Hey, got six million bucks we can borrow?
A Swiss auction house is accepting bids for a complete Tyrannosaurus Rex skeleton, starting at a mere 5,000,000 Swiss francs (just under $5.5 million USD). We probably don’t have room for it in the GrayRobinson DC office, but our building has a great roof terrace.
Grasping for a narrative
As the late, great Rep. Mo Udall (D-AZ) once said, “Everything has been said, but not everyone has said it.” This week in Washington, everyone had something to say about the failures of Silicon Valley Bank and Signature Bank, about the surge in borrowing from the Federal Reserve and the Federal Home Loan Banks, and about the appropriate level of deposit insurance coverage.
Any immediate risk of contagion seems to have eased, as Secretary of the Treasury Janet Yellen told the American Bankers Association on Tuesday. The Treasury, Fed, and FDIC worked out a plan to protect all depositors of Silicon Valley Bank and Signature Bank under a “systemic risk exception” that didn’t cost taxpayers, but will probably raise deposit insurance premiums. The Fed created the Bank Term Funding Program to provide additional liquidity for the system. Yellen said Tuesday that aggregate deposit outflows from regional banks had stabilized.
But what happens now? Next week we get to hear everyone’s suggestions. FDIC Chair Marty Gruenberg, Federal Reserve Board Vice Chair for Supervision Michael Barr, and Undersecretary of the Treasury for Domestic Finance Nellie Liang will appear before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.
Vice Chair Barr is working on a systemwide review of the Silicon Valley Bank failure, but that won’t be published until May 1. Three members of the House Financial Services Committee sent a letter to Barr yesterday demanding detailed information about Silicon Valley Bank’s supervision, including examiners’ work papers. On the other side of the Hill, unlikely allies Senator Elizabeth Warren (D-MA) and Rick Scott (R-FL) have introduced legislation to install an independent Inspector General at the Fed, and Warren led a group of 11 Senators in their own letter calling on the Fed to strengthen supervision of banks with assets of more than $100 billion.
Treasury Secretary Janet Yellen called an impromptu closed meeting of the Financial Stability Oversight Council (FSOC) this morning. This afternoon, Treasury released a statement that said only that the Council believes “the US banking system remains sound and resilient despite the fact that some institutions are under stress.”
Pressure grows on US-China business relations
Yesterday was a full day of House members wrestling with the question of whether and how to separate American consumers and investors from connections to the Chinese Communist Party.
“Welcome to the most bipartisan Committee in Congress,” Rep. Buddy Carter (R-GA) told TikTok CEO Shou Zi Chew at yesterday’s House Energy & Commerce hearing on “How Congress can Safeguard American Data Privacy and Protect Children from Online Harms.” Over the course of a hearing that lasted more than five and a half hours, both Republicans and Democrats grilled Chew about connections between TikTok’s parent company, ByteDance, and the Chinese Communist Party. “When you celebrate the 150 million American users on TikTok, it emphasizes the urgency for Congress to act,” Chairwoman Cathy McMorris Rodgers (R-WA) told Chew.
Last night, members of the House Select Committee on the Chinese Communist Party heard harrowing testimony about Chinese concentration camps and factories that operate with forced labor. Nury Turkel, a Uyghur American and Chair of the US Commission on International Religious Freedom, told the Committee that Americans continue to fuel genocide in Xinjiang and elsewhere by buying tainted products from more than 80 global brands that benefit from forced labor. Rep. Blaine Luetkemeyer (R-MO) called out Vanguard, Blackrock, HSBC, Fidelity, and other pension funds as companies whose investments are helping to fund horrors that include organ theft and kidnapping.
Testifying before the Senate Finance Committee yesterday, US Trade Representative Katherine Tai said that American workers, farmers, and businesses should not have to compete against the People’s Republic of China’s “state-led policies, labor rights suppression, weak environmental regime, or other distortions.” Finance Committee Chairman Ron Wyden (D-OR) called for the Administration to ramp up enforcement of trade laws that China and other countries are violating.
FHFA winds up roundtables, listening sessions on the future of the Federal Home Loan Bank System
The Federal Housing Finance Agency (FHFA) held one last roundtable and three afternoons of “listening sessions” this week to wind up one stage of its “Federal Home Loan Bank System at 100” initiative. At all four sessions, Federal Home Loan Bank members emphasized the important of the Banks’ liquidity services during times of economic turmoil, while critics questioned the System’s lending to institutions known to be troubled, such as IndyMac and Washington Mutual in 2008 and Silicon Valley Bank and Signature Bank this year. Commenters reminded the FHFA that any major changes to System structure or membership requirements will require Congressional action. The FHFA is accepting written comments through March 31, and will eventually publish a report with recommendations.
The Week Ahead
The Washington Nationals open their Major League Baseball season on Thursday, March 30 against the Atlanta Braves. We are sure that’s not the reason neither the House nor the Senate has any hearings scheduled on Thursday afternoon.
March 28 at 10:00 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Recent Bank Failures and the Federal Government Response.” FDIC Chair Martin J. Gruenberg, Federal Reserve Board Vice Chair for Supervision Michael Barr, and Under Secretary of the Treasury for Domestic Finance Nellie Liang will testify.
March 28 at 10:00 a.m. House Transportation Subcommittee on Highways and Transit holds a hearing on “Reviewing the Implementation of the Infrastructure Investment and Jobs Act.”
March 28 at 2:00 p.m. House Transportation Subcommittee on Coast Guard and Maritime Transportation holds a hearing on “Maritime Transportation Supply Chain Issues.”
March 29 at 10:00 a.m. House Committee on Financial Services holds a hearing on the failures of Silicon Valley Bank and Signature Bank, with testimony from FDIC Chair Martin J. Gruenberg, Federal Reserve Board Vice Chair for Supervision Michael Barr, and Under Secretary of the Treasury for Domestic Finance Nellie Liang.
March 29 at 2:30 p.m. Appropriations Subcommittee on Financial Services and General Government holds a hearing on the SEC FY 2024 budget request. SEC Chair Gary Gensler will be the only witness.
The Ellis Insight - Jim Ellis on political news
PRESIDENT
Monmouth Poll: Monmouth University went into the field with a very small sample of US Republican primary voters (3/16-20; 521 US likely Republican primary voters; live interview & online) and again finds former President Donald Trump holding the advantage. Like in many of the studies, however, Mr. Trump is below the majority support line (50%), and he and Florida Governor Ron DeSantis are pulling away from the other tested individuals.
According to the Monmouth data, Mr. Trump leads Gov. DeSantis, 44-36%, with former Vice President Mike Pence and ex-UN Ambassador and former South Carolina Governor Nikki Haley trailing with 7 and 6% respectively.
The results are typical for what we are seeing elsewhere in national polling. It is important to remember, however, that the national polls do not provide us with a clear indication as to who might prevail in a political contest where the results are decided with delegate votes earned in every state primary or caucus. Based upon available state totals, Gov. DeSantis fares better in the more important state-by-state count.
Gov. Chris Sununu: New Hampshire Gov. Chris Sununu (R) is still not providing straight answers about whether he will run for President, seek re-election to an unprecedented fifth term as Governor, or retire from politics. The Governor yesterday said he would decide later in the year if he would run for President.
Mr. Sununu’s main advantage is that he governs the first Republican primary state, and therefore can wait to a late date and still enter the race as a main competitor. His hope would be to claim the New Hampshire primary, in a place where he is already extremely well known, and use such a victory to catapult him into the top tier of presidential candidates.
This is a risky strategy that political history suggests will not be successful. Even if not, however, Gov. Sununu could still pivot after the presidential race and run again for Governor since the New Hampshire primary is one of the nation’s latest, typically scheduled for mid-September.
Additionally, the state is only one of two, Vermont being the other, that holds its Governors elections every two years. While Gov. Sununu has won four elections, he is only in his seventh year of service. Yet, he is only the second Governor in state history to win four consecutive statewide elections. The other is Democrat John Lynch, who served from 2005-2013.
SENATE
Michigan: Michigan School Board President Pamela Pugh (D), who has won two statewide elections to the state school board, a post that features eight-year terms, says she is considering entering the open Democratic primary for US Senate.
At this point, Rep. Elissa Slotkin (D-Lansing) is unopposed for the party nomination, but Ms. Pugh says she is concerned with the lack of African American representation throughout the state. Even the congressional delegation has no black Democrats despite the two Detroit anchored congressional seats featuring plurality African American populations. The only black in the congressional delegation, freshman Rep. John James, is a Republican.
Washington: Public Policy Polling, the regular survey research firm for the Northwest Progressive Institute, released their latest Washington statewide study (3/7-8; 874 WA registered voters; live interview & text) and tested the 2024 Senate race featuring four-term incumbent Maria Cantwell (D). Paired with former Rep. Jaime Herrera Beutler (R), who is reportedly considering the challenge, PPP finds Sen. Cantwell holding a comfortable 50-35% advantage.
The 2022 Washington Senate race was billed as a competitive contest between Sen. Patty Murray (D) and Republican Tiffany Smiley, but ended in a 57-43% result. Since Republicans have a target-rich Senate cycle in 2024, it is doubtful the party will invest any serious resources toward a Cantwell challenge.
Wisconsin: While Republicans are searching for a candidate to challenge two-term Sen. Tammy Baldwin (D) in a race that could become competitive, one prominent Republican closed the door on a candidacy. Former two-term Governor Scott Walker (R), who twice was elected Governor but defeated for a third term after not faring well in the 2016 presidential race, says he will not run for the Senate next year. The two most talked about potential GOP candidates are Mr. Walker’s former Lt. Governor, Rebecca Kleefisch, and businessman Scott Mayer.
HOUSE
CA-41: Lake Elsinore City Councilman Tim Sheridan (D), who challenged Rep. Ken Calvert (R-Corona) twice in the pre-redistricting and much more Republican 42nd District, announced this week that he will return to again run for the House in 2024.
In November, Rep. Calvert survived his second closest re-election effort, a 52-48% win over former federal prosecutor Will Rollins (D) in the new 41st District that is fully contained within Riverside County. We could see action in the all-party jungle primary because Mr. Rollins is also considering waging a return re-match with the 16-term incumbent.
IA-3: Freshman US Rep. Zach Nunn (R-Bondurant) was one of the few challengers to win a House seat in 2022 when he scored a 49.6 – 48.9% win over two-term Rep. Cindy Axne (D-Des Moines), a margin of just 2,145 votes from more than 315,000 ballots cast. During the week, mental health therapist Tracy Limon (D) announced her congressional candidacy, the first individual to come forward for the 2024 election. This could be a signal that former Rep. Axne will not return for a re-match, since the Democratic primary would likely be cleared for her if she desired to make a comeback.
MI-7: Recently, Lansing Mayor Andy Schor (D) launched a congressional exploratory committee since Rep. Elissa Slotkin (D-Lansing) will vacate the 7th Congressional District seat in order to run for the state’s open Senate seat. Typically, filing such a committee is the first step to announcing a candidacy, but in this case the opposite has occurred. Clearly, Mayor Schor did not find the results for which he had hoped, and announced early in the week that he would not be a candidate for the 2024 open congressional seat.
No one has announced for the 7th District as yet. It is presumed that 2022 Republican candidate Tom Barrett, now a former state Senator, will again make a run for the seat. He lost 51-46% to Rep. Slotkin last November.
MN-2: Navy veteran and businessman Tyler Kistner (R) has lost two close congressional races to Minnesota Rep. Angie Craig (D-Prior Lake), and confirms that he is considering launching another re-match in 2024. The 2020 election proved his better showing, losing 48-46%.
In the redistricted 2nd District, which now stretches from the Wisconsin border southwest to include the southern St. Paul and Minneapolis suburbs, the result was not as close: 51-46%, in the Congresswoman’s favor. A third Kistner run would not likely change the result since he received 46% in both of his elections. Republicans might find more success in 2024 with a fresh candidate.
RI-1: As we previously reported, the RI-1 special election will be scheduled when Rhode Island Rep. David Cicilline (D-Providence) resigns from the House on June 1st. This week, another four individuals announced their special Democratic primary candidacies already bringing the field’s total number to six.
Those previously declaring are Lt. Gov. Sabina Matos (D) and state Sen. Sandra Cano (D-Pawtucket). The latest to enter are state Rep. Nathan Biah (D-Providence), corporate Environmental, Social, and Governance (ESG) consultant Nick Autiello, financial consultant Allen Waters, and bus driver Mickeda Barnes. The special election will effectively be decided in the Democratic primary from a seat that the FiveThirtyEight data organization rates as D+32.
WI-3: The 3rd District of Wisconsin occupies the state’s southwestern region and while often voting Republican for President, the electorate returned Democratic Rep. Ron Kind (D-La Crosse) to office 13 consecutive times. Mr. Kind retired in 2022, and the Democratic leadership basically conceded the seat to Republican Derrick Van Orden in that the national party spent no money to protect a seat their member held for 26 consecutive years. In the end, Mr. Van Orden did win, but his victory margin fell below predictions in defeating then-state Sen. Brad Pfaff (D-La Crosse) 52-48%.
It appears that Mr. Pfaff and two other former congressional candidates, La Crosse City Councilman Mark Neumann and small business owner Rebecca Cooke, are considering entering the 2024 congressional race. All, however, are saying they won’t run unless they are assured of national outside party support.
GOVERNOR
Utah: Gov. Spencer Cox (R) announced that he will seek a second term next year, but more of the political attention centers around former Congressman and current Fox News commentator Jason Chaffetz (R). There has been much speculation, and not denied, that Mr. Chaffetz is considering launching a Republican primary challenge against either Gov. Cox or Sen. Mitt Romney (R). Therefore, it appears the 2024 Utah nomination convention and Republican primary will feature some meaningful political action.
STATES
Louisiana: State Rep. Francis Thompson of Delhi is the longest serving state legislator in Louisiana state history, being first elected in 1975. Late last week, he left the Democratic Party and became a Republican. The move gives the Republicans a 2/3 majority in the House, and makes it easier to override Democratic Gov. John Bel Edwards’ vetoes. The move won’t change many issue voting patterns, however, since Rep. Thompson has always been one of the more conservative legislators. During his long tenure in the legislature, Mr. Thompson has served in both the House and Senate.
MAYOR
Chicago: The Chicago municipal contest where voters have already defeated Mayor Lori Lightfoot continues to brandish polling showing a very tight runoff contest between former Chicago Public Schools CEO Paul Vallas and Cook County Commissioner Brandon Johnson. Several published polls disagree as to who is leading the race. The latest Victory Research survey (3/20-23; 806 Chicago likely runoff voters) sees Mr. Vallas leading 46-44%. IZQ Strategies (3/15-16; 680 Chicago likely runoff voters) arrives at the same 46-44% ballot test result, but they find Commissioner Johnson holding the slight edge.
Mr. Vallas has recently been able to cross racial lines by attracting endorsements from African American former officeholders Jesse White, who served six terms as the Illinois Secretary of State, and ex-Congressman Bobby Rush, who was in office for 30 years. Crime is a big issue in the contest and could be defining. The runoff is scheduled for April 4th.
Jacksonville, FL: The Jacksonville Mayor’s primary was held during the week, and Democrat Donna Deegan topped the field of candidates with 39% of the vote. Daniel Davis (R), the local Chamber of Commerce CEO, was second with 25%. Since neither candidate received majority support, the two will advance to a May 16th runoff election. Combined, Republican candidates received 51% of the vote compared to the combined Democratic percentage of 48. Republican incumbent Lenny Curry is ineligible to seek a third term.
New Orleans: The move to force a recall vote against Crescent City Mayor LaToya Cantrell (D) came to an abrupt end at the petition signature deadline. The recall organization fell woefully short of recruiting the 45,000 registered voter signatures necessary to force a confirmation election. The Cantrell opposition group was only able to qualify approximately 27,000 signatures, or just 60% of the required number. The next regular mayoral election is scheduled for 2025.