FDIC Chair Gruenberg intends to resign

The Buzz on the Hill

FDIC Chair Gruenberg intends to resign
Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg has been under heavy scrutiny the last few weeks following reports of a toxic workplace culture, sexual harassment, and bullying taking place at the FDIC. Initially, Gruenberg said he had no plans to step down from his post and maintained this stance at congressional hearings last week. The heat ratcheted up on Gruenberg when Sen. Sherrod Brown (D-Oh.), the Chairman of the Senate Banking Committee, called for new leadership at the FDIC. On Monday evening, Gruenberg reversed course. “In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg said in a statement. The succession process will now begin with Gruenberg planning to remain in charge until a new Chair is established. The Biden administration intends to nominate a candidate soon and hopes for a quick confirmation process through the Senate. Commissioner of the Commodity Futures Trading Commission Kristin Johnson has emerged as a leading candidate to replace Gruenberg.

House passes crypto legislation
On Wednesday, the House passed the Financial Innovation and Technology for the 21st Century Act by a vote of 279 to 136. The legislation would put a regulatory framework in place for cryptocurrencies and give the SEC more clarity on how to manage them. The bill now moves to the Senate. Pres. Joe Biden released a policy statement against the bill following its passage. The administration said that while they are “eager” to build a regulatory framework around digital assets, this bill "lacks sufficient protections for consumers and investors who engage in certain digital asset transactions.” Where this bill winds up remains unclear, but this still represents the most progress Congress has made to legislate around digital assets.

Sen. Rick Scott enters the race for GOP Senate leader
Sen. Rick Scott (R-Fla.) announced on Wednesday that he intends to run for Senate GOP Leader, becoming the third candidate aiming to replace Sen. Mitch McConnell (R-Ky.), who will step down from the role at the end of the term. Scott, 71, is two years into his first term as a Senator after serving as the Governor of Florida from 2010 through 2018. He is viewed as more of a dark horse candidate than Sens. John Thune (R-S.D.) and John Cornyn (R-Texas), who are both close allies of McConnell and have long been gunning for the number one spot. Scott, however, is closer with former Pres. Donald Trump, which could play in his favor if Trump wins the White House. Trump first pushed Scott to challenge McConnell for the leadership position two years ago. The race to replace McConnell will be a showdown between the three Senators, and more campaigning will take place in the coming months as they jockey for control. 

This Week’s Takeaways

• The House Energy & Commerce Energy, Climate and Grid Security Subcommittee held a hearing on Wednesday, reviewing the Biden administration’s efforts to make building codes more energy efficient. The Committee heard from stakeholders in the construction industry about the process of updating to the 2021 International Energy Conservation Code and their overall thoughts on green energy policies aiming to reduce emissions and fossil fuel usage. Some members supported the energy-efficient building standards and pointed out that the additional upfront costs to implement energy-efficient technology are offset by the long-term energy savings and the 45L tax credit for zero energy ready homes. Other members criticized the Biden administration’s policies for raising the price of homes and making them less accessible for first time homebuyers. Some witnesses expressed concerns that moving away from fossil fuels and natural gas was driving up energy costs and putting more strain on the energy grid.

• The House Appropriations Committee is attempting to speed through the funding bills and have all 12 finished by the end of July. The Committee, now led by Chairman Tom Cole (R-Okla.), is aiming to avoid a repeat of last year’s appropriations season which dragged on for months. The Committee began its work this week with the Military Construction, Veterans Affairs, and Related Agencies Appropriations Bill, which passed the full committee by a vote of 34 to 25. When they return to session in June, they’ll turn to appropriating the Departments of Defense, Homeland Security, Financial Services, and State and Foreign Operations.

• The Space Force has a new permanent home. This week it was announced that Patrick Space Force Base in Cape Canaveral will serve as the permanent headquarters for the U.S. Space Force Training and Readiness Command (STARCOM). The Space Force has been operating at the Florida Military base since last year after moving its operations from Colorado. The move was only considered temporary while the U.S. Air Force conducted an environmental review to ensure the base was suitable for long-term operations. Now, the Space Force will be in Florida for the long haul. “Pleased to learn that the U.S. Air Force selected Patrick Space Force Base as the permanent headquarters for STARCOM!” Rep. Bill Posey (R-Fla.) posted on X. “Proud to have worked alongside Sen. Rick Scott (R-Fla.) and Sen. Marco Rubio (R-Fla.) & FL Delegation to champion this effort.”

• The first successful discharge petition in nine years passed the House this week. Rep. Greg Steube (R-Fla.) gained 218 signers on his discharge petition H.R. 5863 to trigger a floor vote. The legislation, which gives tax relief to those impacted by natural disasters, western wildfires, and the East Palestine train derailment, overwhelmingly passed the House 382 to 7. "I am grateful for the motivation and support of 217 of my bipartisan colleagues as we join forces to deliver tax relief for Americans all across the country," Steube said in a statement. "That's a testament to how important this issue is for ALL of our constituents."

Outstanding Achievements

This week, GrayRobinson hosted an event on its rooftop with the Associated Equipment Developers and the National Stone, Sand, and Gravel Association for the Tax and Trade Staff Association. The event was spotlighted in a Politico article:
 

SPOTTED last night at a reception for the Tax and Trade Staff Association hosted by the Associated Equipment Distributors and National Stone, Sand and Gravel Association on GrayRobinson’s rooftop: Staffers for Reps. Jason Smith (R-Mo.), Terri Sewell (D-Ala.), Carol Miller (R-W.Va.), Jimmy Gomez (D-Calif.), Gabe Amo (D-R.I.), Brendan Boyle (D-Pa.), Randy Feenstra (R-Iowa), Nicole Malliotakis (R-N.Y.) and Jodey Arrington (R-Texas), NSSGA’s Michele Stanley, AED’s Daniel Fisher and GrayRobinson’s Chris McCannell and other tax and trade staff.

Preparing for the Week Ahead

Congress is taking a one-week recess around Memorial Day. They will be back in session on Monday, June 3.

The Ellis Insight

PRIMARY RESULTS

CA-20: California Assemblyman Vince Fong (R-Bakersfield), fresh from winning court challenges that could have prevented him from running for Congress, clinched the special election to replace former House Speaker Kevin McCarthy (R). Upon certification, Mr. Fong will be immediately sworn into the House and increase the party division to 218R – 213D.  In Tuesday’s election, Mr. Fong defeated Tulare County Sheriff Mike Boudreaux (R), 60-40%.

Next, Representative-Elect Fong will again face Sheriff Boudreaux in the 2024 general election this November in a double-Republican general election contest where he will be favored to win a full term.
 
Georgia: Both Reps. Lucy McBath (D-Marietta), running in a newly reconfigured 6th District, and David Scott (D-Atlanta) were easily renominated on Tuesday night. Rep. McBath defeated Cobb County Commissioner Jerica Richardson and state Rep. Mandisha Thomas (D-Red Oak) with a whopping 85% of the vote. Rep. Scott defeated six opponents, scoring 58% and winning renomination outright. Both incumbents will face little in the way of re-election challenges in November.
 
In retiring Rep. Drew Ferguson’s (R-The Rock/Carrollton) open 3rd District, a pair of Republicans will advance to a June 18 runoff election, though former Trump White House aide Brian Jack came close to winning outright. Mr. Jack recorded 47% of the vote, just short of the 50% plus one vote mark that would have clinched the nomination. 
 
Advancing into the runoff with 25% is former state Senator Mike Dugan. Getting as close as he did to the majority threshold gives Mr. Jack a major advantage heading into the runoff.  The secondary election will be the deciding factor since the eventual Republican nominee will be the prohibitive favorite to win the seat in the general election.
 
Idaho: Veteran Rep. Mike Simpson (R-Idaho Falls) won renomination for a 14th US House term, defeating two Republican opponents with 55% of the vote. The state’s other House member, Rep. Russ Fulcher (R-Meridian) was unopposed for renomination. Idaho also has no US Senate race in this election cycle.
 
Kentucky: Half of the state’s congressional delegation faced minor primary opponents and half were unopposed.
 
Reps. Morgan McGarvey (D-Louisville), Thomas Massie (R-Garrison), and Hal Rogers (R-Somerset) were all renominated for new terms and have easy runs in the general election.  Mr. McGarvey won with 84%, Mr. Massie recorded 76%, and Mr. Rogers scored an 82 percent preference figure. All are locks to win the general election. 
 
The same November outlook is on tap for Tuesday’s unopposed congressional candidates: James Comer (R-Tompkinsville), Brett Guthrie (R-Bowling Green), and Andy Barr (R-Lexington). 
 
Oregon: As expected, state Rep. Maxine Dexter (D-Portland) clinched the crowded 3rd District Democratic primary, which is tantamount to winning the general election and succeeding retiring 14-term Rep. Earl Blumenauer (D-Portland). Ms. Dexter, at this writing, was projected the winner with a 48-32% margin over former Multnomah County Commissioner Susheela Jayapal, sister to Washington US Rep. Pramila Jayapal (D-Seattle), and five others.
 
With the Democratic leadership virtually united in backing state Rep. Janelle Bynum’s (D-Clackamas) attempt to deny 2022 congressional nominee Jamie McLeod-Skinner renomination because they viewed the former as the stronger opponent to 5th District freshman Rep. Lori Chavez-DeRemer (R-Happy Valley), their goal was achieved in a landslide proportion. Rep. Bynum defeated McLeod-Skinner by what looks to be a 69-30% margin. 
 
In ‘22, Ms. McLeod-Skinner won the Democratic congressional primary unseating seven-term Rep. Kurt Schrader.
 
The CD-5 general election encompasses the state capital city of Salem and outer Portland suburbs. This will be one of the most hotly contested House races in the nation.
 
In the adjacent 6th District, we will see a re-match from the 50-48% result posted in 2022. Rep. Andrea Salinas (D-Tigard) will defend her seat against businessman Mike Erickson who scored a 75% victory in the May 21st Republican primary. Though the race will be competitive, Rep. Salinas is favored to successfully defend her seat.
 
In other Oregon results, Rep. Suzanne Bonamici (D-Washington County) was easily renominated for an eighth term with 91% of the Democratic primary vote as final counting continues. Sophomore Rep. Cliff Bentz (R-Ontario) also won renomination for a third term defeating Prineville Mayor Jason Beebe (R) with 82% vote preference.

SENATE

Arizona: The new YouGov poll for CBS News (5/10-16; 1,183 AZ likely general election voters; online) sees US Rep. Ruben Gallego (D-Phoenix) developing a stronger lead against Republican former news anchor Kari Lake than a recent New York Times/Siena College survey projected. The CBS poll finds Rep. Gallego holding a 49-36% advantage. 
 
Phoenix based Noble Predictive Insights (5/7-14; 1,003 AZ registered voters; online) also sees Rep. Gallego posting a double-digit lead, 46-36%, over Ms. Lake. Conversely, the NYT/Siena poll (4/28-5/9; 626 AZ likely general election voters; live interview) pinpointed only a 39-36% Gallego edge. 
 
The race has changed significantly since Sen. Kyrsten Sinema (I) announced that she would not seek re-election in that Gallego’s position has improved according to most released surveys.
 
Florida: Continuing to post strong polling numbers, Sen. Rick Scott (R) again records a significant lead, this time according to the CBS News/YouGov recent survey (5/10-16; 1,163 FL likely general election voters; online). The new data finds Sen. Scott recording a 45-37% advantage over former US Rep. Debbie Mucarsel-Powell (D). 
 
The same polling sample finds former President Donald Trump leading President Biden, 54-45%, but 49-36-3% when the independent and minor party candidates are added to the questionnaire. Green Party nominee Jill Stein was the only name included other than Trump and Biden. Because he has not yet officially qualified for the Florida ballot, Independent Robert F. Kennedy, Jr. was not included as a response option. A 5% total, however, said they would vote for “someone else.”

HOUSE

SCOTUS: On a 6-3 vote, the United States Supreme Court overturned the lower court ruling that declared South Carolina’s 1st Congressional District (Rep. Nancy Mace (R-Charleston)) as a racial gerrymander.  Writing for the majority, Justice Samuel Alito stated that the lower court’s ruling saying race had been the predominate factor in drawing the 1st District was “clearly erroneous,” according to the Daily Kos Elections site analysts.  Therefore, the current South Carolina map will stand.  
 
This decision could well affect the Louisiana case, which the high court stayed. The lower court had overturned the Louisiana legislature’s original map as a racial gerrymander. The appellate court then reversed the ruling, but the Supreme Court stayed that decision. It is possible the stay was ordered because the court was making an important ruling on the South Carolina case, and that decision could again change the Louisiana situation.
 
MI-13: After the initial clerk staff reports revealed that former state Senator and 2022 congressional candidate Adam Hollier (D) failed to submit the required number of valid petition signatures for the 2024 congressional election, the Wayne County Clerk has verified that he is disqualified. 
 
According to the clerk’s report, Mr. Hollier filed only 863 valid registered voter signatures, well short of the needed 1,000. The disqualification is a break for freshman Rep. Shri Thanedar (D-Detroit), who defeated then-Sen. Hollier, 28-23%, in the 2022 Democratic primary. 
 
It appeared that Mr. Hollier was the Congressman’s most serious challenger. Remaining in the race are former state Rep. Mary Waters and resigned Southfield City Clerk Shakira Hawkins. The latter agreed to a plea bargain that required her to admit to criminal misconduct in office. Ms. Waters reported just over $5,000 cash-on-hand in her March 31st campaign disclosure report. Therefore, Rep. Thanedar’s political position has greatly improved.
 
OK-4: Several US House incumbents from both parties face serious primary challenges and one surprising battle is unfolding in central Oklahoma. Insurance industry executive Paul Bondar (R) late last week just reserved $2 million in media time to oppose veteran Rep. Tom Cole (R-Moore/Norman) who has been elevated to House Appropriations Committee chairman. 
 
Though it is unlikely that Mr. Bondar will have enough support to unseat Rep. Cole, this type of advertising buy will force the Congressman to spend money and put forth a campaign effort prior to the June 18th Republican primary. In fact, Mr. Cole has already reserved a commensurate amount of media time for his own campaign.
 
UT-2: Utah Rep. Celeste Maloy (R-Cedar City) finds herself becoming embroiled in a serious primary challenge. Ms. Maloy won the special election last November to replace resigned Rep. Chris Stewart (R), her former boss. Now, she is on the ballot to earn a full term in her own right. 
 
Her opponent is technology company executive and Army Reserve Colonel Colby Jenkins who has support from Utah’s senior Senator Mike Lee (R) and Kentucky Senator Rand Paul (R). Sen. Lee supported Mr. Jenkins at the GOP nominating convention and helped him finish first in the delegate voting. 
 
Rep. Maloy barely qualified, winning 43% of the delegate vote, just three points better than the minimum number needed for advancement to the general election ballot. Since Rep. Maloy did not protect herself by filing petitions, she would have forfeited her chance to run for re-election had she not scraped through the convention. The Utah primary is June 25th, and the 2nd District race is becoming a contest worth watching.

GOVERNOR

New Hampshire: The National Journal published a new survey of New Hampshire voters (5/15-20; 420 NH likely voters; online) that posts former US Senator Kelly Ayotte to a double digit Republican primary advantage over former state Senate President and 2022 US Senate candidate Chuck Morse. According to this data, Ms. Ayotte’s lead is 50-28%.
 
The survey is comprised of an online panel from Survey Monkey, which is one of the least accurate sources in the polling industry. The sampling universe began with 1,196 NH adults, and then was winnowed to 420 likely GOP primary voters. Therefore, while Ms. Ayotte undoubtedly has a lead in the race, it may not be as strong as this poll suggests. 
 
With a late September 10 primary election, this contest has many weeks to fully develop. The eventual Republican nominee will face the winner of the Democratic primary between former Manchester Mayor Joyce Craig and Executive Council member Cinde Warmington. 
 
Vermont: On the heels of former Vermont Governor Howard Dean (D) announcing that he would not again run for his former position, ex-Burlington Mayor Miro Weinberger (D) early this week made a similar announcement regarding the 2024 gubernatorial campaign. 
 
With the May 30 candidate filing deadline fast approaching, Democrats have yet to recruit a strong opponent for four-term Gov. Phil Scott (R) who is seeking re-election to a fifth term. Despite Vermont’s heavily Democratic voting history, Gov. Scott again is well positioned to defy the odds and win yet another time.
 
West Virginia: Reports are circulating that certain establishment Republican donors are urging Sen. Joe Manchin (D) enter the gubernatorial race because they believe new nominee Patrick Morrisey (R), the state’s three-term Attorney General, is too conservative.  The move would necessitate the official Democratic nominee, Huntington Mayor Steve Williams who won the May 14 statewide Democratic primary, to step down. 
 
At this point, Sen. Manchin is non-committal about backing such a move. It is highly unlikely that Mayor Williams would step down now that he has become the official party nominee, however.