Senate approves temporary increase to debt limit
Senate approves temporary increase to debt limit
Financial markets breathed a tentative sigh of relief last night when the Senate voted 50-48 to raise the statutory debt limit by $480 billion. This should push the federal government’s risk of default to early December. House Majority Leader Steny Hoyer (D-MD) said that members will return for a vote on Tuesday; the House had not planned to hold any floor votes next week. “It is egregious that our nation has been put in this spot, but we must take immediate action,” Hoyer said.
US-China strategy includes few changes, but will begin tariff exclusion review
US Trade Representative Katherine Tai unveiled the Biden-Harris administration’s much-anticipated “New Approach to the US-China Relationship” in remarks to the Center for Strategic and International Studies on Monday. The new approach makes no major changes to existing policies, but Tai emphasized the Administration’s focus on the effects of Chinese trade practices on US employees and communities, and on building US competitiveness. The Administration will enforce the Phase 1 agreement between China and the US and the Section 301 tariffs, but will begin a targeted exclusion review for key industries. Tai said they would factor the market-distorting role of Chinese state-owned enterprises into current and future tariffs and negotiations. She also pledged to work with allies to shape multilateral trade policies with China for the 21st century.
Market structure, crypto platforms, ESG disclosures are SEC priorities, says Gensler
Securities and Exchange Committee Chair Gary Gensler spent four hours on a screen before the House Financial Services Committee on Tuesday, at a virtual oversight hearing that spent much of its time on how the SEC plans to supervise cryptocurrency transactions. Gensler has asked SEC staff to research and make recommendations on policy issues in three broad areas: market structure, especially for Treasuries; the effect of rapid technological changes, and particularly the platforms for crypto asset transactions; and consistent and comparable disclosures about risks related to climate change, human capital, and cybersecurity. The Committee’s ranking member, Rep. Patrick McHenry (R-NC), told Gensler that his recent public comments about crypto assets had been “concerning and contradictory,” and he warned Gensler against trying to regulate through guidance rather than following the Administrative Procedures Act.
Senate Commerce turns to data security
The Senate Committee on Commerce, Science and Transportation continued work on data protection legislation this week with a hearing on enhancing data security, an issue witnesses said was inextricably intertwined with data privacy standards. Online data breaches have become more frequent and sophisticated, and ransomware attacks have reached record numbers. Witnesses and Committee members agreed that the FTC is the agency best suited to regulate and enforce data security standards, but members have not yet reached consensus on whether and how federal standards should preempt state laws, or on whether and how to preserve a private right of action for victims of security breaches. The Committee’s Chair, Senator Maria Cantwell (D-WA) and ranking member, Senator Roger Wicker (R-MS), both reiterated that they want to get legislation passed in this Congress.
HUD wants mortgage underwriting to reflect climate risk
The Department of Housing and Urban Development was one of 23 executive-branch agencies that released climate adaptation plans yesterday in response to President Biden’s January 28 Executive Order. HUD’s plan calls for updated building-level data for all Department programs, reporting not only climate risk but also environmental justice concerns. The Department said it would work with the Departments of Veterans Affairs and Agriculture on better integrating climate risk into mortgage underwriting standards, loan terms and conditions, and asset managing and servicing procedures. HUD will also look for ways to incentivize energy and water efficiency and climate-resilient building practices.
Treasury will revise investment approach, manage real estate to reflect climate risk
In its own Climate Action Plan, the Treasury Department said it would pursue “a financial investment approach appropriate to the Department’s climate objectives.” This is one of five action areas the Treasury is prioritizing in response to its expectation that “aspects of its mission and operations will be impacted by global warming, sea level rise, increased intensity and frequency of major weather events, and impacts on energy and availability.” Other action areas include taking a climate-focused approach to managing Treasury’s real estate holdings and instructing procurement management “to fully consider climate change realities.” Treasury said it had been guided by anticipated changes to federal acquisition regulations.
Confirmations, Nominations, Departures
We bid farewell this week to our colleague and friend Greg Mesack, who is moving from GrayRobinson’s Washington office to the National Association of Federally-Insured Credit Unions, where he will be Senior Vice President, Government Affairs. We’ll miss him, and we wish him well.
Rohit Chopra is stepping down from his position as Commissioner at the Federal Trade Commission today in order to take office as Director of the Consumer Financial Protection Bureau.
President Biden nominated Elizabeth de León Bhargava to be Assistant Secretary of Housing and Urban Development for Administration. She was most recently New York State Deputy Secretary for Labor & Workforce.
The President nominated Brian Tomney to serve as Inspector General of the Federal Housing Finance Agency. Tomney currently serves as Head of the Office of Corporate Investigations at Capital One.
The President named Jed David Kolko to be Under Secretary of Commerce for Economic Affairs.
The Week Ahead
Federal offices are closed on Monday for the Columbus Day/Indigenous Peoples Day holiday. The Senate has a State Work Period scheduled for next week. The House will return on Tuesday to vote on the debt limit increase.
October 13 at 12:00 noon House Small Business Subcommittee on Contracting and Infrastructure holds a hearing on “Growing the Small Business Supplier Base in Government Contracting.”
October 13 at 12:00 noon House Financial Services Task Force on Artificial Intelligence holds a hearing on “Beyond I, Robot: Ethics, Artificial Intelligence, and the Digital Age.”
October 14 at 12:00 noon House Financial Services Subcommittee on Oversight & Investigations holds a hearing on “Cashed Out: How a Cashless Economy Impacts Disadvantaged Communities and People.”
October 15 at 12:00 noon House Financial Services Subcommittee on Housing, Community Development, and Insurance holds a hearing on “Zoned Out: Examining the Impact of Exclusionary Zoning on People, Resources, and Opportunity.
The Ellis Insight – Jim Ellis on political news
SENATE
Florida: Republican pollster VCreek/AMG this week added to the large number of surveys already published for the statewide Florida races. Their new study (9/23-27; 405 FL likely voters; live interview) finds Sen. Marco Rubio (R) topping Rep. Val Demings (D-Orlando), 42-38%. If former Rep. Alan Grayson were the Senator’s Democratic opponent, the Rubio advantage expands to 44-32%. The sample size of 405 individuals for a Florida statewide general election survey is low, but the results appear consistent with the preponderance of released data to date.
Kansas: Former Kansas City/Wyandotte County consolidated Mayor Mark Holland (D) announced that he will challenge two-term Sen. Jerry Moran (R) in next year’s Kansas US Senate race. Rev. Holland, a Methodist pastor, served one term as the consolidated city/county Mayor after winning two terms for an at-large council seat in the KC metro area. Sen. Moran is a heavy favorite for re-election, but Rev. Holland is a credible potential Democratic standard bearer.
Utah: Independent presidential candidate (2016) Evan McMullin, who drew 22% of the presidential general election vote in Utah, will mount an independent race against Sen. Mike Lee (R). Though Sen. Lee is a prohibitive favorite to win a third term, the race involving the incumbent and Mr. McMullin could become interesting.
HOUSE
Arkansas: The Arkansas legislature sent Gov. Asa Hutchinson (R) a congressional map that adjusts the population figures by approximately 100,000 people statewide to bring the four US House seats into equivalence. Gov. Hutchinson, a former Congressman himself, is expected to sign the measure. The map makes the least Republican seat of the four, the 2nd District of four-term Rep. French Hill (R-Little Rock), much stronger. The draw will make Rep. Hill’s re-election campaign’s much easier while simultaneously preserving the other three Republican districts.
CA-37: Culver City is a city within the huge Los Angeles metropolis, and one of its local Council members, Democrat Daniel Lee, announced that he will attempt to succeed US Rep. Karen Bass (D-Los Angeles). It is possible, however, that there won’t be a seat to obtain. With Ms. Bass departing the House to run for LA Mayor, and the County likely to lose a congressional seat, the 37th becomes perhaps the leading option for collapse. More will be known when the California Citizens Redistricting Commission soon releases their proposed congressional map.
CO-8: Now that Colorado redistricting is complete and awaits only state Supreme Court legal confirmation, two candidates have already announced their intentions to run in the state’s new 8th District, which lies north of Denver. State Representative and pediatrician Yadira Caraveo (D-Thornton) and Adams County Commissioner Chaz Tedesco (D) have both announced their congressional candidacies. The 8th is a politically marginal district, so we can expect a very active general election campaign in this new domain.
Indiana: Gov. Eric Holcomb (R) signed the legislature’s redistricting maps into law, making Indiana the fourth state to complete the redistricting process. The congressional map will likely return seven Republicans and two Democrats to the House, while the state Senate and House will assuredly remain in GOP hands. Indiana joins Oregon, Colorado, and Nebraska as the first places to complete the re-mapping process.
IN-5: Former state Rep. Melanie Wright (D) announced her congressional candidacy yesterday, and she will be the likely general election opponent for freshman Rep. Victoria Spartz (R-Noblesville). The newly crafted and enacted redistricting map makes this seat much stronger for the Republicans, thus Rep. Spartz is likely to significantly expand upon her 50-46% victory last November over former Democratic Lt. Governor nominee and ex-state Representative Christina Hale.
Iowa: The Iowa state Senate panel considering the committee staff’s formulaic redistricting maps for the congressional, state Senate, and state House district boundaries has rejected the first draw, returning all three maps to the committee with an order that they begin anew. Under Iowa legislative rules, the legislature must consider all three maps as a package, meaning an objection to one map means returning all three. The committee can make three attempts at obtaining approval. If failing a third time, the process reverts to total state legislative control.
MI-6: Physician Sherry O’Donnell becomes the sixth Republican challenger to veteran Michigan Rep. Fred Upton (R-St. Joseph) with her candidacy declaration. Mr. Upton was one of the ten Republicans to vote for then-President Trump’s second impeachment, promoting the former national chief executive to endorse state Rep. Steve Carra (R-Kalamazoo).
SC-1: 2020 state House nominee Rebecca Cingolani (D) announced her congressional candidacy, becoming the first Democrat to challenge freshman South Carolina Rep. Nancy Mace (R-Charleston). Since former Rep. Joe Cunningham, whom Ms. Mace defeated in 2020, eschewed another run for Congress and is instead challenging Gov. Henry McMaster (R), Democrats have not been able to recruit a top-tier 1st District candidate.
It is believed the Republican legislature will make the 1st more Republican in redistricting, thus making it difficult for any Democrat to win the seat. More action will likely occur here once the redistricting maps become public.
Texas: The state House of Representatives, which is the key body in developing the Texas redistricting maps, has taken a step forward. This week, the Redistricting Committee approved the state House plan, thereby qualifying the map for a floor vote. The legislative leaders said they will not move any map until they pass the state House plan. Currently, the legislature is in special session, and it is a virtual certainty that Gov. Greg Abbott (R) will be forced to call another 30-day session to complete the process.
TX-15: Three-term Rep. Vicente Gonzalez (D-McAllen) is confirming that he would consider running in the open Brownsville-anchored 34th District if the proposed Texas congressional redistricting map becomes law. Under the new plan, his current 15th District, which has already been trending more Republican (Rep. Gonzalez’s 2020 victory margin was 50-48%), goes even further under the new map. The new lines find former President Trump actually carrying the district by three percentage points.
Five-term Rep. Filemon Vela (D-Brownsville), the current 34th District incumbent, has already announced his retirement. The 34th should continue to play as a safe Democratic seat.
TX-28: Retired Air Force officer and Afghan War veteran Steve Fowler announced he will compete for the Republican nomination in hopes of challenging nine-term Texas US Rep. Henry Cuellar (D-Laredo) in a re-drawn 28th District that again stretches from San Antonio to the Mexican border. Previously, Trump campaign activist Sandra Whitten (R) had announced her candidacy. Rep. Cuellar’s most serious opponent, however, is likely in the Democratic primary. Attorney Jessica Cisneros, who held the Congressman to a 52-48% re-nomination win for the 2020 Democratic nomination, is back for a re-match.
TX-38: Mortgage industry representative and Iraq War veteran Wesley Hunt (R), who held Rep. Lizzie Fletcher (D-Houston) to a 51-47% re-election victory, has already announced that he will run in the new Harris County 38th District should the released congressional redistricting map become law. Now, reports are surfacing that he will report over $1 million raised with $1 million-plus cash-on-hand for the period that closed September 30th. The campaign finance reporting deadline is October 15th.
WI-3: Wisconsin state Sen. Brad Pfaff (D-Onalaska) over last weekend announced that he will attempt to succeed retiring 25-year congressional veteran Ron Kind (D-La Crosse) in a southwestern Badger State district that appears to be one of the GOP’s top national conversion prospects. The 3rd voted both times for Donald Trump, and Rep. Kind’s previously stout re-election percentages dropped to 51.3% in 2020. Republican Derrick Van Orden, who held Rep. Kind to the closest of his 12 re-election wins, returns for another run and will likely be a consensus candidate for the GOP nomination.
GOVERNOR
Florida: The VCreek/AMG survey (see Florida Senate above) also tested the Florida Governor’s race. The results find Gov. Ron DeSantis (R) expanding his lead over the totals reported from the most recent surveys. VCreek/AMG finds Gov. DeSantis holding a 47-39% margin over US Representative and former Governor Charlie Crist (D-St. Petersburg), and a larger 48-36% advantage if state Agriculture Commissioner Nikki Fried were the Governor’s Democratic opponent.
Illinois: Republicans appear to be banking on venture capitalist Jesse Sullivan, who is ready to spend large amounts from his personal fortune, to give them the type of candidate needed to compete with Gov. J.B. Pritzker (D). A new Ogden & Fry survey (10/3-4; 404 IL likely Republican primary voters; live interview) finds Mr. Sullivan trailing state Sen. Darren Bailey (R-Louisville) by a large 33-6% deficit, however. This suggests Mr. Sullivan will not only have to spend heavily in the general election, but also for the June 28th Republican primary in order to reverse his standing in the race.
Oklahoma: State School Superintendent Joy Hofmeister, who was elected to her position as a Republican, announced that she is switching to the Democratic Party and will challenge Gov. Kevin Stitt (R) next year. Despite looking to run against a statewide office holder, Gov. Stitt is in strong position for re-election and will be considered the prohibitive favorite to win a second term.
Pennsylvania: Susquehanna Polling & Research conducted a small-sample survey of Pennsylvania Republican voters (9/24-30; released 10/7; 313 PA likely Republican primary voters; live interview) and found former US Congressman Lou Barletta holding a strong lead in the Republican primary. According to the results, Mr. Barletta is staked to a 27-6-1-1% major advantage over state Sen. Scott Martin (R-Strasburg), attorney James Richey, and Montgomery County Commissioner Joe Gale. Attorney General Josh Shapiro is the likely Democratic nominee, though he has still not officially entered the race.
Rhode Island: So far, the 2022 Rhode Island gubernatorial campaign has featured a great deal of action in the Democratic primary with Secretary of State Nellie Gorbea, Rhode Island General Treasurer Seth Magaziner, and former Secretary of State Matt Brown all coming forward to challenge Gov. Dan McKee in next year’s September 13th primary. Gov. McKee, the elected Lt. Governor, ascended to the Governorship when incumbent Gina Raimondo (D) resigned to become US Commerce Secretary.
Republican David Darlington, the former RI Turnpike Authority chairman, joined the candidate parade this week when announcing his candidacy for the GOP nomination. This guarantees the Republicans will be in position to fight for the chief executive post, but clearly as an underdog.
Virginia: Emerson College is returning new polling data (10/1-3; 620 VA likely voters; live interview and online panel with weighted responses) that finds Democratic former Governor Terry McAuliffe and Republican ex-hedge fund CEO Glenn Youngkin are within one point of each other on the latest ballot test response, 49-48%. This is a change from other polling that consistently found Mr. McAuliffe leading by larger margins.