is scheduled for September 13th.
The prediction of a combative primary has already come true. Late this week, former Secretary of State Matt Brown announced he will join the Democratic gubernatorial primary. Already in the race to challenge Gov. McKee are General Treasurer Seth Magaziner and current Secretary of State Nellie Gorbea. It is probable that with more candidates in the field, the stage will be better set for Gov. McKee to win a plurality primary.
Texas: Two hypothetical Texas gubernatorial ballot test responses were released late this weekend, finding Gov. Greg Abbott (R) both leading and trailing. Against a more likely opponent, former Congressman and presidential candidate Beto O’Rourke (D) who is beginning to act like a candidate, the University of Texas at Tyler polling for the Dallas Morning News (9/7-14; 1,148 TX registered voters; live interview & online) conducted an exhaustive 78-question survey and found Gov. Abbott ahead of Mr. O’Rourke only by a 42-37% count. Conversely, if actor Matthew McConaughey (D) were to run, he would top the Governor, 44-35%.
Iowa: Tom Miller (D), who is 77 years of age and was first elected Iowa Attorney General in 1978, announced that he will seek an 11th non-consecutive term next year. Mr. Miller served in office from 1979 to 1991, departing after running unsuccessfully for Governor in 1990. He returned to re-claim the Attorney General’s position in 1994, and has held the office ever since. Needless to say, he is the longest serving Attorney General in the country.
North Carolina: In a scenario that has occurred several times in North Carolina over the past several years, a state three-judge panel struck down the NC voter identification law on a 2-1 decision, ruling that the law is unfair to minority voters. The Republican state legislative leadership will likely appeal the decision, meaning we will again see a legal battle over the requirements surrounding proof of identity before voting. It is unclear how this development could affect the upcoming election cycle.
Buffalo: The Buffalo Mayor’s race has acted like a seesaw ever since self-proclaimed socialist India Walton (D) denied four-term Mayor Byron Brown re-nomination in the June Democratic primary. Mayor Brown is returning as an Independent, and through various court rulings and then reversals, he is forced to run as a write in candidate. Otherwise, Ms. Walton is unopposed on the general election ballot.
A new co/efficient survey (9/16-17; 653 likely Buffalo voters; live interview & text) finds Mayor Brown with an increasingly large lead, now 59-28%. The question is, will these poll numbers translate into actual write-in votes for Mayor Brown. Therefore, this becomes an interesting race.
Cleveland: Cleveland City Council President Kevin Kelley has taken a small lead over attorney Justin Bibb in the city’s mayoral race according to a new citywide poll. Both men advanced into the general election after placing first and second in the September 14th primary election. While each is a Democrat, the election is ostensibly non-partisan.
The Pathway Polling firm (9/17-20; 492 Cleveland likely general election voters) found Mr. Kelley holding a slight 32-30% edge over Mr. Bibb. The latter man, however, finished first in the jungle primary with a 27-19% spread over Council President Kelley. Mayor Frank Jackson is retiring after 16 years in office.