The Next 100 Days: A look back and a look ahead in Washington

The mantra and the agenda of the current Congress certainly continues to be primarily “investigations and nominations,” with each body pursuing a different track. The Senate and the President are expected to focus on filling vacancies across key cabinet and judicial posts, while the House of Representatives will continue its investigations into the administration and other politically charged topics. 

In considering what comes next, it is important to note that the demographic composition of the Democratic Caucus that now controls the House is somewhat different from the Democratic Caucus that was in the minority in the last Congress. Many, if not most, of the Democratic “pickups” that allowed Democrats to gain control of the House came from moderate swing districts and Democratic success in those districts appears to have been fueled by suburban female voters, as well as minority voters, many of whom were and continue to be repulsed by both the agenda and the rhetoric of President Trump.

Whatever their motives for supporting Democrats, what is abundantly clear is that this House Democratic Caucus is younger, more female, more minority, less respectful of hierarchy and seniority, and overall far less willing to “wait their turn” than any of their predecessors. This can make leading such a diverse and opinionated group a very challenging task, as the ongoing back-and-forth between Speaker Pelosi and some of the members of the Freshman Democratic “Twitter Caucus” certainly reveals.

As the House pursues its investigative agenda with respect to the President, presumably hearing from such key witnesses as Special Counsel Robert Mueller, former White House Counsel Don McGahn and many others, Speaker Pelosi will have to manage the increasingly sharp divisions within her diverse Caucus of moderate Democrats who believe that pursuing an impeachment of President Trump is both politically unwise and at best premature and their more liberal counterparts who believe that impeachment proceedings are essential, constitutionally mandated and should proceed forthwith. While the Speaker has skilfully managed these challenges to date, there is every reason to think that this task will become more not less difficult with the passage of time and as witnesses testify. 

Don’t expect the Administration to play nice with the House Democrats’ investigation focus. President Trump has said he will resist every subpoena from congressional Democrats investigating his administration, promising an all-out legal war. To this end, President Trump has ordered officials not to comply with legal requests from Democrats in the House who are conducting multiple investigations of his administration, on topics including Trump’s tax returns, the White House’s overturning of security clearance denials, and Russian election interference. This has sparked complaints of unprecedented obstruction of congressional oversight from Democrats who believe that the President is simply trying to run out the clock by raising frivolous legal arguments against their subpoenas and requests for testimony and documents in order to push a resolution of these issues beyond the 2020 election.

Might we have a constitutional crisis on our hands that would effectively shut the legislative process down until the 2020 election? That may just be a cynic’s thinking, but this possibility certainly cannot be ruled out at this time.

On April 25, House Majority Leader Steny Hoyer (D-MD) issued a Dear Colleague announcing that, this week, the House will consider HR 9, the Climate Action Now Act, a bill affirming the principles of the Paris Climate Agreement, and consider a disaster relief supplemental appropriations bill during the week of May 6. During the May Work Period, Hoyer also expects to bring H.R. 5, the Equality Act, and H.R. 1994, the SECURE Act, to the House Floor, along with an extension of the national flood insurance program whose current short-term authorization is set to expire at the end of May. He said that the House will take up legislation to strengthen the Affordable Care Act and address rising prescription drug costs, and will possibly consider HR 1500, the Consumers First Act. Pending committee action, in May the House may also consider H.R. 6, the Dream and Promise Act, and/or a bill to increase the minimum wage.

Beyond investigations and nominations, Congress does still have to address the specter of sequestration and a potential debt limit breach. The prospect of enormous statutorily mandated cuts to both defense and non-defense spending if an agreement cannot be reached certainly creates a powerful incentive for most in the Congressional leadership to reach such an agreement. 

While it’s far too early to predict another government shutdown, with so many freshman members who must face the voters in 2020 for their first re-election campaign, one should assume that this lift will be even harder than the end of 2018’s spending package debacle.  

See the highlights from the first 100 days.

It’s a new day at the Financial Services Committee. But what does it mean for policy?

With the change in control of the House of Representatives, there has been a massive change in the agenda of the Financial Services Committee.  There also is an improved relationship between the new Chair and new Ranking Member of the Committee from that in the last Congress which has already resulted in House passage of about ten noncontroversial Financial Services Committee bills and which could improve the chances for passage of some bipartisan legislation including long-term reauthorizations of some expiring programs .  However, there appears to be quite limited overlap between the Financial Services Committee’s agenda and the agenda of Senate Banking Committee Chairman Mike Crapo (R-ID). 

Thus, apart from those noncontroversial bills that are passed under suspension of the rules, many, if not most, of the bills that the Financial Services Committee reports and the House eventually passes in this Congress will be “messaging” bills that are destined to die in the Senate, such as HR 1500, the Consumers First Act , a bill designed to protect the Consumer Financial Protection Bureau (CFPB) from what Democrats see as  the Trump White House’s anti-consumer agenda and a Republican assault on the CFPB’s mission, and HR 1856, the Ending Homelessness Act.  Most of these bills will not even be taken up by the Banking Committee. 

Financial Services Committee Chairwoman Maxine Waters (D-CA) says that her  focus is on protecting consumers from harmful financial practices, ensuring that there are strong safeguards in place to prevent a financial crisis, expanding and supporting affordable housing and tackling the homelessness crisis, encouraging responsible innovation in financial technology while protecting against abusive payday lending practices, promoting diversity and inclusion in the financial services sector including through the creation of a Diversity and Inclusion Subcommittee , comprehensively reforming or, if necessary replacing, the credit reporting system and making sure that Americans and small businesses have fair access to the financial system. 

Chairwoman Waters also has laid out a set of core principles that she says should be part of legislative efforts to address the future of housing finance reform, with a particular emphasis on maintaining access to the 30-year fixed rate mortgage and to affordable mortgage credit, ensuring sufficient private capital is in place to protect taxpayers, and ensuring that underserved borrowers and communities are not overlooked

In contrast, Banking Committee Chairman Crapo’s agenda is somewhat more narrow.  He has declared pursuit of housing finance reform legislation to be his highest priority and says that the Banking Committee will determine how it can fix the housing finance system, establish appropriate levels of taxpayer protection, preserve the 30-year fixed rate mortgage,  increase competition among mortgage guarantors  and promote access to affordable housing..  He wants to ensure that the agencies effectively implement the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA),the regulatory relief law enacted last year and also wants to pursue additional legislative proposals to promote capital formation and economic growth  and better corporate governance while reducing regulatory burden.

Chairman Crapo is also not a big fan of the CFPB and wants to explore whether the CFPB should funded through the regular appropriations process and whether a commission, rather than a single Director, would allow the Bureau to pursue its mission more effectively.  Noting that the most recent NFIP reauthorization expires on May 31, he says that  any comprehensive reforms to the NFIP must achieve the appropriate balance of protecting taxpayers and assisting consumers.  He also, along with Ranking Member Sherrod Brown, has posed a series of questions and invited public comment about what types of potential data privacy legislation would give consumers more control over and enhance the protection of consumer financial data that is collected about them and ensure that consumers are notified of breaches in a timely and consistent manner. 

While both Chairwoman Waters and Chairman Crapo have expressed interest in housing  finance reform and in February the White House has published its principles for such reform, it will be a very heavy lift, especially with the 2020 presidential election on the horizon, to pass GSE reform legislation in this Congress.  With the recent confirmation of Mark Calabria, a long-time critic of Fannie Mae and Freddie Mac, as Director of the Federal Housing Finance Agency (FHFA), the open question is how much GSE reform can be accomplished through administrative action and degree to which legislation will be required. 

Assuming that enactment of GSE reform legislation remains a pipe dream, except for possible reauthorizations of the National Flood Insurance Program (NFIP), the Terrorism Risk Insurance Act (TRIA),  and the Export-Import Bank, and potential passage of HR 1595, the SAFE Banking Act of 2019, a cannabis banking bill with 165 House sponsors and 22 Senate sponsors, if Leader McConnell will allow the bill to be considered by the Senate, the prospects for the enactment of significant financial services legislation in this Congress currently appear limited. 

FEC increases contribution limits for 2019-2020

The Federal Election Commission (FEC) updated the federal contribution limits for the 2019-2020 election. The new per election limits were effective January 1, 2019. Below is a chart that explains the new limits on each donor.

The chart above illustrates the new increased contribution limits to the respective donors. Individuals can now contribute $2,800 per election to a candidate, an increase of $100 from the 2018 cycle. This means that individuals may now give up to $5,600 per candidate per cycle (combined to include both the primary and general election limits). Due to changes in inflation, these limits are increased every odd-numbered year to balance out differences.

The contribution limit to national party committees can now contribute $35,500 per year, an increase of $1,600 from last year. The annual max contributions to the national party committee accounts have been increased to $106,500, an increase of $4,800.

Note that traditional PAC contributions are not indexed for inflation. This means that PAC contributions remain the same from 2018.

Every committee assignment for the 116th Congress

House Democratic and Republican leadership have nearly finalized the grueling task of doling out committee assignments, capping weeks of acute jockeying by freshman lawmakers hoping to earn influential postings.

An opaque process tightly controlled by party leaders, the committee sweepstakes represents one of the earliest and most significant influences on a new legislator’s career trajectory, as panel membership often drives member legislative priorities and opens important avenues of fundraising opportunities.

House rules generally limit members to serving on no more than two standing committees and four subcommittees, with the four-most prized including Ways and Means, which writes tax laws; Energy and Commerce, which claims the broadest non-tax-oriented jurisdiction of any committee and has principal responsibility for telecommunications, consumer protection, food and drug safety, public health, the supply and delivery of energy, and interstate and foreign commerce; Financial Services (also known as the Banking Committee), which oversees the totality of the financial services sector; and Appropriations, which is responsible for passing spending blueprints for the federal government.

While the final composition of every committee is still being negotiated, Dentons’ bipartisan public policy team has assembled here the most up-to-date index of assignments available.

We’ll update this space as new assignments are announced.

Meet the (likely) freshman class of the 116th Congress

Dentons’ public policy team probes the polls to give you a first look at the newest (anticipated) members of Congress in this special report.

New federal court ruling shakes up disclosure norms in the federal independent expenditure space

In a decision likely to throw further uncertainty into the world of campaign finance disclosure rules, an Obama-appointed judge on the United States District Court for the District of Columbia recently invalidated the Federal Election Commission’s (“FEC”) regulation regarding the disclosure of donors by organizations making federal independent expenditure communications.  In light of the ruling, organizations, including 501(c)(4) social welfare entities, seeking to spend money on independent expenditures involving federal candidates between now and the November midterms should be mindful of the shifting legal ground beneath them and the likelihood of increased scrutiny into their FEC disclosure filings moving forward.

The existing FEC regulation at issue – 11 C.F.R. § 109.10(e)(1)(vi) – requires organizations that make independent expenditures in excess of $250 in a calendar year to disclose the identity of donors who gave over $200 for the purpose of furthering the reported independent expenditures.  Independent expenditures are communications that expressly advocate the election or defeat of a clearly identified federal candidate.  According to Judge Beryl Howell’s decision, the current iteration of the 11 C.F.R. § 109.10(e)(1)(vi) “blatantly undercuts” the overall congressional goal of disclosure due to the fact that it only requires organizations to report donors who gave for the particular independent expenditure being reported.  Thus, if donors gave contributions for general independent expenditures, or even if donors gave contributions earmarked for a specific independent expenditure plan but not a particular expenditure, such donors would not need to be disclosed on the independent expenditure reports.

In light of Judge Howell’s ruling, the FEC now has 45 days to issue regulations that more closely align with her understanding of the purpose of the Federal Election Campaign Act of 1971 – greater transparency.  The existing regulation will remain in effect for the 45 days, so organizations spending money on independent expenditures for the next 45 will be subject to those rules.  In the interim period, there is no need to amend past disclosure reports.

Given the significance of this ruling and the mixed reception it has received among lawyers concerned about First Amendment and administrative deference concerns, there will likely be an appeal from Crossroads GPS, an intervenor in the case and one of the most active 501(c)(4) social welfare organizations in the political arena.  It also remains to be seen how the FEC will respond to the court’s order and how it choose to enforce a new regulation that might jeopardize the anonymity of good faith donors to politically-active nonprofits. The Dentons Political Law Team will continue to monitor the legal issues and developments surrounding non-profit disclosure rules, but in the meantime please consult legal counsel should your organization be considering playing in the independent expenditure space.

Primaries in Conn., Minn., Wisc.: what to watch for and expect as polls close

Primaries in three states on Tuesday will set the contours of some of fall’s highest profile gubernatorial  and US House contests, as both parties eye possible and long-pursued upsets in Connecticut, Minnesota, and Wisconsin.

Connecticut

CT-Gov (D & R): Democratic Gov. Dan Malloy decided not to seek a third term in the face of an ongoing economic crisis that’s made him incredibly unpopular, and Republicans have a real chance to score a pickup in the fall.

Five Republicans are competing here, and there’s no obvious frontrunner. The state party endorsed Danbury Mayor Mark Boughton, who has led the few polls we’ve seen. Boughton, along with businessman Steve Obsitnik and former Trumbull First Selectman Tim Herbst, are participating in the state’s public financing program, which gives them each $1.35 million for the primary but caps their spending at $1.6 million.

Two businessmen, David Stemerman and Bob Stefanowski, are mostly self-funding their bids and are therefore not limited in how much they can spend. Stemerman has spent a hefty $6.2 million during his campaign, while Stefanowski has spent $2.9 million. Both Stefanowski and Stemerman have also aired commercials attacking one another while largely laying off their rivals. A survey earlier this month from the Democratic firm Tremont Public Advisors had Boughton leading Stefanowski 32-22, with Stemerman at 17.

Things are much more lopsided for the Democrats. The state party establishment, as well as a number of prominent unions, are supporting wealthy businessman Ned Lamont, who notably defeated Sen. Joe Lieberman in the 2006 primary before losing the general election to Lieberman’s independent campaign; Lamont also lost the 2010 primary to Malloy. The only other Democrat in the race is Bridgeport Mayor Joe Ganim, who spent several years in prison for corruption but regained his old office in 2015. Lamont has outspent Ganim $2.6 million to $600,000 during the campaign.

CT-05 (D & R) (50-46 Clinton, 54-45 Obama): Democratic Rep. Elizabeth Esty announced she would retire in the spring after news broke that she’d inadequately handled an abusive staffer.

Former Simsbury First Selectwoman Mary Glassman narrowly won the endorsement of the Democratic Party endorsement over former high school teacher Jahana Hayes, the 2016 National Teacher of the Year. Glassman has the backing of several of Connecticut’s House members, but several unions and Sen. Chris Murphy are supporting Hayes, who would be the first black woman to represent the state in Congress. Glassman outspent Hayes $220,000 to $59,000 from July 1 to July 25 (which the FEC calls the “pre-primary period”), but Hayes had more money in the bank for the final weeks of the race.

This western Connecticut seat has been competitive territory in the past, and Republicans hope that retiring Gov. Dan Malloy’s unpopularity will give them an opening. However, none of the three Republican candidates have raised much money. The top fundraiser is retired psychology professor Ruby O’Neill, who outspent businessman Rich DuPont $57,000 to $33,000 in the pre-primary period. Former Meriden Mayor Manny Santos spent only $6,000 during this time, but he has the state party endorsement.

Minnesota

MN-Gov (D & R): Democratic Gov. Mark Dayton is retiring after two terms, and both parties will fight hard to win this contest in the fall. The Democratic primary is a three-way race between Attorney General Lori Swanson, Rep. Tim Walz, and state Rep. Erin Murphy.

Swanson only entered the race in early June, but she brought plenty of name recognition with her. However, her campaign has faced some tough stories in the two months since. News broke in July that Rep. Rick Nolan, who is Swanson’s running mate, had hired a former employee for his 2016 re-election campaign even though the aide had previously left Nolan’s legislative staff after multiple women accused him of sexual harassment. In the final week of the contest, former staffers at the attorney general’s office charged that Swanson had pressured government employees into doing political work for her. Two polls taken in July, before the Nolan story broke, showed Swanson leading the primary, but we have no new data since then.

Walz, who represents a competitive congressional seat in the southern part of the state, looked like the frontrunner throughout most of the race, and he and his allies have outspent the rest of the field. However, Murphy, who has been trying to run to the left of the pack, has Dayton’s support as well as the official endorsement of the state Democratic Party.

On the GOP side, former Gov. Tim Pawlenty is seeking to regain his old seat eight years after leaving office and embarking on an unsuccessful presidential bid. He faces Hennepin County Commissioner Jeff Johnson, who lost the 2014 general election to Dayton 50-44. Pawlenty has considerably more money and name recognition, and the few polls we’ve seen have shown him far ahead. Johnson, however, has the state GOP’s backing, and he’s tried to position himself to Pawlenty’s right. The former governor went up with a negative TV ad last month, so he’s at least taking Johnson seriously as a threat.

MN-01 (R) (53-39 Trump, 50-48 Obama): Democratic Rep. Tim Walz is leaving this competitive southern Minnesota seat behind to run for governor, and Republicans are hoping its sharp swing towards Trump will give them a big opening in the fall. The GOP candidates are state Sen. Carla Nelson and businessman Jim Hagedorn, who narrowly lost to Walz in 2016 in a race that had looked safe for Team Blue until election night.

Nelson outspent Hagedorn $126,000 to $93,000 during the pre-primary period, though he had more money left for the final weeks of the contest. Nelson does have the NRA in her corner, while Hagedorn has the party endorsement. Still, some Republicans are anxious about nominating Hagedorn, who has a long history of misogynist comments, birther ramblings, and comments about “ungrateful” and “dead Indians.” Whoever emerges will take on former Defense Department official Dan Feehan, who faces little opposition in the Democratic primary.

MN-05 (D) (73-18 Clinton, 74-24 Obama): Rep. Keith Ellison announced on the final day of candidate filing that he was leaving this safely blue Minneapolis seat to run for attorney general to succeed Lori Swanson, who herself had just announced a last-minute bid for governor. Several Democrats quickly entered the race for Ellison’s seat, and the main candidates look like former Minnesota House Speaker Margaret Anderson Kelliher, state Rep. Ilhan Omar, and state Sen. Patricia Torres Ray.

Kelliher narrowly lost the 2010 primary for governor to Mark Dayton. Omar, who would be the nation’s first Somali-American member of Congress, has endorsements from Dayton, Minneapolis Mayor Jacob Frey, and the state party. Torres Ray would also make history as Minnesota’s first Hispanic member of Congress, but she’s raised considerably less money than her two main opponents.

MN-08 (D) (54-39 Trump, 52-46 Obama): Democratic Rep. Rick Nolan is retiring from a seat in the Iron Range in the northeast corner of the state. This area is ancestrally Democratic but shifted hard towards Trump, and Republicans are excited about St. Louis County Commissioner Pete Stauber, who faces no serious primary opposition.

There are three main Democratic candidates. State Rep. Jason Metsa and former state Rep. Joe Radinovich, who was Nolan’s campaign manager during his tight 2016 re-election campaign, have the most money and support from party elites. Radinovich, who has had the airwaves to himself, outspent Metsa $124,000 to $82,000 during the pre-primary period, and they both had a similar amount of cash left for the final weeks of the race. However, while retired Duluth news anchor Michelle Lee has raised and spent very little money or attracted much support from Democratic power players, she does have name recognition from her decades on TV.

Mining is one of the key issues in this contest. Mesta is the Democrat closest to mining interests and he has the backing of the United Steelworkers. Lee in particular has emphasized her opposition to local copper-nickel mining and its effects on the environment. Radinovich has tried to position himself in the middle on this issue while focusing more on healthcare.

Vermont

VT Gov (R): Gov. Phil Scott, a centrist Republican stock-car driver, was once one of the most popular governors in the country — beloved by Republicans, Democrats and independents. But then, in April, he signed three historic gun-control laws, drawing fierce protests from residents of this traditionally pro-gun state. In a Morning Consult poll conducted after the signing, Scott’s popularity among Republicans dropped by 26 percentage points, and he now has a -15 net approval rating with voters of his own party. That could be a problem on Tuesday, given that shopkeeper Keith Stern is challenging Scott from the right, specifically criticizing Scott for signing the gun bills. The Republican Governors Association is acting like this is a competitive race: It has invested more than $1 million in a PAC supporting Scott’s re-election.

If Scott does lose the primary, then Stern, a more mainstream conservative, would instantly become a heavy underdog in this dark-blue state. (Going by our new and improved partisan lean metric,1 Vermont is 24 points more Democratic-leaning than the country as a whole.) Although none of the Democratic candidates has lit the world on fire financially, the favorite in the Democratic primary is probably former Vermont Electric Cooperative CEO Christine Hallquist, who, if elected, would be the nation’s first transgender governor.

Wisconsin

WI-Gov (D): Democrats have a crowded contest to take on GOP Gov. Scott Walker. State Superintendent of Public Instruction Tony Evers, the only statewide official running, has had decisive leads in the few polls we’ve seen, while his rivals have all been far behind.

However, former state Rep. Kelda Helen Roys, who would be the first woman to serve as governor, spent considerably more money than the rest of the field during July, which could help her get her name out late in the race. Professional Fire Fighters of Wisconsin president Mahlon Mitchell, who would be Wisconsin’s first black governor, has also spent a credible amount of money, and he’s backed by several unions. Attorney Matt Flynn, campaign finance reform activist Mike McCabe, Madison Mayor Paul Soglin, and state Sen. Kathleen Vinehout are also in.

WI-Sen (R): Republicans have hosted an extremely expensive contest to take on Democratic Sen. Tammy Baldwin. In one corner is businessman and Marine veteran Kevin Nicholson, who has benefited from over $10 million in spending from groups supported by conservative megadonor Richard Uihlein. In the other is state Sen. Leah Vukmir, who has received $2.5 million in air support from groups funded by Diane Hendricks, another conservative megadonor, and the Metropolitan Milwaukee Association of Commerce.

Nicholson has pitched himself as a conservative outsider, while Vukmir is much closer to the state GOP establishment and touts endorsements from both the state party and most of the state’s House delegation (including retiring Speaker Paul Ryan). Vukmir and her allies have taken aim at Nicholson’s tenure as president of the College Democrats of America, including his 2000 speech at the Democratic National Convention in support of Al Gore. Nicholson and his supporters have hit back against Vukmir for expressing past doubts about Donald Trump. A few polls in July showed Nicholson ahead, but we haven’t seen any fresh numbers in weeks.

WI-01 (D) (53-42 Trump, 52-47 Romney): Speaker Paul Ryan is retiring from this southern Wisconsin seat, and the GOP quickly closed ranks behind attorney Bryan Steil. Democrats are hoping to make a play for this district, and they have a battle between ironworker Randy Bryce and Janesville School Board member Cathy Myers.

Bryce entered the race last year with a strong announcement video promoting him as a blue-collar American who will stand up to the GOP, which helped him raise gobs of money. He also has the support of the DCCC, Bernie Sanders, and several unions. However, Bryce has attracted some bad headlines over the last year. Most notably, he only paid off some old debts, including $1,300 in child support and a $2,000 loan from almost two decades ago, well after he kicked off his campaign. Myers has raised considerably less money and generated much less attention, either good or bad.