House Financial Services schedules first markup
Congress was in recess this week, but you wouldn’t know it by us. We’re gearing up for a busy stretch as the House focuses on the FY 2024 budget and legislators on both sides of the Hill consider a range of bills addressing subjects from antitrust to trade (we couldn’t think of an issue that began with “Z”).
The House will vote next week on H.J.Res. 30, a resolution sponsored by Rep. Andy Barr (R-KY). The resolution would nullify a rule issued by the Department of Labor last December that would allow retirement plan fiduciaries to consider climate change and other environment, social, or governance (ESG) factors in making investment decisions. The resolution is expected to pass along party lines, and while it’s unlikely to reach the Senate floor, ESG considerations in investment decisions will remain a hot topic in this Congress.
House Financial Services schedules first markup
On Tuesday, the House Financial Services Committee will meet in person to mark up fourteen bills, including several bipartisan measures. GR’s Nick Manriquez has looked through all of these bills so you don’t have to; let us know if any are of particular interest. Click the hyperlinks for texts of the individual bills.
HR 554, the Taiwan Conflict Deterrence Act of 2023, sponsored by Rep. French Hill (R-KY), would require the Treasury to make a public report to Congress listing the financial institutions that provide services to Chinese government officials, and would empower the Secretary of the Treasury to prohibit financial institutions from offering these services.
HR 555, the Securing America’s Vaccines for Emergencies (SAVE) Act of 2023, also sponsored by Rep. Hill, would amend the Defense Production Act (DPA) to ensure the availability of medical materials necessary for national defense.
The Public Health Emergency Medical Supplies Enhancement Act of 2023, sponsored by Rep. Juan Vargas (D-CA), would also amend the DPA to identify certain medical supplies as scarce and critical during an emergency period.
HR 1076, the Preventing the Financing of Illegal Synthetic Drugs Act, introduced by Rep. Monica De La Cruz (R-TX), has been referred to the Committees on Judiciary and Energy & Commerce as well as to Financial Services.
HR 510, the Chinese Currency Accountability Act of 2023, sponsored by Rep. Warren Davidson (R-OH), would require the Treasury Secretary to oppose any increase in the weight of China’s renminbi in the basket of currencies that determines IMF Special Drawing Rights unless China meets certain international standards.
HR 839, the China Exchange Rate Transparency Act of 2023, sponsored by Rep. Daniel Meuser (R-PA), would instruct the US Director at the IMF to advocate for greater transparency in China’s disclosure of its exchange rate policies.
The China Financial Threat Mitigation Act of 2023, sponsored by Rep. Abigail Spanberger (D-VA), would require the Secretary of the Treasury to report on global risks emanating from the Chinese financial sector.
HR 803, the PROTECT Taiwan Act, introduced by Rep. Frank Lucas (R-OK), would direct the Fed, the Treasury, and the SEC to exclude Chinese representatives from proceedings of international finance and regulatory meetings such as the G20 and the Basel Committee within 10 days if the President informs Congress of imminent risk to Taiwan.
HR 1137, the Neutralizing Unfair Chinese Export Subsidies Act of 2023, sponsored by Rep. Zachary Nunn (R-IA), would require the Treasury Secretary to work with allies to seek China’s compliance with international export subsidy standards.
HR 540, the Taiwan Non-Discrimination Act of 2023, introduced by Rep. Young Kim (R-CA), would instruct the US Governor of the IMF to advocate vigorously for Taiwan’s admission to the IMF and its inclusion in IMF operations.
HR 1109, the Bank Service Company Examination Coordination Act of 2023, sponsored by Rep. Roger Williams (R-TX), would increase information sharing and coordination among state banking agencies and federal regulators in supervising the activities of bank service companies.
The Data Privacy Act of 2023, introduced by Committee Chairman Patrick McHenry (R-NC) just today, needs its own item in the newsletter, so keep reading.
The OFAC Outreach and Engagement Capabilities Enhancement Act of 2023, sponsored by Rep. Stephen Lynch (D-MA), would require the Comptroller General to investigate and report on the quality and efficacy of the public-private outreach efforts of the Office of Financial Asset Control (OFAC).
The Aligning SEC Regulations for the World Bank’s International Development Association Act of 2023, sponsored by Rep. Maxine Waters (D-CA), the Committee’s ranking member, would classify securities issued by the World Bank’s International Development Association (IDA) as exempted securities for purposes of SEC reporting requirements.
Chairman McHenry’s data privacy plan
Rep. Patrick McHenry (R-NC) had been working with then-Financial Services Committee Chairwoman Maxine Waters (D-CA) on data privacy legislation in the last Congress, but introduced his own bill today with no mention of the previous bipartisan work.
McHenry describes the Data Privacy Act of 2023 as “technology-agnostic.” It includes language to modernize Gramm-Leach-Bliley’s consumer protections so they apply to future innovations and technology. It would require disclosure of information collection activities, and allow consumers to opt out of information collection and sharing at any time. It would require data collectors to limit that data and use it only for its stated purposes. It would require privacy terms and conditions to be “transparent and easily understandable.” Finally, it would preempt state privacy laws, something Rep. Waters and other Democrats have strongly opposed.
A section-by-section summary of the bill is here.
FHFA seeks comment on Federal Home Loan Bank members’ community support performance
Federal Housing Finance Agency (FHFA) Director Sandra L. Thompson announced this week that the agency will review the community support performance (CSP) of individual members of the Federal Home Loan Banks. Federal Home Loan Bank members must comply with an FHFA rule that requires a Community Support Statement every two years describing their community support activities — which must include Community Reinvestment Act (CRA) performance where applicable and the member’s record of lending to first-time homebuyers. Failure to meet the community support performance standard may limit members’ access to FHLBank advances and keep members from participating in programs such as the FHLBanks’ Affordable Housing Program or Community Investment Cash Advance program. As part of this review, the FHFA is asking for public comments about individual members’ performance. Comments are due by March 24.
HUD cuts mortgage insurance premiums for FHA borrowers
Vice President Kamala Harris and Secretary of Housing and Urban Development Marcia L. Fudge announced last week that the Department of Housing and Urban Development, through the Federal Housing Administration, would lowering the FHA mortgage insurance premium by 30 basis points, from 0.85% to 0.55%. The FHA estimates that the reduction will lower borrowers’ costs by an average of $800 a year. The reduction will apply to all eligible property types, including single-family homes, condominiums, and manufactured homes. Details of the reduction are here.
Confirmations, Nominations, Departures
Virginians elected state Senator Jennifer McClellan (D) to fill the vacant House seat left by the death of Rep. Donald McEachin (D). McClellan is the first Black woman elected to the House of Representatives from Virginia, and her election brings the number of women in the House to a new all-time high of 125.
Dr. Lael Brainard stepped down as Vice Chair and member of the Federal Reserve Board this week after President Biden appointed her to be Director of the National Economic Council.
President Biden also nominated Jared Bernstein as Chair of the Council of Economic Advisers.
The United States will nominate Ajay Banga, former President and CEO of Mastercard, to succeed David Malpass as President of the World Bank. House Financial Services Committee Chairman Patrick McHenry (R-NC) praised the nomination, saying he hoped it “represents a recognition that President Biden’s financial management and nominees have been outside the mainstream.”
The Week Ahead
We’ll be paying specific attention to the Senate Banking Committee’s hearing on sanctions and export controls, the House Natural Resources Committee’s hearing on Rep. Graves’s BUILDER legislation to speed up environmental reviews, and the SEC’s Investor Advisory Committee meeting on Thursday. As always, please let us know if you’d like more detailed information about any of these.
February 28 at 10:00 a.m. House Committee on Science, Space, and Technology holds a hearing on “The United States, China, and the Fight for Global Leadership: Building a US National Science and Technology Strategy.”
February 28 at 10:00 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Advancing National Security and Foreign Policy through Sanctions, Export Controls, and Other Economic Tools.”
February 28 at 2:00 p.m. House Natural Resources holds a legislative hearing on Rep. Garrett Graves’s bill, “Building United States Infrastructure through Limited Delays and Efficient Reviews Act of 2023.”
March 1 at 8:30 a.m. House Energy & Commerce Subcommittee on Innovation, Data, and Commerce holds a hearing on “Promoting US Innovation and Individual Liberty through a National Standard for Data Privacy.”
March 1 at 10:00 a.m. Senate Committee on the Budget holds a hearing on “Rising Seas, Rising Costs: Climate Change and the Economic Risks to Coastal Communities.”
March 1 at 10:00 a.m. Senate Committee on Commerce, Science, and Transportation holds a hearing on the nomination of Phillip A. Washington to be Administrator of the Federal Aviation Administration.
March 1 at 10:00 a.m. Senate Committee on Agriculture, Nutrition, and Forestry holds a hearing on “Farm Bill 2023: Conservation and Forestry Programs.”
March 2 at 10:00 a.m. Securities and Exchange Commission Investor Advisory Committee holds a day-long public meeting to discuss the growth of private markets, the oversight of registered investment advisers, and the Open-End Fund Liquidity Risk Management/Swing Pricing Rule proposal.
The Ellis Insight - Jim Ellis on political news
PRESIDENT
Sen. Joe Manchin: This week, Sen. Manchin (D-WV) made it clear that he would not run for President. Rumors had abounded that the West Virginia Senator might run for Governor or President, both of which have now been dispelled. Previously, on national television, the Senator said he will not again run for Governor.
With Gov. Jim Justice (R) ineligible to seek a third term in the Mountain State and broadly hinting that he will run for the Senate, the door would have opened for Manchin to again run for Governor, a position he held from 2005-2010.
The seriously discussed national option was Mr. Manchin running for President on a No Labels ticket, possibly even with Sen. Kyrsten Sinema (I-AZ) as his running mate. Now that both the President and Governor options are seemingly eliminated, Sen. Manchin will soon opt for re-election or outright retirement from politics. The early tea leaves suggest he will seek a third full term.
Vivek Ramaswamy: Venture capitalist Vivek Ramaswamy announced his candidacy for the Republican presidential nomination in a move that was anticipated. Mr. Ramaswamy, whose personal wealth is estimated to exceed $500 million, is basing his campaign on promoting the free enterprise system and opposing corporate “wokeism.”
While Mr. Ramaswamy’s wealth will certainly allow him to communicate a message effectively, he is a very long shot to become a top tier candidate. Still, he is someone worthy of attention.
SENATE
Arizona: Based upon recent statements from Arizona state Senate President Pro Tempore T.J. Shope (R-Coolidge), it appears we could see a new Republican in the US Senate arena. Mr. Shope is indicating that he is seriously considering entering the statewide field. Former gubernatorial nominee and ex-television news anchor Kari Lake is also gearing up for a Senate run.
With Sen. Kyrsten Sinema likely running as an Independent and Rep. Ruben Gallego (D-Phoenix) already well on his way to sewing up the Democratic nomination, a very interesting three-way race is unfolding for next year.
California: In an expected move, twelve-term California US Rep. Barbara Lee (D-Oakland) announced that she will officially join the open US Senate campaign to replace retiring Sen. Dianne Feinstein (D). Rep. Lee had already filed a Senate committee with the Federal Election Commission, and had been making it clear she would announce once Sen. Feinstein made her retirement plans public.
Already declared are fellow Reps. Katie Porter (D-Irvine) and Adam Schiff (D-Burbank). The latter man has recruited endorsements from 15 members from the California Democratic delegation, including former House Speaker Nancy Pelosi (D-San Francisco). At this point, however, no statewide elected office holders are making a move to run for the Senate. California features an all-party jungle primary system, so it is likely that two Democrats will advance to the general election. In 2024, because it is a presidential election year, the California primary moves to Super Tuesday, March 5, 2024.
While Rep. Lee is the only major candidate at this point hailing from northern California, she will be a severe underdog on the fundraising circuit. Both Reps. Porter and Schiff are two of the most prolific House fundraisers in the country. Though the seat will remain in Democratic hands, this race will continue to feature a highly competitive cycle-long open seat campaign.
Michigan: Hill Harper (D), the actor who plays the role of Dr. Marcus Andrews on ABC’s “The Good Doctor” program, indicates that he is testing the waters for his own run in what will be the open Michigan Senate seat next year. Despite many elected officials expressing interest, only State Board of Education Member Nikki Snyder (R) has officially announced her candidacy.
It was thought that US Rep. Elissa Slotkin (D-Lansing) officially launching a Senate effort was imminent just after incumbent Sen. Debbie Stabenow (D) publicly stated that she would not seek re-election to a fifth term in 2024. So far, however, the Congresswoman has yet to make such a declaration. It is still expected that she will enter the race.
Montana: Through a Twitter announcement yesterday, Montana Sen. Jon Tester (D) announced that he will seek a fourth term next year. Speculation about his potential retirement had become relatively intense.
While the Democratic leadership needed Sen. Tester to run again in order to increase hope of holding the party’s tenuous Senate majority when facing a 2024 election map that forces them to defend 23 of 34 in-cycle seats, keeping the Montana seat is no sure thing even with their best candidate.
While the media, and the Senator himself, will continue to use a “moderate,” label to describe Mr. Tester, his voting record has moved decidedly to the left during this term and is now a solid leadership vote. Regardless of who ultimately becomes the Montana Republican Senate nominee, we can count on seeing an ideological contrast race being run with the GOP accusing Tester of being out of step with the state’s electorate, and the Senator firing back with extremist claims about his Republican opponent.
Utah: With Utah Sen. Mitt Romney (R) now saying he won’t decide until this summer about whether to seek a second full six-year term from the Beehive State, another name is being floated as a potential candidate. Former US Rep. Jason Chaffetz (R) resigned from the House in the middle of his fifth term, having been originally elected to the state’s 3rd Congressional District in 2008. He left Congress to join Fox News as an on-camera contributor where he remains today.
While not denying that he may be seriously looking at challenging Sen. Romney in the 2024 GOP primary, Mr. Chaffetz, like Sen. Romney, says he will wait a much longer period of time before making a final decision about running. Attorney General Sean Reyes is a potential GOP challenger to Sen. Romney, along with several other prominent Utah Republicans.
HOUSE
CA-16 & 18: This week, former San Jose Mayor Sam Liccardo (D), who was ineligible to seek a third term in 2021, is saying he has informed both Reps. Anna Eshoo (D-Atherton/Palo Alto), and Zoe Lofgren (D-San Jose) that he plans to challenge one of the two veteran Democratic incumbents next year. Mr. Liccardo says he has polled both Rep. Eshoo’s 16th CD and Rep. Lofgren’s 18th District to assess his chances in what would likely transition into a double Democratic general election.
The 18th contains most of the city of San Jose, but Rep. Lofgren responded to Mr. Liccardo with a statement saying she plans on seeking re-election in 2024. Rep. Lofgren, who was first elected in 1994, has been re-elected against light challenges with over 65% of the vote ever since. In the 2022 jungle primary, Rep. Eshoo dropped below the 50% mark suggesting some vulnerability to a future Democratic challenge.
CA-27: California Rep. Mike Garcia (R-Santa Clarita) is one of the few House members who has won multiple terms in a district that favors the opposite political party. One reason is because he has defeated the same opponent, former state Assemblywoman Christy Smith (D), in three consecutive elections. Now, another contender has emerged.
Former NASA chief of staff and ex-Virgin Galactic CEO George Whitesides (D) has announced that he will run for the seat in 2024. For Democrats to have a chance to capture this D+8 seat (FiveThirtyEight data organization projection), it is becoming obvious that they need to field a candidate other than Ms. Smith.
CA-30: Rep. Adam Schiff’s (D-Burbank) open seat has been the most popular California early congressional race. Now, a tenth candidate has announced. West Hollywood Mayor Sepi Shyne (D) confirmed that he will join the open seat contest.
The major candidates, all Democrats, are state Sen. Anthony Portatino (D-La Canada), state Assemblywoman Laura Friedman (D-Burbank), former state Assemblyman Mike Feuer, Los Angeles Unified School District Board member Nick Melvoin, and actor Ben Savage. Two from this group advancing to a double-Democrat general election is a likelihood.
RI-1: Earlier this week, Rhode Island Rep. David Cicilline (D-Providence) announced that he will resign from the House on June 1st to accept a new position as president and CEO of the Rhode Island Foundation. The Cicilline move will require Gov. Dan McKee (D) to schedule a special election later in the year to fill the congressional post. The FiveThirtyEight organization rates RI-1 as D+32 with a partisan lean according to the Dave’s Redistricting App calculations of 64.7D – 33.0R.
The Rhode Island Foundation is a 100+ year-old donating nonprofit entity with an endowment of more than $1.3 billion according to their latest public financial statement. The organization specializes in providing financial grants and scholarships particularly in the areas of community development and education.
According to the RI Secretary of State, it appears Gov. McKee would only have two options to be in compliance with both Rhode Island and federal election law in scheduling the special replacement election. Therefore, the special primary could be no earlier than August 8th, with the special general on October 3rd. The Governor could also call a primary for September 5th and make the special general concurrent with municipal elections on November 7th.
Therefore, we can expect the RI-1 seat to remain vacant for a relatively long period once Congressman Cicilline resigns.
VA-4: Virginia state Senator Jennifer McClellan (D-Richmond) easily won the state’s 4th District special election on Tuesday night, earning the right to replace the late Congressman Donald McEachin (D-Richmond) who passed away at the end of November.
Ms. McClellan was the clear favorite going into the election after winning the Democratic nomination process in December. She easily defeated Republican Leon Benjamin, a frequent candidate, with an unofficial 74% of the vote. The 4th District, which stretches from Richmond to the North Carolina border, is heavily Democratic. The FiveThirtyEight data organization rates the district D+30, while Dave’s Redistricting App scores the seat’s partisan lean at 66.8D – 31.6R.
GOVERNOR
Mississippi: A pair of minor Democratic gubernatorial contenders have been disqualified from the ballot for failing to meet the state’s candidate requirements. This means that Public Service Commissioner Brandon Presley, cousin to the late music legend Elvis Presley, will be unopposed for the party nomination.
With Gov. Tate Reeves facing only minor opposition in the August 8th Republican primary, we will now assuredly see both the Governor and Mr. Presley advancing into the general election. Therefore, a defined Mississippi gubernatorial campaign commences and will continue for the better part of this year. The general election date is November 7th.
STATES
Oregon: Since 2020, a total of eleven eastern Oregon counties have voted to explore ways for their geographic region to join neighboring Idaho and now another, northeastern Wallowa County, has qualified an advisory ballot proposition for the next election.
The project is called the Greater Idaho Movement, and though they don’t have any realistic possibility of seeing the voting counties to join Idaho since both state legislatures and Congress would have to approve, the organizers say the votes will show the current liberal Beaver State political structure that more attention must be given to the needs of those in the conservative eastern Oregon rural communities.