Our inaugural issue of 2025
Welcome back to the Golden Apple. Our inaugural issue of 2025 has a full agenda: there has been much to report as both Congress and the Trump administration hit the ground running. Most of D.C., including the federal government, is closed for a snow day (even the Golden Apple experienced a weather delay). But as a reminder, Congress does not follow the rest of the government. Congress was in and is already done for today with the counting of electoral ballots and the certification of election results.
Financial Services and Banking Updates
Senate Banking Committee Announces Additions: The Senate Banking Committee roster is now complete, as both parties have announced their new members. On the Republican side, Senators Pete Ricketts (NE), Jim Banks (IN), and Dave McCormick (PA) will be joining the Committee. Democrat Senators Ruben Gallego (AZ), Lisa Blunt Rochester (DE), and Angela Alsobrooks (MD) will also be joining. The Senate Committee will be chaired by Sen. Tim Scott (SC) and, as expected, Sen. Elizabeth Warren (MA) will move to the Ranking Member role with the departure of Sherrod Brown (OH).
Financial Services Chair Announces Senior Staff: Rep. French Hill (AR), newly the Chair of the Financial Services Committee, is building out his senior staff structure in announcements made last week. Leading the committee staff will be Ben Johnson as Staff Director who most recently held that title for the House Small Business Committee. Staying on as Deputy Staff Director and General Counsel will be Kim Betz, who held that title for former Chairman Patrick McHenry (NC) and also has served the House in numerous other roles. Allison Behuniak has been named Policy Director; Behuniak was most recently the Staff Director for the Digital Assets Subcommittee, where she worked closely with Hill.
Congressional Updates
Johnson Holds on to Speakership: Last Friday, Speaker Mike Johnson (LA) was re-elected with relatively little drama. Though three members initially voted for members other than Johnson, and several others abstained their votes, live negotiations involving President-elect Trump urged enough of those members to cast their votes for Johnson before the end of the first ballot. Johnson’s return to the Speaker’s office seemed all but doomed before Christmas, as hardline conservatives in the House revolted against the handling of the CR. However, the President-elect threw his support behind Johnson, urging House Republicans to fall in line. A lot can happen in two weeks.
Trump Endorses the One-Bill Strategy (Sort Of): Since President-elect Trump’s victory in November, action by reconciliation has been a foregone conclusion. However, leaders within Trump’s office and on the Hill have been divided on strategy. Senate Majority Leader John Thune was joined by Trump advisor Stephen Miller in endorsing a two-bill strategy: namely passing one bill early to post a quick victory on hot issues like the border, and embracing a longer timeline on a second bill that would encompass tax cuts and potentially more challenging issues. House Ways and Means Chair Jason Smith, on the other hand, was pushing one bill that would encompass all of Trump’s priority issues, including tax cuts, border security, and energy policy, arguing that the tight margins in the House will make passing one bill, let alone two, challenging enough. Over the weekend, Trump appeared to back one bill, saying that Congress is hard at work on “one powerful Bill” that will secure the border, renew tax cuts, and unleash American energy. However, earlier today, the President-elect appeared to waffle slightly on this approach, stating that while his preference was for one bill, his bottom line is getting everything passed through whichever means.
Administration Updates
Michael Barr to Step Down as Vice Chair for Supervision: Federal Reserve Vice Chair for Supervision Michael Barr announced today that he will step down from his position on February 28, 2025. Importantly, Barr will stay on as a governor, as his term extends until 2032. Barr lead the attempted “Basel Endgame” rewrite of bank capital requirements that drew the ire of Capitol Hill leaders and fellow regulators; Trump allies had threatened a clash over demoting Barr. In Barr’s announcement to step aside, he states his desire to avoid the clash and subsequent distraction from the agency’s mission. However, because Barr plans to retain his seat on the Fed’s Board of Governors, the pool for replacement candidates for the position of Vice Chair for Supervision is limited. The pick must be a sitting governor, and there are no vacancies with the first opening not coming available until 2026. This requirement likely limits the Trump’s administration’s options for Vice Chair for Supervision to either Governor Waller or Governor Bowman. However, Trump also does not have to formally nominate anyone and can instead seek to have Governor Waller or Governor Bowman appointed to chair the regulation and supervision committee within the Fed.
Ken Kies to Lead Treasury’s Tax Policy: Ken Kies, a long-time figure in D.C. politics, has been nominated to serve as the Treasury Department’s Assistant Secretary for Tax Policy. In this role, he will serve alongside Treasury Secretary Nominee Scott Bessent and will play a leading role in shaping and implementing Trump’s signature tax cuts. Kies is currently a managing director of the Federal Policy Group, a lobby shop that provides tax policy advice. Kies served as Chief of Staff to the Congressional Joint Committee on Taxation from 1995 to 1998.
Political Update from Jim Ellis
In lieu of the weekly political synopsis, we are sending Jim’s update on gubernatorial campaigns. Interesting and timely!
As the new Congress begins, election observers are already contemplating how the many open 2026 Governors’ campaigns might affect the razor-thin US House majority.
Looking toward next year’s election, a total of 36 states will host gubernatorial campaigns. In the 19 places where term limits are in effect, we will see open statewide contests. In many of these developing races, US House members are potential candidates. Therefore, protecting the small GOP majority with a large number of open seats becomes an even more difficult task.
US Representatives who could run for an open Governor’s position are already rumored or announced in ten states: Alabama, Colorado, Florida, Kansas, Maine, Michigan, Minnesota, New Jersey, South Carolina, and Tennessee.
Alabama US Sen. Tommy Tuberville (R) opting to seek re-election instead of running for Governor opens the field to replace term-limited Gov Kay Ivey (R).
It is unlikely that Rep. Mike Rogers (R-Weaver/Gadsen) will risk his role as chairman of the House Armed Services Committee to run for Governor, but he is considered a possible candidate. Rep. Gary Palmer (R-Hoover), chairman of the House Policy Committee, is also a potential gubernatorial contender.
Already, polling is suggesting that Rep Joe Neguse (D-Lafayette/Boulder) is the leading potential candidate to succeed term-limited Colorado Gov. Jared Polis (D). Yet, we can expect a lively Democratic primary possibly between Reps. Neguse and Jason Crow (D-Aurora). It is doubtful that any Centennial State Republican House member, largely comprised of freshmen, will jump into the open Governor’s campaign.
Florida Governor Ron DeSantis (R) being ineligible to seek a third term leaves a wide open succession field. The person Mr. DeSantis appoints as the new Senator when incumbent Marco Rubio is confirmed as the US Secretary of State may influence who runs for Governor. Rep. Byron Donalds (R-Naples) is the congressional member most often mentioned as having an interest in running for the office. The eventual GOP nominee will have the inside track of winning the next Sunshine State gubernatorial general election.
In Maine, all eyes are on whether Rep. Jared Golden (D-Lewiston) will attempt to replace term-limited Gov. Janet Mills (D). So far, Mr. Golden has not provided any hints about his future political plans.
The odd-year New Jersey open Governor race has already attracted two Democratic House members into the 2025 campaign, Reps. Mikie Sherrill (D-Montclair), who leads in early polling, and Josh Gottheimer (D-Wycoff) who enjoys a big edge in fundraising.
At the end of this term, Henry McMaster (R) will be the longest-serving Governor in South Carolina history but cannot run again to succeed himself. South Carolina has a two-term limit, but McMaster ascended to the office from his post as Lt. Governor when then-Gov. Nikki Haley resigned to become US Ambassador to the United Nations and did so during a time frame that still allowed him to run for two full terms.
A crowded open Republican primary field will form and could feature two US House members. Both Reps. Nancy Mace (R-Charleston) and Ralph Norman (R-Rock Hill) have indicated they are considering gubernatorial bids. Ms. Mace has also not quelled speculation that she could challenge Sen. Lindsey Graham (R) as he seeks renomination for a fifth term.
In Tennessee, several Republican House members are considering a bid for Governor but could be effectively blocked should just re-elected Sen. Marsha Blackburn (R) continue to make moves suggesting that she will run.
Reps. Tim Burchett (R-Knoxville), Andy Ogles (R-Columbia), John Rose (R-Cookeville), and Mark Green (R-Clarksville) have all either indicated they are considering running for Governor or speculation has surrounded them regarding launching such a campaign. Incumbent Republican Bill Lee is ineligible to run for a third term.
While a midterm election cycle typically attracts lesser voter interest, 2026 will feature a large number of competitive statewide campaigns. Expect the many open Governors’ races to also ignite a round of political musical chairs in several US House delegations.