Buttigieg reports on infrastructure funding, promises implementation of “One Federal Decision” mandate
Secretary of Transportation Pete Buttigieg spent about , giving a progress report on implementation of the Infrastructure Investment and Jobs Act (IIJA, or the bipartisan infrastructure bill). Money is going out to projects at a record pace: DOT has already apportioned $75 billion in formula funding for highways, airports, and transit, and has issued Notices of Funding Opportunity for 22 different competitive grant programs. Buttigieg defended the Administration’s emphasis on alternative fuels and electric vehicles, and said that pilot programs underway in several states will provide information about how best to replace the gas tax revenues that currently support the Highway Trust Fund.
Members on both sides of the aisle emphasized the need to speed the permitting process, which Buttigieg discussed in some detail. IIJA incorporated a One Federal Standard provision that should eliminate the need for multiple approvals, and Republican Committee members expressed frustration about how long it’s taking to implement this. The Department has created a to track projects through the system, but Buttigieg said that meeting the goal of completing environmental reviews within two years would be “a big ship to turn” that will require the collaboration of all parties involved.
Republicans blast SEC for “regulation through enforcement”
Republican members of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets grilled Gurbir S. Grewal, Director of the Securities and Exchange Commission’s Division of Enforcement, about the agency’s plans to regulate digital assets and enforce disclosure requirements about climate risk. Rep. Tom Emmer (R-MN), ranking member of the Committee’s Task Force on Financial Technology, said that the SEC was eroding public confidence in the financial markets by using enforcement to expand the Commission’s jurisdiction and acting in bad faith when it came to the digital assets industry. Emmer implied that things would be different if and when Republicans assume control of the House: “Understand, sir, there is a new day coming.” Both Democrats and Republicans wanted to know how Grewal planned to enforce upcoming disclosure rules on climate risk and other environmental, social, and governance policies. Grewal said he could not answer those questions until the rules are finalized, but the SEC has asked for funding to support 125 additional positions within the Enforcement Division.
House Financial Services Committee reviews FHFA
Longtime regulator Sandra L. Thompson made her , for a hearing that lasted almost five hours and covered the full spectrum of policy issues, including the status of the GSE conservatorship, GSE capital requirements, the Housing Trust Fund, the appropriate credit scoring model for mortgage borrowers, and more. Thompson asked the Committee for authority to regulate and supervise third-party service providers to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; the federal banking agencies have this authority through the Bank Service Company Act, and Thompson, an FDIC veteran, had been surprised to discover that FHFA did not.
FHFA creates Office of Financial Technology, seeks comment on fintech’s role in housing finance
The Federal Housing Finance Agency (FHFA) that it was creating an to serve as a hub for information and coordination in the agency’s treatment of fintech in housing finance. The Office of Financial Technology, currently a three-member team headed by Jason Cave, Deputy Director of Conservatorship Oversight and Readiness, will engage with market participants and other stakeholders, facilitate interagency collaboration, conduct outreach to regulated entities, and serve as an internal resource for innovations, trends, and emerging risks. In conjunction with this effort, FHFA is about the role of technology in housing finance and related risks and opportunities. Comments are due to FHFA by October 16.
It’s a defense spending bill — but it’s a financial services bill, too
As must-pass legislation, the annual National Defense Authorization Act (NDAA) is always a convenient vehicle for non-defense related policy measures. , approved by the House with a bipartisan vote of 329-101, incorporated 650 amendments — of which eighteen make potentially significant changes to federal financial services policy. GR’s legislative analyst Nick Manriquez tallied them up:
- Amendment 107, offered by Reps. Ed Perlmutter (D-CO), Nydia Velázquez (D-NY), Warren Davidson (R-OH), Earl Blumenauer (D-OR), Dave Joyce (R-OH), Barbara Lee (D-CA), Lou Correa (D-CA), and Charlie Crist (D-FL), is the bipartisan SAFE Act, which would allow state-legal cannabis businesses to access the banking system.
- Amendment 138, offered by Reps. Bryan Steil (R-WI) and Jake Auchincloss (D-MA), would require the US Treasury to report regularly to Congress on any sanctions waivers that would allow transactions between financial institutions and targeted individuals.
- Amendment 371, offered by Reps. Josh Gottheimer (D-NJ) and Brian Mast (R-FL), would require Treasury to report to Congress on any licenses authorizing financial institutions to provide services that benefit state sponsors of terrorism, and report on foreign financial institutions that conduct significant transactions for people sanctioned for international terrorism or human rights violations.
- Amendment 372, offered by Rep. Josh Gottheimer (D-NJ), would create a credit reporting ombudsman at the Consumer Financial Protection Bureau to help servicemembers and veterans resolve credit reporting errors.
- Amendment 389, offered by Rep. Stephen Lynch (D-MA), would create an exchange within the Office of Foreign Assets Control (OFAC) to improve information sharing with law enforcement, national securities agencies, and financial institutions, and facilitate sanctions enforcement.
- Amendment 578, offered by Rep. Jesús “Chuy” García (D-IL), would direct the Treasury to use its vote and influence in global financial institutions (IMF, World Bank, etc.) to advocate for immediate suspension of all debt service payments owed by Ukraine, and directs Treasury and the State Department to pursue comprehensive debt payment relief for Ukraine with other creditors.
- Amendment 668, offered by Rep. Bill Foster (D-IL), would grant the NCUA explicit supervisory oversight authority over the cybersecurity practices of credit unions’ third-party service providers.
- Amendment 673, offered by Rep. James Himes (D-CT), would modernize FinCEN’s special measures authorities to let FinCEN meet the challenges of combating 21st-century financial crime.
- Amendment 739, offered by Rep. Maxine Waters (D-CA), would extend the CARES Act’s access to emergency liquidity for smaller credit unions through 2023.
- Amendment 760, offered by Rep. Ritchie Torres (D-NY), would require financial institutions to report certain credit application data to the Consumer Financial Protection Bureau for the purposes of enforcing fair lending laws.
- Amendment 808, offered by Reps. Linda Sánchez (D-CA) and Nancy Mace (R-SC), would extend consumer credit protections to active duty armed and uniformed consumers in combat zones or at sea, and would prohibit the inclusion of adverse credit information that occurred while a uniformed consumer was serving.
- Amendment 898, offered by Rep. Madeleine Dean (D-PA), would prohibit debt collectors from telling service members that failure to pay might result in a reduction of rank, loss of security clearance, or military prosecution.
- Amendment 950, offered by Rep. Brad Sherman (D-CA), would require US financial institutions to ensure that its subsidiaries, controlled affiliates, employees, etc. comply with US financial sanctions on Russia and Belarus to the same extent required for the financial institution itself.
- Amendment 952, offered by Reps. Abigail Spanberger (D-VA) and Anthony Gonzalez (R-OH), would require Treasury to study and report on the effects of Chinese financial system reforms on the US and global financial systems.
- Amendment 983, offered by Rep. Joyce Beatty (D-OH), would reduce barriers to employment at federally insured financial institutions for people who have completed sentences for certain criminal offenses.
- Amendment 1006, offered by Rep. Pramila Jayapal (D-WA), would require the Secretary of HUD to report to Congress within 180 days on the effectiveness of “Housing First” strategies for reducing homelessness.
- Amendment 1057, offered by Reps. Maxine Waters (D-CA), Jamie Malinowski (D-NJ), Maria Elvira Salazar (R-FL), Joe Wilson (R-SC), Abigail Spanberger (D-WA), and Richard Hudson (R-NC), would bring services that facilitate anonymity or evasion of anti-money laundering provisions into compliance with the Bank Secrecy Act.
- Amendment 1070, offered by Reps. Carolyn Maloney (D-NY) and Patrick McHenry (R-NC), would require federal financial regulators to adopt specific standards of formatting, searchability, and transparency that would make electronic data searches easier and downloadable in bulk, without license restrictions.
Confirmations, Nominations, Departures
Shailen P. Bhatt has been nominated to head the Federal Highway Administration. Bhatt’s career in transportation policy includes service as Executive Director of the Colorado Department of Transportation, Secretary of Transportation for the state of Delaware, and a presidential appointee at the US Department of Transportation. He is currently Senior Vice President of Global Transportation Innovation and Alternative Delivery at AECOM, a multinational infrastructure consulting firm.
Kimberly Ann McClain has been nominated as an Assistant Secretary of Housing and Urban Development.
The Week Ahead in Washington
This week is officially the last week of session for the House of Representatives before it leaves town for the entire month of August. The Senate is currently scheduled to continue meeting through August 7.
July 26-27 Federal Open Market Committee meets in Washington, DC, with a press conference on the 27th to announce the Committee’s decisions.
July 28 The in both executive session and public session. The executive session will include updates from the Council’s Hedge Fund Working Group and Climate-related Financial Risk Committee, and a discussion of the report the Council is preparing in response to the President’s Executive Order on Ensuring Responsible Development of Digital Assets. The public session will discuss FSOC’s work related to climate-related financial risk.
The Ellis Insight
Jim Ellis on Political News
Maryland: Though polling was suggesting that several close races would be present on the Maryland primary ballot, it appears none materialized. Approximately one-third of the Democratic ballots and 20% of the GOP’s tallies still remain to be counted, and it will be several days until we see final totals. The margins from the various races, however, are such that they are unlikely to reverse any finishing order.
It appears that author and anti-poverty activist Wes Moore will win the Democratic gubernatorial primary. He has almost a full ten-percentage point lead over his closest rival, former Labor Secretary and ex-Democratic National Committee chairman Tom Perez, with state Comptroller Peter Franchot now a distant third.
Claiming the Democratic nomination makes him a prohibitive general election favorite against Donald Trump-backed state Delegate Dan Cox (R-Frederick), who clinched the Republican primary over former state Commerce Department Secretary Kelly Schulz. Assuming a November win, Mr. Moore will become Maryland’s 63rd Governor and first African American to hold the post. He would replace Governor Larry Hogan (R), who is ineligible to run again because of the state’s term-limit law.
Sen. Chris Van Hollen was a landslide Democratic primary winner, as expected. He will face Republican activist and homebuilding contractor Chris Chaffee in what should be an easy re-election run for the incumbent. US Rep. Anthony Brown (D-Bowie) also was easily nominated as the Democratic candidate for Attorney General in another race polling projected as trending close. Rep. Brown has so far claimed approximately 60% of the vote against retired district judge Katie Curran O’Malley (D), wife of former Governor and presidential candidate Martin O’Malley.
Last Tuesday’s competitive US House races saw the open 4th District going to ex-Prince Georges State’s Attorney Glenn Ivey, who surprisingly easily defeated former US Rep. Donna Edwards (D). The ex-House member, who served nine years after winning a special election in 2008, was attempting a political comeback after losing the 2016 US Senate Democratic primary.
In the 6th District, State Delegate and 2020 Republican nominee Neil Parrott defeated journalist Matthew Foldi, who attracted support from Gov. Hogan and other key GOP leaders. Mr. Parrott will again challenge Rep. David Trone (D-Potomac), but now in a district that is more favorable to a Republican candidate.
Georgia: In the developing seesaw battle between Georgia Sen. Raphael Warnock (D) and Republican retired professional football player Herschel Walker, a new joint Fabrizio Ward (R) and Impact Research (D) poll for AARP (11/5-11; 1,197 GA likely general election voters with an over-sample of 500 voters aged 50 and older and a 147-person over-sample of black voters; live interview and text) projects the incumbent to be holding a 50-47% edge despite Gov. Brian Kemp (R) running ahead of Democrat Stacey Abrams, 52-45%, and Republicans leading on the generic congressional question, 48-45%.
Iowa: Selzer & Company, which scores an A+ rating from the FiveThirtyEight poll ranking apparatus and is widely viewed as Iowa’s most accurate and consistent pollster, went into the field over the July 8-11 period. They interviewed 811 adults, 597 who identified themselves as likely voters. The Senate ballot test broke only 47-39% in Sen. Grassley’s favor over retired Navy Admiral Mike Franken, the Democratic nominee.
Though Sen. Grassley has the advantage beyond the polling margin of error, the race has signs of becoming competitive. The Senator will be 89 years of age at the time of the election, which may be one reason he is trailing 40-30% with voters 35 years of age and younger. He continues perform strongly with men, 56-33%, but falls behind Admiral Franken with women, 44-38%.
Iowa is a Senate race to watch during the rest of the campaign. Contrasting the Grassley numbers, GOP Gov. Kim Reynolds holds a strong 48-31% advantage over Democratic nominee Deirdre DeJear.
Ohio: Though polling finds US Rep. Tim Ryan (D-Warren/Youngstown) and author J.D. Vance (R) in a neck-and-neck contest, one area that is anything but close is campaign fundraising. In the second quarter, Rep. Ryan outraised Mr. Vance by a whopping 9:1 ratio, meaning over $9 million raised to just over $1 million for the latter man. Perhaps more seriously, Mr. Vance is reporting only $630,000 cash-on-hand as compared to Rep. Ryan’s $3.6 million. Expect outside sources to become heavily involved in this race with the goal of helping Mr. Vance close the resource gap.
Utah: Dan Jones & Associates, polling for the Deseret News and the Hinckley Institute at the University of Utah (7/11-13; 801 UT registered voters), projects Sen. Mike Lee (R) with only a 41-36% lead over Independent Evan McMullin. This is the closest general election poll reported in the current election cycle. The Democrats coalesced behind Mr. McMullin instead of fielding a candidate of their own.
The move looks to be working since Sen. Lee would be faring better in a three-way race with a Democratic candidate peeling away from Mr. McMullin the most partisan party voters. Sen. Lee is likely in better position that this one poll indicates, but the Utah race is certainly beginning to attract some national attention.
Washington: For the second time in a matter of days, a poll finds Sen. Patty Murray (D) re-establishing a strong lead in her 2022 re-election effort after earlier surveys were projecting a tight race. Elway Research (7/7-11; 400 WA registered voters; live interview & text) projects Sen. Murray to be holding a 51-33% lead over veterans advocate and former nurse Tiffany Smiley (R).
The result is almost identical to the Survey USA poll that was conducted during the same period. The S-USA data found a 53-33% Murray advantage. The confirming Elway result suggests the two pollsters are detecting a positive response to the recent Murray ad blitz.
Florida: The Republican Party of Florida contracted with the Tyson Group research firm to conduct a series of GOP primary polls in the state’s new open congressional districts.
In the Jacksonville area’s new 4th CD, state Senate President Pro Tempore Aaron Bean leads college professor Erick Aguilar, 24-14%. Just to the south in the new Volusia County 7th District, businessman and Iraq War veteran Cory Mills and state Rep. Anthony Sabatini (R-Howey-in the-Hills) are in a virtual tie with the former leading the latter, 23-21%.
Turning to the St. Petersburg seat of Rep. Charlie Crist (D), who is running for Governor, 2020 nominee Anna Paulina Luna leads attorney Kevin Hayslett and lobbyist and 2020 candidate Amanda Makki, 37-17-10%. The new Hillsborough County 15th CD features a virtual three-way tie among state Sen. Kelli Stargel (R-Lakeland) who has 13% support, with Secretary of State Laurel Lee and state Rep. Jackie Toledo (R-Tampa) each trailing with 10% apiece.
IA-3: The Moore Information Group tested the toss-up rated IA-3 congressional race between two-term Rep. Cindy Axne (D-Des Moines) and state Sen. Zach Nunn (R-Bondurant). Not surprisingly, the poll results (7/9-11; 400 IA-3 likely voters; live interview) found the two candidates tied at 43% apiece. In neither of Ms. Axne’s congressional wins did she reach 50%. Therefore, we can expect another very close result come election night.
Nevada: Emerson College ran a series of polls testing 500 registered voters in each of the three Democratic-held Las Vegas congressional districts over the July 7-10 period. While the Dem incumbents lead in all three, none even break the 42% plateau in support.
In the 1st District, Rep. Dina Titus’ (D) advantage over Republican Mark Robertson is only 41-37%. Third District incumbent Susie Lee holds just a 42-40% slight margin over Republican attorney April Becker. In the 4th CD that stretches from North Las Vegas to the state’s middle section, Rep. Steven Horsford’s (D) spread over insurance agency owner Sam Peters (R) is a similar 42-39%. The three seats were drawn as Lean Democratic seats, but it appears all could be in position to swing toward the Republicans in November.
NY-10: The Justice Research Group, polling for state Assemblywoman Yuh-Line Nioh (D) and the Working Families Party largely confirms Data for Progress poll that finds NYC Councilwoman Carlina Rivera and Ms. Nioh at the top of the Democratic candidate throng competing for the new open Lower Manhattan congressional seat. Each posted a preference figure of 16% in this poll. There is no runoff law in New York, so the eventual nominee will almost assuredly win with just plurality support.
Like the DfP poll, the Justice Research survey finds both US Rep. Mondaire Jones, coming from his Westchester County seat, and ex-NYC Mayor Bill de Blasio falling below the 10% plateau. In this survey, Rep. Jones posts only 8% preference and de Blasio 3%. The pollsters conducted the survey from July 1-11, and interviewed 636 NY-10 likely Democratic primary voters through live conversations and texts.
Largely, as a result of the two polls, Mr. de Blasio ended his congressional effort. In a video message thanking people for their help and support, the former Mayor indicated that since it is clear the people of the new 10th District prefer a different direction, it is time that he found a different way to serve. Therefore, Mr. de Blasio says he will exit elective politics.
NY-23: While the Republican Party establishment is clearly behind NY GOP state chairman Nick Langworthy to replace resigned Rep. Tom Reed (R-Corning) in the new 23rd CD, a new poll suggests the likely Republican primary voters feel otherwise. The WPA Intelligence survey (7/9-11; 604 NY-23 likely Republican primary voters; live interview) sees former Republican gubernatorial nominee Carl Paladino posting a whopping 54-24% lead over Mr. Langworthy.
This poll tested voters for the regular election. Neither Mr. Paladino nor Mr. Langworthy is competing in the special election to fill the balance of the term, also to be held on primary day, August 23. The Republican nominee in that race is political caretaker candidate Joe Sempolinski, the Steuben County Republican Party chairman.
WY-AL: The Caspar Star Tribune newspaper sponsored a Mason-Dixon Polling & Strategy study (7/7-11; 1,100 WY registered voters) that finds GOP attorney and congressional challenger Harriet Hageman, who former President Donald Trump endorses, posting a 52-30% lead over controversial incumbent Rep. Liz Cheney (R-Wilson) in anticipation of the August 16 Republican primary, now less than a month away.
This is the third consecutive released survey projecting Ms. Hageman holding a lead well into double digits. While Ms. Cheney has a huge lead in campaign resources and is making overt requests of Democratic voters to participate in the Republican primary, it is doubtful there is enough she can do to ultimately prevail.
Ohio: Continuing the fight between the Ohio Supreme Court and the Buckeye State legislature, the high court again struck down the enacted congressional map as a partisan gerrymander, once more on a 4-3 ruling, and mandated that the plan be re-drawn for the 2024 election. It is likely that the US Supreme Court will issue a ruling on partisan gerrymandering at some point next year, which may make the Ohio decision moot. This ruling does not affect the 2022 election cycle, which will be run under the plan that the court just struck down.
Missouri: The grassroots organization attempting to convert the Missouri primary system into a top-four jungle primary format à la Alaska, has failed to qualify for the November initiative ballot. Though the group recruited more than 300,000 signatures, they did not reach the mandated number of verified petition signatures in each of the state’s eight congressional districts. The organizers vowed to mount a similar effort for the 2024 election.
The top-four system, used only in Alaska and for the first time in the 2022 election cycle, features a jungle primary that includes all candidates on the same ballot. The top four contenders then advance to the general election regardless of party preference and vote percentage attained. Once the four general election finalists are determined, the system converts to Ranked Choice Voting System, where voters prioritize their candidate choices from 1-4. Contenders are eliminated once one reaches the 50% mark.