Our thoughts and prayers are with the people of Ukraine.

In Washington, D.C., the business of government continues, and it was an exceptionally busy week.

Postal reform bill passes
On Tuesday, the Senate voted 79-19 to approve HR 3076, the Postal Service Reform Act of 2022. The bipartisan legislation, which passed the House by a vote of 342 to 92, heads to the President for signature. The bill amounts to a financial rescue for the US Postal Service, which has been burdened since 2006 with a requirement to pre-fund retiree health benefits. HR 3076 repeals that requirement and integrates future Postal Service retirees into Medicare. It preserves the six-day delivery schedule, and requires the USPS to develop a public dashboard that provides service performance data. It also allows the USPS to make agreements with state, local, and tribal governments to provide non-commercial property and services that do not interfere with core postal services.

House, Senate approve $1.5 trillion omnibus
The House and Senate voted this week to approve a 2,741-page spending bill for FY 2022, beating today’s deadline to keep the federal government running. (Just in case, they also approved a four-day continuing resolution that provides government funding through March 15, to give the President time to sign enrolled legislation.) The omnibus provides $730 billion in nondefense spending and $782 billion in defense spending, and includes $27.4 billion for tenant-based rental assistance, a 75% increase in investments in the Choice Neighborhoods initiative, and $10 billion for community planning and development, with $3.3 billion going to Community Development Block Grants. It also includes an unspecified amount of money, estimated to be between $5 billion and $10 billion, for “community projects” — formerly known as earmarks — proposed by more than 265 members of the House and 60 Senators to support “a variety of targeted housing, economic, and community development investments.”

President issues Executive Order on digital assets
In an Executive Order issued Wednesday, President Biden called for a whole-of-government approach to “enhancing United States economic competitiveness in, and leveraging of, digital asset technologies.” The Executive Order notes the “dramatic growth in markets for digital assets,” and efforts around the global to develop central bank digital currencies (CBDCs).

It lays out six major policy objectives: 1) consumer protection; 2) protecting global financial stability and mitigating systemic risk; mitigating the illicit financing and national security risks posed by misuse of digital assets; reinforcing American leadership in the global financial system and technological and economic competitiveness; 5) promoting access to safe and affordable financial services; and 6) supporting technological advances that promote the responsible development and use of digital assets. The EO assigns implementation duties to the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy.

The Executive Order also makes explicit the Administration’s policy on a US central bank digital currency: “My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC.” It directs the Secretary of the Treasury, in consultation with six other Cabinet members and “the heads of relevant agencies” to submit a report on the future of money and payment systems and the potential implications of a US CBDC within 180 days. (If you’re marking your calendar, that’s September 5.)

SEC proposes cybersecurity rules
The Securities and Exchange Commission is seeking comment on proposed amendments to its rules that would standardize and enhance public companies’ disclosures on cybersecurity risk management, strategy, governance, and incident reporting. The proposal would require current reporting about material cybersecurity incidents on Form 8-K. It would require periodic disclosures about cybersecurity risk management policies and procedures, the board of directors’ cybersecurity expertise and oversight rule, and updates to previously reported material cybersecurity incidents. Comments on the proposal are due to the SEC by May 9.

Justice Department appoints Director for COVID-19 fraud enforcement
“The watchdogs are back,” President Biden said yesterday in a statement applauding the Department of Justice’s appointment of a chief prosecutor for pandemic fraud. Associate Deputy Attorney General Kevin Chambers will serve as Director for COVID-19 Fraud Enforcement. Justice has already taken criminal and civil enforcement actions in relation to more than $8 billion in COVID-19 related fraud. Director Chambers will focus on “large-scale criminal enterprises and foreign actors” who committed fraud against COVID-19 relief programs, using strike teams to move quickly and forcefully. The Department of Justice is pursuing cases involving the Paycheck Protection Program, the Economic Injury Disaster Loan (EIDL) program, unemployment insurance, and COVID-19 health care fraud enforcement.

Planning for EV infrastructure
The bipartisan infrastructure bill included $7.5 billion for infrastructure to support electric vehicles (EVs), and President Biden has said he wants EVs to account for 50% of all new vehicles sold by 2030. The House Energy & Commerce Subcommittee on Energy spent four hours on Tuesday arguing about how that $7.5 billion should be spent. Republicans called for a shift in focus to increased production of conventional fuels, given the spike in oil and gas prices caused by the invasion of Ukraine, while Democrats said that these prices make conversion to electric vehicles even more urgent. Cassandra Powers, testifying for the National Association of State Energy Officials, described the work that’s already happening among the states as they forge Regional Electric Vehicle (REV) plans to support infrastructure design and construction, especially in rural areas.

Brown seeks end to mandatory arbitration for financial services contracts
Senate Banking Committee Chairman Sherrod Brown (D-OH) introduced the Arbitration Fairness for Consumers Act this week, to prohibit financial services providers from including mandatory arbitration clauses in contracts with consumers. “Studies have shown consumers do not understand what they’re signing away,” Brown said at a hearing on the bill on Tuesday. The issue is sharply partisan, and the Committee’s ranking member, Senator Pat Toomey (R-PA), was the only Republican who attended Tuesday’s hearing. He said that banning mandatory arbitration would not help consumers, but would only create new business opportunities for trial lawyers.

The Week Ahead

We’re not in the predictions business, but we’ll be very surprised if the FOMC’s press conference next Wednesday does not include the announcement of an increase in the federal funds rate.

March 15 at 2 p.m. Senate Judiciary Subcommittee on Immigration, Citizenship, and Border Safety holds a hearing on “Removing Barriers to Legal Migration to Strengthen our Communities and Economy.”

March 15 at 2:30 p.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Advancing Public Transportation under the Bipartisan Infrastructure Law.”

March 16 at 10 a.m. House Committee on Financial Services marks up pending legislation.

March 16 at 10 a.m. House Energy & Commerce Subcommittee on Water Resources and Environment holds a hearing on members’ proposals for the Water Resources Development Act of 2022.

March 16 at 10 a.m. House Small Business Subcommittee on Oversight, Investigations, and Regulations holds a hearing on “An Empirical Review of the Paycheck Protection Program.”

March 16 at 10 a.m. House Select Committee on Economic Disparity and Fairness in Growth holds a hearing on “Big Ideas for Small Businesses: Fostering American Entrepreneurship through Starting, Sustaining, and Growing Small Businesses.”

March 16 at 10 a.m. Senate Committee on Environment and Public Works holds a hearing on “Oversight of the Clean Water State Revolving Loan Fund Formula.”

March 16 at 2 p.m. The Federal Open Market Committee holds a press conference to announce results of its two-day meeting.

March 16 at 2:30 p.m. Joint Economic Committee holds a hearing on “Examining the Impact of Shareholder Primacy: What it Means to Put Stock Prices First.”

March 16 at 2:30 p.m. Senate Committee on Small Business & Entrepreneurship holds a hearing on “Small Business Franchising: An Overview of the Industry, SBA’s Role, and Legislative Proposals.”

March 17 at 9:30 a.m. Senate Special Committee on Aging holds a hearing on “Unbanked and Credit Invisible: Building Financial Inclusion for America’s Underserved Populations.”

March 17 at 10 a.m. Senate Banking Committee holds a hearing on “Understanding the Role of Digital Assets in Illicit Finance.”

The Ellis Insight - Jim Ellis on political news

SENATE

Georgia: Blueprint Polling, a Democratic survey research firm, released their new Georgia statewide study, a result that stakes GOP candidate Herschel Walker to his largest lead of the early election cycle. Mr. Walker’s edge, however, is only three-plus percentage points. The Blueprint survey (3/2-8; 662 GA definite (90%) and probable (10%) voters; live interview) projects Mr. Walker to a 48.5 - 45.4% edge over Sen. Raphael Warnock (D).

Perhaps the poll’s most interesting result, however, pertains to the question about who the respondents would support in a presidential re-match. This universe reported that they would back former President Trump with a 50-36% margin. President Biden carried the controversial Georgia result by 11,779 votes in 2020.

Ohio: A new Fox News Ohio poll (3/2-6; 918 OH likely Republican primary voters; live interview) again posts businessman Mike Gibbons to a small lead in the GOP Senate primary. According to the surveyors, Mr. Gibbons holds a 22-20-11-9-7% edge over former state Treasurer Josh Mandel, the 2012 US Senate nominee, author J.D. Vance, ex-Ohio State Republican Party chair Jane Timken, and state Sen. Matt Dolan (R-Chagrin Falls), respectively.

The Ohio primary is May 3rd. US Rep. Tim Ryan (D-Warren/ Youngstown) is the clear Democratic primary leader.

Pennsylvania: Fox News tested the Pennsylvania statewide races (3/2-6; 960 PA likely Republican primary voters; live interview) and, like the TargetPoint Consulting Republican primary survey released last week, sees former hedge fund CEO Dave McCormick putting a clear distance between he and Dr. Mehmet Oz. The ballot test yielded Mr. McCormick a 24-15% advantage with no other candidate reaching double-digits. The others, however, in particular ex-Lt. Governor nominee Jeff Bartos and former US Ambassador to Denmark Carla Sands, still remain within striking distance.

Utah: Despite former Obama State Department official Kael Weston filing in the Democratic Senate primary, there may be a move to deny him an endorsement at the Utah State Democratic Party convention. Not obtaining the requisite number of delegate votes to win a ballot placement would force Mr. Weston to enter the primary through the difficult signature gathering process.

Many believe the party’s best strategy would be to unite behind Independent former presidential candidate Evan McMullin who looks to have much stronger appeal against incumbent Sen. Mike Lee (R) than Mr. Weston. The Utah state Democratic convention is scheduled for April 23rd. The state primary is June 28th.

HOUSE

CA-41: Republican state Senator Melissa Melendez (R-Murrieta) announced yesterday that she is ending her campaign for Lt. Governor, and switching to challenge veteran US Rep. Ken Calvert (R-Corona) in the state’s new 41st CD.

Ms. Melendez was elected to the California Senate in a 2020 special election, after winning five elections to the state Assembly. Rep. Calvert was first elected in 1992, and currently represents 74% of the new 41st. Because of California’s jungle primary structure, members of the same party can advance into the general election, so it is not out of the realm of possibility that both Rep. Calvert and Sen. Melendez could participate in a double Republican general election.

MI-10: Former Macomb County Judge and ex-prosecutor Carl Marlinga (D) announced that he will enter the Democratic primary in the new 10th District, which will play as a toss-up seat in the general election. Early polling suggests Mr. Marlinga is already the clear favorite for the Democratic nomination.

Though the FiveThirtyEight organization rates the District as R+6, Dave’s Redistricting App finds the Democrats having a slight edge on the composite scale, 49.4 - 47.8%. The eventual Republican nominee will likely be 2018 and 2020 US Senate nominee John James. This will be one of the national House races to watch on election night.

MI-11: Democratic Reps. Haley Stevens (D-Rochester Hills) and Andy Levin (D-Bloomfield Township) are again tied in a new poll. The two are paired in the new 11th District where carryover constituent territory favors Rep. Stevens, 46-27%, but all of Rep. Levin’s local political base is in the new seat as opposed to none from Ms. Stevens’ home area in Rochester Hills.

Lake Research Partners released their mid-February survey (2/15-20; 500 MI-11 likely Democratic primary voters) that pegs the two House members even at 36%. This largely confirms the previous published poll from Target Insyght (2/1-3; 400 MI-11 likely Democratic primary voters) that found the two tied at 41%. The Michigan primary is August 2nd, so much time remains for this race to define itself.

MN-5: Controversial Democratic Socialist Rep. Ilhan Omar (D-Minneapolis) has drawn a notable Democratic primary opponent. Former Minneapolis City Councilman Don Samuels filed a committee with the Federal Election Commission to challenge the two-term House member. The candidate filing deadline is May 31st for the August 9th primary, so Mr. Samuels has time to test the political waters to determine if Rep. Omar is vulnerable to a nomination challenge before filing official papers.

NY-24: Attorney Todd Aldinger, who had launched a Republican primary challenge to Rep. Chris Jacobs (R-Orchard Park) in New York’s newly-configured 24th District, one of only four strongly Republican districts in the state, this week ended his political pursuit. Mr. Aldinger said he was unable to generate the necessary early support to wage a viable primary campaign against a sitting incumbent, even one that contains only 55% of the Congressman’s current 27th district.

Remaining in the GOP primary race are US Intelligence analyst Andrew McCarthy and software engineer John Murtari. Rep. Jacobs is favored in both the primary and general election from a district that the FiveThirtyEight statistical projection organization rates R+25.

Redistricting: Both the state court approved North Carolina and Pennsylvania congressional maps will be in place for the current election cycle, because six justices of the United States Supreme Court refused to hear a Republican motion to strike the plans down as not fully adhering to the US Constitution. This means the Democratic advantage gained through the courts will stand at least for this midterm election. Legislatures have the right to adopt permanent maps to replace the court plans, which are interim in nature, possibly in the legislative session beginning next year.

Saying another majority black seat could be created in Louisiana, Gov. John Bel Edwards (D) vetoed the Republican legislature’s bill that made few changes in the state’s 6R-1D congressional map. The measure now returns to the legislature for an attempted veto override. Republicans were just short of two-thirds approval when they passed the bill, so they will have to convince the outstanding party members to support the measure. Odds are against the leadership succeeding, however. The last time the Louisiana legislature voted to override any gubernatorial veto came in 1993.

GOVERNOR

Georgia: Regular Georgia pollster Insider Advantage, surveying for Fox5 Atlanta (3/1; 750 GA likely Republican primary voters; interactive voice response system and online), finds former Senator David Perdue gaining on Gov. Brian Kemp in their latest Republican primary survey. The ballot test finds the Governor leading Mr. Perdue, 44-35%, which is a net ten point improvement for the challenger when compared to Insider Advantage’s December study. The Georgia primary is May 24th.

Gov. Kemp, however, rebounded in the Fox News Poll. According to this data (2/2-6; 914 GA likely Republican primary voters; live interview) Mr. Kemp holds a 50-39% Republican primary advantage. Though the Governor consistently leads in the early part of this race, the fact that he only hovers around the 50% mark among voters within his own party suggests that this race will severely tighten as we approach the May 24th primary election. Former state House Minority Leader and 2018 gubernatorial nominee Stacey Abrams is the consensus Democratic candidate.

Iowa: A pair of polling firms recently surveyed the Iowa Governor’s race as incumbent Kim Reynolds (R) positions herself to run for a second full term. Selzer & Company, polling for the Des Moines Register newspaper (2/28-3/2; 813 IA adults; 612 likely IA voters; live interview), found the Governor leading Democrat Diedre DeJear by a 51-43% margin with a job approval rating on the tepid side, 49:44%.

The Cygnal research firm also polled the race (2/20-22; 610 IA likely voters; live interview & text) and found the Governor in stronger position, leading Ms. DeJear 55-38% with a much better 57:40% personal favorability ratio. The statewide Republican generic advantage from answers pertaining to party preference in voting for the House of Representatives was a whopping 54:37%.

Ohio: The Fox News Poll also tested the Ohio Governor’s Republican primary (3/2-6; 918 OH likely Republican primary voters; live interview) and sees Gov. Mike DeWine holding a 50-21-18% lead over farmer/businessman Joe Blystone and former US Rep. Jim Renacci. The results are a surprise in that ex-Rep. Renacci, who had previously been polling competitively with Gov. DeWine, now trails a virtual unknown.

While this poll may be an anomaly with regard to the Blystone-Renacci showing, once again we see Gov. DeWine failing to dominate a GOP primary field. This remains a race to watch as the campaign moves closer to the May 3rd Ohio primary.

Pennsylvania: Fox News also tested the Pennsylvania Governor’s Republican primary and found the multi-candidate contest becoming even tighter than other recent polling suggested.

The Fox results find former Congressman Lou Barletta’s lead over state Senator and author Doug Mastriano (R-Fayetteville) dropping to 19-18% with former Delaware County Commissioner Dave White and ex-US Attorney Bill McSwain closely trailing with 14 and 11%, respectively. The eventual winner, the identity of whom is obviously in doubt, will face Democratic consensus candidate Josh Shapiro, the state’s Attorney General in the November election.

TargetPoint Consulting previously tested the open GOP Governor’s contest in their statewide survey (2/25-28; 600 PA Republican likely primary voters). In this race, Mr. Barletta maintains his lead over Sen. Mastriano, Mr. McSwain, and state Senate President Pro Tempore Jake Corman (R-Bellefonte) by a close 17-14-7-6% split. Gov. Tom Wolf (D) is ineligible to seek a third term.