Seeing paradise by the dashboard light

We can’t publish this week without noting the passing of Meat Loaf, best known for his operatic rock album Bat out of Hell but immortal in our memories as Eddie in The Rocky Horror Picture Show. Tonight we’ll gather our lighters, rice, newspapers, and squirt guns, and do the Time Warp in his honor.

Omnibus, competitiveness, Ukraine, veterans top 2022 House agenda
Speaker of the House Nancy Pelosi outlined her priorities in a letter to Democratic colleagues today, while expressing disappointment that the Senate had rejected the John R. Lewis voting rights bill. Pelosi emphasized the need for a strong omnibus spending bill. She said that House leadership, under the guidance of Science, Space, and Technology Committee Chair Eddie Bernice Johnson (D-TX) would soon be introducing a competitiveness bill to “supercharge our investment in chips, strengthen our supply chain and transform our research capacity.” The House Foreign Affairs Committee, led by Chair Gregory Meeks (D-NY) will advance “comprehensive” legislation to support Ukraine in the face of Russian aggression, and the House Veterans Affairs Committee, under Chair Mark Takano (D-CA), will act on its bipartisan Honoring Our PACT Act, protecting veterans exposed to toxic substances in burn pits. Pelosi said they would continue to advance the individual provisions of the Build Back Better Act, specifically those related to child and family care, healthcare, and climate.

Fed releases discussion paper on a digital dollar
Yesterday the Federal Reserve Board published its much-anticipated discussion paper on the pros and cons of a central bank digital currency (CBDC). As Chair Jay Powell said at his Senate confirmation hearing last week, the paper, “Money and Payments: The US Dollar in the Age of Transformation,” is less a proposal than a call for public comment. The paper defines a CBDC as a digital liability of the Federal Reserve that would be widely available to the general public. It would not require deposit insurance to maintain public confidence, nor would it need to be backed by an asset pool. But creating a CBDC raises questions about finding the appropriate balance for consumer privacy; what the intermediation model for CBDC distribution should look like; how the CBDC would be transferable; and how users’ identities would be verified. Perhaps most importantly, the Fed asks, is the crucial question of whether a CBDC would be superior to other payment methods that are already available. The paper lays out potential benefits and risks, and asks the public to submit their comments by May 20, using this form.

Can cryptocurrency inspire energy solutions?
Experts and advocates for cryptocurrency and blockchain computing appeared before the House Energy & Commerce Subcommittee on Oversight and Investigation yesterday for a lively hearing about the energy demands of blockchain. Members on both sides of the aisle seemed equally intrigued by and skeptical about the uses of blockchain beyond cryptocurrency, while witnesses made a powerful case for how cryptocurrency mining's use of energy could actually speed up grid modernization and the transition to renewable energy. Witnesses debated the relative merits of “proof of work,” the basis of Bitcoin mining that consumes vast amounts of energy, and “proof of stake,” a less energy-intensive standard used for smart contracts and other blockchain solutions.

GAO, HUD Inspector General recommend codification of CDBG–DR program
A bipartisan consensus on the need to make HUD’s Community Development Block Grant–Disaster Recovery program permanent seemed to be emerging at a House Financial Services Oversight Subcommittee hearing on Wednesday. Representatives of the Government Accountability Office (GAO) and HUD’s Office of the Inspector General both said that codifying the CDBG–DR program would speed up delivery of recovery funds, make program requirements clearer and more consistent, and make it easier for potential grantees to build capacity to administer any funds received. The GAO also called for more extensive data collection about applications for CBDG-DR grants as well as grantees. Members on both sides of the aisle agreed on the benefits of codification and better data collection. Oversight Subcommittee Chairman Al Green (D-TX) has reintroduced the Reforming Disaster Recovery Act, legislation similar to a bill Green has co-sponsored with Rep. Ann Wagner (R-MO) in previous Congresses.

SEC must update rules to keep up with economy, technology
In remarks to the Exchequer Club this week, Securities and Exchange Commission Chair Gary Gensler said that the two principles guiding his term so far had been the need to drive efficiency at all levels of the capital markets and the need to modernize rules for today’s economy and advances in technology. Gensler said that “driving efficiency,” to him, meant lowering the costs of intermediation and risk transfers. He has directed SEC staff to recommend ways to improve competition in all markets, including Treasury's, non-Treasury fixed income, and fund management. Increasing transparency and improving competition should benefit all stakeholders, including portfolio companies, pension funds, and other institutional investors. Gensler also highlighted the need to update rules in response to technological advances, especially in the area of predictive data analysis. Artificial intelligence is lowering costs and creating new forms of pattern analytics, but also raising questions about conflicts of interest, bias, and systemic risk. The SEC will also be looking at innovations in how products are offered, and at changes in the information investors want from companies. He encouraged all interested parties to communicate with SEC staff before and during the rulemaking process.

Confirmations, Nominations, Departures

Rep. Jim Langevin (D-RI) will leave Congress when his 11th term ends in December. He is cofounder and cochairman of the Congressional Cybersecurity Caucus.

Rep. Jerry McNerney (D-CA) is retiring at the end of this, his 8th term. McNerney, a PhD mathematician, serves on the House Committees on Energy & Commerce and Science, Space & Technology.

The Week Ahead

Next week is a District Work Period for the House of Representatives, and the Senate has no hearings scheduled.

January 26 at 10 a.m. The Securities and Exchange Commission holds an open meeting to discuss Form PF Amendments and Redefinition of Exchange and ATS-G.

January 26 at 12 p.m. Federal Housing Finance Agency Acting Director Sandra L. Thompson speaks at a virtual meeting of Women in Housing & Finance; online registration is open to nonmembers.

The Ellis Insight - Jim Ellis on political news

SENATE
New Hampshire: Polling without Gov. Chris Sununu (R) as a potential Republican US Senate candidate, The New Hampshire Institute for Politics at St. Anselm’s College released their latest statewide survey (1/11-12; 1,215 NH registered voters; online). While the pollsters found the respondent sample in a state of general unhappiness with regard to New Hampshire’s political figures and direction of the country, Sen. Maggie Hassan (D) is improving her ballot test numbers against potential Republican opponents even though her favorability index is down.

Retired Army General and 2020 US Senate candidate Don Bolduc fares best among the tested Republicans, trailing Sen. Hassan, 43-36%. She tops recent Senate campaign entries Chuck Morse, the Granite State Senate President, 41-27%, and former Londonderry Town Manager Kevin Smith, 42-24%. On the negative side, she is six points in the red (45:51%) on her favorability ratio, and nowhere close to majority support on any ballot test scenario.

Ohio: Businessman Bernie Moreno (R) released his internal poll, following the lead of some of his GOP nomination opponents, and the results again suggest that winning the intra-party contest is turning into a free-for-all. An internal survey that Kellyanne Conway conducted for the Moreno campaign (1/11-13; 600 OH likely Republican primary voters; live interview) finds former state Treasurer Josh Mandel (R) again holding the lead, but with a tightening margin over former Ohio Republican Party chair Jane Timken, 20-18%.

Mr. Moreno, after spending $4 million in advertising media, moved into a third place tie with businessman Mike Gibbons and author J.D. Vance, with each commanding approximately 10% support.

HOUSE
CA-9: Eight-term California Democratic US Rep. Jerry McNerney (D-Stockton) announced this week that he will not seek a ninth term later this year. Originally elected to a Bay Area anchored district in 2006 when he defeated veteran Rep. Richard Pombo (R), Mr. McNerney’s then-11th District was moved into the San Joaquin Valley because of 2011 redistricting. The new 9th District will still be anchored in the city of Stockton, but the updated version is somewhat more Republican than the current CA-9. The Congressman would have been favored for re-election.

CA-13: Immediately upon California Rep. Jerry McNerney (D-Stockton) announcing his retirement, the political musical chairs began. Fellow NorCal Rep. Josh Harder (D-Turlock) abandoned his re-election plans in District 13 to run in the newly open 9th CD. Once Harder made his move, state Assemblyman Adam Gray (D-Merced) quickly announced that he will run for Congress in the suddenly open 13th.

California's Central Valley is in a state of political flux. With the special election for resigned Rep. Devin Nunes’ (R-Tulare) underway in the neighboring current 22nd District and the candidates having no place to run in the regular election, the 13th District could now become an attractive landing spot for one or more of the GOP special election contenders. A Republican will be an underdog in the new 13th, but at least the candidate would have a fighting chance to win a full term and the opportunity of seeking re-election if successful.

MD-4: Former Congresswoman Donna Edwards (D), who gave up her 4th District congressional seat to challenge then-Rep. Chris Van Hollen (D) for the state’s open Senate seat six years ago when then-Sen. Barbara Mikulski (D) retired, announced that she is making a comeback.

Current 4th District Rep. Anthony Brown (D-Bowie) is leaving the House to run for state Attorney General, thus the 4th District becomes open. Ms. Edwards will make an attempt to re-claim her previous position. Her main opponent in a crowded open Democratic primary appears to be former Prince George’s County State’s Attorney Glenn Ivey. The seat will remain Democratic in the general election. The Maryland candidate filing deadline is February 22nd for the June 28th statewide primary.

MI-8: Bill Schuette, the former Congressman, Michigan Appellate Court Judge, Attorney General, and US Senate and gubernatorial nominee who Republican leaders hoped would challenge US Rep. Dan Kildee (D-Flushing/Flint), said that he will not run for Congress this year. The new 8th CD was made slightly more Republican in redistricting, but Rep. Kildee would have been cast as the favorite even against Mr. Schuette.

Paul Junge, the former US Citizens & Immigration Service official and ex-television news anchor who held Rep. Kildee to a 54-42% re-election victory in 2020, remains in the race. With the district becoming more Republican, Mr. Junge’s chances will improve but he remains a clear underdog to the five-term incumbent.

MI-12: Former state Representative Shanelle Jackson announced that she will launch a Democratic primary challenge to controversial US Rep. Rashida Tlaib (D-Detroit). Ms. Jackson describes herself as a “pro-business centrist” who says she wants to “calm down some of the antisemitic rhetoric.” She further said that “she (Tlaib) obviously is carrying the water of Palestine in all that she does. Meanwhile, Detroiters, we don’t have a voice. It’s just the truth.”

Ms. Jackson served three terms in the state House of Representatives. Rep. Tlaib, who currently represents the 13th District, chose to run in the new 12th after Rep. Brenda Lawrence (D-Southfield) announced her retirement. Rep. Tlaib said more of her constituents reside in the new 12th than the new 13th. The redistricted version of MI-12 is safely Democratic, so the winner of the party primary is virtually guaranteed victory in November.

NE-1: State Senator Mike Flood (R-Norfolk), a former Speaker of the unicameral legislature and local news television network owner, announced yesterday that he will challenge indicted Rep. Jeff Fortenberry (R-Lincoln) for the 2022 Republican nomination. In October, Fortenberry was charged with concealing information and making false statements to federal authorities who were investigating illegal contributions made by a foreign national to the Congressman’s 2016 re-election campaign, according to the US Attorney in the Central District of California.

The new 1st District is reliably Republican, but became a bit more Democratic when the legislature added some of its GOP voters to the neighboring 2nd District to make the latter seat stronger for Rep. Don Bacon (R-Papillion/Omaha). Democratic state Sen. Patty Pansing Brooks (D-Lincoln) appears to be a consensus Democratic candidate. The Nebraska candidate filing deadline is March 1st for the May 10th statewide primary.

NY-24: Citing family issues, four-term New York Rep. John Katko (R-Syracuse) announced that he will not seek re-election this year. In addition to his family situation, Rep. Katko was arguably in the worst redistricting position of any New York incumbent and was likely staring at a paired situation with another GOP incumbent. Additionally, he was facing political pressure from his ideological right because he was one of ten Republicans who had voted to impeach former President Trump, which would cause him problems in a Republican primary.

Ohio Redistricting: As they did earlier with their state’s House and Senate maps, the Ohio State Supreme Court, on a 4-3 vote, invalidated the legislature’s congressional map, sending the re-mapping process back to square one. Therefore, previous analyses of the voided map’s competitiveness factor are now irrelevant. The elected official redistricting commission will re-draw all the maps and again submit to the legislature for approval. The Ohio candidate filing deadline is February 2nd for the May 3rd primary, so the legislature’s time frame is short.

RI-2: Saying he’s been “burning the candle at both ends and needs a change,” 11-term Rhode Island US Rep. Jim Langevin (D-Warwick) announced that he will not seek re-election later this year. For a long while, it appeared that Rhode Island would lose a congressional seat and revert to at-large status. Instead of running against fellow Democratic Rep. David Cicilline (D-Providence), Mr. Langevin indicated that he would consider a bid for Governor. When reapportionment did not take Rhode Island’s 2nd District, it appeared that the Congressman would again have an easy run for re-election.

Mr. Langevin becomes the 28th House Democrat not to seek re-election, and RI-2 will now be the 49th open seat for the regular election. The open seat number includes incumbents not seeking re-election, new districts through reapportionment, and created seats from various redistricting plans. Democrats will hold this Ocean State congressional seat, but we can expect a competitive party primary late in the year.

VA-7: Former Virginia State Delegate Jennifer Carroll Foy (D-Woodbridge), who lost to ex-Governor Terry McAuliffe in the 2021 Democratic gubernatorial primary, yesterday said she will not continue her campaign for the US House in the re-drawn 7th District. Incumbent Rep. Abigail Spanberger (D-Glen Allen) benefited from the state Supreme Court’s redraw of the special masters’ draft to the point that at least some of the Congresswoman’s constituency lies in the new 7th District. Instead, Ms. Foy says she will run for the state Senate in 2023.

GOVERNOR
Arizona: Citing poor fundraising results, Arizona State Treasurer Kimberly Yee (R) announced that she will discontinue her Governor’s campaign and instead file for re-election to her current position. With Ms. Yee departing, 20 announced Republican candidates remain in the race to succeed term-limited GOP Gov. Doug Ducey.

Former President Donald Trump has endorsed ex-television news anchor Kari Lake in the Republican primary. Ex-Congressman and 2002 gubernatorial nominee Matt Salmon is the only former elected official within the large group. Secretary of State Katie Hobbs appears to be the leading Democratic candidate. The Arizona candidate filing deadline is April 4th for the August 2nd statewide primary. Therefore, time remains for the large field to settle.

Connecticut: Financial company executive Bob Stefanowski (R), who held Gov. Ned Lamont (D) to a 49-46% win in their 2018 open race contest, announced yesterday that he will return for a re-match this year. He also said he was seeding his statewide campaign with a $10 million personal investment. Gov. Lamont will be favored, but we could again see a close race here if a Republican wave begins to develop.

New York: Former New York City Mayor Bill de Blasio (D), who left office at the beginning of this year after serving two four-year terms, announced that he will not enter the crowded Democratic field for Governor. Early polling showed Mr. de Blasio faring poorly against new incumbent Kathy Hochul, NYC Public Advocate Jumaane Williams, and US Rep. Tom Suozzi (D-Glen Cove).

Fundraising Giants: As year-end campaign financial reports begin becoming public, two sitting Governors are reporting major totals. Florida Republican Gov. Ron DeSantis reported raising $4.4 million in the month of December and holds a whopping $72 million in his campaign accounts. In New York, new Gov. Kathy Hochul (D), since taking office in late August, has raised a huge $21.6 million for her 2022 campaign, and with $21 million in the bank.

STATES
North Carolina: The original North Carolina primary was scheduled for March 8th, but this week the state legislature took action to transfer the election date for a second time. Due to ongoing redistricting litigation, the state Supreme Court moved the primary to May 17th. The legislative leaders, however, believing that the litigation process will drag on and may even include recusal motions against three of the seven state Supreme Court justices, will move the primary again, this time to June 7th.