November 17, 2017

November 17, 2017

Counting down — With the House and Senate gone for the Thanksgiving holiday, 12 voting days remain in this legislative session.

Tax plan passes House, moves through Senate Finance — The House of Representatives voted 225-207 on Thursday to approve H.R. 1, the Tax Cuts and Jobs Act. Later in the day, the Senate Finance Committee approved its own version of the bill along party lines, 14-12. The plan on both sides now includes a repeal of the individual mandate for health insurance, which Senator Ron Johnson (R-WI) has said is a deal-breaker for him.

Cordray to leave CFPB, Mulvaney to step in — Richard Cordray, Director of the Consumer Financial Protection Bureau, announced Wednesday that he will step down from that position at the end of November. News reports say that OMB Director Mick Mulvaney will be appointed interim director of the CFPB, adding this to his portfolio until a permanent replacement is nominated and confirmed. Outgoing House Financial Services Committee Chairman Jeb Hensarling (R-TX) hailed the resignation, calling the CFPB “structurally unconstitutional and completely unaccountable to the American people.”

House passes flood insurance bill — The House of Representatives voted 237-189 on Tuesday to pass H.R. 2874, the 21st Century Flood Reform Act. Among other provisions, the bill would allow for private sales of flood insurance by corporations or mutual aid societies. It would make FEMA responsible for maintaining and overseeing the National Flood Insurance Program (NFIP), and would authorize FEMA to create a flood insurance pilot program that would cover all residential and non-residential properties and satisfy the mandatory coverage requirements. The Senate has yet to act on its own bill; the NFIP will expire on December 8.

House Financial Services approves 23 bills — The House Financial Services Committee marked up 23 bills this week in a two-day session that ended with votes sending all the legislation to the House floor. Among the bills approved were H.R. 3299, the “Protecting Consumers’ Access to Credit Act of 2017,” which passed 42-17; H.R. 4248, to repeal certain disclosure requirements related to conflict minerals, which passed 32-27; H.R. 4263, the “Regulation A+ Improvement Act of 2017,” which passed 37-23; and H.R. 4267, the “Small Business Credit Availability Act,” to update rules for business development companies, which passed 58-2.

House, Senate look at electricity & infrastructure needs in PR, USVI — At hearings before the House Natural Resources Committee and Senate Energy and Natural Resources Committee this week, the governors of Puerto Rico and the U.S. Virgin Islands reported on the progress of hurricane recovery efforts and asked for additional help. Kenneth Mapp, Governor of the U.S. Virgin Islands, said that more than 70% of the islands are still without power, though he hopes most power will be restored by Christmas. Puerto Rico Governor Ricardo Rosselló Nevares said that power levels there have been restored to 49% of the island, and that 90% of residents now have access to clean water. Legislators discussed the need to amend the Stafford Act to allow the Army Corps of Engineers to improve previous structures, rather than simply rebuilding them to old specifications. Today the White House asked Congress to authorize an additional $44 billion for disaster relief to be shared among the afflicted areas; Puerto Rico alone had asked for $94 billion to rebuild the power grid and housing, while Texas asked for $61 billion and Florida asked for $27 billion.

Senate confirms Otting as Comptroller of the Currency — The Senate voted 54-43 yesterday to confirm Joseph Otting as Comptroller of the Currency. Democrats supporting the nomination were Senators Heidi Heitkamp (D-ND) and Joe Manchin (D-WV). Otting, who was most recently President and CEO of OneWest Bank, was appointed to a full five-year term. He must divest his options and holdings from CIT Group, which acquired OneWest, within 90 days.

Treasury recommends changes to SIFI designation process — Today the U.S. Treasury delivered a report to the White House that examined the Financial Stability Oversight Council’s process for identifying systemically important financial institutions (SIFIs), and recommended several changes to the way FSOC designates nonbanks as systemically important. The Council should look at activities and industry-wide issues rather than at individual companies, the report said, and should give more consideration to the likelihood of a firm’s material financial distress in making the SIFI determination. “The Council should . . . designate a nonbank financial company only if the expected benefits to financial stability outweigh the costs that designation would impose.”

FHA insurance fund capital remains above 2%, draws fire from Hensarling — The Federal Housing Administration released its annual report on Wednesday, noting a decline in the capitalization of its Mutual Mortgage Insurance (MMI) Fund from 2.35 percent in 2016 to 2.09 percent this year. This remains above the statutory minimum of 2 percent, which FHA did not meet until 2015, but House Financial Services Committee Chairman Jeb Hensarling (R-TX) said that the MMI Fund presents “a clear and present danger to taxpayers, homebuyers, and the U.S. economy.” Hensarling commended President Trump’s January decision to suspend a plan to lower FHA mortgage insurance premiums.

 

Next Week(s) in Washington:

Both House and Senate are in recess next week for the Thanksgiving holiday. We wish you and yours a safe and happy holiday.

November 28            Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on the nomination of the Honorable Jerome H. Powell to serve as Chairman of the Federal Reserve Board. 10:00 a.m., SH-216 Hart Senate Office Building.

November 29            Federal Reserve Board Chair Janet Yellen testifies before the Joint Economic Committee on the nation’s economic outlook. 10:00 a.m., location to be announced.

November 29            Official expiration date of Martin H. Gruenberg’s term as Chairman of the Federal Deposit Insurance Corporation. A successor has yet to be named.

 

The Ellis Insight. Jim Ellis reports on political news:

Senate
Alabama:  Six different pollsters went into the field immediately after the Roy Moore sexual impropriety scandal broke and they all now show a very tight special election campaign. Of the six, three find Democratic nominee Doug Jones leading, two still see embattled Republican Moore with an advantage, and one projects a dead heat. Interestingly, the one giving Mr. Jones his largest lead, a 51-39% spread, comes from the National Republican Senatorial Committee but they release no information about the pollster or methodology.

Fox News (11/13-15; 649 AL registered voters) gives Jones a 50-42% lead, but a Democratic skew appears to exist. The party division is listed at 48R-42D, in a place where Democrats have failed to break 37% of the vote in any statewide election during the last two cycles, and Republican primary and run-off turnout virtually three times greater than that of their Democratic counterparts. Therefore, it is likely that Jones’ edge is much closer to very low single digits. The special election is December 12th.

Arizona:  The local Arizona polling firm OH Predictive Insights conducted a new open Senate race survey (11/9; 600 AZ likely voters; automated responses) testing Democratic Rep. Kyrsten Sinema (D-Phoenix) against GOP Rep. Martha McSally (R-Tucson) and then pairing the former with ex-state Senator and US Senate candidate Kelli Ward. According to the results, with Rep. Sinema having a statewide name identification advantage over Ms. McSally largely due to the Democrat hailing from the dominant Phoenix media market, the spread between the two House members is only one point. From this data, Ms. Sinema would lead 46-45%, meaning such a contest is a virtual tie. Against ex-state Sen. Ward, Ms. Sinema’s lead is just slightly larger, 46-43%. The open Arizona race figures to be one of the focal point campaigns of the 2018 election cycle.

West Virginia:  A late October Fabrizio, Lee & Associates poll is now making its way into the public domain. According to the survey (10/19-22; 400 WV likely Republican primary voters), Attorney General Patrick Morrisey would lead Rep. Evan Jenkins (R-Huntington), 40-34%. The poll was conducted for a Super PAC supporting Morrisey, called the “35th PAC.”  The West Virginia GOP primary will be hotly contested from now until its culmination at the end of May. The winner then faces Sen. Joe Manchin (D), and will begin that campaign in an underdog position. Still, the general election figures to become highly competitive.

House
NH-1:  Executive Councilor Nick Pappas (D-Manchester) announced that he will join the open seat field of candidates for the 1st Congressional District. The eastern New Hampshire seat has defeated more incumbents since 2006 than any single congressional district in the country. Current Rep. Carol Shea-Porter (D-Rochester), who was twice defeated herself only to come back each time, has already announced that she will not run again. This race will be highly competitive. The New Hampshire Executive Council is a five-person elected board, divided into single-member districts, that has a check on the Governor’s veto power.

NH-2:  Former state House Majority Leader Jack Flanagan (R) announced that he is ending his congressional campaign. Mr. Flanagan was one of four candidates who had announced candidacies for the Republican nomination. The eventual winner will challenge Rep. Annie Kuster (D-Concord), who was re-elected in 2016 with only a 50-45% margin. The remaining candidates include state Rep. Steve Negron, physician Stewart Levenson, and 2016 candidate Jay Mercer. Despite her close call last November, Rep. Kuster will be a decided favorite for re-election to a fourth term.

OH-16:  State House Majority Whip Tom Patton (R-Strongsville), a former state Senate Majority Floor Leader, announced yesterday that he is ending his congressional campaign for the open 16th District. Mr. Patton’s newborn grandson is in a life-threatening situation, thus continuing his run for Congress, he says, would impede upon his family responsibility. Therefore, Rep. Patton will instead seek re-election to his current position in the state legislature. This leaves former Indianapolis Colts and Ohio State University football star Anthony Gonzalez as the leading Republican congressional candidate. He has raised more than $600,000 for the effort, an almost 6:1 ratio over his remaining top competitor, state Rep. Christina Hagan (R-Marlboro Township). The 16th District is reliably Republican. Four-term Rep. Jim Renacci (R-Wadsworth) is not seeking re-election in order to run for Governor.

PA-9:  While so many of his colleagues, particularly those whose committee chairmanships are expiring at the end of this Congress, are announcing their retirements, nine-term Rep. Bill Shuster (R-Hollidaysburg/Altoona) made public this week his intention to seek re-election. Speculation was relatively heavy that the Congressman might retire since he had a close primary in 2016, his Transportation & Infrastructure Committee chairmanship is ending, and the threat of a new redistricting map before the next election could radically change his district. But, Mr. Shuster has chosen to stay. Assuming no change in district boundaries, the Congressman will be a clear favorite for re-election.

PA-18:  It appears that state Rep. Rick Saccone (R-Elizabeth/Jefferson Hills) made the right move in withdrawing from the US Senate race and jumping into the vacated House special election when Rep. Tim Murphy (R-Pittsburgh) resigned his seat. Early in the past week, Mr. Saccone won the special Republican nominating convention, defeating state Sens. Guy Reschenthaler (R-Bethel Park) and Kim Ward (R-Greensburg). The convention featured 215 voting members from the district’s four counties.

Mr. Saccone, first elected to the state House in 2010 after a US Air Force career in counterintelligence and serving as a US diplomat in North Korea, won the nomination on the second ballot after Sen. Ward was eliminated in the first round of voting. The Democrats will nominate their candidate on November 19th. The special election is scheduled for March 13th, and Mr. Saccone begins the campaign as a heavy favorite to secure the safely Republican western Pennsylvania seat.

TX-29:  Veteran Texas Democratic Rep. Gene Green (D-Houston/Pasadena) became the sixth member of the state’s delegation to not seek re-election next year. Yesterday, Mr. Green announced that he will retire after 13 terms in the House, originally winning election in 1992. Rep. Green has continually represented the majority Hispanic Democratic seat since that time. The 29th District, which meanders within and around Houston and then stretches to the Pasadena area, is 77% Hispanic and safely Democratic. We can expect a large number of Democrats to now come forward to join former Harris County Sheriff and ex-Houston City Councilman Adrian Garcia, who challenged Mr. Green in the 2016 Democratic primary and had already announced his candidacy for next year. The Green retirement now brings the regular cycle open seat count to 35.

VA-2:  Democrats were excited about the electoral prospects of retired Air Force Colonel Doug Belote in a district that is moving more toward a politically marginal status. Late this week and due to illness in his family, Col. Belote announced that he is withdrawing from the race. Three other Democrats remain, but party leaders are now looking toward state Senator Lynwood Lewis as a viable alternative. Freshman Rep. Scott Taylor (R-Virginia Beach) defends the southeastern Virginia Tidewater district in what could become a competitive campaign.

Governor

California:  The USC Dornsife/Los Angeles Times poll (10/27-11-6; 1,504 California adults) was just released into the public domain. As has been the case for every survey, Lt. Gov. Gavin Newsom (D) leads the diverse, multi-candidate field. He scores 31% support within this sampling universe, ahead of former Los Angeles Mayor Antonio Villaraigosa (D) who posts 21% support. Republican state Assemblyman Travis Allen (R-Huntington Beach) is next with 15%, followed by Democratic state Treasurer John Chiang (12%), and GOP businessman John Cox (11%). The latter man is a former presidential and Illinois federal candidate. Democrats are prohibitive favorites to hold the California Governor’s mansion. Gov. Jerry Brown (D) is ineligible to seek re-election.

Connecticut:  While the open Connecticut Governor’s race has exploded with seven Democratic and 11 Republican candidates, one major political figure looming large on the horizon will not enter the race. Lt. Gov. Nancy Wyman (D) announced yesterday that she won’t enter next year’s gubernatorial campaign thus making the campaign to succeed outgoing Gov. Dan Malloy (D) even more unpredictable.

Iowa:  The Insight, LLC survey research firm tested the Iowa Democratic gubernatorial primary (8/8-10; 762 IA likely Democratic primary voters) and found that businessman Fred Hubbell, largely because of his early advertising campaign, has jumped out to the early lead. According to the result, Mr. Hubbell would command 22% support. He is followed by state Sen. Nate Boulton (D-Des Moines) with 13%.

All of the other candidates: SEIU labor union leader Cathy Glasson, John Norris, the former chief of staff to then-Gov. Tom Vilsack, ex-state Democratic Party chairman Andrea McGuire, former Des Moines School Board president Jonathan Neiderbach, and Ross Wilburn, the ex-Iowa City Mayor, all fall under 7% support. Gov. Kim Reynolds (R), who ascended to her position when incumbent Terry Branstad (R) was appointed US Ambassador to China, will seek her first full term in the Hawkeye State’s top political position.

Ohio:  Speculation had been rampant earlier in the year that Consumer Financial Protection Bureau director Richard Cordray (D) would resign his federal position and return to Ohio to run for Governor. He was expected to leave in September to formally enter the statewide campaign, but did not.

Then, speculation became pretty clear that he would not become a candidate to the point that state Supreme Court Justice Bill O’Neill (D), who previously said he would not run for Governor if Mr. Cordray returned, announced last month that he would officially enter the gubernatorial race in February. Now, it looks like Mr. Cordray, a former Ohio Attorney General and state Treasurer, will run for Governor after all. This week, he announced that he is in fact resigning his position and returning to the Buckeye State, but still stopped short of declaring for Governor, however.

Pennsylvania:  With early polling suggesting that state Sen. Scott Wagner (R-York) leading the GOP gubernatorial contest and businessman Jeff Bartos (R) leaving the US Senate campaign hoping to join Wagner has his Lt. Governor running mate, a new Republican gubernatorial candidate is emerging. State House Speaker Mike Turzai (R-McCandless Township) says he will now become a gubernatorial candidate and compete for the nomination. Businessman Paul Mango, who has just recently run a wave of television advertising, is also waging an active campaign. The eventual Republican nominee will challenge first-term Gov. Tom Wolf (D) next November.

Rhode Island:  According to a TargetPoint Consulting survey (11/4-6; 600 RI active voters; 433 registered Republican households) conducted for 2014 gubernatorial nominee Allan Fung, he leads state House Minority Leader Patricia Morgan and former state Representative and Trump honorary Rhode Island campaign co-chairman Joe Trillo by a respective 45-24-10% split. In the proposed general election, Mr. Fung claims a 46-41% edge over Gov. Gina Raimondo (D), who records an upside down favorability ratio of 43:49%.  While Rhode Island is one of the nation’s most reliably Democratic states, the party has only elected two of the last six Governors.

Wisconsin:  Labor leader Mahlon Mitchell (D), who was the party’s Lt. Governor nominee when Democrats attempted to re-call Gov. Scott Walker and Lt. Gov. Rebecca Kleefisch in 2012, announced that he will join the enlarging Democratic gubernatorial field, one of whom will challenge Gov. Walker next year.  Adding Mr. Mitchell means that 14 candidates are running in the Democratic primary, a race that won’t be settled until next August. Among the more prominent contenders are state Superintendent of Public Instruction Tony Evers, state Sen. Kathleen Vinehout (D-Buffalo County), state Rep. Dana Wachs (D-Eau Claire), and Madison Mayor Paul Soglin.