What’s next?
Now that the President has signed the bipartisan budget agreement, Congress can turn to other pressing business. In addition to approving spending bills for the next fiscal year, some deadlines are pending. Between now and the end of the year, Congress needs to:
Pass a federal budget or at least a continuing resolution to keep the government running past September 30. We expect to see a proposal for top-line allocations from House Republicans by the end of the day, and the Appropriations subcommittees will start amending their individual bills before the end of the month. The Agriculture-FDA, Homeland Security, Legislative Branch, and Military Construction-Veterans Affairs Subcommittees already have bills ready for markup.
Pass a Farm Bill to succeed the Agriculture Improvement Act of 2018, which expires on September 30.
Reauthorize the Federal Aviation Administration before September 30; the leaders of the House Transportation & Infrastructure Committee and its Aviation Subcommittee introduced bipartisan legislation earlier today (keep reading for more information).
The legislative calendar between now and September 30 is short: two more weeks this month, three weeks in July, and four weeks in September. (The House has not yet published its August schedule, but the Senate will be out from July 31 to September 4.) We’ll be busy.
House approves capital formation packages
While the House of Representatives was in Washington last week to vote on the budget agreement, it approved four bipartisan bills to facilitate capital formation:
H.R. 2792, the Small Entity Update Act, would require the Securities and Exchange Commission to measure regulatory costs of compliance for small and growing businesses.
H.R. 2795, the Enhancing Multi-Class Share Disclosures Act, would provide more uniform information in proxy materials while preserving the multi-class share structure.
H.R. 2796, the Promoting Opportunities for Non-traditional Capital Formation Act, would require the SEC’s Advocate for Small Business Capital Formation to provide educational resources and host events to promote capital-raising opportunities for underrepresented small businesses.
H.R. 2797, the Equal Opportunity for All Investors Act of 2023, would allow investors to qualify as accredited through testing administered by the Financial Industry Regulatory Authority (FINRA).
This Monday, the House approved seven more bipartisan capital formation bills by voice vote:
H.R. 835, the Fair Investment Opportunities for Professional Experts Act, would expand the definition of “accredited investor.”
H.R. 1579, the Accredited Investor Definition Review Act, would update the list of certifications required for the accredited investor designation.
H.R. 2608 would clarify that the scaled financial reporting obligations for emerging growth companies (EGCs) remain available when EGCs acquire other companies, and in follow-on offerings for companies that lose their EGC status during IPO registration.
H.R. 2610 would equalize accommodations for financial statements made by EGCs regardless of whether they are conducting an IPO or spinning off part of their business.
H.R. 2593, the Senior Security Act of 2023, would create a task force to protect seniors from fraud and abuses in US capital markets.
H.R. 2793, the Encouraging Public Offerings Act of 2023, would allow issuers to submit confidential draft registrations for review before going public.
H.R. 2812, the Middle Market IPO Cost Act, would require the Securities and Exchange Commission to study the costs to small and medium-sized companies of undertaking initial public offerings.
House Transportation leaders unveil bipartisan FAA reauthorization
House Transportation and Infrastructure Chairman Sam Graves (R-MO), ranking member Rep. Rick Larsen (D-WA), Aviation Subcommittee Chairman Garret Graves (R-LA), and Subcommittee ranking member Rep. Steve Cohen (D-TN) jointly introduced the Securing Growth and Robust Leadership in American Aviation Act today. The 773-page bill would reauthorize the Federal Aviation Administration (FAA) and the National Transportation Safety Board (NTSB) through fiscal year 2028. It would also make “targeted changes” to the FAA’s organization structure and provide additional funding for general aviation, airport infrastructure, and building the aviation workforce. The full Committee will take up the bill as a substitute to H.R. 3935 at a markup scheduled for next Tuesday.
Smith introduces tax cuts & jobs package that would protect angel investors
This afternoon House Ways & Means Chairman Jason Smith (R-MO) introduced the American Families and Jobs Act, which combines three bills that would reduce taxes, create Rural Opportunity Zones, and provide greater incentives for investment in small business: the Tax Cuts for Working Families Act (H.R. 3936), the Small Business Jobs Act (H.R. 3937), and the Build It in America Act (H.R. 3938). The package includes H.R. 2767, the Small Business Investment Act introduced by Rep. David Kustoff (R-TN), which would modify the tax treatment of gains from qualified small business stock (QSBS) in a way that should attract additional “angel” investment in early-stage businesses. The Committee will take up this legislation next Tuesday.
No timeline for guidance on outbound investments, officials tell Senate Banking
Two Treasury officials and two Commerce officials appeared before the Senate Banking Committee last week to talk about how the Biden administration is balancing the need for a constructive trade relationship with China with the need to protect US intellectual property and national security. Assistant Secretary of the Treasury Paul Rosen, who oversees the revamped Committee on Foreign Investment in the United States (CFIUS), said the Committee was improving its tactics for gathering more detailed information about foreign acquirers and deal structures, and for identifying transactions that aren’t brought to CFIUS voluntarily. Rosen is part of an interagency group working on potential restrictions on outbound investments, which he said was taking “a tailored, narrow, administrable, understandable approach” that focuses on elements of national security. They are working “quickly and diligently,” he said, but without a specific deadline.
Confirmations, Nominations, Departures
Rep. David Cicilline (D-RI) resigned his seat in Congress effective May 31 to become president and CEO of the Rhode Island Foundation. The district will vote on a replacement in a special election this November.
Rep. Chris Stewart (R-UT) announced last week that he was resigning his seat due to his wife’s illness. He will leave office sometime in September, telling reporters he wanted to ensure an orderly transition. Utah must hold a special election to fill the seat, which has not yet been scheduled.
SEC Commissioner Mark T. Uyeda has been reappointed to the Commission for a term to expire in 2028.
Deputy Secretary of Transportation Polly Trottenberg has been named Acting Administrator of the Federal Aviation Administration.
The Week Ahead
After a few days of relative quiet, Washington gets busy again next week. On top of all this, the Federal Open Market Committee will meet on Tuesday and Wednesday, with its press conference scheduled for 2:00 p.m. on Wednesday, June 14.
June 13 at 10:00 a.m. House Committee on Financial Services hears the Annual Testimony of Secretary of the Treasury Janet Yellen on the State of the International Financial System.
June 13 at 10:00 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.”
June 13 at 10:00 a.m. Senate Commerce Subcommittee on Tourism, Trade, and Export Promotion holds a hearing on “Oversight and Implementation of Travel and Tourism Legislation.”
June 13 at 2:00 p.m. House Committee on Financial Services holds a hearing on “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem.”
June 13 at 2:00 p.m. House Committee on Small Business holds a hearing on “Assisting Entrepreneurs: Examining Private and Public Resources Helping Small Businesses.”
June 14 at 10:00 a.m. House Committee on Financial Services holds a hearing on “The Semi-Annual Report of the Bureau of Consumer Financial Protection.”
June 14 at 10:00 a.m. House Committee on Oversight and Accountability holds a hearing on “Death by a Thousand Regulations: The Biden Administration’s Campaign to Bury America in Red Tape.”
June 14 at 10:00 a.m. Senate Committee on Environment & Public Works holds a hearing on “Implementation of the Infrastructure Investment & Jobs Act and the Inflation Reduction Act by the Federal Highway Administration.” FHA Administrator Shailen Bhatt will be the only witness.
June 14 at 10:00 a.m. The SEC’s Small Business Capital Formation Advisory Committee holds a public meeting, which will stream at www.sec.gov.
June 14 at 2:00 p.m. House Foreign Affairs Committee holds a hearing on “Assessing US Efforts to Counter China’s Coercive Belt and Road Diplomacy.”
The Ellis Insight - Jim Ellis on political news
PRESIDENT
Announcements: Former Vice President Mike Pence (R), ex-New Jersey Gov. Chris Christie, and North Dakota Gov. Doug Burgum all declared their presidential campaigns during the week. None of the three are regarded as top tier contenders at this time, but things can change in the next months as we head toward the first vote in the Iowa Caucuses on February 5, 2024.
The field now grows to nine candidates, featuring former President Donald Trump, Florida Gov. Ron DeSantis, Sen. Tim Scott (R-SC), ex-UN Ambassador Nikki Haley, businessman Vivek Ramaswamy, former Arkansas Gov. Asa Hutchinson, and Messrs. Pence, Christie, and Burgum.
Gov. Chris Sununu: New Hampshire Gov. Chris Sununu (R), saying he understands that a crowded Republican presidential field will renominate former President Donald Trump with about 35% of the vote, announced this week that he will not enter the GOP presidential nomination contest.
Mr. Sununu said he believes he can best influence the Republican presidential campaign from the outside in his current position as Governor of one of the key early primary states. The Governor did not indicate whether he would consider a third party run for President and said he would decide about seeking a fifth term as Governor during the summer.
Debates: The Republican National Committee announced that the first 2024 Republican presidential debate will occur on Wednesday, August 23rd of this year, at the site of the 2024 Republican National Convention, Milwaukee, WI. Criteria for participation was also announced.
To be included in the debate, candidates must reach at least 1% support in three independent national or early state polls of at least 800 sampled Republicans taken on or after July 1, 2023; they must have at least 40,000 documented contributors; a declaration of candidacy statement filed with the Federal Election Commission; and sign various pledges to the RNC, the most important of which is that they will support the eventual Republican presidential nominee.
SENATE
Delaware: The Politico publication reports that at-large US Rep. Lisa Blunt Rochester (D-Wilmington), who retiring Sen. Tom Carper (D) hopes will succeed him, is indeed preparing an official launch of a US Senate campaign. The reports indicate that we can expect an announcement sometime later this month.
There has also been no evidence that term-limited Gov. John Carney (D) is about to enter the race. If not, the primary and general election campaigns should be a breeze for Rep. Blunt Rochester, which, for her, would be just like running another re-election campaign. As the state’s sole US House member, she has conducted all four of her House elections as a statewide campaign.
Her move to the Senate race will leave a competitive open House race in her wake. Most of the competition will be in the September 2024 Democratic primary, but seeing a strong Republican emerge may not be out of the question to force a contested general election. At this point, however, expect both the Senate and House seats to remain under Democratic Party control.
Missouri: St. Louis County prosecutor and ex-Ferguson City Councilman Wesley Bell (D) announced that he will enter next year’s US Senate race. He joins Iraq/Afghan War veteran and 202 US Senate candidate Lucas Kunce in the 2024 Democratic primary. In the ’22 race, Mr. Kunce lost the Democratic nomination 43-38% to Trudy Busch Valentine, a philanthropist who was a late entry into the campaign. She would then lose to current Senator Eric Schmitt in the general election by a 55-42% count.
The August 6, 2024, Democratic primary winner will face first-term Missouri Sen. Josh Hawley (R) in the general election. Sen. Hawley defeated Sen. Claire McCaskill (D) in the 2018 race with at 51.4 – 45.6% margin. He is favored for re-election in a state that should lie solidly within the Republican realm during the next election. In 2020, then-President Trump defeated Joe Biden, 57-41%, in The Show Me State.
Nevada: The Nevada Senate race featuring incumbent Jacky Rosen (D) running for a second term should be a top tier competitive race, but the Republican field has been slow to assemble. Businessman, disabled Afghan War veteran and 2022 Senate candidate Sam Brown is expected to run but has not yet officially entered the race. A new candidate coming on the horizon, Dr. Jeffrey Ross Gunter (R), the former US Ambassador to Iceland in the Trump Administration, is apparently now testing the political waters to become a candidate.
HOUSE
Supreme Court: The US Supreme Court, on a 5-4 decision, ruled in favor of the plaintiffs in the Alabama racial gerrymandering case. Therefore, the Alabama map must be redrawn to reflect a second minority district of the state’s seven seats. Louisiana will likely have to be redrawn as well. Possible redraws could occur in several other southern states. The ruling is clearly a win for the Democrats and gives them even better odds of re-capturing the House majority in the 2024 election.
AZ-3: Over the weekend, Sen. Mark Kelly (D) indicated that his preferred candidate to replace Rep. Ruben Gallego (D-Phoenix), who is running against Sen. Kyrsten Sinema (I), is former state Senate Minority Leader and ex-Arizona Democratic Party chair Raquel Teran. Four other Democrats are in the race, including Phoenix City Councilwoman Laura Pastor, daughter of former US Rep. Ed Pastor (D), but his relationship with Ms. Teran while she guided the Arizona party during his 2022 run for Senate makes her his candidate of choice.
The Phoenix anchored 3rd District is heavily Democratic with a D+44 rating from the FiveThirtyEight data organization. Therefore, Rep. Gallego’s successor will be decided in the August 6, 2024, Democratic primary, thus making Sen. Kelly’s endorsement valuable.
GA-14: Right-wing gadfly activist and two-time Florida congressional candidate Laura Loomer (R) is citing an online voluntary response website poll that supposedly reveals a 75% factor who wants to see Georgia Rep. Marjorie Taylor Greene (R-Rome) challenged for the 2024 Republican nomination because she supported Speaker McCarthy’s debt ceiling bill. Ms. Loomer characterizes Rep. Greene as a “Primary professional conwoman,” for supporting the debt crisis bipartisan compromise. She also states that she can move to Georgia and run because she has proven herself as a “robust campaign fundraiser.”
While Ms. Loomer may well have raised over $3 million for two campaigns, she would need to improve her vote-getting ability in order to unseat Rep. Greene. First, she has already run in two different Florida districts, against Rep. Lois Frankel (D-West Palm Beach), where she lost by 20 percentage points, and in a primary challenge against Rep. Dan Webster (R-Clermont/The Villages). In this latter 2022 race, she fell seven full percentage points from unseating the Republican incumbent.
IA-3: In 2022, then-state Senator Zach Nunn (R-Bondurant) upset Rep. Cindy Axne (D-Des Moines) to claim the 3rd District seat. Thoughts of a rematch were routinely discussed, but the latest action suggests one will not occur, at least in 2024.
This week, President Biden announced that he has appointed former Rep. Axne as a senior advisor to the Department of Agriculture for rural engagement, delivery, and prosperity. While this move doesn’t completely eliminate Ms. Axne from returning to the political wars, her new position makes it less likely that she will be a candidate in the coming election cycle. Currently, mental health therapist Tracy Limon is the only announced 3rd District Democratic congressional candidate.
NY-17: One of the biggest 2022 congressional upsets came in Upstate New York where then-state Assemblyman Mike Lawler (R-Pearl River) defeated Democratic Congressional Campaign Committee chairman Sean Patrick Maloney (D). Now, a new EMC Research poll, surveying for the End Citizens United and Let America Vote organizations (5/4-7; 300 NY-17 likely voters; live interview & online) finds Rep. Lawler clinging to a slight 50-48% lead over former Congressman Mondaire Jones, in what is expected to be the 2024 candidate lineup.
Mr. Jones was elected to the former 17th District in 2018 but moved to New York City to run for re-election when Rep. Maloney decided to run in the court-drawn 17th CD. Mr. Jones has not yet announced he will run in 2024 but is expected to enter the NY-17 race. The district leans Democratic. The FiveThirtyEight organization rates the seat D+7 with a Dave’s Redistricting App partisan lean topping 56% Democratic. Also in the Democratic contest is local school board trustee Liz Gereghty, the sister of Michigan Gov. Gretchen Whitmer (D).
PA-10: Former Pennsylvania State Auditor and 2020 congressional candidate Eugene DePasquale (D) will not be returning to the federal campaign wars in 2024. Viewed as six-term Rep. Scott Perry’s (R-Dillsburg/Harrisburg) toughest possible Democratic opponent – the 2020 race ended 53-47% in Rep. Perry’s favor – Mr. DePasquale late last week announced that he will return to the statewide theatre in an open bid for Attorney General.
Rep. Perry already has Democratic opposition for 2024. Shamaine Davis, his 2022 opponent who he defeated 56-44%, returns for a re-match. Carlisle School Board member Rick Coplen, a retired Army officer who lost the 2022 Democratic primary to Ms. Davis, is also returning to run again. With Mr. DePasquale out of the House picture, Rep. Perry, who voted against the McCarthy debt ceiling compromise, will again begin as a favorite for re-election.
RI-1: State Rep. Nathan Biah (D-Providence), one of 18 Democratic candidates vying for the congressional seat from which Rhode Island Rep. David Cicilline (D-Providence) resigned, is leaving the race. Instead, he will enter the special election to replace the late state Sen. Maryellen Goodwin (D).
Candidate filing continues to progress and will end June 30th for the determinative September 5th Democratic primary. The FiveThirtyEight organization rates RI-1 as D+32 with a Democratic partisan lean score of almost 65%D according to the Dave’s Redistricting App data organization.
UT-2: Utah Rep. Chris Stewart (R-Farmington) made his resignation statement official with a letter to House Speaker Kevin McCarthy (R-CA) and Gov. Spencer Cox (R). The Congressman, leaving office because of his wife’s health condition, will depart on September 15th. Making the resignation official now gives Gov. Spencer Cox (R) more scheduling leeway in calling the replacement special election, and he is scheduling the special primary and general elections for September 5th and November 21st.
Already, former state Representative and 2020 US Senate candidate Becky Edwards (R) has announced her candidacy as has state Sen. Kathleen Riebe (D-Cottonwood Heights). Crowded fields are expected for both parties. Republicans have a big advantage here in a district that the FiveThirtyEight data organization rates as R+23.
Fox News has reported in association with this story that the Republicans will be down a seat when Mr. Stewart departs. This is not accurate. Rhode Island Rep. David Cicilline (D-Providence) resigned his seat on June 1st, meaning the majority margin will be retained, with each party missing one member.
LOCALITIES
Denver, CO: Former state Senator Mike Johnston defeated ex-Chamber of Commerce CEO Kelly Brough by a 55-45% margin to win the open Denver mayor’s position on Tuesday night. Mr. Johnston unsuccessfully ran for Governor and US Senator after leaving the state legislature.
Though the race was ostensibly nonpartisan, Mr. Johnston aligned with the Democrats while Ms. Brough was closer to the Republicans. Campaign spending was about even between the two contenders, but outside liberal organizations came in to tip the financial advantage toward Mr. Johnston.
The Mayor-Elect will take office on July 17th. He replaces three-term incumbent Michael Hancock, who was ineligible to seek another term under the new service limit ordinance the city adopted. In fact, Mayor Hancock will be the city’s final three-term chief executive.