American Rescue Plan signed into law
The House of Representatives approved HR 1319, the American Rescue Plan Act, last Wednesday by a vote of 220-211. Rep. Jared Golden (D-ME) was the only Democrat to vote against it; no Republicans voted for it. President Biden signed the bill, saying the law was “about rebuilding the backbone of this country and giving people in this nation — working people and middle-class folks, the people who built the country — a fighting chance.” Direct payments to eligible households will start going out before the end of the month. The White House has posted a summary of the act to its website.
Velázquez, Luetkemeyer agree on PPP extension
House Small Business Committee Chairwoman Nydia Velázquez and ranking member Rep. Blaine Luetkemeyer (R-MO) introduced bipartisan legislation last week to extend the Paycheck Protection Program (PPP) to May 31, 2021. The PPP had been scheduled to expire at the end of March. The bill would also give the Small Business Administration an additional 30 days to process applications filed before May 31. Separately, the Federal Reserve announced that it is extending its Paycheck Protection Program Liquidity Facility (PPPLF), which had been scheduled to close on March 31, to June 30.
CFPB rescinds abusiveness policy statement
The Consumer Financial Protection Bureau announced that it is rescinding its January 2020 Statement of Policy Regarding Prohibition on Abusive Acts or Practices. “Going forward, the CFPB intends to exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under the Dodd-Frank Act as established by Congress,” the announcement said. Last year’s policy statement had said the CFPB would not seek civil money penalties or disgorgement for certain abusive acts or practices; yesterday, the CFPB said that was “inconsistent with the Bureau’s duty to enforce Congress’s standard.”
CFPB clarifies that fair lending rules apply on sexual orientation, gender identity
Last Tuesday, the CFPB issued an interpretive rule clarifying that the prohibition against sex discrimination under the Equal Credit Opportunity Act (ECOA) and Regulation B applies to discrimination on the basis of sexual orientation and gender identity as well.
Consensus builds on reducing settlement time
The Senate Banking Committee held a largely bipartisan hearing last Tuesday to discuss the trading volatility around GameStop and other companies earlier this year. Ranking member Senator Pat Toomey (R-PA) warned against “knee-jerk reactions” and rushing to implement new rules or laws that would restrict participation in the stock market, but he and Chairman Sherrod Brown (D-OH) on the need to shorten the settlement cycle. Former SEC Commissioner Michael Piwowar, testifying before the Committee, said that while real-time settlement is probably not feasible, the Securities and Exchange Commission should “absolutely” move to one-day settlement, as it moved from three-day to two-day in 2017.
House Financial Services Committee targets fair access, racial wealth gap
In hearings of the full Committee and the Subcommittee on Consumer Protection and Financial Institutions, Democratic and Republican members presented sharply contrasting ideas on how best to address racism in the US financial system. “Let’s just start with facts,” ranking member Rep. Patrick McHenry (R-NC) said, “racism is real.” Chairwoman Maxine Waters (D-CA) said that legislation is necessary to address persistent redlining in 61 metropolitan areas, and to remove systemic barriers to housing, homeownership, credit, and leadership in business and the community. The hearings collected testimony in support of 44 different bills offered by Democratic members, while Republicans argued that enforcement of existing laws and free market dynamics would remove most barriers to access.
Waters urges financial regulators to maintain high capital standards
In a letter to the federal financial regulators last week, House Financial Services Committee Chairwoman Maxine Waters (D-CA) warned against reducing bank capital requirements, including extending the temporary change the regulators made in response to the pandemic. “The economic recession caused by COVID-19 has reminded us again of the importance of robust capital protections,” Waters wrote, and repeated her admonition to then-Secretary of the Treasury Steven Mnuchin that “Deregulation is not the solution to the coronavirus.” She said it was disappointing to see the agencies allow big banks to make capital distributions while “advancing proposals that directly or indirectly weaken large bank capital requirements.”
Blinken cautions US businesses operating in Hong Kong
At a marathon but cordial hearing of the House Foreign Affairs Committee last week, Secretary of State Antony Blinken said that the State Department is deeply concerned about the Chinese government’s continuing crackdown on Hong Kong, and that further sanctions are likely. He said that the US needed to remind its own companies “that there are sanctions on the books that they need to be mindful of if they’re operating in Hong Kong,” and “there are certain risks that come along with that.”
Nellie Liang nominated as Under Secretary for Domestic Finance
President Biden announced last week that he will nominate Nellie Liang to be Under Secretary of the Treasury for Domestic Finance, a position that has been officially vacant since 2014 and vacant of even an acting Under Secretary since 2015. Liang was most recently a Senior Fellow in Economic Studies at the Brookings Institution, but spent nearly 30 years at the Federal Reserve Board. She headed the Fed’s capital markets section from 1997 to 2001 and served as the Fed’s first Director of the Division of Financial Stability from 2010 to 2017. She holds degrees from the University of Maryland, where she taught economics, and the University of Notre Dame. The President also named NYU Law School professor of taxation Lily Batchelder as Assistant Secretary for Tax Policy, former Kellogg School of management executive Ben Harris as Assistant Secretary for Economic Policy, and veteran Capitol Hill staffer Jonathan Davidson as Assistant Secretary for Legislative Affairs.
Senate Banking deadlocks on Chopra nomination to CFPB
With a tie vote of 12-12, the Senate Committee on Banking, Housing, and Urban Affairs failed to report out Rohit Chopra’s nomination to be Director of the Consumer Financial Protection Bureau this week. Senator Pat Toomey (R-PA), the Committee’s ranking member, said that Chopra had taken “aggressive anti-business actions” in his previous roles at the CFPB and his current position on the Federal Trade Commission. Toomey said he was afraid Chopra would “return the CFPB to the hyper-active, law breaking, anti-business, unaccountable agency it was under Obama Administration.” Banking Committee Chairman Sherrod Brown (D-OH) said that Chopra’s nomination would proceed to the Senate floor without the Banking Committee’s favorable report. The Committee voted 14-10 to approve the nomination of Gary Gensler to be Chairman of the Securities and Exchange Commission, despite Senator Toomey’s opposition to that nomination as well.
Confirmations, Nominations, Departures
- The Senate confirmed the nomination of Marcia L. Fudge to be Secretary of Housing and Urban Development, and she was sworn in last Wednesday.
- The Senate confirmed the nomination of Merrick Garland to be Attorney General, and he was sworn in last Thursday.
- Senator Roy Blunt (R-MO) announced that he will not run for reelection to a third term in 2022.
The Week Ahead in Washington
- March 16 at 9:30 a.m. Senate Committee on Energy & Natural Resources holds a hearing on research and development in transportation technologies.
- March 16 at 2:00 p.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Home = Life: The State of Housing in America.”
- March 17 at 9:30 a.m. House Committee on Homeland Security holds a hearing on “The Way Forward on Homeland Security.” DHS Secretary Alejandro Mayorkas will be the only witness.
- March 17 at 10:00 a.m. Senate Committee on Environment and Public Works holds a hearing on “Examining the Challenges Facing Drinking Water and Waste Water Infrastructure Projects.”
- March 17 at 10:00 a.m. Senate Committee on Foreign Relations holds a hearing on “Advancing Effective US Policy for Strategic Competition with China in the Twenty-first Century.”
- March 17 at 10:00 a.m. House Financial Services Committee holds its second hearing on the GameStop volatility episode.
- March 17 at 11:00 a.m. Senate Committee on the Budget holds a hearing to examine the income and wealth inequality crisis in America.
- March 17 at 11:00 a.m. Select Subcommittee on the Coronavirus Crisis holds a hearing on “From Rescue to Recovery: Building a Thriving Post-Pandemic Economy.” Nobel laureate economist Joseph E. Stiglitz and AFL-CIO Chief Economist William E. Spriggs will testify.
- March 17 at 2:30 p.m. Senate Committee on Small Business & Entrepreneurship holds a hearing on “The Paycheck Protection Program: Performance, Impact, and Next Steps.”
- March 18 at 10:00 a.m. Senate Banking Committee holds a hearing on “21st Century Economy: Protecting the Financial Risks Associated with Climate Change.”
- March 18 at 10:00 a.m. House Financial Services Subcommittee on Diversity and Inclusion holds a hearing on “By the Numbers: How Diversity Data Can Measure Commitment to Diversity, Equity and Inclusion.”
- March 18 at 10:00 a.m. House Small Business Subcommittee on Underserved, Agricultural, and Rural Business Development holds a hearing on “The Role of Community Navigators in Reaching Underserved Businesses,” to discuss the new Community Navigator Program created by the American Rescue Plan.
- March 18 at 11:00 a.m. House Energy and Commerce Subcommittee on Environment and Climate Change holds a hearing on “The Clean Future Act: Industrial Climate Policies to Create Jobs and Support Working Communities.”
- March 18 at 2:00 p.m. House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law holds its third hearing on “Reviving Competition: Strengthening the Laws to Address Monopoly Power.”
- March 19 at 9:00 a.m. The Securities and Exchange Commission’s Asset Management Advisory Committee holds a public meeting to discuss potential recommendations of the ESG Subcommittee and the Diversity & Inclusion and Private Investments Subcommittees.
The Ellis Insight
Jim Ellis reports on political news
Iowa: Last week, Johnson County Democrats passed a resolution with 78% of the attending party members in agreement to change the Iowa presidential nominating system from a caucus to a primary. Many believe the 2020 Democratic caucus debacle featuring a system so complicated that even today it is difficult to determine whether Sen. Bernie Sanders (I-VT) or now-Transportation Secretary Pete Buttigieg actually won the statewide caucus vote will not return for future presidential campaigns.
If the Iowa Democrats do change, it is likely they will lose their first position on the nomination calendar since New Hampshire has the ability to keep their status as the first-in-the-nation primary. Johnson County features the fifth largest population base of Iowa’s 99 local entities, housing Iowa City and the University of Iowa campus.
Arkansas: While most of the early political announcements have dealt with retirements, one Senator not opting out of a 2022 race is Arkansas Republican Sen. John Boozman. Mr. Boozman announced that he will seek a third term next year. He will prove to be a prohibitive favorite for re-election.
Florida: Mason-Dixon Polling & Strategy released their latest Florida statewide survey (2/24-28; 625 FL registered voters) testing Sen. Marco Rubio’s re-election status as he prepares to run for a third term in 2022. According to the M-D data, the Senator has a 47:42% job approval ratio. By a margin of 46-40%, the survey respondents said they would vote to re-elect Sen. Rubio.
Indiana: Former US Senator and House member Joe Donnelly (D), who lost his Senate re-election in 2018 to current Indiana Sen. Mike Braun (R) despite running in a strong Democratic year, said in a Tweet last week that he will not launch a statewide effort against Sen. Todd Young (R) next year. Mr. Donnelly lost a 51-45% race in 2018 after serving a single Senate term. He represented the 2nd Congressional District for six years beginning with his 2006 electoral victory.
Maryland: Greenbelt Mayor Colin Byrd, who had announced a Democratic primary challenge to House Majority Leader Steny Hoyer (D-Mechanicsville) back in December, has now changed races. Last week, Mayor Byrd indicated that he is abandoning his Hoyer challenge and will instead oppose Sen. Chris Van Hollen in the 2022 Democratic primary. Mr. Byrd says Sen. Van Hollen not fight strongly enough to keep the $15 minimum wage provision in the COVID-19 relief package is his main reason for switching races. Sen. Van Hollen is a prohibitive favorite both in the Democratic primary and the 2022 general election.
Missouri: Missouri Senator Roy Blunt became the fifth Republican to announce that he won’t seek re-election in 2022. Sen. Blunt was originally elected to the House in 1996, the first of his seven terms. He previously served as the Missouri Secretary of State and Green County Clerk over his long career in elective politics. In 2016, he won a competitive 49-46% race over then-Secretary of State Jason Kander (D) to secure his second and final US Senate term. If two more potential retirees, Sens. Chuck Grassley (IA) and Ron Johnson (WI), choose not to seek re-election, the Republicans will be forced to defend seven open seats in a toss-up election cycle.
New Hampshire: A second poll published within 20 days of the first gives Gov. Chris Sununu (R) a lead over Sen. Maggie Hassan (D) in anticipation of the two potentially squaring off in the 2022 general election. On the heels of the University of New Hampshire study from late February that gave the Governor a 48-46% edge over Sen. Hassan, the current St. Anselm’s survey (3/4-6; 871 NH registered voters; online) finds Gov. Sununu in stronger shape, leading 47-41% with a 67:31% favorable job approval rating. By contrast, Sen. Hassan’s favorability index is 47:44%. Such a race could become a premier 2022 national Senate campaign.
North Carolina: Retired space shuttle astronaut Joan Higginbotham, one of the first African American women to be launched into space, confirms that she is considering entering the Democratic primary for what will be an open US Senate race next year. Already in the race are state Senator Jeff Jackson (D-Charlotte) and former state Senator and 2020 US Senate candidate Erica Smith. Potential Democratic candidates include state Attorney General Josh Stein and former US Transportation Secretary and ex-Charlotte Mayor Anthony Foxx. For the Republicans, former US Rep. Mark Walker is an announced candidate and ex-Governor Pat McCrory is a potential candidate. Sen. Richard Burr (R) is not seeking a fourth term.
FL-11: State Rep. Anthony Sabatini (R-Howey-in-the-Hills) says he will run for Congress next year. Congressman Dan Webster (R-Clermont) noted that Mr. Sabatini called him to say that he would run for the House but not oppose him. Rep. Sabatini’s hometown of Howey-in-the-Hills is currently in Rep. Webster’s district, but the phone conversation may not prove to be disingenuous or inconsistent. Reapportionment is projected to award Florida with two new congressional seats, and one looks to be headed to the Orlando area based upon population trends. Therefore, Mr. Sabatini may just be getting a head start in preparation for an open run in a new congressional district.
Louisiana: The pre-primary Federal Election Commission reports for the two Louisiana special elections are now public. In the vacant 2nd District, the 15-candidate campaign appears winnowing down to two major contenders, both Democratic state Senators. Sen. Troy Carter (D-New Orleans), who has attracted most of the key endorsements, has raised over $944,000 and holds just over $291,000 cash-on-hand according to his February 28th report. His colleague in the legislature, state Sen. Karen Carter Peterson (D-New Orleans), reports just under $450,000 raised while topping $207,000 in the bank.
It is likely the March 20th election sends both Sens. Carter and Peterson into an April 24th runoff election. An Edgewater Research survey (3/2-7; 651 LA-2 likely voters; interactive voice response system and live interview) found Sen. Carter leading Sen. Peterson and Mr. Chambers, 35-24-11%, as the candidates turn into the final week of campaigning before the first election.
In the vacant 5th District, the story is much different. There, Julia Letlow (R), widow of Congressman-Elect Luke Letlow (R), has a wide financial lead. She reports just under $683,000 raised with $521,000 remaining to spend. Her next closest opponent, Democrat Candy Christophe, reported just under $70,000 obtained with a little over $50,000 in her campaign account. Ms. Letlow is becoming a heavy favorite to win the special election and certainly has the opportunity to win outright on March 20th.
OH-11: Ohio’s 11th Congressional District that stretches from Cleveland to Akron is now officially vacant. Rep. Marcia Fudge (D-Cleveland), upon her confirmation as Housing & Urban Development Secretary in the Biden Administration, resigned from the House. Gov. Mike DeWine (R) will now officially schedule the replacement special election. The most likely primary date will be May 4th, concurrent with the state’s municipal elections, while the special general is probable for early August.
Kansas: Former Kansas Gov. Jeff Colyer (R), who ascended to the position from his election as Lt. Governor when then-Gov. Sam Brownback (R) resigned to accept a federal position in the Trump Administration, is looking at launching another run for the state’s top office. As the sitting Governor, Dr. Colyer lost the 2018 Republican primary to then-Secretary of State Kris Kobach by just 343 votes statewide. Mr. Kobach then went onto lose the general election to Democrat Laura Kelly.
Dr. Colyer sent an email to supporters announcing that Mary Eisenhower, granddaughter of former President and Kansas native Dwight D. Eisenhower, will serve as his campaign treasurer. Last week, Attorney General Derek Schmidt announced that he will run for Governor next year, as well. The move sets the stage for a major GOP primary battle in August of 2022 before the winner takes on Gov. Kelly three months later.
Nebraska: Three-term Rep. Don Bacon (R-Papillion/ Omaha) confirmed that he is considering running for the state’s open Governor’s office in 2022. Rep. Bacon has won three tough elections and reached 51% only one time in the marginal metro Omaha’s 2nd Congressional District. Earlier in the year, it was reported that Sen. Deb Fischer (R) is also considering entering the gubernatorial race, but neither GOP office holder is definitive about their 2022 plans at the present time. Sen. Fischer is not again in-cycle until 2024. Gov. Pete Ricketts (R) is ineligible to seek a third term.
New York: Earlier this year, grocery store magnate and former New York City Republican mayoral candidate John Catsimatidis toyed with the idea of entering the 2021 mayoral contest as a Democrat saying he would spend $100 million. He soon decided against such a move. Now, reports suggest that Mr. Catsimatidis may be looking at the Republican gubernatorial nomination since Gov. Andrew Cuomo (D) is on the political ropes. He again speaks of making a $100 million personal expenditure.
Texas: Former state Sen. Don Huffines, who has the ability to self-fund a statewide race in Texas, confirmed that he is considering challenging Gov. Greg Abbott in the 2022 Republican primary. Mr. Huffines, who lost his Senate seat in 2018, referred to the Governor in a Houston Chronicle article as “King Abbott.” He then tweeted, “it’ll be great to have our freedoms back next week. Unfortunately, we still live in a dictatorship where Greg Abbott can yank those the next time it’s politically convenient to him.”
Virginia: The Virginia Republican Party has yet another problem with their 2021 statewide nomination process. Originally opting out of a primary election in favor of some type of modified conclave, their desired site for a “drive thru” convention, Liberty University, now sees its administrators rejecting the idea. LU officials say the campus cannot physically handle as many as 4,000 cars and an additional 70 buses all descending upon their campus at approximately the same time. Therefore, how the party now proceeds is open to question.
The major Republican candidates are Delegate and former state House Speaker Kirk Cox (R-Colonial Heights), state Sen. Amanda Chase (R-Midlothian), and businessmen Paul Davis, Pete Snyder, and Glenn Youngkin. Former Roanoke Sheriff Octavia Johnson just announced her candidacy last week.
Ratings: The University of Virginia’s political prognosticator Larry Sabato has released his first ratings of the 2021-22 Governor’s cycle. Curiously, of the 38 races to be held during the two-year period he rates just one of them, Hawaii, as wholly safe for the Democratic Party but nine securely in the Republican column. Many would disagree with such an outlook, but complicating factors as a Governor’s recall in California and New York Gov. Andrew Cuomo’s personal problems raise questions about future election prospects in even this pair of rock solid Democratic states.
Currently, Republicans have a 27-23 edge in Governor’s offices. Of the twelve states not holding chief executive elections during this cycle, Republicans hold eight and Democrats’ four. Dr. Sabato rates 15 of the early contests as heading toward the Democratic side and 17 going Republican with five states, Arizona (R), Georgia (R), Kansas (D), Pennsylvania (D), and Wisconsin (D) in the toss-up category.
Tennessee: Tennessee is the only place where the state Supreme Court, through secret ballot, appoints the attorney general for an eight-year term. That process may soon change. The state Senate passed, for the second time, a measure to make the Supreme Court vote public and install a confirmation process for both houses of the General Assembly.
In Tennessee, the state Constitution can only be changed when both houses vote twice to do so, the second time with a 2/3 majority. Once the House passes this bill for a second time, and with a super majority, the measure would move to the 2022 ballot for voters to confirm the change. Forty-four of the fifty states choose their attorney general through direct election.