Focus of the week continues to be reconciliation

Welcome back to the Golden Apple.  The House is out on recess this week; the Senate is in. The main focus of the week continues to be reconciliation.  Before leaving town, the House Budget Committee advanced their budget resolution, adhering to their preferred “one bill” strategy.  All eyes will be on the Senate this week as we watch to see whether Senate Majority Leader John Thune will bring the upper chamber’s border security, energy, and defense package to the floor.

Congressional Updates

Recapping the House Budget Bill: As we noted above, the House Budget Committee marked up and reported out their reconciliation bill after a 12-hour session last Thursday.  The bill includes tax cuts as well as the Trump administration’s border security, energy, and defense priorities.  By the numbers, the bill includes $4.5 trillion in tax cuts with a $4 trillion increase in the debt limit, offset by $1.5 trillion or more in cuts to spending programs.  Tensions between GOP leadership and members of the Freedom Caucus marked the negotiation, with Reps. Chip Roy (R-TX) and Ralph Norman (R-SC) balking at the increases to the deficit.  Notably, both members sit on the Budget Committee, giving them an influential seat at the table. A deal requiring $2 trillion in budget cuts or an comparable reduction in the $4.5 trillion in tax cuts brought the fiscal hardliners on board and enabled the bill’s passage in Committee.

Senate Budget Outlook: Meanwhile, the Senate is poised to move forward with their own, separate, budget plan.  Senate Majority Leader John Thune has favored a two-bill strategy that features a pared-back first bill that contains border, defense, and energy provisions.  A second, tax-focused bill would follow.  Proponents of Senate action believe that if the House experiences further roadblocks in their attempts to pass an all-encompassing bill, the upper chamber will have a viable backup at the ready.  As of now, it looks as though the Senate plans to bring their bill to the floor this week.  However, without an agreement with the Democrats to limit debate, it is difficult to see how they finish this week and complete the nominations they have lined up. 

This Week’s Nominations: Meanwhile, Senate floor time continues to be devoted to advancing the Trump administration’s nominees.  Senators will vote this evening to confirm Howard Lutnick to lead the Commerce Department, and later this week will consider Kash Patel’s nomination to lead the F.B.I and former Senator Kelly Loeffler to lead the Small Business Administration.

Administration Updates

CFPB Layoffs on Hold, For Now: Last week, Acting CFPB Director Russ Vought moved to terminate 95% of the agency’s employees, beginning with probationary employees and term employees.  In addition to these cuts, reports indicated that Vought also sought to delete the agency’s storage of sensitive data.  Late Thursday evening, the union for the CFPB sought an emergency temporary restraining order to halt the layoffs and the removal of data.  The following day, February 14th, a judge upheld the union’s bid and blocked Vought’s actions temporarily, with a hearing set for March 3rd. 

McKernan, Gould Tapped to lead Key Agencies: Last week, the Trump Administration tapped Jonathan McKernan to be the permanent Director of the CFPB, and Jonathan Gould for Comptroller of the Currency.  The two would replace acting leaders Russ Vought and Rodney Hood, respectively, at each agency.  McKernan resigned his seat on the FDIC Board ahead of his appointment.  As noted above, it is unclear what will remain of the CFPB by the time McKernan is confirmed by the Senate.

Layoffs at the FDIC: In a similar pattern, the Trump Administration yesterday sought to cull the staff at the FDIC, beginning again with probationary employees with less than one year at the agency.  Exact numbers aren’t yet clear, but it is estimated that the agency had approximately 500 probationary employees. 

Weekly Political Synopsis from Jim Ellis

NATIONAL

Democratic National Committee:  Minnesota Democratic Farm Labor Party chairman Ken Martin was elected as the new chairman of the Democratic National Committee replacing South Carolina’s Jaime Harrison who declined to seek re-election for a second term. 

Mr. Martin has run the Minnesota party operation since 2010.  He defeated Wisconsin Democratic Party chairman Ben Wikler and former Maryland Governor and 2016 presidential candidate Martin O’Malley with more than 57% of the vote.  A total of 428 Democratic National Committee members participated in the vote. 

SENATE

Kentucky:  State House Minority Leader and defeated 2023 Attorney General nominee Pamela Stevenson (D-Louisville) announced her run for the US Senate over the weekend.  Incumbent Sen. Mitch McConnell (R) is presumed headed for retirement, but he has yet to confirm that he will not seek an eighth term in 2026.

Michigan:  The first individual to announce an official candidacy to replace retiring Sen. Gary Peters (D) came forward this week.  State Sen. Mallory McMorrow (D-Royal Oak Township) declared her candidacy. 

A crowded Democratic primary is expected.  Former US Transportation Secretary Pete Buttigieg, Attorney General Dana Nessel, and US Rep. Haley Stevens (D-Birmingham) are all potential Senate contenders, among others.  Former US Rep. Mike Rogers, who came within 19,006 votes of defeating now-Sen. Elissa Slotkin (D) in November, is a probable GOP candidate.

North Carolina:  Former Lt. Governor Mark Robinson (R), whose 2024 gubernatorial campaign was destroyed over a personal scandal revelation, said he will not challenge Sen. Thom Tillis (R) next year.  Mr. Robinson said he has no plans to again seek public office.  Democrats are expected to make North Carolina their top 2026 Senate conversion target.  Sen. Tillis has already announced that he will run for a third term.

HOUSE

AZ-6:  Former Arizona state Sen. Kirsten Engel (D) has lost two close elections to US Rep. Juan Ciscomani (R-Tucson) in the state’s politically marginal southeastern 6th Congressional District, so it is likely that Democratic leaders will look toward another candidate option in 2026.  Such being the case, retired Marine Corps Sergeant JoAnna Mendoza (D) announced her candidacy this week.  Whether she becomes the party standard bearer for the next election remains to be seen, but it is likely that Ms. Engel’s congressional opportunities have come to an end.

NY-21:  Local Democratic County party chairmen have chosen Lisbon, NY dairy farmer Blake Gendebien as their upcoming special election congressional nominee once US Rep. Elise Stefanik (R-Schuylerville) is confirmed as US Ambassador to the United Nations. 

Republican county chairmen have yet to announce their choice.  In New York, vacancies are filled in one election.  There are no special election party primaries.  The local political party leadership in the counties comprising the particular district are given the power to choose the succeeding nominee.

Meanwhile, Democrats in the state legislature are considering drafting legislation to change the special election law in order to delay filling this Republican seat until much later this year.  Their plan is to hold the special congressional election concurrently with either with the June primary or, more preferably from their perspective, the November municipal elections.  The goal is to retain the 21st District, which encompasses all or parts of 15 counties in the northeastern part of the state, as a vacant seat in order to keep the House Republican majority as slim as possible. 

GOVERNOR

California:  Attorney General Rob Bonta (D) announced this week that he will not run for Governor in 2026 when incumbent Gavin Newsom (D) will retire due to term limits.  Mr. Bonta said he will seek re-election and urges former Vice President Kamala Harris to enter the ’26 gubernatorial campaign.

Florida:  The Victory Insights research firm tested the Florida Republican electorate and sees US Rep. Byron Donalds (R-Naples) opening with a big lead.  Though no candidate has formally announced for Governor, Rep. Donalds appears as a definitive bet to run.  The VI poll (1/26-27; 850 FL likely 2026 Republican primary voters; interactive voice response system and text) projects Rep. Donalds as holding a substantial 33-4-3-1% advantage over Lt. Gov. Jeanette Nunez, state Agriculture Commissioner Wilton Simpson, and Miami Mayor Francis Suarez. 

Meanwhile, Lt. Gov. Nunez is now scheduled to resign her position in order to become the interim President of Florida International University.  Gov. DeSantis will then appoint a new Lt. Governor, which could change the outlook for the 2026 gubernatorial campaign to replace him.

Illinois:  The Land of Lincoln is one of 11 states that has no gubernatorial term limits.  This being the case, Gov. J.B. Pritzker (D) confirms that he is considering running for a third term but will announce his decision at some point in the future.  Illinois is one of the Democrats’ strongest states, so winning a third term will largely depend upon clinching renomination in the March 2026 party primary.

Maryland:  Gov. Wes Moore (D) seems secure in what will be his re-election run in 2026, but he has already drawn at least one challenger.  Retired Air Force veteran John Myrick (R), who ran for the US Senate in 2022 but fared poorly in the GOP primary, announced that he will enter next year’s Governor’s race.

Michigan:  Rep. John James (R-Farmington Hill) is way ahead in newly released statewide poll.  The OnMessage firm tested the Michigan Republican primary electorate (1/17-19; 1,000 MI likely 2026 Republican primary voters; text to web) and finds Rep. James leading Sen. Aric Nesbitt (R-Porter Township), former Attorney General Mike Cox, and businessman and former gubernatorial candidate Kevin Rinke, by a huge 46-6-4-3% count.  Rep. James has not indicated whether he will enter the open Governor’s campaign.

For the Democrats, Lt. Governor Garlin Gilchrist moved closer to running for Governor.  Early this week, he released a statement saying he would not enter the open US Senate race leading observers to believe he is taking one more step toward finalizing a campaign for the state’s chief executive position.  Additionally, Genesee County Sheriff Chris Swanson moved ahead to declared his candidacy for the Democratic gubernatorial nomination.

Ohio:  Confirming last week’s released Fabrizio Lee & Associates survey (1/26-27; 600 OH likely 2026 Republican primary voters; live interview & text) that projected businessman and former presidential candidate Vivek Ramaswamy (R) leading Attorney General Dave Yost and State Treasurer Robert Sprague, 52-18-2%, in a preliminary Republican primary gubernatorial poll, the WPA Intelligence firm this week confirms the findings.

According to WPA’s Ohio poll (1/28-30; 600 OH likely Republican primary voters; live interview and text), Mr. Ramaswamy would lead Messrs. Yost and Sprague, 57-26-6%.  The latter two men are announced gubernatorial candidates, while a declaration of candidacy from Mr. Ramaswamy is still forthcoming.

Mr. Sprague just ended his short-lived Governor’s candidacy.  Instead, he is entering the open Secretary of State’s race.  In departing the gubernatorial campaign, Mr. Sprague pledged his support to Mr. Ramaswamy.

South Carolina:  The Down Ballot political blog is reporting that former Palmetto State Governor and ex-US Representative Mark Sanford (R), who concluded his time as Governor in disgrace over an extramarital affair with an Argentinian woman in 2011 only to return to win a US House special election in 2013, but then lost a renomination primary in 2018, says he may attempt another political comeback. 

This week, Mr. Sanford said he is considering again running for Governor when the post comes open in 2026.  Gov. Henry McMaster (R), now the longest-serving chief executive in state history, is ineligible to seek a third full term next year.  Other Republicans considering running for Governor are Lt. Gov. Pamela Evette, Attorney General Alan Wilson, and US Rep. Nancy Mace (R-Charleston).

South Dakota:  We may see a budding Republican gubernatorial primary soon develop.  With Gov. Kristi Noem (R) resigning to become US Homeland Security Department Secretary, Lt. Gov. Larry Rhoden (R) ascended to the Governorship.  Late last week, he indicated to reporters that he had not yet decided whether to run for a full term in 2026. 

At-large US Representative Dusty Johnson (R-Mitchell) is reportedly developing a gubernatorial campaign operation irrespective of Gov. Rhoden running.  It is apparent that this June 2026 Republican primary could be a battle to watch.

Wyoming:  Two-term at-large Wyoming US Rep. Harriet Hageman (R-Cheyenne) is confirming that she is considering mounting another campaign for Governor.  Rep. Hageman came to national political prominence by defeating then-Rep. Liz Cheney in the 2022 Republican primary with a landslide 66-29% victory. 

Ms. Hageman ran in 2018 but lost the Republican primary to now-Gov. Mark Gordon.  Wyoming has a two-term limit on the office, but the state Supreme Court has ruled that the limit is only a statute and not in the state’s Constitution.  Therefore, the law could be challenged.  Gov. Gordon has not ruled out making such a challenge, so the Equality State political picture could become quite active as the 2026 election cycle progresses.

STATE AND LOCAL

Boston:  As expected, Josh Kraft, son of New England Patriots owner Robert Kraft and head of the team’s philanthropic entity, announced that he will challenge Boston Mayor Michelle Wu later this year. 

Mr. Kraft attacks the Mayor for abandoning her promise to make the city’s transportation system free and adding too many bike lanes that cause further traffic problems on Boston’s narrow and already congested streets.  Ms. Wu responded saying Mr. Kraft has voted in Republican primaries while never voting in a Boston City Council or Mayor’s election. 

The mayoral jungle primary is scheduled for September.  All candidates are placed on one ballot with the top two advancing to a runoff election if no one receives majority support in the initial vote.

New York City:  Another mayoral poll was released for the 2025 election, and the results confirmed two previously released public polls.  The Honan Strategy Group conducted the latest mayor’s race survey (1/23-26; 769 New York City likely Democratic primary voters; text to web) and found former Governor Andrew Cuomo leading the pack of candidates while Mayor Eric Adams is way behind. 

The initial ballot test question found Mr. Cuomo topping NYC Comptroller Brad Lander and Mayor Adams 35-9-9%, with all other candidates trailing in single digit support.

New York City uses the Ranked Choice Voting system to determine the municipal election winners.  Carried through to a sixth RCV round, Mr. Cuomo would defeat Mr. Lander 58-17%.  Mayor Adams would be eliminated after the fifth round of political overtime voting.  Among the respondents, 85% said that Mayor Adams should not be re-elected. Rounds continue until one candidate commands majority support.