Happy New Year
Greetings from the nation’s capital, where the 118th Congress has not yet quite begun. Senators took their oaths of office on Tuesday, but the House has just adjourned after a 13th inconclusive vote on a Speaker of the House. Nothing else can happen in the House until they have a Speaker: nobody’s sworn in yet, the House has no operating rules, personal offices can’t do constituent work, and staffers aren’t getting paid. Opposition to Republican Leader Kevin McCarthy’s candidacy is dwindling, and the House is scheduled to reconvene at 10:00 tonight. The Democratic Whip’s office sent around a memo earlier today advising members to expect to stay in town until a Speaker is elected.
Meet the new Senators
Seven freshman Senators—five Republicans, two Democrats—are organizing their offices and preparing to receive committee assignments:
Senator Katie Britt (R-AL) was Chief of Staff to her predecessor, Senator Richard Shelby (R-AL).
Senator Ted Budd (R-NC) was a three-term member of the House of Representatives, where he served on the House Financial Services Committee.
Senator John Fetterman (D-PA) was mayor of Braddock, PA, before his election as Lieutenant Governor of Pennsylvania in 2018.
Senator Markwayne Mullin (R-OK) is an entrepreneur and member of the Cherokee Nation who served five terms in the House of Representatives.
Senator Eric Schmitt (R-MO) was Missouri Attorney General, after serving as Missouri State Treasurer and as a state senator.
Senator J.D. Vance (R-OH) is an attorney and entrepreneur best known for his book Hillbilly Elegy.
Senator Peter Welch (D-VT) served eight terms in the House of Representatives, where he was a Chief Deputy Whip and a member of the Democratic Steering and Policy Committee.
After convening on Tuesday, the Senate adjourned for a district work period through January 20.
Regulators warn banks about crypto risks
The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency published a joint statement this week identifying specific “risks associated with crypto-assets and crypto-asset sector participants.” The agencies reiterated that they aren’t prohibiting or discouraging banks from providing banking services to any specific type of customer, but emphasized the importance of keeping “risks related to the crypto-asset sector that cannot be mitigated or controlled” out of the banking system. Those include the risks of fraud and scams; legal uncertainties about custody, redemption, and ownership; significant volatility in crypto markets; the susceptibility of stablecoins to run risk; and contagion risks created by opaque lending, service, and operational arrangements within the sector. The lack of government oversight is also a risk within the sector, regulators said. The statement noted that all three agencies have created structures for “robust supervisory discussions” about crypto-related activities, and reminded banking organizations of the need for appropriate risk management, including board oversight.
FTC proposes ban on noncompete clauses
The Federal Trade Commission voted 3-1 yesterday to seek comment on a proposed rule that would prohibit employers from requiring workers to comply with noncompete agreements. The rule would prohibit noncompete clauses going forward, and rescind any noncompete clauses currently in place. The notice of proposed rulemaking says that noncompete clauses lower wages by reducing competition for workers, stifle entrepreneurship, and prevent innovation and new business creation. The FTC estimates the rule would increase workers’ earnings between $250 billion and $296 billion every year. Once published in the Federal Register, the proposal will be open for comment for 60 days.
CFPB will consider new rules for credit bureaus, says Chopra
In releasing the Consumer Financial Protection Bureau’s annual report of credit and consumer reporting complaints, Director Rohit Chopra said the Bureau would be “exploring new rules to ensure that they are following the law,” despite reported improvements. The Bureau found that Equifax, Experian, and TransUnion, the nation’s three largest credit reporting companies, were providing more substantive and tailored responses to consumer complaints, and that rates of relief to consumers were higher. Chopra advised the companies to consider consumer burden when automating certain procedures, to make it easier for consumers to provide data about their own credit records, and not to assume that “similar-sounding letters are from third parties.”
Confirmations, Nominations, Departures
Senator Debbie Stabenow (D-MI) announced that she will not seek reelection in 2024. She was first elected to the Senate in 2000, and currently chairs the Senate Committee on Agriculture, Nutrition, and Forestry.
Senator John Kennedy (R-LA) announced that he will not run in this year’s race for Governor of Louisiana, but will continue in the Senate seat he just won reelection to.
The Securities and Exchange Commission announced that Megan Barbero will succeed Dan Berkovitz as the agency’s General Counsel at the end of this month. Barbero is currently the SEC’s Principal Deputy General Counsel.
Martin J. Gruenberg, Travis Hill, and Jonathan McKernan were sworn in yesterday as Chairman, Vice Chairman, and member of the Federal Deposit Insurance Corporation, respectively.
The Week Ahead
Under the calendar published by presumptive House Majority Whip Steve Scalise (R-LA) last year, the House of Representatives is scheduled to be in session most of next week, from Monday through Thursday. The Senate is in a district work period until January 23.
The Ellis Insight - Jim Ellis on political news
PRESIDENT
Biden Approval: With the new 2024 election cycle now officially underway, let’s take a look at where President Biden’s job approval rating stands as he likely begins to prepare for a re-election run.
The two most recent survey reports during this holiday period came from Rasmussen Reports and the Morning Consult firm. Both organizations continually track presidential job approval on a daily basis. Rasmussen (sampling conducted through Pulse Opinion Research; 12/27-29; 1,500 US registered voters) projects the President to have a 47:51% favorable to unfavorable ratio. Morning Consult, which has been closer to a more consensus ratio among the plethora of typical job approval polling (12/21-27; 45,000 US adults; online) finds Biden’s favorability index at lesser 42:51% favorable to unfavorable clip.
Comparing these two polls produces typical results since President Biden has always fared better with registered voter samples than among a respondent pool of adults. Still, it is clear that the President will begin the road to re-election with more people disapproving of his performance in office.
SENATE
Arizona: Upon exiting office at the end of his two full terms, Arizona Gov. Doug Ducey’s (R) name continues to be mentioned prominently as a potential US Senate candidate. The now-former Governor again confirmed, however, that he is not even considering running for the federal post in 2024. Another potential Senate candidate who is considering making a run is 2022 gubernatorial candidate Karrin Taylor Robson (R), who lost to former news anchorwoman Kari Lake, 48-43%, in the Republican gubernatorial primary.
Sen. Kyrsten Sinema (I) has not yet announced her re-election intentions but appears to be preparing her Independent run in a three-way race. Reps. Ruben Gallego (D-Phoenix) and Greg Stanton (D-Phoenix) are actively assessing their individual chances in what could become a seriously contested Democratic primary. Again, the Arizona Senate race will be one of the focal points of the 2024 election cycle, but this time will feature a unique procedural contest.
Indiana: A Bellwether Research survey (12/11-17; 1,000 IN registered Republican voters; 457 likely Republican primary voters; online & text) was fielded just before Christmas and found former Governor, and most recently Purdue University President, Mitch Daniels leading a prospective open Indiana Republican US Senate primary. If he were to run, Mr. Daniels would top Rep. Jim Banks (R-Columbia City) 32-10% with former Rep. Trey Hollingsworth, current US Rep. Victoria Spartz (R-Noblesville), and Attorney General and former Congressman Todd Rokita trailing with 9-7-7% support levels, respectively.
Sen. Mike Braun (R) is running for Governor. None of the aforementioned has officially declared their intention to run for the Senate, but all admit to at least be considering the possibility of launching a campaign.
Michigan: Toward the end of the week, four-term Michigan Senator Debbie Stabenow (D) announced that she will not seek re-election in 2024, becoming the first incumbent to announce a retirement in the 2024 election cycle. Many names are being floated as potential candidates. Reports suggest that Rep. Elissa Slotkin (D-Lansing) will make a Senate announcement as early as next week. Multiple Republicans are considering their own potential Senate bids.
Prior to her election to the Senate in 2000, Ms. Stabenow served in the House of Representatives, the Michigan state Senate and House, and the Ingham County Board of Commissioners. She won her first election in 1974, and with the exception of just a three-year hiatus has been in elective office ever since.
Nebraska: Sen. Ben Sasse (R) has already delivered his farewell speech to the Senate, and scheduled January 8th as his official resignation day. He is leaving the Senate to become president of the University of Florida. With Gov-Elect Jim Pillen (R) being sworn into office later today, he will soon announce his appointed choice to replace Sen. Sasse.
The odds clearly favor outgoing Gov. Pete Ricketts (R) as Mr. Pillen’s selection, but such a move is reportedly not being completely well received within Nebraska GOP circles. Charges of an inside deal surround the potential pick since Gov. Ricketts was instrumental in helping Mr. Pillen win a crowded Republican primary back in May. Whoever is chosen must stand for election in 2024 to fill the remaining two years of the present term. The seat is next in-cycle in 2026.
HOUSE
NY-17: Democrat Mondaire Jones, who won the 17th Congressional District in 2020 only to depart for a post-redistricting New York City seat in 2022, says he is considering returning to Westchester County to challenge Rep-Elect Mike Lawler (R-Pearl River) next year. Mr. Jones did not want to oppose then-Rep. Sean Patrick Maloney in the Democratic primary after the latter man declared his candidacy, so he instead moved to a new Manhattan-Brooklyn 10th District that Rep-Elect Dan Goldman (D-New York City), an heir to the Levi Strauss fortune, eventually won.
In the 17th, Mr. Lawler, then a state Assemblyman, unseated Rep. Maloney with a 51-49% general election victory margin. This, in a new district that the FiveThirtyEight data organization rates as D+7. There is no question that NY-17 will be a top target in 2024.
WA-3: Joe Kent, the Republican who denied then-Rep. Jaime Herrera Beutler advancement into the general election but then lost in November to Rep-Elect Marie Gluesenkamp Perez (D-Skamania County) in one of the nation’s biggest 2022 upsets, says he will return for a 2024 re-match.
Because Mr. Kent was widely favored to win the seat but failed to convert, we can expect intense competition in what will be an August Washington jungle primary. FiveThirtyEight rates WA-3 as R+11.
GOVERNOR
Indiana: The aforementioned Bellwether Research poll (see Indiana Senate above) projects Sen. Mike Braun to a large lead in the impending open 2024 GOP gubernatorial contest.
Mr. Braun holds a 25-9-7-6-3% Republican primary advantage over Attorney General Todd Rokita, Lt. Gov. Suzanne Crouch, ex-Rep. Trey Hollingsworth, and businessman Eric Doden, respectively. At this point, Ms. Crouch and Mr. Doden have announced their candidacies, as has Sen. Braun. Gov. Eric Holcomb (R) is ineligible to seek a third term.
Louisiana: Sen. John Kennedy (R-LA) announced this week that he will not enter the 2023 Louisiana Governor’s race, thereby creating a wide-open race to succeed term-limited Democratic Gov. John Bel Edwards. Lt. Gov. Billy Nungesser (R) said he would run if Sen. Kennedy does not, and his now released internal poll from last month testing his standing against potential opponents has great relevancy.
The BDPC local Louisiana consulting firm poll conducted in mid-December (12/7-13; 603 LA likely jungle primary voters; live interview) sees Lt. Gov. Nungesser and Democratic Department of Transportation Secretary Shawn Wilson tied at 23% apiece. Closely following is Attorney General Jeff Landry (R) with 22%, which virtually means a three-way tie.
The Louisiana jungle primary is scheduled for October 14th. If no one receives majority support, which is likely, the top two finishers will advance to a November 18th runoff election.
NATIONAL, STATE & LOCAL
New Congressional Members: When 118th Congress officially gets underway, we will see a large contingent of new members in the House and Senate.
In the House, 85 freshmen members are coming to Washington, including the dozen who won special elections during the session just ended. Additionally, one former member, Montana’s Ryan Zinke (R-Whitefish) who also served in the Trump Administration as Interior Secretary, returns to the House.
The Senate, exclusively due to retirements along with one appointed member, California Senator Alex Padilla (D) seeking a full term, will only welcome eight new freshmen since all incumbents seeking re-election were victorious.
Of the 85 new House members, 46 are Republicans while 39 are members of the Democratic Party. Just over one-third of the incoming group will be serving in their first elected position, a total of 31. Conversely, 37 of the House freshmen have previously been elected to their respective state legislatures. The remaining 17 held other elected positions, typically at the local level as county or city officials.
In the Senate, only two of the eight incoming members have never before served in an elective office: Alabama’s Katie Britt (R) and J.D. Vance (R) of Ohio.
Reapportionment: Apparently, it is not too early to begin discussing which states may gain and lose representation in the 2030 census. The first concrete projections have been publicized based upon the country’s current growth trends since the 2020 census was completed.
No real surprises were among the first cut, as eight seats are projected to change states. In the 2020 census, only seven seats changed states. The early estimates suggest that Texas will again be the big gainer, with an additional three seats. This would increase the nation’s second largest population state to 41 seats if the early guesstimates prove accurate. Florida could gain two, with Idaho, Utah, and Washington each gaining one seat.
The losing states would again be familiar, as Illinois and New York could be on a path to lose two seats apiece. As always, Pennsylvania would again be slated to lose one. The new losing states would be Connecticut, New Jersey, and Wisconsin, all possibly losing one of their current districts. None of these projections are firm, and much will happen to change the national and regional growth rates in the coming eight years.
Chicago: Chicago Mayor Lori Lightfoot (D), in a fight for her political life as the nine candidates move toward the February 28th Windy City municipal election, has released a major negative attack against who polling shows to be her chief opponent, US Rep. Jesus “Chuy” Garcia (D-Chicago).
Her new media ad attacks Rep. Garcia as being corrupt for his association with, and receiving financial favors from, indicted crypto currency fund owner Sam Bankman-Fried, along with his relationship with indicted former Speaker of the House Mike Madigan (D), and for what she claims is his delivering the deciding vote for a red light camera company contract just hours after receiving a contribution from the manufacturing company. The gloves have already come off in this major mayoral battle, and it is certainly a campaign to watch.