Short but wild

That was the week in Washington. You’ve probably seen some things about it on TV. The good news is that the government won’t shut down tonight. And who wants to hear bad news?
 
In the face of today’s deadline, Congress has passed a “two-step” continuing resolution that extends funding under four appropriations bills to January 19, 2024, and under the other eight bills to February 2, 2024.
 
Expiring on January 19 are the appropriations for Agriculture-FDA, Energy and Water, Military Construction-VA, and Transportation-HUD. The eight extended to February 2 are Commerce-Justice-Science; Defense; Financial Services and General Government; Homeland Security; Interior-Environment; Labor-HHS-Education; Legislative; and State-Foreign Operations.
 
The legislation extends major provisions of the last Farm Bill, which started to expire on September 30, for one year. It also extends the National Flood Insurance Program and Temporary Assistance to Needy Families (TANF) to February 2. It did not include any supplemental funding for Israel, Ukraine, or border security.
 
Tempers ran high, and nerves were frayed this week as House Republicans could not assemble enough support for scheduled votes on the Commerce-Justice-Science and Labor-HHS-Education appropriations bills. The Senate has not voted on any appropriations bills since passing a “minibus” spending package covering Agriculture-FDA, Military Construction-VA, and Transportation-HUD on November 1.
 
GR’s Blair Hancock is tracking these developments and has more details for anyone who wants them.
 
Basel III Endgame proposal finds little support on Capitol Hill
The federal financial regulators appeared before the Senate Banking Committee and the House Financial Services Committee this week for their semi-annual oversight hearings. These events are never a barrel of laughs; the last round of hearings happened not long after the failures of Silicon Valley Bank, Signature Bank, and First Republic earlier this year. This time, legislators were unhappy about the agencies’ proposed rule to implement the last provisions of the international Basel III capital standards. Although Federal Reserve Vice Chair for Supervision Michael Barr pointed out that this rule would apply directly to only 37 financial institutions, Republicans and Democrats on both sides of the Hill expressed concerns about the effects of higher capital requirements on credit availability for farmers and small businesses, farmers’ use of derivatives for hedging, and the use of tax incentives for clean energy. The regulators reminded legislators that the comment period for this proposal remains open until January 16 and said they would consider all comments carefully.
 
A “toxic work environment” at the FDIC?
The day before FDIC Chair Martin J. Gruenberg appeared before the Senate Banking Committee’s oversight hearing, the Wall Street Journal published a harrowing article detailing sexual harassment, sexism, and a “Wild West” culture among the examination force. Gruenberg received pointed and personal questions about this in both the Senate and the House oversight hearings. At Wednesday’s hearing before the House Financial Services Committee, he acknowledged being interviewed in response to an employee’s complaint in 2008. That complaint, he said, had not resulted in any disciplinary action or legal settlement. Yesterday, Senate Banking Committee Chairman Sherrod Brown (D-OH) called for the FDIC’s Office of the Inspector General to conduct “an independent and thorough investigation” into the FDIC’s workplace culture. Today, the chairmen of the House Financial Services Committee and its Subcommittees on Oversight & Investigations and Financial Institutions & Monetary Policy announced their own investigation into these charges with a letter to Chair Gruenberg warning, “The viability of your leadership is in question.”
 
Digital assets are not a major conduit for terrorist financing, say witnesses
The House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion held a surprisingly well-attended hearing on Wednesday afternoon — after the House had officially recessed for Thanksgiving — to hear testimony about the use of cryptocurrency in financing illicit activity. The panel’s chair, Rep. French Hill (R-AR), said he wanted to take the opportunity to “debunk some of the myths” in the wake of a Wall Street Journal article about Iran’s use of cryptocurrency to fund Hamas and Hezbollah. Industry representatives and analysts told legislators that they estimate that only 0.24% of transaction volume on the blockchain is for illicit purposes, and Jonathan Levin of Chainalysis described his firm’s work with the Department of Justice and the Israeli government to dismantle terrorist financing campaigns and seize cryptocurrency donations. Witnesses did say that a federal regulatory framework for digital assets would make it easier to keep bad actors out of the system.
 
White House announces interagency initiative to address homelessness as a health issue
Yesterday, the White House released The US Playbook to Address Social Determinants of Health, a framework developed among almost a dozen agencies to link health services with housing and other critical social support programs. In conjunction with the Playbook, the Department of Health and Human Services (HHS) published a Call to Action that asks those working in health care, social services, public and environmental health, government, and health information technology to partner and work together across silos to address health-related social needs (HRSNs). Under the Housing & Services Partnership Accelerator, a joint program of the HHS and the Department of Housing & Urban Development, four states will be selected for federal approval to cover housing-related services under Medicaid. The Centers for Medicare & Medicaid Services (CMS) announced in July that it will add a wide range of housing and social needs supports to the services eligible for Medicare payments; so far, twelve states have applied for these Medicaid plan changes.

Confirmations, Nominations, Departures

Rep. Brian Higgins (D-NY) announced that he will leave Congress at the end of this term, his tenth. Higgins currently serves on the House Budget Committee and the House Committee on Ways & Means.

Rep. Dan Kildee (D-MI) announced yesterday that he will retire from Congress at the end of this term, his sixth. Kildee is a member of the House Budget Committee and the House Committee on Ways & Means.

Rep. George Santos (R-NY) announced yesterday that he will not seek a second term, after the release of a House Ethics Committee report that recommended criminal charges.

Rep. Abigail Spanberger (D-VA) announced that she will run for Governor of Virginia in 2025 instead of seeking a fourth term in her current office. She serves on the House Intelligence Committee and the House Committee on Agriculture.

The Week Ahead

Congress is out until November 28, and The Golden Apple will be taking a break as well. We’re grateful for you, and wish you and your families a happy Thanksgiving.
 
November 20 at 10:00 a.m. Federal Housing Finance Agency (FHFA) Director Sandra Thompson will speak about the “FHLBanks at 100: Focusing on the Future” report in a fireside chat at the Bipartisan Policy Center. The event is public and will stream online; register here.
 
November 23 Thanksgiving Day

The Ellis Insight - Jim Ellis on political news

PRESIDENT

Sen. Tim Scott: South Carolina Sen. Tim Scott this week announced that he is suspending his 2024 presidential campaign, effectively ending his effort to secure an upset win for the Republican presidential nomination. In late October, Sen. Scott’s campaign principals announced they were turning the strategic focus toward the Iowa Caucuses, but the decision did not result in any appreciable gain in support. 

This, and barely qualifying for his last debate, led the Palmetto State lawmaker to suspend. He follows former Vice President Mike Pence and ex-U.S. Rep. Will Hurd in exiting the race.

New Hampshire: New Hampshire Secretary of State David Scanlan late this week announced that the state’s “first-in-the-nation” presidential primary will be scheduled for January 23, 2024. There is little surprise associated with this date. To remain as the first primary state and comply with New Hampshire election law — Iowa still votes earlier (Jan 15), but they feature caucus voting — January 23 became the state’s only choice. 

President Biden will not participate in the New Hampshire primary because the state would not agree to the new Democratic National Committee schedule. Rep. Dean Phillips (D-MN) will be on the Democratic ballot, but most of the party’s NH9 leadership is organizing a write-in campaign to support President Biden.

SENATE

Montana: A new Fabrizio Lee statewide Montana survey (10/23-25; 600 MT likely Republican primary voters; live interview & text) finds that U.S. Rep. Matt Rosendale (R-Glendive), despite holding Sen. Jon Tester (D) to a 50-47% victory margin in 2018, may not win the 2024 Senate Republican nomination.

According to the Fabrizio Lee data, aerospace company CEO and retired Navy SEAL Tim Sheehy, the Republican leadership’s choice, is already topping Mr. Rosendale among Republican primary voters. The full ballot test, which also includes GOP candidates Brad Johnson and Jeremy Mygland, projects Mr. Sheehy to be holding a 38-35-6-1% edge over Congressman Rosendale and Messrs. Johnson and Mygland, respectively. In a head-to-head hypothetical pairing, Mr. Sheehy holds a 44-41% margin over Rep. Rosendale. 

Mr. Sheehy, who announced his Senate candidacy in late June has been working the state and is on the air with an early television buy. Rep. Rosendale said he will decide whether to run for the Senate when Montana’s candidate filing deadline closes on March 11. 

New Jersey: Tammy Murphy (D), wife of New Jersey Gov. Phil Murphy (D), officially declared her candidacy to oppose indicted Sen. Bob Menendez (D) in next year’s Democratic primary. Though most believe Sen. Menendez will not seek re-election, there has been no confirmation of such from the Menendez camp. 

Ms. Murphy should be regarded as a long shot to win the party nomination. Immediately upon Sen. Menendez’s indictment becoming public, U.S. Rep. Andy Kim (D-Moorestown) announced his challenge to Mr. Menendez, and he has already established a large lead in polling and fundraising. Conversely, Ms. Murphy is a first time political candidate. 

Ohio: The Data for Progress research organization released their new Ohio Senate poll (10/31-11/2; 597 OH likely voters; online) that finds virtual ties for Sen. Sherrod Brown (D) with all three major Republican primary contenders. Ohio Secretary of State Frank LaRose does the best among the Republicans, tying Sen. Brown at 46% apiece. Opposite state Sen. Matt Dolan (R-Chagrin Falls), the Senator holds just a one-point, 47-46%, edge. His margin opposite businessman Bernie Moreno is only three points, 47-44%. 

HOUSE

Arkansas: The Arkansas ballot is now set with the candidate filing deadline passing, and we will see only one contested congressional primary election on Super Tuesday, March 5. The presidential primary will be held that day, and with no Senate seat on the Arkansas ballot this year, the four congressional races become the state’s only other federal elections. 

In three districts, the general election candidates are now already set. In the eastern 1st District, veteran Rep. Rick Crawford (R-Jonesboro) will run for an eighth term against Iraq War veteran Randy Govens (D). Five-term Rep. French Hill (R-Little Rock) will face retired Army Colonel Marcus Jones (D) in the Little Rock anchored 2nd CD. Fourth District incumbent Bruce Westerman (R-Hot Springs) will be tasked with defending his seat against Democratic attorney Risie Howard.

The only primary contest among the congressional districts comes in the state’s western 3rd District where state Senator Clint Penzo (R-Tontitown) will oppose seven-term Rep. Steve Womack (R-Rogers). It remains to be seen if this race develops into a major challenge. Republicans will be favored to again retain all four of the Natural State’s congressional districts.

Louisiana: The three-judge federal Louisiana panel that affirmed the current Bayou State congressional map as an unconstitutional racial gerrymander, has given the legislature until January 15 to produce a map that creates a second African American influenced district. The deadline is actually much shorter unless current Gov. John Bel Edwards (D) calls the Legislature back into session. If he does not, incoming Gov. Jeff Landry (R) will have to act immediately since he will not be sworn into office until January 8. 

Before winning his election outright in October, Gov-Elect Landry was Louisiana’s Attorney General and previously a U.S. Congressman. He served only one term in the House when his seat was collapsed because Louisiana lost a district in the 2010 national reapportionment.

MN-5: Former Minneapolis City Councilman Don Samuels, who held controversial Rep. Ilhan Omar (D-Minneapolis) to a 50.3 – 48.2% renomination victory in the 2022 Democratic primary, officially announced this week that he will return for a rematch next year. Two other candidates previously announced, so it remains to be seen if they will continue their campaigns or give Mr. Samuels a clear path toward challenging Rep. Omar. The Minnesota primary is scheduled for August 13.

NJ-8: Freshman Rep. Rob Menendez (D-Jersey City) appears headed for a legitimate primary challenge battle. Mr. Menendez is the only member of the New Jersey delegation who has stood up for embattled Sen. Bob Menendez, who is the Congressman’s father. 

Immediately upon the Menendez indictment being announced in late September, Hoboken Mayor Ravi Bholla declared his congressional candidacy in the Democratic primary to oppose the younger Menendez. The latest information proves Mr. Bholla is a serious candidate. The New Jersey Globe reports that the mayor has already raised over $500,000 for his campaign. Therefore, this primary has legitimate upset potential.

NY-3: Embattled New York Congressman George Santos (R-Long Island), understanding that he cannot win re-election considering the ethics and criminal investigations that plague him, announced that he will not seek re-election next year. The move may not be enough for those who want to see him out of the House now. According to reports covering the House Ethics Committee report about Mr. Santos’ activities, the content is damning to the point that he may now be vulnerable to another budding expulsion resolution. 

NY-26: New York U.S. Rep. Brian Higgins (D-Buffalo) clarified over the weekend that he will resign from the House in February in order to become president of the Shea’s Performing Arts Center in his home city of Buffalo. Rep. Higgins was first elected in 2004 from a 26th District that includes two-thirds of Erie County and almost three-quarters of Niagara County. 

The Democrats should have little trouble holding this district, though a new open seat in western New York could influence what is likely a second round of redistricting to come early next year. Therefore, the confines of the Buffalo-anchored district could change.

The FiveThirtyEight data organization rates NY-26 as D+18. Dave’s Redistricting App calculates a 61.4D – 36.1R partisan lean. President Biden recorded a 61-37% win here in the 2020 election. The Daily Kos Elections site ranks this district as the 78th most vulnerable seat in the Democratic Conference.

OH-2: Six-term Ohio U.S. Rep. Brad Wenstrup (R-Hillsboro) announced via video message on Friday that he will not be seeking re-election in 2024. Mr. Wenstrup first came to Congress in 2012, when he scored an upset victory over then-Rep. Jean Schmidt in that year’s Republican primary. The Congressman has not been seriously challenged since. 

Ohio’s 2nd District contains all or parts of 16 southern counties that stretch from the eastern Cincinnati suburbs all the way to West Virginia. Republicans will have little trouble holding the district as an open seat and Mr. Wenstrup’s successor will be determined in the March 19 GOP primary. The FiveThirtyEight data organization rates the seat as R+49. Former President Trump carried the seat in 2020 with a whopping 72-27% majority. The Daily Kos Elections site ranks OH-2 as the 13th safest Republican seat.

TX-4: Earlier in the week, Texas Rep. Pat Fallon (R-Frisco) declared that he would not seek re-election to the U.S. House and instead filed papers to run for the state Senate seat that he vacated to initially run for Congress. A day later, however, he announced a change of heart and will run for re-election after all. Rep. Fallon will have little trouble winning a third term despite his equivocation about what office to seek. Therefore, take TX-4 off the open seat list.

TX-26: Veteran Rep. Michael Burgess (R-Pilot Point), in a 26th District that covers three-quarters of Denton County, all of Cooke, and two-thirds of Wise County in North Texas, announced that he will not seek an 11th term in the House. The 26th District seat is safely Republican. The FiveThirtyEight data organization rates TX-26 as R+26. The Daily Kos Elections site ranks the district as the 127th most vulnerable seat in the GOP Conference.

VA-5: Two-term Virginia Rep. Bob Good (R-Lynchburg), one of the outspoken Freedom Caucus members who was a leader in the move to oust Speaker Kevin McCarthy, will have a renomination challenge next year. 

John McGuire III, a state delegate first elected in 2017, who then won a state Senate seat last week in unopposed fashion, yesterday filed a congressional campaign committee with the Federal Election Commission. Mr. McGuire, a retired Navy SEAL, ran for Congress once before, losing in the former 7th District’s 2020 Republican nominating convention. State Delegate Nick Freitas, who defeated Mr. McGuire that year, would then lose a close battle to Rep. Abigail Spanberger (D-Glen Ellen) in the general election.

Rep. Good was first elected to the Campbell County Board of Supervisors in 2015. He defeated then-U.S. Rep. Denver Riggleman (R) in a district convention that his key supporters controlled. Assuming Rep. Good is as strong with the local Republican Party as he was during his first election campaign, it would be very difficult for Mr. McGuire to upset him within such an incumbent-favorable venue.

VA-7: Three-term U.S. Rep. Abigail Spanberger (D-Glen Allen) announced that she will run for Governor of Virginia in 2025. The move means she will not seek re-election to the House in 2024. 

Gov. Glenn Youngkin (R), under Virginia’s unique one-term limit law for its state chief executives, is ineligible to seek re-election. Rep. Spanberger reports over $1.4 million cash-on-hand in her congressional committee, all of which is transferrable to a Virginia state campaign. Without Ms. Spanberger seeking re-election, the 7th District becomes highly competitive in the general election. 

The FiveThirtyEight data organization rates the seat as D+2. Dave’s Redistricting App calculates 51.1D – 47.2R partisan lean. The Daily Kos Elections site ranks VA-7 as the 17th most vulnerable seat in the Democratic Conference.

WA-6: Another six-term U.S. House member also announced his retirement. Washington Congressman Derek Kilmer (D-Gig Harbor) will leave the House after what will be twelve years in office at the end of the current Congress. Washington’s 6th District encompasses the Olympic Peninsula, the large area west of Seattle and the Puget Sound, that stretches to the Pacific Ocean. 

The 6th is reliably Democratic. The August partisan primary will likely determine Mr. Kilmer’s successor. Before he won the seat in 2012, then-Rep. Norm Dicks (D) held the 6th for 36 years.

The FiveThirtyEight data organization rates WA-6 as D+10, but Dave’s Redistricting App suggests a stronger 55.8D – 42.4R partisan lean advantage. President Biden won the 6th District constituency with a 57-40% victory margin. The Daily Kos Elections site ranks WA-6 as the 57th most vulnerable Democratic seat.