Senate approves bipartisan infrastructure plan
Unless you’ve been asleep this past week, you already know that the Senate voted last Tuesday to pass their version of a bill to authorize five years of infrastructure funding. The bill replaced the text of H.R. 3684, the INVEST in America Act, which the House passed on July 1. The Senate deal would reauthorize surface transportation programs for five years and provide an additional $550 billion over that period for highway, safety, transit, rail, pipeline, and research programs. That’s considerably less than the package approved by the House, and House Transportation Committee Chairman Peter DeFazio (D-OR) has said he wants to work out differences between the two bills in conference.
Senate infrastructure bill includes new cryptocurrency reporting requirements
The infrastructure bill included several measures that might seem unrelated to highways and bridges, but are intended to generate additional revenue that would help pay for these projects. One of those is a requirement that brokers report certain digital asset transactions to the Internal Revenue Service. The bill would also require businesses to report cryptocurrency transactions of more than $10,000 in the same way they report cash transactions above that amount. The House has not passed similar legislation, and senior House Democrats are already saying the Senate requirements would be too broad. In a letter to Speaker of the House Nancy Pelosi (D-CA), Rep. Anna Eshoo (D-CA) said that while she supports the provision’s goals, its definition of “broker” is so broad that it would include “miners, validators, and developers of wallets who are unable to comply.”
Senate passes $3.5 trillion budget framework
Last Wednesday, the Senate voted along party lines (50-49) to approve a budget resolution that would provide $3.5 trillion for a wide range of programs that make up President Biden’s Build Back Better agenda. Chairs of individual Senate committees will be responsible for developing the policies that direct specific spending:
- Committee on Agriculture, Nutrition, and Forestry — $135 billion
- Committee on Banking, Housing, and Urban Affairs — $332 billion
- Committee on Commerce, Science, and Technology — $83 billion
- Committee on Energy and Natural Resources — $198 billion
- Committee on Environment and Public Works — $67 billion
- Committee on Finance — directed to produce legislation that reduces the deficit by at least $1 billion
- Committee on Health, Education, Labor, and Pensions — $726 billion
- Committee on Homeland Security and Governmental Affairs — $37 billion
- Committee on the Judiciary — $107 billion
- Committee on Indian Affairs — $20.5 billion
- Committee on Small Business and Entrepreneurship — $25 billion
- Committee on Veterans Affairs — $18 billion
House will return for votes on August 23
Majority Leader Steny Hoyer (D-MD) has called members of the House of Representatives to return for votes from “the evening of August 23 . . . until our business for the week is concluded.” The Senate’s budget resolution will be the first item on the House’s agenda, but Hoyer said they are also likely to consider H.R. 4, the John Lewis Voting Rights Act.
Investors on crypto platforms need greater protection, says Gensler
In a letter to Senator Elizabeth Warren (D-MA), Securities and Exchange Commission Chairman Gary Gensler said that investors currently lack adequate protections on cryptocurrency trading platforms; that stablecoin investors may well be using those assets to evade anti-money laundering laws, tax compliance, and sanctions; and that the SEC needs additional authorities to protect investors trading in digital assets. Crypto trading, lending, and DeFi platforms should be Congress’s legislative priorities, Gensler said.
Republican Senators say they will not raise debt ceiling
Since a debt ceiling increase was not part of the budget reconciliation package the Senate approved, Congress will need to act to raise the limit sometime next month, possibly as part of a continuing resolution to keep the government running after September 30. Senate Minority Leader Mitch McConnell (R-KY) and Senator Ron Johnson (R-WI) led a letter from 46 Republican Senators last week to let “Senate Democrats and the American public know that we will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle.”
Toomey seeks overturn of eviction moratorium
Senator Patrick Toomey (R-PA), ranking member of the Senate Banking Committee, wrote to the Government Accountability Office (GAO) last week to ask whether the CDC’s extension of its moratorium on evictions constitutes a rule under the Congressional Review Act (CRA). If the moratorium is a rule, Congress can overturn it with a simple majority vote. Toomey asked GAO to make this determination by next Monday, August 16. He, Senator Roger Marshall (R-KS), and Senator Richard Burr (R-NC) have already filed a joint resolution to repeal the moratorium under the CRA.
FFIEC issues guidance on authentication and access risk management
The Federal Financial Institutions Examination Council (FFIEC), which comprises the prudential financial institution regulators and the Consumer Financial Protection Bureau, has updated its guidance on effective authentication and remote access management. The guidance had not been updated since 2011, and regulators highlighted the increase in risks presented by the growing use of remote access, by attacks that use compromised credentials, and by new push payment capabilities. The guidance supports the adoption of layered security practices, reviews the benefits of multi-factor authentication, and includes examples of authentication controls and a list of government and private-sector resources.
Confirmations, Nominations, Departures
- Rep. Ron Kind (D-WI) announced that he will not seek a 13th term in the House of Representatives. Kind is a member of the Ways & Means Committee, where he serves on the Subcommittees on Health and Trade.
- President Biden nominated Elizabeth Prelogar to be Solicitor General of the United States. Prelogar has held the position on an acting basis since January. She served as a clerk to then-Judge Merrick B. Garland at the US Court of Appeals for the DC Circuit, and as clerk to Supreme Court Justices Ruth Bader Ginsburg and Elena Kagan. From 2014 to 2019 she was an Assistant to the Solicitor General, where she served on the Special Counsel’s Russia investigation.
- The President named New York Fed veteran Joshua Frost as Assistant Secretary of the Treasury for Financial Markets, Alexia Marie Gabrielle Latortue to be Assistant Secretary of the Treasury for International Markets, and Brent Neiman to be Deputy Under Secretary of the Treasury for International Finance and Development.
- President Biden renominated National Credit Union Administration Chairman Todd M. Harper to a new term on the NCUA Board, to run to 2027.
The Week Ahead in Washington
Both the House of Representatives and the Senate are in recess this week. The Senate is not scheduled to return until September 13. The House will return the week of August 23 to consider the Senate’s budget resolution and vote on HR 4, the John Lewis Voting Rights Act, but will recess again after that until September 20.
August 17 at 1:30 p.m. Federal Reserve Board Chairman Jerome H. Powell hosts a town hall with educators and students. Participants must register, but the town hall will stream live on the Fed’s YouTube channel and Facebook page. (Yes, the Fed has a Facebook page.)
The Ellis Insight
Jim Ellis reports on political news
Alaska: The Alaska Survey Research firm went into the online field from July 11-21 and asked 947 likely 2022 general election voters how they would complete a ranked choice ballot. On the initial vote, Sen. Lisa Murkowski (R) led with 36%, but far below the 50% majority threshold, meaning second choices would be added. Former Alaska State Administration Commissioner Kelly Tshibaka (R) was second with 27%, followed by state Rep. Elvi Gray-Jackson (D-Anchorage) at 19%, while Joe Miller, who defeated Sen. Murkowski in the 2010 Republican primary, pulled 18%.
As the last place finisher, Mr. Miller would be dropped from further counting. Round two gave Ms. Tshibaka a 40-39-21% edge over Sen. Murkowski and Rep. Gray-Jackson, meaning the latter individual would be eliminated. In the third round, a head-to-head pairing, Sen. Murkowski would prevail over Ms. Tshibaka, 55-45%.
California: US Rep. Ro Khanna (D-Fremont) became the 42nd and final California Democratic House member to endorse appointed Sen. Alex Padilla (D) for election in 2022. A potential Khanna candidacy would have been a legitimate threat. He is a strong fundraiser and defeated incumbent Democratic Congressman Mike Honda, 61-39%, in the 2016 Double-Democratic general election. With no elected official having yet announced against Sen. Padilla and Rep. Khanna not making the challenge, the appointed incumbent looks like a sure bet for election to a full six-year term next year.
Colorado: 2008 US Olympic pentathlon athlete Eli Bremer (R), as had been expected, formally announced his challenge to Sen. Michael Bennet (D). His campaign kick-off includes a video asking individuals if they have seen the man in the picture that he holds, of course, Sen. Bennet. Mr. Bremer has the potential of becoming a credible challenger candidate, but the Colorado electorate’s leftward swing during the latter part of the decade bodes well for Sen. Bennet’s re-election prospects.
Georgia: Public Policy Polling returned a 2022 Georgia Senate survey (8/4-5; 622 GA voters; interactive voice response system) that finds freshman Sen. Raphael Warnock (D) holding small leads over two potential Republican opponents, while establishing a more substantial advantage against a third.
If retired football star Herschel Walker (R) became the GOP nominee, Sen. Warnock would lead 48-46%. Opposite former Sen. Kelly Loeffler (R), the incumbent posts a similar 47-44% margin despite Ms. Loeffler holding a poor 28:47% favorability ratio. Against the only officially announced Republican candidate, Agriculture Commissioner Gary Black, the Warnock edge expands to 46-38%. Though Georgia does not register voters by political party, a 38-35% Democrat to Republican split within this survey universe could suggest a slight Democratic skew.
Ohio: For the second time in just over a month, Fabrizio Lee & Associates released an Ohio Senate Republican poll for their client, author, and open seat candidate J.D. Vance (R). This poll (7/20-22; 800 OH likely Republican primary voters; 77% identified Republican, 20% Independent who could choose to vote in the Republican primary; combination live interview and text) again finds former state Treasurer and 2012 US Senate nominee Josh Mandel leading the GOP candidate field, this time with 21 percent. Mr. Vance increases his vote share from 4% in the group’s June poll to 12% in this latest edition.
For the second time in a Fabrizio Lee survey, and third overall since early June, former state Republican Party chair Jane Timken drops below 10%. Rep. Mike Turner (R-Dayton), who is not an announced candidate, polled 7% support. In a companion WPA Intelligence poll (7/27-29; 500 OH likely Republican primary voters; live interview), Mr. Mandel reaches the 40% plateau, while the other candidates’ support levels are consistent with the Fabrizio Lee findings.
Pennsylvania: As expected, US Rep. Conor Lamb (D-Pittsburgh), who is serving his second full term in the House, announced that he will become a US Senate candidate. He joins Lt. Gov. John Fetterman, Montgomery County Commissioner Val Arkoosh, and state Rep. Malcolm Kenyatta (D-Philadelphia) in the open Democratic primary.
Lt. Gov. Fetterman leads the Democratic contest in fundraising, bringing in over $6.5 million for the campaign with more than $3 million in his campaign account. In anticipation of filing for the Senate, Mr. Lamb raised $1.4 million and held $833,819 cash-on-hand according to his June 30th campaign financial disclosure report.
AR-1: State Representative Brandt Smith (R-Jonesboro), also a college professor and Vice-Chairman of the state House Judiciary Committee, says his move to challenge Rep. Rick Crawford (R-Jonesboro) is based not upon ideology or voting record, but rather constituent services. According to Mr. Brandt, Rep. Crawford hasn’t been responsive or accessible to 1st District residents. The Arkansas primary is scheduled for May 24, 2022, with a June 21st runoff date if necessary.
CA-52: Coronado Mayor Richard Bailey (R) announced that he will launch a challenge to five-term Rep. Scott Peters (D-San Diego) in next year’s election. What was once a highly competitive San Diego congressional district is no longer. President Biden carried the seat, 63-34% last November, and Rep. Peters averaged just under 63% of the vote in his last two elections after winning a pair of close initial campaigns. This means the Congressman is in safe position unless the California Citizens Redistricting Commission unexpectedly makes major changes to the CA-52 boundaries.
FL-20: The candidate filing period expired last week and we see eleven Democrats on the ballot vying to succeed the late Rep. Alcee Hastings (D-Delray). The 20th District is safely Democratic (Biden ’20: 77%; Clinton ’16: 80%) so the winner of the November 2nd nomination campaign will win the special general on January 11, 2022.
Among the eleven are three state legislators, Senator Perry Thurston (D-Ft. Lauderdale), and two Representatives, Bobby DuBose (D-Ft. Lauderdale) and Omari Hardy (D-West Palm Beach), along with two members of the Broward County Commission, Dale Holness (D) and Barbara Sharief (D).
IL-18: Earlier in the year, it appeared that Rep. Darin LaHood (R-Peoria) was considering running for a state Supreme Court seat, a move that could possibly have created a Republican majority on the high judicial panel. Democrats took action and quickly passed a judicial redistricting map, making the seat where Mr. LaHood resides more Democratic. The plan worked, as Rep. LaHood now says he will seek re-election to the House next year and in “whatever our district turns out to be.” Rep. LaHood was first elected to the House in a 2015 special election.
MS-4: Former Hattiesburg Mayor and 2011 Democratic gubernatorial nominee Johnny DuPree announced that he will challenge Rep. Steven Palazzo (R-Biloxi) next year A decade ago, Mr. DuPree was the Democratic candidate for Governor opposite Republican Phil Bryant, who would defeat him 61-39% and then win an easy re-election in 2015.
Rep. Palazzo was first elected in 2010, defeating veteran Democratic Rep. Gene Taylor. Since then, he has averaged 73.4% of the vote in his five re-election efforts, though he has received Republican primary challenges in four of those contests, and already faces Jackson County Sheriff Mike Ezell (R), among others, in the next GOP nomination vote.
WI-3: Saying he’s “…part of a dying breed in public service today in Washington and certainly in Madison — someone who tried to be reasonable, pragmatic, thoughtful, worked hard to try to find common ground with my colleagues, work in a bipartisan way to find bipartisan solutions for the challenges that we face,” Wisconsin Rep. Ron Kind (D-La Crosse) announced that he will not seek a 14th term in the House next year.
The move opens one of only seven US House seats that voted for ex-President Trump (51.5 – 46.8%) in 2020 while electing a Democrat to the House, thus giving Republicans a chance to convert a key district. Derrick Van Orden (R), the retired Navy SEAL who held Rep. Kind to a 51-49% win last year, is again running and raised over $750,000 for his campaign since the year began.
California: For the first time, a statewide California poll finds Gov. Gavin Newsom (D) trailing in his bid to retain office in the September 14th recall election. The Survey USA poll (8/2-4; 1,100 CA adults; 888 CA registered voters; 613 CA likely recall election voters; 545 CA voters who say they will answer the replacement candidate question; online) finds only 40% support for retaining the Governor, while 51% would vote to remove him from office. Recent polls have shown the removal position gaining support, but not with such a drastic margin as this study.
Those who say they are certain to vote would support removing him in a 57-39% spread. Those categorizing themselves as “likely” to vote would vote against the recall in a 42-36% count. The most damaging number for Gov. Newsom is now a majority of non-affiliated voters, 50-33%, would vote to remove him. Expect a major campaign to ensue in the remaining five weeks before the election.
Florida: The Florida Chamber of Commerce released their Cherry Communications poll (7/26-8/4; 610 FL likely voters; live interview) that finds a considerably different result when compared to the St. Pete Polls data that was released last week. In the latter polls, Gov. Ron DeSantis (R) was found falling into general election virtual dead heats with Rep. Charlie Crist (D-St. Petersburg) and state Agriculture Commissioner Nikki Fried (D) in separate ballot tests.
The FL Chamber poll finds Gov. DeSantis leading Rep. Crist, who served as a Florida Republican Governor from 2007-2011, 51-43%. The Governor’s margin against Ms. Fried is 50-42%. Regardless of the candidates and office sought, the Florida electorate consistently delivers close election results.
Public Policy Polling released a small-sample flash poll (8/10-11; 274 FL likely Democratic primary voters; interactive voice response system), and for the first time found Mr. Crist (D-St. Petersburg) falling behind Ms. Fried. The ballot test result gave Ms. Fried a small 36-33% edge but does show that the early momentum seems to be now breaking her way and against Rep. Crist.
Michigan: Former US Education Secretary Betsy DeVos, daughter-in-law to Amway co-founder Rich DeVos, ended speculation yesterday about her possible gubernatorial bid. Ms. DeVos said that she will not enter the race to challenge Gov. Gretchen Whitmer (D). This leaves former Detroit Police Chief James Craig and online talk show host Tudor Dixon as likely the two top Republican candidates.
New York: Succumbing to pressure from the state Attorney General’s sexual harassment report, New York Gov. Andrew Cuomo (D) confirmed he will resign his office before the end of the month. This means Lt. Gov. Kathy Hochul (D) will ascend to the Governorship as the state’s first female chief executive and already says she will run for a full term in 2022.
Whether she receives Democratic primary opposition is difficult to project at this point, but the chance of a contested primary forming looms large. New York City Public Advocate Jumaane Williams (D) is expressing interest in running and gubernatorial aspirations are clear for Attorney General Letitia James (D). US Rep. Alexandria Ocasio-Cortez (D-Bronx) will also be named at some point as a potential contender.
Republican Congressman Lee Zeldin (R-Shirley) is already the party-endorsed GOP gubernatorial candidate, but any race without a politically wounded Cuomo as the Democratic nominee makes the victory path much more difficult for a Republican challenger.
Virginia: The co/efficient research group conducted a statewide Virginia clean energy poll and asked questions about the coming Governor’s race. The survey (7/25-27; 762 VA likely voters; combination interactive voice response system and text) finds former Gov. Terry McAuliffe (D) leading ex-hedge fund manager Glenn Youngkin (R), 45-40%.
This is the fifth poll conducted since the beginning of June, and all have found both candidates recording support percentages in the 40s and separated by a range of 2-5 percentage points. The co/efficient results provide support to the argument that the Virginia 2021 race will feature a close finish.