The halftime report

No, it’s not a game, and we’re actually a little past the halfway mark of the first session of the 118th Congress, but as our federal legislature leaves for a two-week break, we’re catching our breath and figuring out just where we are.
 
September 30, 2023 is the date we’re all working toward. Not only is it the end of the federal government’s fiscal year and the deadline for a federal budget or a continuing resolution, it’s also the deadline for enacting a new farm bill, extending the National Defense Authorization Act (NDAA), and reauthorizing the Federal Aviation Administration. Congress has made progress on all these fronts, but time is short: they’ll be in session only from July 10 through July 18 before leaving again until September 5.


The budget
Both houses set their top-line allocations for spending bills this week.

Senate figures match the debt-limit deal Congress approved, while the House’s numbers represent cuts to the agreed-upon totals. Members of the House Freedom Caucus are pushing for further cuts, after blocking votes on the House floor for several days earlier this month.
 
Appropriations subcommittees and committees on both sides of the Hill will continue to hammer out details through the markup process once Congress returns in July.
 
Pending in all this debate are billions of dollars in Community Project Funding (formerly known as earmarks), direct spending requests submitted by hundreds of members of Congress. Approximately 85% of House members have submitted requests for funding; the Appropriations Committee has published a list, with links to individual members’ programs, here.
 
Blair Hancock is tracking these developments for GrayRobinson, and provided the table above; you can contact her for more information and updates here.
 
The farm bill: As the budget numbers suggest, the House and Senate differ sharply on priorities for this year’s farm bill: House Republicans want to cut spending, while Senate Democrats want to include climate change provisions.
 
FAA Reauthorization: The House Transportation and Infrastructure Committee introduced the bipartisan Securing Growth and Robust Leadership in American Aviation Act (HR 3935) on June 9 and voted it out unanimously on June 14. The bill’s sponsors hope to take it to the House floor in July, with Senate action to follow quickly after that.
 
NDAA: The House Armed Services Committee spent more than 14 hours marking up the National Defense Authorization Act this week, considering more than 800 amendments, but finally passed the bill on Wednesday with a 58-1 vote.
 
DOJ to revise competition guidelines for bank mergers 
The Department of Justice guidelines for determining whether bank mergers are anticompetitive are sorely in need of an update, Assistant Attorney General Jonathan Kanter said in a speech on Monday. The Bank Merger Competitive Review Guidelines date back to 1995, shortly after the enactment of the law that authorized nationwide branching. DOJ’s Antitrust Division recognizes that banks’ competitive environment has changed considerably, and believes that branch locations and deposit concentrations are no longer the best measures of competitiveness in an industry that offers a wide range of financial services across both state and national borders. The Antitrust Division solicited comments on changing the guidelines in 2020 and again in 2021, and is “carefully considering” those comments.
 
While it works on new guidelines, however, the Division is changing the focus of the “competitive factors” reports it must submit to the bank regulators considering merger applications. The Division will look closely at mergers that could increase the risk of “coordinated effects and multi-market contacts,” or further entrench market dominance. It will also consider how a merger might affect competition in different customer segments, recognizing that many banks serve specialized customer groups.
 
HUD’s Office of Manufactured Housing gets independent status 
The Department of Housing and Urban Development announced yesterday that its Office of Manufactured Housing will move from its former place under the Office of Housing’s Office of Risk Management and Regulatory Affairs to a new independent position, reporting directly to Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. Gordon said the reorganization “represents a recognition of the critically important role that manufactured housing plays in our country’s housing market.”
 
Senate Banking approves RECOUP Act
The Senate Banking Committee voted 21-2 on Wednesday to approve the Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act, which Committee Chairman Sherrod Brown (D-OH) called “part of the Committee’s response to the historic bank failures of earlier this spring.” The RECOUP Act, cosponsored by Chairman Brown and ranking member Senator Tim Scott (R-SC), would claw back incentive and equity-based compensation from executives of failed banks. The Committee also approved Senator Tim Scott’s FEND Off Fentanyl Act, which would direct the Treasury to use its economic sanctions tools against Chinese companies that manufacture precursors to fentanyl and the Mexican cartels that send it across the border.
 
Lawmakers push Powell on bank capital changes 
During his semiannual appearances before the House Financial Services Committee and the Senate Banking Committee this week, Federal Reserve Board Chair Jerome Powell said the Board would be considering proposed changes to bank capital requirements sometime this summer, to align US regulations with the Basel III standards but also to reflect lessons learned from recent bank failures. Republicans on both sides of the Hill strenuously objected to any increases in capital requirements, arguing that the industry is already well-capitalized, and small businesses are already feeling the effects of higher interest rates and tightening credit. Democrats, too, urged Powell to make sure that any changes reflected the lower risk profiles of community banks.
 
Powell reiterated the Fed’s commitment to preserving diversity of size and focus within the banking industry. He said that any changes in capital requirements would be joint rulemaking with the other federal banking agencies, would be open for comment for at least 90 days, and would be phased in over a period of months if not years.
 
House Republicans blast SEC for overreach, opacity 
Two separate House Financial Services subcommittees held overlapping hearings yesterday with different angles on oversight of the Securities and Exchange Commission, but the message from both panels’ Republican members was clear: SEC Chair Gary Gensler is acting well outside his statutory authority, the SEC’s rulemaking process is out of control and flouting cost-benefit analysis requirements, and the SEC’s unresponsiveness to Congressional requests for information will lead only to more requests for information. Rep. Ann Wagner (R-MO), chairing the House Financial Services Subcommittee on Capital Markets oversight hearing on the SEC’s Division of Trading and Markets, implied that yesterday’s hearing would be only the first of many. Rep. Bill Huizenga, grilling SEC General Counsel Megan Barbero at a hearing of his Oversight & Investigations Subcommittee, said the committee “was prepared to take the necessary steps to get the information we have sought,” and that “many more” of Barbero’s colleagues would be appearing before the Subcommittee if obstructions continued.

The Week Ahead

Congress has left town and will not be back until Tuesday, July 10. Even the Chair of the Federal Reserve Board is going to Europe next week. The Golden Apple will probably take next Friday off, but will return on July 7.
 
June 28 at 9:30 a.m. Federal Reserve Board Chair Jerome Powell participates in a policy panel discussion at the European Central Bank (ECB) Forum on Central Banking in Sintra, Portugal. His remarks will stream live here.
 
June 28 at 11:00 a.m. The Consumer Financial Protection Bureau holds its first “CFPB RegCast,” a webcast on its small business lending rule. Staff from the Bureau’s Office of Regulations will explain how financial institutions should determine whether they are “covered financial institutions” for purposes of the rule. The webcast is public, but registration is required (here).
 
June 29 at 2:30 a.m. (8:30 a.m. Portugal time) Federal Reserve Board Chair Jerome Powell has a public dialogue with Bank of Spain Governor Pablo Hernández de Cos at the Banco de España Fourth Conference on Financial Stability in Madrid. The conversation will stream live here.

The Ellis Insight - Jim Ellis on political news

PRESIDENT

Cornel West:  Author/activist Cornel West, who had declared his presidential candidacy under the People’s Party label, has switched to the Green Party. Assuming his new party nominates Mr. West, the move makes sense. The Green Party already has ballot status in 18 states and continues to work for more. Therefore, Mr. West has much greater initial ballot access under the Green Party label than he does with the virtually unknown People’s Party. If he gets enough attention, a West candidacy could draw from President Biden in some of the key states.
 
South Carolina:  South Carolina moving to first position is the focal point of the Democrats’ new presidential pre-Super Tuesday primary calendar, but some of the affected states are not in agreement. Georgia, for example, voted not to adopt the Democratic National Committee recommendation and New Hampshire is sure to follow suit. Michigan has agreed, and both parties will vote on February 27.
 
The South Carolina Republican Party convention delegates voted to hold the state’s Republican primary on February 24. Democrats have already chosen February 3rd. Therefore, it is likely the state will hold two primaries, one for each party. Holding separate primary days in this state has previously happened. Both Palmetto State parties want South Carolina to continue having a premier primary, so the state is likely to make scheduling accommodations for each political entity.
 
Sen. Tim Scott:  Last week we saw New Hampshire polls that found Sen. Tim Scott (R-SC) moving into either third place on the GOP ballot test question, or a tie for that same position. Now, we see a new national poll showing similar upward mobility for the South Carolina Senator. YouGov America, polling for the University of Massachusetts (5/31-6/8; 1,133 US adults; online), finds former President Donald Trump again leading among national Republicans with a 56% preference figure while Florida Gov. Ron DeSantis trails with 26% support. Sen. Scott, though posting only 4%, moves past the other second tier candidates for third place.
 
The general election pairings also show him highly competitive with President Biden. While Mr. Biden leads former President Trump 43-40% in the national popular vote question and posts a 41-37% margin against Gov. DeSantis, Sen. Scott falls into the same realm. Despite not being well known nationally, he actually polls the best against the President, trailing only 37-35%.
 
Michigan Poll:  The new EPIC-MRA Michigan poll (6/8-14; 600 MI likely voters; live interview) again reveals a familiar pattern. That is, President Biden’s job approval rating is extremely low, yet he pulls even in the ballot test with both former President Trump and Florida Gov. Ron DeSantis. The polling sample slightly tilts Republican because the black vote is under-represented by three points when compared to the US Census Michigan population figures.
 
While President Biden’s job approval ratio is a terrible 29:69% favorable to unfavorable (9% excellent; 20% pretty good; 25% just fair; 44% poor), he still pulls even with Mr. Trump in the Michigan ballot test at 44% apiece. When paired with Gov. DeSantis, the President trails by one point, 45-44%. The EPIC poll obviously suggests that Michigan will be a battleground state in the presidential race, but most analysts are projecting it will remain in the Democratic column when the votes are ultimately counted.

SENATE

Delaware:  As expected, Delaware at-large US Representative Lisa Blunt Rochester (D-Wilmington) officially declared her US Senate candidacy during the week. The move became obvious when Sen. Tom Carper (D) announced his retirement in May and as part of his address encouraged the Congresswoman, a former aide and appointee when Mr. Carper was Governor, to run for the seat.
 
Michigan:  The aforementioned EPIC-MRA Michigan poll (see Michigan President above) also tested the impending open Wolverine State US Senate race. The pollsters pitted Rep. Elissa Slotkin (D-Lansing), the early favorite for the Democratic nomination, against retired Detroit Police Chief James Craig, potentially the most well-known Republican. The ballot test revealed a tighter contest than expected, with Rep. Slotkin holding only a 40-39% edge over retired Chief Craig. The figures contain 8% in the “lean” category for both Rep. Slotkin and Mr. Craig.
 
The Michigan race will likely move closer to the Democratic column as the year-long campaign evolves. There is a slight Republican skew in this polling sample, as black voters are under-represented. Both Rep. Slotkin and Mr. Craig are unknown to most of the respondent universe indicating that each will have to spend money to increase name identification. The seat is open because four-term incumbent Debbie Stabenow (D) is retiring.
 
Mississippi:  GOP state Representative Dan Eubanks (R-DeSoto County) confirmed to local publications that he will oppose Sen. Roger Wicker in next year’s Republican primary. The challenge will come from the political right since Mr. Eubanks is a conservative activist. He was first elected to the state House in 2015 and re-elected in 2019. Mississippi House members are awarded four year terms.
 
Sen. Wicker was first appointed at the end of 2007, succeeding former Majority Leader Trent Lott (R) who resigned. He was elected in his own right during the special election of 2008 and won full terms in 2012 and 2018. He has won comfortably in the mid to high 50s but never reached 60% in a general election. The Senator was challenged in the 2018 Republican primary and received 83% of the vote. Prior to serving in the Senate, Mr. Wicker won seven US House elections beginning in 1994.
 
Montana:   Public Policy Polling tested the Montana Republican Senate primary (6/19-20; 510 MT likely Republican primary voters; live interview & text) and sees US Rep. Matt Rosendale (R-Glendive) as the big early leader. According to the ballot test, Rep. Rosendale posts ahead of retired Navy SEAL Tim Sheehy, 64-10%.
 
The National Republican Senatorial Committee leadership would prefer a different candidate since Rep. Rosendale is viewed as part of the far right flank of the Republican Conference and lost to Sen. Jon Tester (D) in the 2018 campaign, but the statewide GOP polling sample propels him to a huge lead for a potential 2024 Senate race. The June 2024 Republican primary winner will face three-term Sen. Tester, the lone Democratic statewide office holder in Montana.
 
Wisconsin:  The Wisconsin Republican Party convention conducted straw polls of its attenders, and though it was no surprise that former President Trump outpolled Florida Gov. Ron DeSantis (53-34%), much of the attention fell to the US Senate contest. Since Rep. Mike Gallagher (R-Green Bay) announced last week that he would not run for the Senate, the party is in need of a strong challenger to oppose two-term incumbent Tammy Baldwin (D) next year.
 
A strong plurality of party delegates are now looking to Rep. Tom Tiffany (R-Minocqua), who is indicating he has some interest in the statewide race. A total of 35% of the delegates voted for Rep. Tiffany as their first choice to oppose Sen. Baldwin. Former Milwaukee County Sheriff David Clarke was second with 19%, with businessman and former statewide candidate Kevin Nicholson, ex-state Sen. Roger Roth, and businessmen Eric Hovde and Scott Mayer following with 16, 11, 8 and 1%, respectively. None from this group are official candidates.

HOUSE

Alabama Redistricting:  After last week’s US Supreme Court’s ruling that invalidated the Alabama congressional map, the federal three judge panel assuming jurisdiction has sent the map back to the state legislature to begin the re-drawing process. SCOTUS agreed with the plaintiffs in the case that a second majority minority district can be drawn in the state. The current map yields a 6R-1D split.
 
The court is giving the legislature until July 21 to produce a new map for judicial review. If the legislature cannot complete the plan within that time frame, the court may step in and order a special master to manage the map drawing process.
 
SCOTUS will also rule on the North Carolina partisan gerrymandering and judicial power lawsuit before the end of June. That ruling could have an effect upon the Alabama case as it relates to judicial control over the redistricting process. Therefore, the situation could again change once the North Carolina ruling is made public.
 
CA-47:  Public Policy Polling (6/14-16; 555 CA-47 registered voters; live interview & text), surveying for state Senator David Min (D-Irvine) to help position him for the open congressional race, released the data results. The initial ballot test favored Republican former state Assemblyman Scott Baugh by a 39-37% margin. After push questions, Sen. Min unsurprisingly pulled ahead, but even this Democratic poll suggests the open Orange County congressional seat battle will be intensely competitive.
 
In 2022, Mr. Baugh held Rep. Katie Porter (D-Irvine) to 51.7% of the vote. The 47th District includes the cities of Irvine, Costa Mesa, Huntington Beach, Newport Beach, and Laguna Beach. The FiveThirtyEight data organization rates the seat as D+6. Dave’s Redistricting App calculates the partisan lean at 52.5D – 45.5R. Rep. Porter is leaving the district to run for US Senate.
 
UT-2:  The Utah Republican Party has scheduled the special 2nd District GOP live nominating convention for this coming Saturday, June 24 in the city of Delta, which is in the geographical center of the sprawling CD that stretches from the city of Farmington, through the western Salt Lake City suburbs and then all the way to the Arizona border. Democrats are meeting in a virtual convention on June 28.
 
The 2nd District Republican delegates will vote among the 13 filed Republicans to send one into the special September 5 primary as the official party endorsed candidate. Democrats have three candidates including the favorite for the nomination, state Sen. Kathleen Riebe (D-Cottonwood Heights). The delegates will continue the voting process until one candidate receives majority support. This individual will be automatically placed on the primary ballot. Other candidates wishing to contest the nomination will be required to file 7,000 valid registered voter petition signatures from the party for which they are attempting to qualify.
 
Republican debates have also been held for the special election. The northern Utah forum was conducted Tuesday, with the southern district event on Thursday. Rep. Chris Stewart (R-Farmington), for family reasons, is resigning his seat on September 15. The special general election will be held on November 21. Republicans are favored to hold the UT-2 seat which the FiveThirtyEight data organization rates as R+23.

GOVERNOR

New Hampshire:  In a radio interview this week, four-term Gov. Chris Sununu (R) said, “I don’t think I’m going to run again,” but indicated he would make a firm decision this summer. Gov. Sununu is only the second four-term Governor in state history, and no one has served five. New Hampshire, along with neighboring Vermont are the only two places that have two-year gubernatorial terms. Already, Manchester Mayor Joyce Craig and Executive Councilor Cinde Warmington have indicated they will compete for the Democratic nomination. In an open situation, the New Hampshire state house would be a prime Democratic conversion target. 

LOCALITIES

Houston:  Former Houston City Councilwoman and ex-US Senate candidate Amanda Edwards (D) is ending her campaign for the open Mayor’s position, but has her eyes on Rep. Sheila Jackson Lee’s US House seat.
 
Ms. Edwards, who now endorses Rep. Jackson Lee for Mayor, says she will be a candidate in an 18th Congressional District special election should the Congresswoman win the Mayor’s race. Ms. Edwards says she is confident Rep. Jackson Lee will be elected as Houston’s chief executive. Polling, however, suggests the leading candidate is state Senator John Whitmire (D-Houston), who has represented the city in the legislature since the beginning of 1973. The Mayor’s election will be held on November 7, 2023. If no candidate receives majority support in that contest, a runoff will be scheduled likely for a point in December.