Lá fhéile Pádraig sona dhuit
Happy St. Patrick’s Day, when everyone in Washington is Irish or wants to be. President Joe Biden and Speaker of the House Kevin McCarthy sat down to the annual Friends of Ireland Caucus luncheon today with Irish Taoiseach Leo Varadkar, and everyone raised a glass. Our invitation got lost in the mail, so we had to watch it on YouTube.
It’s 2023, not 2008
It had been a while since we heard the word “contagion” applied to anything that wasn’t actually a virus. But last weekend’s failures of Silicon Valley Bank and Signature Bank are raising concerns all over Washington about the overall stability of the US financial system. Secretary of the Treasury Janet Yellen, appearing before the Senate Finance Committee yesterday, warned against jumping to conclusions and said a full investigation of the causes of failure would take time. Senate Banking Committee Chairman Sherrod Brown (D-OH) announced plans to hold hearings and asked regulators for a full review, a call echoed by the Committee’s ranking member, Senator Tim Scott (R-SC). The House was in recess this week, but House Financial Services Committee Chairman Patrick McHenry (R-NC) called Silicon Valley Bank “the first Twitter-fueled bank run.”
While investigations are underway, the finger-pointing has begun. This afternoon, President Biden called on Congress to “do more to hold bank executives accountable.” He wants to expand the FDIC’s authority to claw back executive compensation, including stock buybacks, from failed institutions. He said that Congress should lower the legal standard for banning executives from banking, and give the FDIC authority to set monetary penalties for executives engaged in “recklessly” unsafe and unsound practices. (A summary of his proposals is here.) At hearings on other topics yesterday, both Democratic and Republican members of the Senate Banking Committee and the Senate Finance Committee said regulators — specifically, the Federal Reserve Bank of San Francisco — had been lax in using the supervisory tools available to them. The Fed announced that Vice Chair Michael S. Barr will lead a review of Silicon Valley Bank’s supervision and regulation, with a public report to be released by May 1.
EPA seeks comment on PFAS standard
On Tuesday, the Environmental Protection Agency (EPA) released its long-awaited proposal for a National Primary Drinking Water Regulation (NPDWR) that would set federal maximum levels for six per- and polyfluoroalkyl substances (PFAS). The limit for the two most common PFAS would be set at four parts per trillion. The proposed rule would require public water systems to monitor for these PFAS, notify the public of PFAS levels, and reduce those levels in drinking water when they exceed the standard. The proposal will be open for comment for 60 days, and the EPA will hold a public hearing on the rule on May 4.
Radhika Fox, chief of the EPA’s Office of Water, appeared before the Senate Committee on Environment and Public Works (EPW) on Wednesday to talk about the bipartisan infrastructure law’s funding for state and local water projects, but spent most of her time answering questions about the proposed PFAS standard. This is not a partisan issue; everyone agrees that PFAS are deadly, and are most likely to contaminate water in rural and low-income areas. But, as several Senators noted, small water utilities will need financial help and technical assistance in complying with the PFAS rule. Fox reported on the distribution of a first round of nearly $5 billion in state revolving fund (SRF) money in 47 states, and six tribal lands and territories. EPA Administrator Michael Regan will testify before the EPW Committee on the agency’s budget request next week, and is likely to get more questions about both the PFAS standard and the recently enacted Waters of the United States (WOTUS) rule, which the House voted to overturn last week.
CFPB seeks information about data brokers
The Consumer Financial Protection Bureau issued a Request for Information about “data brokers and other business practices involving the collection and sale of consumer information” on Wednesday. The CFPB wants to know the types of data collected, aggregated, sold, licensed, used for research or otherwise shared; what else they might do with that data; what types of data are financial in nature; where and how data brokers get their information; what information is available from public databases; whether and how people are unwittingly manipulated into providing personal information to data brokers; and what technology is used in data collection.
More specifically, the CFPB asks about information sharing between financial institutions and data brokers; data brokers’ relationships with third-party vendors; who buys this data; and whether or how consumers can avoid having their data collected. The RFP asks about state-level data broker registries, and whether these registries are sufficient to protect consumers. It also wants statements from anyone harmed by data brokers’ activities. Comments are due to the CFPB by June 13.
FHFA to wind up “Federal Home Loan Bank System at 100” roundtables
Since last September, the Federal Housing Finance Agency (FHFA) has been conducting roundtables around the country as part of its “Federal Home Loan Bank System at 100: Focusing on the Future” initiative. This week’s roundtables included a discussion in Boston of Federal Home Loan Bank System governance and membership, and discussions via Zoom about access with stakeholders in Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and Hawaii. After one last virtual roundtable with Alaska stakeholders on Monday, the FHFA will hold three final days of listening sessions in Washington DC next week, on March 22, 23, and 24. The FHFA is encouraging written comments as well; those are due by March 31.
The Week Ahead
The Federal Open Market Committee meets next Tuesday and Wednesday. House and Senate committees start their budget hearings on Wednesday, and the schedule gets crowded fast. The schedule below is a sampling drawn from issues we’re tracking; please let us know if you have interests in any specific budget area.
March 22 at 10:00 a.m. Senate Committee on Environment and Public Works holds a hearing on the Environmental Protection Agency’s FY 2024 budget request.
March 22 at 10:00 a.m. Senate Committee on the Budget holds a hearing on “Risky Business: How Climate Change is Changing Insurance Markets.”
March 22 at 10:00 a.m. The Securities and Exchange Commission holds an open meeting to consider amendments to Form PF and proposed changes to electronic filing requirements.
March 22 at 2:30 p.m. Senate Appropriations Subcommittee on Financial Services and General Government holds a hearing on the Treasury Department’s FY 2024 budget request. Secretary of the Treasury Janet Yellen will testify.
March 23 at 10:00 a.m. House Committee on the Budget holds a hearing on the President’s FY 2024 budget request. Office of Management and Budget Director Shalanda D. Young will be the only witness.
March 22-24 Federal Housing Finance Agency conducts three days of listening sessions on “The Federal Home Loan Bank System at 100.” Wednesday is a hybrid session, with people appearing in person at Constitution Center; Thursday and Friday’s sessions are streaming only.
March 23 at 10:00 a.m. Senate Committee on Finance hears testimony from US Trade Representative Katherine Tai on “The President’s 2023 Trade Policy Agenda.”
March 23 at 10:00 a.m. House Transportation & Infrastructure Subcommittee on Aviation holds a hearing on “FAA Reauthorization: Navigating the Comprehensive Passenger Experience.”
March 23 at 10:30 a.m. House Committee on Appropriations holds a hearing on the Department of Energy’s FY 2024 budget request. Secretary of Energy Jennifer Granholm will be the only witness.
March 23 at 2:00 p.m. House Committee on Small Business holds an oversight hearing on the Small Business Administration.
March 23 at 3:00 p.m. House Appropriations Subcommittee on Financial Services and General Government hears testimony from Council of Economic Advisers Chair Cecelia Rouse, Secretary of the Treasury Janet Yellen, and OMB Director Shalanda D. Young on “President Biden’s FY 2024 Budget Request and Economic Outlook.”
The Ellis Insight - Jim Ellis on political news
PRESIDENT
Sen. Tim Scott: The Hill newspaper reported that South Carolina Senator Tim Scott is taking definitive steps to formally enter the Republican presidential campaign. This is not surprising since Sen. Scott has been considered a potential national candidate for months. It’s difficult, however, to see a victory path for the Palmetto State Senator, especially with former South Carolina Governor Nikki Haley already in the field.
A Scott entry would presumably be helpful to Donald Trump, since the former President would be the beneficiary of a larger field, similar to the configuration that helped him win the 2016 nomination. Such is likely the case because Trump has a large, loyal base within the Republican Party, enough to carry him to a plurality win.
New York: The New York Republican Party last week reinstalled its former state chairman, Richard Nixon son-in-law Ed Cox, to lead the organization again. The previous chairman, Nick Langworthy, was elected to Congress in November from the state’s 23rd District, thus creating a vacancy in the chairman’s position.
In a statement this week, Mr. Cox said that the state party would not issue an official endorsement in the presidential race in order to encourage all of the eventual GOP candidates to come to New York and compete for the state’s delegate base. He said this policy is consistent with their 2016 practice, the last time the Republicans had an open race for the presidential nomination. Mr. Cox previously chaired the state party organization from 2009 to 2019.
National Polls: While national polls don’t mean much in terms of projecting who will win a presidential nomination because the ultimate winner is decided through accumulating delegate votes through the states, we now see a released pair of interesting Republican nomination surveys conducted during the same period.
The CNN national survey (conducted by SSRS; 3/8-12; 1,040 US registered voters; live interview and online) found the ballot test favoring Gov. Ron DeSantis, as he led former President Donald Trump, 39-37%. Former UN Ambassador Nikki Haley and ex-Vice President Mike Pence were a distant third and fourth with 7 and 6 percent.
Conversely, Quinnipiac University, in the field with their national poll (3/9-13; 677 Republican and Republican leaning voters; live interview) projects a completely different ballot test result. The Q-Poll sees Mr. Trump holding a strong 46-32% lead over Gov. DeSantis, with Haley and Pence following at 5 and 3%, respectively.
SENATE
Florida: Quelling recent speculation that Florida US Rep. Matt Gaetz (R-Ft. Walton Beach) might launch a Republican primary challenge to Sen. Rick Scott (R), the Congressman issued a statement regarding the matter. Saying he would not oppose Sen. Scott for renomination, Rep. Gaetz quipped, "if I wanted to spend my time in a retirement community, I'd definitely choose The Villages over the Senate."
Pennsylvania: A new Public Policy Polling survey (3/9-10; 616 PA likely Republican primary voters) finds state Sen. Doug Mastriano (R-Chambersburg), the 2022 Republican gubernatorial nominee who proved non-competitive in the general election, again leading in a statewide Republican primary.
In a hypothetical US Senate nomination contest, PPP finds Sen. Mastriano topping 2022 candidate and former hedge fund CEO David McCormick and 2022 Senate candidate Kathy Barnette, 39-21-11%. If the race was a two-way between Messrs. Mastriano and McCormick, the former would lead 42-28%. Should these numbers hold, such a primary result would again nullify any realistic chance Republicans have of upsetting Sen. Bob Casey, Jr. (D) in November.
Ms. Barnette announced after this poll was released that she would not enter the 2024 Senate campaign.
Wisconsin: Business owner Scott Mayer (R) confirms he is considering competing for the Wisconsin US Senate nomination in a race that has not yet seen much activity. Mr. Mayer is capable of self-funding his race, though he says it’s “not something he is comfortable with.” Mr. Mayer has been told he might have to fund as much as $20 million to run a competitive race.
Speculation that former Lt. Governor and defeated gubernatorial candidate Rebecca Kleefisch (R) is considering entering the race is also gaining steam. A spokesperson for Ms. Kleefisch, now running the state’s 1848 Project conservative organization, indicated that the former Lt. Governor has not closed the door on running for the Senate. Incumbent Tammy Baldwin (D), first elected in 2012, is expected to seek re-election.
HOUSE
CA-13: Phil Arballo (D) has twice run unsuccessfully for Congress and has announced his 2024 candidacy for the California’s 13th District, the seat that delivered the second-closest election in 2022. In that race, Rep. John Duarte (R-Modesto) defeated now-former state Assemblyman Adam Gray (D) by just 564 votes. Mr. Gray is also returning for a re-match.
Mr. Arballo’s candidacy, however, may be short lived. It has just been uncovered that he is running a premium amateur adult porn video business on the side under the name of Felipe Jones. Regardless of what happens in the March 5th all-party jungle primary, expect both Rep. Duarte and Mr. Gray to advance into the general election.
FL-25: Weston City Commissioner Chris Eddy (R), a retired Air Force General and former FBI analyst, announced his candidacy for the Republican nomination with the hope of facing Rep. Debbie Wasserman Schultz (D-Weston) in the general election. He first must get past 2022 nominee Carla Spalding, however.
The 25th District is reliably Democratic – FiveThirtyEight rates the seat D+18; Dave’s Redistricting App calculates the partisan lean at 62.0D – 36.8R – which means the chances of scoring an upset here are slim. Still, Rep. Wasserman Schultz showed some weakness in the 2022 election against Ms. Spalding, however, winning only a 55-45% victory, which proved the closest of her ten career congressional elections.
IL-13: Educator and West Point graduate Joshua Lloyd (R) announced his congressional candidacy this week, hoping to challenge Illinois freshman Rep. Nikki Budzinski (D-Springfield) next year. The 13th District became a created open seat under the gerrymandered Illinois congressional map, and it stretches all the way from the Champaign-Urbana area through Decatur and Springfield until ending in the Illinois side of the St. Louis suburbs.
The seat was drawn to elect a Democrat and force then-Rep. Rodney Davis (R) into another district. The FiveThirtyEight data organization rates IL-13 as D+7, while Dave’s Redistricting App calculates the partisan lean at 53.3D – 41.8R. In November, Ms. Budzinski won a 57-43% victory over conservative activist Regan Deering (R).
IN-5: Hoosier State Rep. Victoria Spartz’s (R-Noblesville) surprise retirement decision in only her second US House term had left an open Republican seat with no early declared candidates until late last week. First to announce is state Rep. Chuck Goodrich (R-Noblesville), who is also the president & CEO of an electric company. We expect to see a crowded Republican field in the R+22 district, but the unexpected open seat status has featured a slow candidate development. The Indiana primary is scheduled for May 7, 2024.
NJ-9: This week, veteran New Jersey Rep. Bill Pascrell (D-Paterson) announced that he will run for a 15th term next year, ending speculation that he might retire from Congress. Mr. Pascrell will be 87 years of age at the time of the next election. Before winning his House seat in 1996, he served simultaneously in the New Jersey state Assembly and as Mayor of Paterson.
The congressman is expected to have little trouble winning re-election in a 9th District that the FiveThirtyEight data organization rates as D+17. Dave’ Redistricting App calculates the partisan lean as 60.7– 37.1R. The New York City suburban CD includes the cities of Passaic, Paterson, and Clifton, the town of Kearny, and the borough of Oakland.
SC-1: Museum founder Michael Moore (D), a relative of Civil War figure Robert Smalls, announced that he will enter the Democratic primary to challenge two-term Rep. Nancy Mace (R-Charleston).
There is a great deal of uncertainty surrounding this race because earlier this year a South Carolina three judge federal panel declared the 1st District an unconstitutional racial gerrymander. This means, that unless the SC ruling becomes moot when the US Supreme Court decides the related Alabama racial gerrymandering case, the district will be re-drawn.
A new version under the South Carolina judicial directive should make this seat more Democratic, but a considerable amount of time will likely elapse if and before the seat is reconfigured. Therefore, it is difficult to draw any current conclusions about the 2024 SC-1 campaign.
TX-34: Republican Mayra Flores made national news in 2022 when she scored an upset special election win in the Texas Rio Grande Valley 34th District that is anchored in the city of Brownsville. In the regular election, however, she fell 51-43% to fellow Rep. Vicente Gonzalez (D-McAllen) who decided to run in the 34th instead of his previous 15th CD.
The principal reason for Ms. Flores losing was redistricting. The 34th went from a D+5 to a D+17 under the FiveThirtyEight data organization statistical calculation making the seat difficult for any Republican to attain.
Seeing political reality, Ms. Flores is indicating that she is unlikely to run again in 2024. In order to make the adjacent 15th CD more winnable for a Republican, which happened with the election of Rep. Monica de la Cruz (R-McAllen) in November, the 34th became more Democratic. The redistricting map was drawn long before Ms. Flores won the special election, hence the lopsided partisan lean for a district the GOP was able to convert.
GOVERNOR
Mississippi: Mason-Dixon Polling & Strategy conducted a new Mississippi Governor’s poll for the Magnolia Tribune (3/6-9; 625 MS registered voters; live interview) and sees Gov. Tate Reeves (R) rebounding from a January Tulchin Research survey. The Mason-Dixon ballot test posts Gov. Reeves to a seven-point lead over Mississippi Public Service Commissioner Brandon Pressley (D), 46-39%. The Tulchin poll staked Mr. Pressley to an early 47-43% advantage.
In the M-D poll, the Governor has leads throughout the state with the exception of the state’s 2nd Congressional District (Rep. Bennie Thompson-D), that occupies most of the Mississippi Delta area. In that region, Mr. Pressley pulls a 15-percentage point lead. Gov. Reeves is strongest, a pair of 15-point spreads, in the Tennessee border region and on the Gulf Coast. With party nominations secure for both Gov. Reeves and Mr. Pressley, the two are already waging a general election battle that will be settled on November 7th.
West Virginia: Attorney General Patrick Morrisey (R), who lost to Sen. Joe Manchin in a close 49-46% result in 2018, claims to be deciding among seeking a re-match in the Senate race, or running for the open Governor or 2nd Congressional District positions, or simply seeking re-election.
A newly released National Research poll that was conducted in late February for the Black Bear PAC (2/23-28; 600 WV likely Republican primary voters) projects Mr. Morrisey to be holding a 28-15-11-6% advantage in an open Governor’s primary against state Delegate Moore Capito (R-Charleston), the son of Sen. Shelley Moore Capito (R), Secretary of State Mac Warner (R), and businessman Chris Miller, son of Rep. Carol Miller (R-Huntington).