House panels focus on the housing crisis

The House Financial Services Committee and its Subcommittee on Oversight & Investigations held two hearings this week to discuss the critical nationwide shortage of affordable housing. The Subcommittee hearing on Tuesday focused on reports that private equity and other institutional investors have made it more difficult for traditional homebuyers, especially first-time and lower-income buyers, to acquire single-family homes for rental (SFR) in major markets including Atlanta, Los Angeles County, Phoenix-Glendale-Scottsdale, Boston, and Charlotte-Mecklenburg County. Witnesses told the panel that institutional investors are raising rents, evicting tenants at higher rates than other landlords, and flipping properties in ways that raise housing costs for everyone.

The full Committee hearing on Wednesday was a long discussion of deeply partisan differences on how best to alleviate the housing shortage. Last week the Committee voted along party lines to approve legislation sponsored by Chairwoman Maxine Waters (D-CA) that would provide down payment assistance for first-time homebuyers. Republican Committee members argued that federal policies subsidizing would-be homebuyers only raise housing prices further and do nothing to encourage the construction of new homes.

Senate Banking Republicans accuse Kansas City Fed of stonewalling information requests
Senator Patrick Toomey (R-PA), ranking member of the Senate Banking Committee, originally asked the Federal Reserve Bank of Kansas City for information about its revocation of Reserve Trust Company’s master account in January. This week, Toomey and his Senate colleagues Tim Scott (R-SC), Thom Tillis (R-NC), and Cynthia Lummis (R-WY) sent Kansas City Fed President Esther George a blistering letter accusing the Bank of “stonewalling” and “obstructionism” after George wrote to decline the request because it would include confidential supervisory information. “By continually stonewalling Congress, you have essentially asserted that the Kansas City Fed is not subject to any oversight by Congress or the public,” the Senators wrote. “Your latest letter appears to mislead Congress and the public . . . this type of obstructionism has become too common a response from the Kansas City Fed, other regional Fed Banks, and the Fed itself.” They warned that these responses “highlight the pressing need to reform the regional Fed banks to make them more transparent and accountable to Congress.”

Yellen reiterates need for federal framework, legislation on digital assets
The President’s Working Group on Financial Markets (PWG) met yesterday with representatives of the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (OCC) to discuss developments in the stablecoin market since the PWG issued its Report on Stablecoins last November. Secretary of the Treasury Janet Yellen, who chairs the PWG, pointed to recent events as evidence of the “urgent need” for a consistent, comprehensive federal framework for stablecoins. A readout after the meeting emphasized Yellen’s call for “serious legislative efforts” to put a regulatory framework in place to address current and future risks.

Confirmations, Nominations, Departures

Associate Justice of the Supreme Court Stephen Breyer officially retired yesterday, and Associate Justice Ketanji Brown Jackson was sworn in to succeed him. The Supreme Court has adjourned, and will reconvene on Monday, October 3.

Mark T. Uyeda was sworn in as a Commissioner of the Securities and Exchange Commission, for a term to expire on June 5, 2023.

Rep. Sean Casten (D-IL), a member House Financial Services Committee, won a primary election against fellow Rep. Marie Newman (D-IL), after redistricting eliminated a House seat.

Rep. Markwayne Mullin (R-OK), a member of the House Energy & Commerce Committee, was a top candidate in the primary election for the Senate seat being vacated by retiring Senator James Inhofe (R-OK), and will face a runoff election on August 23.

The Week Ahead

The House and Senate are in recess next week and will return on Tuesday, July 12. The Golden Apple is also taking next week off, and GrayRobinson’s offices will be closed on Monday, July 4. We wish all of you a safe and happy Independence Day.

The Ellis Insight - Jim Ellis on political updates

PRIMARY ELECTIONS

Colorado: As expected, University of Colorado Regent Heidi Ganahl captured the Republican gubernatorial nomination with a 53% majority over GOP nominating convention winner Greg Lopez. In the Senate contest, as most predicted, construction company owner Joe O’Dea defeated state Rep. Ron Hanks (R-Penrose) with just under 55% of the vote. Like Mr. Lopez, Rep. Hanks also won the Republican nominating convention endorsement. The two will advance to the general election against Gov. Jared Polis (D) and Sen. Michael Bennet (D).

Illinois: The big news from Tuesday’s primary election surrounded the two paired districts. In the Chicago suburbs, Rep. Sean Casten (D-Downers Grove), who unexpectedly lost his 17-year old daughter just two weeks ago, scored a landslide win over fellow Rep. Marie Newman (D-La Grange) in the new 6th District that contained more of the latter member’s current turf.

In the downstate Republican 15th CD, freshman Rep. Mary Miller (R-Oakland), armed with an endorsement and rally appearance from former President Donald Trump, recorded a decisive 57-43% over veteran Rep. Rodney Davis (R-Taylorville). The latter man will now see his congressional career draw to a close after serving what will be ten years in the House.

The Democratic pairing occurred in order to create a new Chicago anchored Hispanic district. State Rep. Delia Ramirez (D-Chicago) easily won the Democratic nomination in this seat, and becomes the prohibitive favorite for the general election. State Sen. Darren Bailey (R-Louisville) won an outright majority with 57% of the vote opposite five opponents in the Governor’s primary. He advances to the general election to oppose incumbent J. B. Pritzker (D).

Conservative activist Kathy Salvi won the Republican Senate nomination, and now faces a likely insurmountable opponent in Sen. Tammy Duckworth (D).

MS-3 and 4: As predicted, despite a scare in the primary election, 3rd District Rep. Michael Guest (R-Brandon) easily won re-nomination last night in the Mississippi congressional runoff election. He topped challenger Michael Cassidy with two-thirds of more than 70,000 votes that were cast in last night’s election. Rep. Guest will now have an easy run in the general election.

Rep. Steven Palazzo (R-Biloxi) was not so fortunate in his southern Mississippi 4th CD. He failed to overcome Jackson County Sheriff Mike Ezell and lost his seat in a 54-46% count. Mr. Palazzo becomes the eighth House incumbent to be denied re-nomination and the fourth who lost to a challenger that was not a fellow incumbent forced into a paired district. Sheriff Ezell is now the heavy favorite to win the seat in November.

NE-1: Another special congressional election was held on Tuesday, and this result ended in a closer final tally than originally expected. State Sen. Mike Flood (R-Norfolk), a media company owner, claimed the seat with a 53-47% victory over fellow state Sen. Patty Pansing Brooks (D-Lincoln) in a district the FiveThirtyEight data organization rates as R+17.

Mr. Flood will be sworn into the House upon official election certification. He will replace convicted Rep. Jeff Fortenberry (R-Lincoln). Rep-Elect Flood and Sen. Pansing Brooks will see each other again. Both are the party nominees for the regular general election in November.

New York: The New York statewide contests also ended as expected. Gov. Kathy Hochul (D), who ascended from the Lt. Governor’s position when Andrew Cuomo (D) resigned, easily defeated NYC Public Advocate Jumaane Williams and US Rep. Tom Suozzi (D-Glen Cove), 68-19-13%. Mr. Williams was unopposed for the Working Families ballot line, so he will advance into the general election despite his loss.

The Republican battle was a bit closer. US Rep. Lee Zeldin (R-Shirley; East Long Island) topped Andrew Giuliani, son of ex-NYC Mayor Rudy Giuliani, in a 44-23% split. Former Westchester County Executive and 2018 gubernatorial nominee Rob Astorino and businessman Harry Wilson recorded 18 and 15%, respectively.

Oklahoma: As polling correctly predicted, Oklahoma US Rep. Markwayne Mullin (R-Westville) built a major advantage in the special US Senate GOP primary and claimed first position with 44% of the vote, but it was not enough to win the party nomination. Former state House Speaker T. W. Shannon (R) is well behind, but his 18% is enough to capture second place and advance to the August 23 runoff election opposite Rep. Mullin. The eventual Republican nominee will be favored in the general election over former US Rep. Kendra Horn (D). Both Sen. James Lankford and Gov. Kevin Stitt easily won re-nomination.

In Rep. Mullin’s open eastern Oklahoma 2nd District, a total of 14 Republicans were on the ballot and the top five candidates all finished within a four percentage point range. State Rep. Avery Frix (R-Muskogee) clinched a runoff position for the August 23 secondary election. Former state Sen. John Brecheen edged Muskogee Police Chief Johnny Teehee for the second qualifying slot. The eventual Republican nominee will win the Autumn election.

South Carolina: The Democratic runoff to produce an opponent for Sen. Tim Scott (R) this November ended with a 56-44% victory for state Rep. Krystle Matthews (D-Ladson). She is a decided underdog in the general election.

Utah: Sen. Mike Lee (R) clinched his nomination for a third term with a 62-30-8% primary win over former state Rep. Becky Edwards and ex-Kaysville Councilwoman Ally Isom. The Utah general election is now more interesting because the Democrats are not fielding a candidate and have instead coalesced behind Independent Evan McMullin. This could make the general election slightly more competitive, but Sen. Lee remains a clear favorite to win again.

All four Republican US House incumbents had primary opposition, and each easily prevailed. Reps. Blake Moore (R-Salt Lake City), Chris Stewart (R-Farmington), John Curtis (R-Provo), and Burgess Owens (R-Salt Lake City) all presumably clinched another term with their primary victories last night.

SENATE

Georgia: The new Georgia Quinnipiac poll (6/23-27; 1,497 GA registered voters; live interview) finds Sen. Raphael Warnock (D) claiming a 54-44% lead over Republican Herschel Walker, the most lopsided pro-Democratic ballot test to date. The previous polling from December to mid-April (six polls) had given Mr. Walker a slight edge. As point of reference, the same polling sample finds Gov. Brian Kemp (R) and former state House Minority Leader and 2018 gubernatorial nominee Stacey Abrams (D) tied at 48%.

Missouri: Answering ex-Sen. John Danforth’s (R) call for a new candidate in the Senate race, former US Attorney John Wood announced his plans to enter the contest as an Independent. He claims this is a move to potentially stop former Gov. Eric Greitens from prevailing in the general election should he win the Republican nomination. In reality, however, splitting the vote in such a manner, if Wood were to become a top tier candidate, would likely elect the Democratic nominee. To qualify for the ballot, an Independent candidate must submit 10,000 valid registered voters’ signatures by an August 1 deadline.

Washington: Republican Tiffany Smiley, who has been polling closer to Sen. Patty Murray (D) than one might expect for a Washington Senate race, just released the results of her internal Tarrance Group poll (6/14-16; 17-18; 600 WA registered voters). The results find Sen. Murray’s lead dropping to 48-43%. A great deal of the downturn is likely due to President Biden’s job approval rating moving into upside down territory with a 53% unfavorable in a state that he carried 58-39%. Sen. Murray is countering with an ad blitz on the Roe v. Wade decision.

HOUSE

FL-2: Though the new northern Florida’s 2nd District is rated R+16 according to the FiveThirtyEight data organization. A recent Sachs Media poll (6/20-23; 400 FL-2 likely general election voters), however, finds Rep. Neal Dunn (R-Panama City) leading Rep. Al Lawson (D-Tallahassee) by only a 43-40% margin. Perhaps the most troubling segment for Rep. Dunn is the unaffiliated voters who are breaking for Mr. Lawson by a 42-18% margin.

MI-7: State Sen. Tom Barrett (R-Lansing) released an internal Cygnal campaign poll (6/14-16; 400 MI-7 registered voters; peer-to-peer text) that gives the candidate a 46-44% ballot test lead over two-term US Rep. Elissa Slotkin (D-Holly). In 2020, Rep. Slotkin was re-elected to the 8th CD with a 51-47% margin. The new 7th District contains just over 38% new constituents for the Congresswoman. The Michigan Independent Citizens Redistricting Commission drew several toss-up congressional districts, similar to the statistics we see from the new 7th CD.

NV-3: The Tarrance Group, polling for the April Becker (R) campaign (6/20-23; 400 NV-3 likely general election voters), posts their client to a 46-44% edge over incumbent Rep. Susie Lee (D-Las Vegas). Likely most troubling for the Lee campaign is her deficit among Hispanic voters who comprise almost 19% of the 3rd District’s population. Within this segment, Ms. Becker leads the Congresswoman 48-42%.

RI-2: Though Rhode Island’s open 2nd District is rated as heavily Democratic, D+17 according to the FiveThirtyEight data organization, a new Suffolk University poll (6/19-22; 423 RI likely general election voters; live interview) finds former Cranston Mayor and 2014 and ‘18 Republican gubernatorial nominee Allen Fung taking a 45-38% lead over state Treasurer Seth Magaziner who is the Democratic primary polling leader.

Former state Rep. Bob Lancia (R) decided not to enter the race at the filing deadline. Trailing badly in the primary polls to Mr. Fung, Mr. Lancia ended his campaign to allow the former man to run unopposed for the party nomination.

REDISTRICTING

Louisiana: The federal judge’s ruling that disqualified the new Louisiana congressional map because it did not draw a second black district has been stayed. The United States Supreme Court took the action to at least temporarily block the ruling from taking effect. The conclusion will mean the legislature’s map will return at least for the 2022 election.

The courts, either through this case or the Alabama Voting Rights case that the SCOTUS has already scheduled for hearing, will likely determine how the Voting Rights Act is to be interpreted moving forward. This could mean that the Louisiana map and many others will be re-drawn for the 2024 election and beyond.

GOVERNOR

Arizona: Former US Representative Matt Salmon, who was the Republican gubernatorial nominee in 2000, dropped his comeback bid on Tuesday. In an announcement, Mr. Salmon said, “the numbers are the numbers,” meaning he doesn’t believe he can overcome former television news anchor Kari Lake’s large GOP polling lead. The move leaves Arizona University Regent Karrin Taylor Robson as Ms. Lake’s most credible Republican primary opponent.

Rhode Island: Gov. Dan McKee won a solid 56% endorsement vote at the Rhode Island Democratic convention, and he will be the official party supported candidate for the September 13th primary. Secretary of State Nellie Gorbea, however, leads McKee in a new Democratic poll (Suffolk University; 353 RI likely Democratic primary voters; live interview), 24-20%.