The Golden Apple – November 19, 2021
| House approves Build Back Better plan on party lines After a speech by House Minority Leader Kevin McCarthy (R-CA) lasting more than eight hours (we admit we did not stay up for all of it), the House of Representatives approved HR 5376, the Build Back Better Act, by a 220-213 vote this morning. All Republican members voted against the bill, along with a single Democrat, Rep. Jared Golden of Maine.The Build Back Better Act must pass the Senate, which is expected to make changes.On Wednesday, GrayRobinson federal lobbyists Doyle Bartlett and Blair Hancock, with consultant John Ariale, briefed clients and friends of the firm on the major provisions of the Infrastructure Investment and Jobs Act (signed into law earlier this week) and the Build Back Better Act. We invite you to watch a recording (access code PkN84.fU)of the “Federal Funding Trifecta: Understanding and Navigating the IIJA, the BBB, and Appropriations in Washington” presentation or download the materials. Yellen flags December 15 as new debt limit deadline Congress is scheduled to leave town for the year on December 10. They have a lot to do between now and then, including another increase or suspension to the debt limit. In a letter to Speaker of the House Nancy Pelosi (D-CA) on Monday, Secretary of the Treasury Janet Yellen noted that the Infrastructure Investment and Jobs Act (IIJA) appropriates $118 billion for the Highway Trust Fund. Those funds must be transferred within a month of the bill’s enactment, and Yellen said the transfer would be completed on December 15. Yellen said she had “a high degree of confidence” that Treasury could make that transfer as scheduled, but under some scenarios, this would leave Treasury without enough money to keep the rest of the government running. “It is critical that Congress raise or suspend the debt limit as soon as possible,” she concluded. The continuing resolution currently keeping the government running expires on December 3. Do Opportunity Zones need fixing? The House Ways and Means Subcommittee on Oversight held a well-attended hearing on Tuesday to talk about the successes and disappointments of the Opportunity Zones (OZ) program created by the 2018 Tax Cuts and Jobs Act (TCJA). The program’s goal was to diversify capital investing beyond California, New York, and Massachusetts by awarding capital gains tax exemptions to investors in distressed communities designated by the nation’s governors. Governors have designated almost 8,700 opportunity zones nationwide, but only a handful have attracted the kind of investment program sponsors hoped for. Critics say that most of the projects funded in OZs would have been able to attract traditional funding, so the capital gains exemptions are essentially giving investors discounts for investments they would have made anyway. Subcommittee Chairman Bill Pascrell (D-NY) emphasized that no one was arguing for the program’s elimination, while Subcommittee ranking member Rep. Mike Kelly (R-PA) pointed to notable successes in post-industrial small cities such as Erie, PA. Bank regulators issue final rule on cyber incident reporting Yesterday the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) finalized a joint rule that requires banks to notify their primary federal regulators of “any significant cyber-security incident” as quickly as possible, but no later than 36 hours after the institution realizes an incident has occurred. The rule also requires bank service providers to notify affected customers as soon as possible after identifying any cyber-security incident that might affect its customers for four hours or more. Organizations must comply with the final rule by May 1, 2022. Joint Economic Committee discusses need for crypto rules The explosion in the market for cryptocurrency and digital assets over the last two years has not escaped Congress’s attention. The Joint Economic Committee (JEC) invited four industry experts, including a former CFTC Chairman and the industry’s top lobbyist, to talk about whether and how the government needs to intervene to protect the economy and unwary consumers. The JEC’s Chairman, Rep. Don Beyer (D-VA), said that Congress needed to update the regulatory framework for digital assets in the same way Dodd-Frank created the framework for complex swaps and derivatives. His Digital Asset Market Structure and Investor Protection Act seeks to set guardrails and give clarity to regulators and investors without stifling innovation. Senator Mike Lee (R-UT), the Committee’s ranking member, called for “clear rules and a light touch,” saying that the technology behind cryptocurrency could create opportunities we can’t yet imagine. Guzman promises reform, highlights success of PPP at contentious House hearing House Committee on Small Business hearings are usually fairly bipartisan and congenial, but House Republicans blasted Small Business Administrator Isabella Casillas Guzman when she appeared before the panel on Tuesday. Guzman was there to deliver good news about the number of new business startups, the distribution of Paycheck Protection Plan (PPP) loans to microbusinesses, reforms to the COVID Economic Injury Disaster Loan (EIDL) program, and the launch of the Community Navigator pilot program, which will deploy trusted community partners to connect small business owners in underserved communities to SBA resources. Rep. Blaine Luetkemeyer (R-MO), the Committee’s ranking member, said that the SBA was not addressing the real challenges facing small businesses. He called the agency’s direct COVID-EIDL lending program a “fraud-riddled disaster,” and said he had serious concerns about Guzman’s ability to do the job she’d been given. Guzman said they made significant changes to prevent fraudulent use of COVID-EIDL loans, launched a direct PPP loan forgiveness portal to support smaller lenders, and were using technology to streamline the delivery of relief to small businesses. Senate Republicans grill OCC nominee Dr. Saule T. Omarova, President Biden’s choice to serve as Comptroller of the Currency, testified before the Senate Banking Committee for more than two and a half hours yesterday, facing not only strenuous opposition from Republican members but substantive concerns from Democrats as well. Committee Chairman Sherrod Brown (D-OH) said that Omarova was one of the most qualified candidates ever nominated for the job, a “thoughtful, balanced professional” who had been the target of “a hit job” by The Wall Street Journal that had turned her into “a Marxist boogeyman.” Senator Patrick Toomey (R-PA), the Committee’s ranking member, said that Omarova’s published proposals amounted to “a socialist manifesto for American financial services,” including nationalizing the banking system. Senators Mark Warner (D-VA) and Jon Tester (D-MT) both expressed concerns about positions Omarova had taken, but did not say they would oppose the nomination. GOP lawmakers scrutinize Pharmacy Benefit Managers The Republican members of the House Committee on Oversight and Reform held their own forum this week to examine conflicts of interest and anti-competitive practices among pharmacy benefit managers (PBMs). Rep. James Comer (R-KY), ranking member of the Committee, said that the forum was necessary since Chairwoman Carolyn Maloney (D-NY) had not been willing to schedule a full Committee hearing on the topic. Witnesses and members emphasized what they described as obvious conflicts of interest among PBMs that own retail pharmacies and are in turn owned by insurance companies. They called for more transparent drug pricing, and for changes that would reduce the gap between list prices and the net prices paid by PBMs. Rep. Comer said he would continue to push for full Committee attention to these issues. CFPB seeks comment on HMDA rule Earlier this week, the Consumer Financial Protection Bureau (CFPB) issued a request for comment on its rules implementing the Hoe Mortgage Disclosure Act (HMDA). The Bureau revised HMDA reporting rules in 2015, and now wants public comment on its effectiveness. A HMDA report published in August 2021 found applications from Black and Hispanic homebuyers were more likely to be denied than those of white applicants, and mortgage lenders were charging Black and Hispanic borrowers higher interest rates. The request for comment asks for feedback specifically on coverage of institutions and transactions, data points, the benefits of new data collected since 2015, and the operational and compliance costs of HMDA reporting. Comments are due to the CFPB by mid-January. Mitch Landrieu named infrastructure czar Before signing the Infrastructure Investment and Jobs Act into law this week, President Joe Biden appointed former New Orleans Mayor Mitch Landrieu to the new position of senior advisor and infrastructure coordinator. Landrieu will oversee partnerships among federal, state, and local governments, the private sector, and labor. He is best known for coordinating recovery efforts in New Orleans after Hurricane Katrina and the BP oil spill. The position does not require Senate confirmation. |
| Confirmations, Nominations, Departures |
| Senator Patrick Leahy (D-VT), chairman of the Senate Appropriations Committee, announced on Monday that he will not seek a ninth term next year. Leahy, first elected in 1974, is the longest-serving Senator currently in office and the Senate president pro tem. Rep. G.K. Butterfield (D-NC) will retire at the end of this Congress. He has served in the House since 2004, and is a Senior Chief Deputy Whip in this Congress. He chaired the Congressional Black Caucus in the 114th Congress. Rep. Jackie Speier (D-CA) announced that she will not run for reelection to a ninth term. She was elected to Congress in 2008 after serving 18 years in the California legislature. As a staffer to Rep. Leo Ryan (D-CA), she survived the 1978 massacre in Jonestown, Guyana, that killed Ryan. Federal Reserve Board Governor Randal K. Quarles , whose term as Vice Chair for Supervision ended last month, announced that he will leave the Fed at the end of this year. His three-year term as chair of the Financial Stability Board (FSB) ends on December 3. President Biden will nominate a candidate to fill Quarles’ unexpired term as a Governor, which is scheduled to end on January 31, 2032. President Biden nominated former GSA Administrator and Treasury CFO Daniel Tangherlini and former Deputy Director of OMB Derek Kan to the U.S. Postal Service Board of Governors. The Securities and Exchange Commission announced a new chair and new members of the Public Company Accounting Oversight Board (PCAOB). Erica Y. Williams, who held a variety of senior positions at the SEC before joining Kirkland & Ellis LLP, was named Chairperson of the Board. Christina Ho, former Deputy Assistant Secretary of the Treasury for Financial Transparency & Accounting Policy; former SEC Commissioner Kara M. Stein; and Tony Thompson, Executive Director and Chief Administrative Officer of the Commodity Futures Trading Commission, have been named to the Board, and current Acting Chairperson Duane M. DesParte will remain on the Board. |
| The Week Ahead |
| The House and Senate are out next week for Thanksgiving. We have much to be thankful for this year, and we hope that you do, too. We wish you and your families a happy and healthy holiday. |
| The Ellis Insight – Jim Ellis on political news |
| Senate Missouri: Missouri State Senate President Pro Tempore Dave Schatz (R-Sullivan) announced that he will join the crowded Republican primary attempting to succeed retiring Sen. Roy Blunt (R). He becomes the tenth announced GOP candidate. The competitive contenders are former Gov. Eric Greitens, Attorney General Eric Schmitt, U.S. Reps. Vicky Hartzler (R-Harrisonville/Columbia), and Billy Long (R-Springfield), and attorney Mark McCloskey. At this point, the leading Democrat appears to be former state Sen. Scott Sifton. Vermont: Senate President Pro Tempore Patrick Leahy (D-VT), first elected in 1974, announced that he will not seek a ninth term next year in a bit of a surprise announcement. Earlier indications suggested he would run again, though he never publicly committed to doing so.Responding to Sen. Leahy’s retirement announcement, several prominent individuals are already declining to run. Gov. Phil Scott (R), former Governor and ex-U.S. Senate candidate Jim Douglas (R), and former Lt. Governor and 2020 Democratic gubernatorial nominee David Zuckerman all say they will not enter the open Senate contest. Meanwhile, reports suggest that at-large Rep. Peter Welch (D-Norwich) is telling his colleagues that he will announce his Senate candidacy in the coming days. Washington: Public Policy Polling, surveying for the Northwest Progressive Institute (11/10-11; 909 WA likely voters; live interview and text) tested the Evergreen State electorate for their upcoming Senate race featuring incumbent Patty Murray (D) running for a sixth term. According to the survey, Sen. Murray holds a 50-37% advantage over Republican Tiffany Smiley. She is a prohibitive favorite for re-election. House CA-14: Veteran California Rep. Jackie Speier (D-Hillsborough/San Mateo) announced this week that she will not seek an eighth full term in the U.S. House and will retire at the end of the current Congress. Ms. Speier has been in elective office since 1980, serving on the San Mateo County Board of Supervisors, the California state Assembly, and the state Senate before winning a special election to the House in 2008 to replace the late Congressman Tom Lantos (D-CA). Counting the newly created seats via reapportionment, at least 32 districts will be open in the 2022 midterm election.CA-14 will remain safely Democratic. The first two candidates, San Mateo Board of Supervisors chairman David Canepa (D) and Burlingame City Councilwoman Emily Beach (D) are the first to announce their candidacies. CA-21: Former U.S. Rep. T.J. Cox (D), who unseated Rep. David Valadao (R-Hanford/Bakersfield) in 2018 only to see the ex-Congressman “return the favor” two years later, won’t seek a re-match next year. After months ago converting his campaign committee into a political action committee, Mr. Cox this week endorsed state Assemblyman Rudy Salas (D-Bakersfield), who will likely be the congressional candidate who advances into the general election against Mr. Valadao. FL-20: With all of the ballots counted in the South Florida special Democratic congressional primary, businesswoman Sheila Cherfilus-McCormick is finally the official five-vote winner over Broward County Commissioner Dale Holness. The final vote total shows Ms. Cherfilus-McCormick, who challenged the late Rep. Alcee Hastings (D-Delray Beach) in the 2020 Democratic primary and lost 69-31%, recording 11,662 votes to Mr. Holness’ 11,657. A total of 11 candidates were on the primary ballot.Ms. Cherfilus-McCormick will advance to compete in the January 11th special general election, a vote she will easily win in the heavily Democratic district. Mr. Holness will apparently not challenge the special election result in court but will likely return to run in the regular 2022 primary. Therefore, it is likely this district will again see a very competitive Democratic primary next August. IA-3: Quelling speculation that she might challenge Gov. Kim Reynolds (R), two-term Rep. Cindy Axne (D-Des Moines) announced that she will seek re-election to the House in the new 3rd District. The 2021 redistricting map paired Reps. Axne and Mariannette Miller-Meeks (R-Ottumwa), but the latter member announced that she would seek re-election in new District 1.We can expect a competitive campaign in the 3rd District. Under the new lines, former President Trump would have carried the seat, 49.3 – 48.9%, and Rep. Axne has not reached 49% in her two plurality congressional victories. The new boundaries yield a slightly more Republican voting history than her previous district. State Sen. Brad Zaun (R-Urbandale) leads a field of four potential GOP challengers. MI-8: Despite redistricting that will greatly change the current 8th Congressional District, state Sen. Tom Barrett (R-Lansing) announced that he will challenge two-term Rep. Elissa Slotkin (D-Holly) even though the seat might become more Democratic. NC-2: North Carolina Rep. G.K. Butterfield (D-Wilson) announced his retirement after nine-plus full terms in office because the new redistricting map makes his district much more competitive. The seat still leans Democratic, but President Biden would have only carried it, 51-48%. His current 1st District yielded Mr. Biden a 54-45% victory margin. NC-4: Ex-state Supreme Court Justice Patricia Timmons-Goodson (D), who held Rep. Richard Hudson (R-Concord) to a 53-47% re-election victory in the current 8th Congressional District, released a statement saying she would not become a candidate in new District 4, the open lean Republican district that includes the city of Fayetteville and Cumberland County. PA-7: Pennsylvania state Rep. Ryan Mackenzie (R-Macungie) yesterday filed congressional committee papers with the Federal Election Commission ostensibly to challenge Rep. Susan Wild (D-Allentown) next year. In 2020, Mr. Mackenzie did the same, only to retreat and run for re-election to his state House position. Already in the race is 2020 nominee Lisa Scheller, a former Lehigh County Commissioner and business owner who held Rep. Wild to a 52-48% re-election victory, and technology firm owner Kevin Dellicker. TX-30: Fifteen-term Texas Rep. Eddie Bernice Johnson (D-Dallas), chair of the House Science Committee, indicated before the 2020 election that this would be her last term in the House. She has scheduled a “special announcement” for Saturday that many now believe will be a re-election announcement since the Congresswoman has refused to confirm her retirement when questioned. Several potential candidates for the safely Democratic Dallas anchored seat are waiting to run in case she does announce that she will step down. Redistricting Redistricting has been completed in Idaho, as the redistricting commission members have sent the congressional map to the Secretary of State for certification. With two districts, only 35,338 people need to move from the 1st District to the 2nd, and that transfer will occur in the Boise area. The fact that both seats will house more than 919,000 residents suggest that Idaho may be in line for a new seat come the 2030 census. The 2021 Massachusetts congressional map has now passed both houses of the state legislature and is headed to Gov. Charlie Baker (R) for his approval. The nine-member delegation, all Democrats, would stay intact with minimal changes to each individual district. The Michigan Independent Redistricting Commission members have published about a dozen maps for public comment. They are expected to adopt a final plan on or about December 29th. Until then, it is difficult to assess any of the Michigan political situations since the state, losing a congressional seat in reapportionment, could witness drastic political changes coming forth. The Montana Districting and Apportionment Commission, on a 3-2 vote with a Democratic member supporting the Republican plan, adopted the state’s new two-district congressional map. The western district, the 1st, will include the cities of Missoula, Bozeman, Butte, and Kalispell. The eastern 2nd District, where current at-large Rep. Matt Rosendale (R-Glendive) will seek re-election, houses the state’s largest city of Billings, Helena, and Great Falls. The Ohio plan that loses a congressional district through reapportionment looks to create three highly competitive CDs for the future, two of which the Democrats hold. The current 12R-4D delegation could stretch to 13R-2D, or drop to 11R-4D. The map passed both houses of the Ohio legislature this week and now await Gov. Mike DeWine’s (R) signature. The Nevada state Senate passed the congressional map in their special session and Gov. Steve Sisolak (D) immediately signed the legislation. The plan will likely strengthen the state’s current 3D-1R political margin. Utah Gov. Spencer Cox (R) signed the congressional and state legislative maps. The congressional map will lock in the Republicans’ 4R-0D advantage. Both houses of Wisconsin’s Republican legislature passed congressional and state legislative maps late last week, but Gov. Tony Evers (D), as expected, vetoed all of the plans. This means Wisconsin will have a court-drawn map. Governor New Jersey: Republican gubernatorial nominee Jack Ciattarelli has officially conceded the 2021 New Jersey campaign, but immediately announced his intention to run again in 2025 when Gov. Phil Murphy (D) will be ineligible to seek a third term under the state’s maximum service law. The final vote totals yield a 51-48% victory spread for Governor Murphy, a vote spread of just under 75,000 votes statewide from a turnout of over 2.57 million votes. The participation level represents an increase of more than 500,000 cast ballots, an uptick exceeding 19%, when compared to the 2017 gubernatorial result. Texas: As expected, former Congressman and 2020 presidential candidate Beto O’Rourke (D) announced his challenge to two-term Gov. Greg Abbott (R) during the week. Prior to running for President, Mr. O’Rourke lost the Texas Senate race to incumbent Ted Cruz (R) by a 51-48% margin. He then launched an ill-fated campaign for President. Mr. O’Rourke was first elected to the U.S. House in 2012, defeating then-Rep. Silvestre Reyes (D-El Paso) in the Democratic primary. Before serving his three terms in the House, Mr. O’Rourke was an elected member of the El Paso City Council, a position he held for six years. Localities Columbia, SC: In a city where the black population reaches almost 40% and President Biden recorded a 40-point win in the 2020 presidential contest, Mayoral runoff voters on Tuesday night chose Republican City Councilman Daniel Rickenmann over Democrat Temeika Isaac Devine. The victory spread was 52-48%, a major change from the 2020 general election margin that so heavily favored Mr. Biden. This suggests another underlying trend showing significant Republican improvement among areas housing large minority communities. |