We need another hero after all

The icons of our fierce and optimistic youth need to stop leaving the stage. News reports say Tina Turner, who began as Anna Mae Bullock but became the Acid Queen, the Private Dancer, the queen of rock and roll — died on Wednesday at the age of 83. How is that possible? Immortals don’t die. Mad Max: Beyond Thunderdome is available for rent on at least one of the major streaming services. We might be spending some time with Aunty Entity this weekend.
 
A new date: June 5
The House has joined the Senate in departing Washington until Monday, June 5, leaving behind a handful of negotiators who are still working toward a deal to raise the federal debt limit. As it happens, June 5 is the new “X date,” after which the federal government may not be able to pay all its bills. Treasury Secretary Janet Yellen wrote to Speaker of the House Kevin McCarthy this afternoon to revise the date, based on “the most recent available data.” She warned, however, that “waiting until the last minute to increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.” House Majority Leader Steve Scalise (R-LA) has said he will summon members of the House back for a vote within 24 hours of a deal.
 
House Financial Services approves bills to preserve demo days, cancel FHFA fee changes
The House Committee on Financial Services marked up and approved six bills on Wednesday to codify, limit, or roll back regulatory decisions. Of particular interest to GrayRobinson and our clients is H.R. 1553, the Helping Angels Lead Our Startups (HALOS) Act, which would clarify the definition of “angel investor” and codify SEC Rule 148, which affirms that “demo days” held by issuers of new securities are not investment offerings. H.R. 3564, the Middle Class Borrower Protection Act, would rescind the Federal Housing Finance Agency’s new single-family mortgage pricing framework, which FHFA Director Sandra Thompson had defended at a hearing on Tuesday.
 
Thompson explains changes to fees credit scoring models, promises Federal Home Loan Bank reform proposal for September
Federal Housing Finance Agency Director Sandra L. Thompson spent more than four hours at a House Financial Services Committee oversight hearing on Tuesday that broke sharply along partisan lines. Republicans blasted the Agency’s changes to Fannie Mae and Freddie Mac’s guarantee fee pricing grids, arguing that under the changes, borrowers with higher credit scores and larger down payments will subsidize borrowers with lower credit scores and smaller down payments. Thompson said that the new pricing grid was an overdue update to more accurately reflect the Enterprises’ capital frameworks, and that under no circumstances would borrowers with better credit be paying more than borrowers with lower ratings. Democrats asked about heavy borrowing from Federal Home Loan Banks that preceded the failures of Silicon Valley Bank and Signature Bank. Thompson emphasized that the Federal Home Loan Banks are not intended to be lenders of last resort, and said the Agency would publish a report by September 30 that summarizes the findings of the “Federal Home Loan Bank System at 100” roundtables, with recommendations for legislative reform.
 
House Ways & Means hearing targets de minimis exemption
Republican and Democratic members of the House Ways & Means Subcommittee on Trade agreed yesterday on the need to reform the de minimis exemption for inspection requirements on imported goods, which one witness called “the Amazon loophole.” US Customs and Border Patrol estimates that as much as $188 billion in goods come into the United States under that exemption, and witnesses told the panel that China uses the de minimis exemption to avoid Section 301 tariffs as well as limits under the Uyghur Forced Labor Prevention Act. Subcommittee Chairman Adrian Smith (R-NE) suggested that Congress create a list of countries allowed to use the de minimis exemption, while ending the exemption for others. Rep. Earl Blumenauer (D-OR) noted that Customs and Border Patrol (CBP) lacks the resources to increase inspections.
 
Treasury announces public-private steering group to address cloud recommendations
Following up on February’s report on “The Financial Services Sector’s Adoption of Cloud Services,” Treasury announced yesterday that a Cloud Executive Steering Group (CESG) will coordinate public and private efforts to identify effective risk management techniques, develop a “best practices” document for cloud adoption, improve transparency and monitoring of cloud services, agree on common terms and definitions, improve information sharing and coordination, and identify any necessary changes to oversight authority. The co-chairs of the new CESG are Graham Steele, Assistant Secretary of the Treasury for Financial Institutions; Acting Comptroller of the Currency Michael Hsu; Rohit Chopra, Director of the Consumer Financial Protection Bureau; Bill Demchak, CEO of PNC Financial Services; and Ron Green, Chair of the Financial Services Sector Coordinating Council (FSSCC) and Security Officer of Mastercard.

Confirmations, Nominations, Departures

Senator Tom Carper (D-DE), who has been the senior Senator from Delaware since Joe Biden left the Senate to become Vice President in 2009, announced this week that he will not seek reelection in 2024. Carper, the last Vietnam veteran serving in the US Senate, was elected to the House of Representatives in 1981, served two terms as Governor in the 1990s, and has been a member of the Senate since 2001. He chairs the Committee on Environment and Public Works.

The Week Ahead

GrayRobinson’s offices will be closed on Monday, May 29 in observance of Memorial Day. The Golden Apple may take next week off, depending on whether we have news to report. We wish all of you a safe and happy holiday weekend.
 
May 31 at 8:50 a.m. The Federal Reserve Bank of Boston holds a “Fed Listens” event on “Transitioning to the Post-Pandemic Economy.” The event will stream live to the public, and include remarks by Boston Fed President Susan M. Collins and Federal Reserve Board Governor Michelle Bowman.

The Ellis Insight - Jim Ellis on political news

PRESIDENT

Gov. Ron DeSantis: Florida Governor Ron DeSantis finally announced his long-awaited presidential campaign this week in a technically flawed Twitter interview with Elon Musk. 

Thus, the slow developing national campaign is now getting underway. In addition to the DeSantis announcement, ex-Vice President Mike Pence, North Dakota Gov. Doug Burgum, New Hampshire Gov. Chris Sununu, and former New Jersey Gov. Chris Christie are all expected to enter the race soon, joining former President Donald Trump, Sen. Tim Scott (R-SC), ex-UN Ambassador Nikki Haley, former Arkansas Gov. Asa Hutchinson, and businessman Vivek Ramaswamy. The first vote will be in the Iowa Caucuses currently scheduled for February 5, 2024.

Gov. Chris Sununu: New Hampshire Governor Chris Sununu said at the end of last week that he will make a formal announcement about his potential presidential candidacy by the end of this month. Reading the political tea leaves suggests that he will enter the race but will forgo a fifth run for Governor later in the cycle, presuming he fails to win the Republican presidential nomination. 

The National Research, Inc. polling firm, surveying for the American Greatness organization, tested the New Hampshire Republican electorate and found Gov. Sununu gaining ground. He will obviously need to score well before his home electorate if he is to become a viable national contender. 

According to the NR data (5/15-17; 500 NH likely Republican presidential primary voters), former President Donald Trump continues to lead the group of candidates with 39% support. Florida Gov. Ron DeSantis is second with 18%, with Gov. Sununu now close behind at 17%. Businessman Vivek Ramaswamy surprisingly rose to the top of the second tier with 6%. No other candidate or potential contender even broke the 3% threshold.

SENATE

Arizona: Former University of Arizona Regent Karrin Taylor Robson (R), who lost a 48-43% gubernatorial Republican primary to Kari Lake in 2022, announced yesterday that she would not enter what will be a three-way Senate race among the eventual GOP nominee, Independent Sen. Kyrsten Sinema, and who appears to be a consensus Democratic candidate, US Rep. Ruben Gallego (D-Phoenix). Ms. Lake is a likely GOP Senate candidate.

The Arizona race continues to evolve as possibly the most interesting campaign in the country considering it will be a three-way contest where each of the major candidates, Sen. Sinema, Rep. Gallego, and the undetermined Republican will have a legitimate path to victory.

California: California US Rep. Barbara Lee (D-Oakland) released the results of a three-pollster conglomeration that included 1,380 California likely voters mostly via live interview with some text responses over the May 13-21 period. The three involved polling firms were FM3, Evitarus, and HIT Strategies. A second California Senate poll released in consecutive days, this one from the University of California at Berkeley for the Los Angeles Times (5/17-22; 7,465 CA registered voters; 5,236 likely jungle primary voters; online), found similar results.

In both surveys, a Republican candidate, former Attorney General contender Eric Early, claimed the lead. With a split among the three Democratic House members of Reps. Lee, Katie Porter (D-Irvine) and Adam Schiff (D-Burbank), Mr. Early placed first in this comprehensive jungle primary survey with a preference figure of 27%. Reps. Porter, Schiff, and Lee followed with 24, 21, and 11%, respectively. In the LA Times/UC poll, the candidates split 18-17-14-9% in the same order.

The result is interesting in that these ballot tests suggest a Republican could well advance into the general election with two of the Dem House members eliminated early from the competition. Clearly, this jungle primary will be another of the most interesting campaigns we will see on the March 5th Super Tuesday election calendar.

Delaware: Delaware Senator Tom Carper (D) announced during the week that he will conclude his long political career at the end of this Congress. Doing so means he will have served in elective office for 48 consecutive years when his current term ends. 

Sen. Carper was first elected state Treasurer in 1976, then to the US House in 1982, Governor in 1992, and the US Senate in 2000. During his retirement announcement, he encouraged At-Large US Rep. Lisa Blunt Rochester (D-Wilmington), one of his former congressional staff members and state appointees, to run for the Senate seat. 

Mr. Carper becomes the fifth Senator and fourth Democrat to forgo re-election in 2024. He joins Sens. Dianne Feinstein (D-CA), Mike Braun (R-IN), Ben Cardin (D-MD), and Debbie Stabenow (D-MI) in the group who are voluntarily ending their Washington careers. All are retiring from politics with the exception of Senator Braun, who is running for Governor of Indiana. 

Nevada: April Becker, the Republican congressional nominee who held Rep. Susie Lee (D-Las Vegas) to a 52-48% re-election victory last November and was reported to be considering entering the 2024 US Senate race, has made a decision about her political future. Instead of running for the Senate next year, she will launch a campaign for the Clark County Commission. At this point, it appears that disabled American veteran Sam Brown could become the leading GOP Senate candidate.

Tennessee: Tennessee state Representative Gloria Johnson (D-Knoxville), who was one vote away from being expelled from the House for her support of the gun control insurrection at the state Capitol earlier this year, confirmed that she is considering entering the US Senate race to challenge incumbent Republican Marsha Blackburn. 

Sen. Blackburn is poised for re-election and will be very difficult to unseat in a state that Donald Trump carried 61-37% in 2020. Sen. Blackburn defeated former Governor Phil Bredesen (D), 55-44%, to initially win her seat in 2018.

Texas: Building upon Rep. Colin Allred’s (D-Dallas) US Senate announcement, the University of Texas at Tyler’s recent poll (5/10-21; 1,413 TX registered voters; live interview & online) finds Sen. Ted Cruz (R) leading his new opponent, 42-37%. If Texas polling history remains constant in 2024, we can expect relatively close ballot test polling throughout this campaign, with Sen. Cruz in the end winning by a larger margin than forecast.

Utah: Riverton Mayor Trent Skaggs (R) announced through a video presentation this week that he will challenge Sen. Mitt Romney in the impending GOP primary. It is likely that Mr. Skaggs will qualify through the convention process, while Sen. Romney will be forced into the signature petition qualification route. Earlier, state House Speaker Brad Wilson had filed a US Senate exploratory committee. Former US Representative and Fox News contributor Jason Chaffetz is also said to be weighing his potential in a race against Sen. Romney. 

In any event, having to fight a primary opponent is a likelihood for the incumbent Senator and Republican former presidential nominee.

HOUSE

AZ-1: Arizona Rep. David Schweikert’s (R-Fountain Hills) close one-point re-election victory over Democratic newcomer Jevin Hodge last November has led to several different Democrats vying for the right to challenge the veteran GOP Congressman in the next election. The Democratic field is enlarged because Mr. Hodge has decided not to return for a re-match. The new 1st District, that the FiveThirtyEight data organization rates as R+7, is six points less Republican than Rep. Schweikert’s previous 6th CD. 

Joining the group this week is former television news anchor Marlene Galan-Woods, the wife of the late Attorney General Grant Woods who was originally elected as a Republican but switched to the Democratic Party. 

Previously announced are state Representative and physician Amish Shah (D-Phoenix), former Arizona Democratic Party chairman Andrei Cherni, ex-Arizona Red Cross CEO Kurt Kroemer, orthodontist Andrew Horne, and educator and frequent candidate W. John Williamson. Expect this race to again evolve into a national competitive congressional campaign after the Democratic nomination is decided in the August 6, 2024, primary election.

AZ-6: The 2022 battle for Arizona’s southeastern politically marginal 6th Congressional District saw Republican Juan Ciscomani defeating then-state Sen. Kirsten Engel (D) by a tight 50.7 – 49.3% margin. Ms. Engel is returning for a re-match, but she will not have a clean primary. 

Already, two Democrats have announced their candidacies, one just this week. Previously, former local school board member Vieri Tenuta declared for the seat. Now, business consultant and non-profit organization executive Jack O’Donnell has also entered the Democratic primary. The nature of the district suggests another close general election battle, but the contested August primary will likely help Rep. Ciscomani better position himself for the November election.

NJ-7: New Jersey’s 7th District is a politically marginal seat anchored in Union County, but the voters there will not see the third version of a Tom Kean, Jr – Tom Malinowski campaign. In 2018, Mr. Malinowski converted the seat for the Democrats, defeating five-term GOP incumbent Leonard Lance. The Democratic Congressman then won a close re-election race against Republican Tom Kean. The 2022 re-match went Mr. Kean’s way, and late this week, Mr. Malinowski announced that he will not return for a rubber match. 

The 7th District became more Republican in redistricting but is still competitive. State Senate President Nick Scutari (D-Linden) and Assembly Deputy Majority Leader Roy Freiman (D-Hillsborough) are two potential Democratic candidates who may come forward to oppose Rep. Kean.

NY-3: As fast as New York television reporter Darius Radzius (D) entered the congressional race with the hope of challenging embattled freshman Rep. George Santos (R-Long Island) last week, he has just as quickly closed his committee with the Federal Election Commission and withdrawn his candidacy “for personal reasons.”

Former state Senator Anna Kaplan and Nassau County Legislator Josh Lafazan are the two most prominent Democrats to so far come forward. Former US Rep. Tom Suozzi (D), who left the seat in 2022 to run a long shot gubernatorial campaign, says he is considering launching a comeback congressional race but only if the party nominates him for a special election. The former Congressman says he is not inclined to compete in a regular primary. 

Republicans are likely to find a new candidate should Rep. Santos be convicted in court, expelled from the House, or defeated in a Republican primary. 

GOVERNOR

Kentucky: Just after last week’s Kentucky Republican primary nominated Attorney General Daniel Cameron to challenge Gov. Andy Beshear (D), the co/efficient GOP polling firm, for the Cameron campaign, went into the field. The survey (5/18-19; 987 KY likely 2023 general election voters) sees Gov. Beshear holding only a two-point, 45-43%, edge over AG Cameron. 

The closeness of this ballot test result is surprising considering Gov. Beshear’s job approval rating index is very favorable. Expect this race to be in competitive mode all the way through the November election.

North Carolina: Former three-term US Representative Mark Walker (R), who found himself without a district under the state Supreme Court-drawn map in 2020 and then ran an ill-fated 2022 US Senate campaign (losing the Republican primary to now-Sen. Ted Budd and attracting only 9.2% of the vote), this week announced his gubernatorial candidacy.

Democratic Gov. Roy Cooper is ineligible to seek a third term, so the position will be open in the 2024 election. So far, Lt. Gov. Mark Robinson (R) has a wide early lead for the party nomination and even enjoys a small polling edge over his likely Democratic gubernatorial counterpart, Attorney General Josh Stein. 

Mr. Walker argues that Lt. Gov. Robinson will be a poor general election candidate, potentially leading the party to a big loss in the November 2024 vote: hence, his reasoning for entering the Governor’s race. North Carolina promises to host one of the most competitive gubernatorial campaigns on the 2024 national election card.