Tis the season

The National Christmas Tree is lit, and holiday receptions have begun in Washington, but Congress has a daunting amount of work to do between now and the end of the year. The scheduled date for adjournment sine die, December 15, looks unrealistically optimistic. The House should take up the defense spending bill next week, but negotiations continue on an omnibus spending bill. The continuing resolution that’s keeping the government running expires on December 16.

Scalise announces 2023 House calendar
House Republican Whip Rep. Steve Scalise (R-LA), who will continue this role as Majority Whip in the 118th Congress, published the House’s 2023 legislative calendar this week. The House will reconvene on January 3 and will meet for 30 legislative weeks over the course of the year, adjourning on December 14.

House Democrats choose leaders
The House Democratic Caucus, preparing for its role as the minority party, elected leaders for the 118th Congress this week. Rep. Hakeem Jeffries (D-NY), current Chair of the Democratic Caucus, will be the party’s Leader. Rep. Katherine Clark (D-MA) will be Democratic Whip, and Rep. Pete Aguilar (D-CA) will succeed Jeffries as Caucus Chair. The New Democrat Coalition chose Rep. Annie Kuster (D-NH) as its chair, succeeding Rep. Suzan DelBene (D-WA); and the Congressional Black Caucus elected Rep. Steven Horsford (D-NV) as chair, succeeding Rep. Joyce Beatty (D-OH).

One Federal Decision is key to infrastructure projects
The Senate Committee on Environment & Public Works (EPW) heard from private sector representatives at a hearing on Wednesday about implementation of the Infrastructure Investment and Jobs Act (IIJA). Witnesses shared their concerns about the effects of inflation on infrastructure investments, and emphasized the need to get funding out to projects quickly in order to minimize those effects. A major factor in the law’s success, however, will be its One Federal Decision provisions, which set a two-year time limit on permitting review processes under the National Environmental Policy Act (NEPA). EPW’s ranking member, Senator Shelley Moore Capito (R-WV), called on the Federal Highway Administration, in particular, to implement this policy as quickly as possible. The Committee approved the nomination of Shailen Bhatt to head the FHWA on Tuesday, and Chairman Tom Carper (D-DE) wants the Senate to confirm the nomination before the end of the year.

FDIC nominees answer questions for Senate Banking
Four nominees appeared before Wednesday’s Senate Banking Committee hearing, but members spent most of their time on former Senate Banking Committee counsel Marty Gruenberg, who is also a former Vice Chair and Chair of the Federal Deposit Insurance Corporation (FDIC), and has served as Acting Chair of that agency since February. Republican Committee members interrogated Gruenberg about his role in events that led to the resignation of the previous FDIC Chairman, Jelena McWilliams, and about the FDIC’s role in Operation Choke Point, the Justice Department initiative meant to cut off funding to illicit businesses. Senator Cynthia Lummis (R-WY) said she would not vote for any of the FDIC nominees, who include Travis Hill as Vice Chair and Jonathan McKernan as a Board member, because their confirmation would violate a provision of Dodd-Frank that requires one member of the FDIC board to have state bank supervisory experience. The five-member FDIC Board includes Rohit Chopra, Director of the Consumer Financial Protection Bureau (CFPB), and Acting Comptroller of the Currency Michael J. Hsu. Senate Banking Committee Chairman Sherrod Brown (D-OH) said he would schedule a vote on nominees quickly, in hopes of a Senate vote in this Congress.

Behnam calls for quick action on a federal crypto framework
Commodity Futures Trading Commission Chairman Rostin Behnam appeared before the Senate Agriculture Committee yesterday to discuss how the collapse of crypto platform FTX highlighted the urgent need for legislation to set guardrails for virtual commodity markets. The CFTC does not have the authority it needs to ensure that crypto investors are protected from fraud and manipulation, Behnam said. “While we can and do hold perpetrators accountable when we find fraud or manipulation, for the victims of the scheme, it's already too late.” Committee Chair Debbie Stabenow (D-MI) and Senator John Boozman (R-AR), the Committee’s ranking member, are cosponsoring the Digital Commodities Consumer Protection Act, which Stabenow said would have made FTX’s activities illegal. Boozman praised the CFTC’s “principles-based regulatory regime,” and said the agency had demonstrated its capacity to regulate digital assets.

FHFA roundtable looks at service to Native American communities
The Federal Housing Finance Agency continued its series of roundtables on “The Federal Home Loan Bank System at 100” in Oklahoma City this week, with the first of two roundtables on how the System can better serve the unique needs of Native Americans. Roundtable participants agreed that even FHLBank member institutions often don’t know enough about available programs, and tribal organizations are not aware that they may qualify for assistance from programs not specifically targeted to Native communities.

“Excess retirements” are fueling the labor shortage, Powell says
In a much-anticipated speech at the Brookings Institution on Wednesday, Federal Reserve Board Chairman Jerome Powell said that “excess retirements” are responsible for most of the drop in the labor force participation rate, one factor in the current shortfall of approximately 3.5 million people. Many older workers lost their jobs in the early days of the pandemic, Powell said. As the pandemic abated, these workers may have found it too difficult to get new work, or may have taken advantage of stock market gains and rising home prices in order to retire earlier than they otherwise would have. Slower growth in the working-age population is responsible for most of the rest of the shortfall, which Powell attributed to the plunge in net immigration and a surge in deaths during the pandemic. “Policies to support labor supply are not in the domain of the Fed,” Powell said, but high demand for labor is one of the factors driving inflation.

Confirmations, Nominations, Departures

• The Democrats’ delegation to the 118th Congress lost a member this week with the death of Rep. Don McEachin (D-VA), who was completing his third term in the House of Representatives after a long career as a Virginia state legislator and environmental justice advocate. We extend our deepest sympathies to his family, his staff, and his constituents.
  

• The Federal Reserve Bank of Chicago has named former Chairman of the Council of Economic Advisors Austan D. Goolsbee as its next President, effective January 9. Goolsbee will succeed Charles L. Evans, who is retiring.

The Week Ahead

December 6 at 10:00 a.m. House Financial Services Subcommittee on Diversity and Inclusion holds a hearing on “Unfinished Business: A Review of Progress Made and a Plan to Achieve Inclusion for Every American.”

December 7 at 10:00 a.m. House Science Subcommittee on Research & Technology holds a hearing on “Building Regional Innovation Economies Part II.”

December 7 at 10:00 a.m. House Committee on Small Business holds a hearing on “Oversight of the Small Business Administration.”

December 8 at 3:00 p.m. The Federal Housing Finance Agency holds a roundtable discussion on the Federal Home Loan Bank System’s work with Native American Community Development Financial Institutions (CDFIs) and nonprofit organizations.

The Ellis Insight - Jim Ellis on political news

PRESIDENT

President Biden: Considering that the White House will have a major say as to how the new Democratic presidential nomination rules are changed, President Biden shared his idea for a new primary schedule. He suggests South Carolina, the state that launched his own victory through the previous nomination process, be the first state to vote.

He then says that New Hampshire and Nevada, voting on the same day, should be scheduled a week after the Palmetto State with Georgia and Michigan following on successive Tuesdays. This idea would increase the number of places voting before Super Tuesday from four to five.

Michigan: The Michigan Senate approved a bill to move the Wolverine State presidential primary from the day designated as Super Tuesday in March to the second Tuesday in February. The move underscores the state leadership’s desire to move Michigan into one of the four primary slots allowed before Super Tuesday.

With the Democrats clearly preparing to change the nominating rules, voting schedule, and primary order of the states, Michigan is attempting to get a head start toward becoming a more prominent force in the presidential nominating system. If the state formally takes the action of legally moving their election date, it is likely that the Republicans would have to follow suit and also schedule the Michigan primary early in the process.

SENATE

Alaska: The Alaska votes are in and projected, and Sen. Lisa Murkowski (R), with a 1,914 plurality vote advantage on the aggregate count and a 54-46% result through two elimination rounds of Ranked Choice Voting, was reelected to a fourth full term. Originally, she succeeded by appointment her father, then-Sen. Frank Murkowski (R), who was elected Governor in 2002.

The final result was easily predictable, and one could argue Sen. Murkowski really won her re-election when people voted to change the state’s election system in 2020. Initiated with support from the Senator’s political organization, the hybrid jungle primary/Ranked Choice Voting system allowed Ms. Murkowski to skip what was her most vulnerable election, a partisan Republican primary. With four people now automatically advancing into the general election, the partisan nomination phase within the traditional election cycle was in effect eliminated. In 2010, Sen. Murkowski lost the Republican primary, but was re-elected when she won a write-in Independent campaign in that year’s general election.

Georgia: With the Georgia Senate runoff fast approaching on December 6th, the early voting, or Advance Voting as the procedure is called in Georgia, is widely favoring the Democrats. After the state Supreme Court granted Advance Voting to begin when the Democratic plaintiffs requested, it was clear that the party would score a large advantage in the pre-election ballot casting process. Republicans typically catch up to early voting disparities on election day itself.

Polling, however, suggests that the race is anything but over. Two surveys were recently released, from Phillips Academy and Frederick Polls, and they arrived at similar conclusions. Phillips (11/26-27; 862 GA runoff likely voters; interactive voice response system and text) finds Republican Herschel Walker leading Sen. Raphael Warnock (D) by a single point, 48-47%. Frederick (11/23-26; 939 GA runoff likely voters) shows the two men breaking even at 50-50%. It is presumed the latter survey was pushing initial undecideds to take a position, but the actual study and crosstabs were not released.

The polling suggests that the electorate remains virtually split in this race, almost exactly what we saw in the November tally when Sen. Warnock placed ahead of Mr. Walker, 49.4 – 48.5%, but fell short of the majority threshold.

Indiana: As expected, Indiana Sen. Mike Braun (R) filed papers this week with the Secretary of State’s office in Indianapolis, which is his first step toward foregoing re-election to a second term in the US Senate in order to become an open seat gubernatorial candidate. Incumbent Gov. Eric Holcomb (R) is ineligible to seek a third term under Indiana’s term limit law.

Should he soon become a candidate, Sen. Braun will very likely face credible opposition in the Republican gubernatorial primary. Already venture capitalist Eric Doden (R) has announced his Senate candidacy. Other potential names being bandied about include former two-term Gov. Mitch Daniels, Lt. Gov. Suzanne Crouch, retiring Congressman Trey Hollingsworth (R-Jeffersonville), and former state Senator and ex-Indianapolis mayoral candidate Jim Merritt. For the Democrats, the only announced candidate is Superintendent of Public Instruction Jennifer McCormick.

Assuming he shortly makes a formal announcement of candidacy, the Indiana Senate seat will be the first to open in the 2024 election cycle.

Maine: Sen. Angus King (I), who has previously overcome both skin and prostate cancer, is reportedly planning to seek re-election in 2024 when he will be 80 years old. The Senator, who previously served two terms as Maine’s Governor, was first elected to his federal office in 2012. At the time, it appeared the 2018 campaign would be his last, but retiring at the end of the succeeding Congress does not now look to be the Senator’s ultimate career path.

HOUSE

AK-AL: After winning the August special election through the Ranked Choice Voting system to replace the late Alaska Rep. Don Young (R), at-large Rep. Mary Peltola (D-Bethel) has now clinched a full term when the state’s preliminary final vote count was released the day before Thanksgiving. The end result was predicted especially when Rep. Peltola easily placed first in the aggregate count, with a 49-26-23% margin spread over former Governor Sarah Palin (R) and businessman Nick Begich, III (R).

The first round of Ranked Choice Voting, which eliminated distant fourth-place finisher Chris Bye (Libertarian), almost put Ms. Peltola over the top. In this round, against both Ms. Palin and Mr. Begich, Rep. Peltola scored 49.2% of the adjusted vote. This result meant eliminating Mr. Begich, who was the third-place finisher. The third RCV round easily went to Rep. Peltola, who defeated Ms. Palin on a 55-45% tabulation. The Peltola victory increases the House Democratic Conference to 213 members as compared to the Republicans’ 221 with one California race remaining outstanding.

CA-13: In the lone undecided US House race, California Republican candidate John Duarte, a local farmer and agri-businessman, predicts that he will eventually win the election once officials finally count all the ballots. The state allows counties 33 days to finish their processing and tabulation procedures, with a certification deadline of December 16th.

Mr. Duarte supports his prediction by pointing out that most of the uncounted ballots are from Fresno and San Joaquin Counties in areas where the Republican performed better than his opponent, state Assemblyman Adam Gray (D-Merced). Currently, the districtwide count is stalled with Mr. Duarte clinging to a 593-vote lead. If the remaining ballots from the five counties perform like the counted ballots, Mr. Duarte would win by approximately 483 votes.

It is difficult to know just how many ballots remain. Percentage estimates as to how much of the vote has been counted have not, heretofore, proven particularly accurate. Therefore, the final count remains a clouded picture.

VA-4: Three-term Rep. Donald McEachin (D-Richmond) unfortunately passed away this week after a long battle with cancer. Mr. McEachin was re-elected to a fourth term on November 8th with 65% of the vote in a 4th Congressional District that the FiveThirtyEight data organization rates as D+30. He becomes the seventh member of the House to die during the current congressional session.

Gov. Glenn Youngkin (R) will schedule a special election to replace Mr. McEachin in accordance with state law. The true battle for the seat will come in the Democratic nomination process. Candidates will likely begin announcing for the special election after Mr. McEachin in laid to rest.

VA-9: Virginia Rep. Morgan Griffith (R-Salem), who was just re-elected to a seventh term with 73.5% of the vote, may be drawing a 2024 Republican primary challenge. Freshman state Delegate Marie March (R-Floyd) made a statement saying that Rep. Griffith has “been in Congress too long,” and hinted that she might challenge him in the next GOP primary.

Rep. Griffith was first elected in 2010, defeating long-time incumbent Rick Boucher (D) and has had little in the way of competition ever since. He has averaged 72.4% in his six re-election victories and has not yet faced a Republican primary challenge.

GOVERNOR

Alaska: One race that did not need a Ranked Choice Voting round was the Alaska Governor’s contest. Incumbent Gov. Mike Dunleavy (R) won a second term in the aggregate count, scoring 50.3% of the vote against three other candidates.

In a distant second place was Democratic former state Representative Les Gara, who posted 24.2% of the vote, while former Gov. Bill Walker, again running as an Independent, followed. The latter man recorded 20.7% of the aggregate popular vote. In the final general election qualifying position was Republican former Kenai Borough Peninsula Mayor Charlie Pierce who managed to secure only 4.5% of the vote.

Gov. Dunleavy, who faced an aborted recall effort early in his tenure, is the first re-elected Alaska chief executive since Democratic Gov. Tony Knowles won a second term in 1998.

Louisiana: Statements from Sen. John Kennedy (R) uttered soon after his re-election victory on November 8th – he captured 62% of the vote to win a second term outright against a field of 12 opponents – suggest that he is moving closer to entering the 2023 open Louisiana gubernatorial contest. The Senator said he will make a decision after the first of the year. Incumbent Gov. John Bel Edwards (D) is ineligible to seek a third term.

Sen. Kennedy looks to be the favorite in such a race, to the point that both Lt. Gov. Billy Nungesser (R) and state Treasurer John Schroder (R) say they will wait to see what Sen. Kennedy decides before he makes his own decision about whether to seek the Governor’s position. Already in the race is Attorney General and former US Congressman Jeff Landry (R).

Louisiana will conduct a statewide jungle primary next October 14th. If no one receives majority support in the first election, a runoff will be held on November 18, 2023. Should Sen. Kennedy run and be elected he would be able to choose his own successor, but only for an interim period. Under Louisiana succession law the Governor must call an immediate special election to fill the unexpired portion of the term (in this case the remaining balance would be close to five years), and that must occur within 11 weeks from the date of the Governor’s call.

West Virginia: West Virginia state Delegate Moore Capito (R-Charleston), son of US Senator Shelley Moore Capito (R) and grandson of the late former Governor Arch Moore (R), this week announced his own campaign for Governor. He hopes to succeed term-limited Gov. Jim Justice (R) who may soon launch his own run for US Senate. Delegate Capito was first elected to the state House in 2016 and currently chairs the House Judiciary Committee.

STATE & LOCAL

Chicago: Late this week, it was announced that eleven candidates, including Mayor Lori Lightfoot (D), have qualified for the 2023 Chicago mayoral election. Among Ms. Lightfoot’s opponents are US Rep. Jesús “Chuy” Garcia (D-Chicago), state Representative Kam Buckner (D-Chicago), Cook County Commissioner Brandon Johnson, and Chicago Aldermen Roderick Sawyer and Sophia King.

The election features a non-partisan jungle primary on February 28th. If no candidate receives majority support, the top two finishers will advance to a runoff election on April 4th. Obviously, with as strong a field as we see lining up against Mayor Lightfoot, a runoff appears inevitable. Should Rep. Garcia be elected Mayor, his 4th Congressional District seat would then be vacated, thus raising the specter of seeing another special election called.