January 4, 2019

January 4, 2019

Happy new year! The federal government remains partially closed. The House passed a spending bill on Thursday night, but the White House has said it will veto this bill, and Senate Majority Leader Mitch McConnell has said that he will not bring it to a vote. The federal banking agencies are not affected by the shutdown, but the SEC, CFTC, FEMA, and the Small Business Administration are closed for the duration. Unfunded operations include Agriculture, Commerce-Justice-Science, Financial Services, Homeland Security, Interior-Environment, State-Foreign Operations, and Transportation-HUD.

Welcome to the 116th Congress — Members of the House and Senate were sworn in on Thursday, and the House of Representatives elected Rep. Nancy Pelosi (D-CA) to a new term as Speaker of the House. Rep. Kevin McCarthy (R-CA) is the House Republican Leader. Senator Mitch McConnell (R-KY) remains the Senate Majority Leader, and Senator Chuck Schumer (D-NY) continues to serve as Senate Minority Leader.

Senate committee assignments — Senate Republicans and Democrats announced committee members for the 116th Congress:

  • Banking, Housing, and Urban Affairs: Mike Crapo, Chairman (R-ID); Richard Shelby (R-AL); Pat Toomey (R-PA); Tim Scott (R-SC); Ben Sasse (R-NE); Tom Cotton (R-AR); Mike Rounds (R-SD); David Perdue (R-GA); Thom Tillis (R-NC); John Kennedy (R-LA); Martha McSally (R-AZ); Kevin Cramer (R-ND); Sherrod Brown, ranking member (D-OH); Jack Reed (D-RI); Robert Menendez (D-NJ); Jon Tester (D-MT); Mark Warner (D-VA); Elizabeth Warren (D-MA); Brian Schatz (D-HI); Chris Van Hollen (D-MD); Catherine Cortez Masto (D-NV); Doug Jones (D-GA); Tina Smith (D-MN); Kyrsten Sinema (D-AZ)
  • Finance: Chuck Grassley, Chairman (R-IA); Mike Crapo (R-ID); Pat Roberts (R-KS); Mike Enzi (R-WY); John Cornyn (R-TX); John Thune (R-SD); Richard Burr (R-NC); Johnny Isakson (R-GA); Rob Portman (R-OH); Pat Toomey (R-PA); Tim Scott (R-SC); Bill Cassidy (R-LA); James Lankford (R-OK); Steve Daines (R-MT); Todd Young (R-IN); Ron Wyden (D-OR), ranking member; Debbie Stabenow (D-MI); Maria Cantwell (D-WA); Robert Menendez (D-NJ); Tom Carper (D-DE); Ben Cardin (D-MD); Sherrod Brown (D-OH); Michael Bennet (D-CO); Robert Casey (D-PA); Mark Warner (D-VA); Sheldon Whitehouse (D-RI); Maggie Hassan (D-NH); Catherine Cortez Masto (D-NV)

Waters identifies priorities on House Financial Services Committee website — House Financial Services Chairwoman Maxine Waters (D-CA) is setting up for a busy Congress, and the Committee’s new website offers background information about five major issues she plans to address. These are “Overhauling Our Nation’s Broken Consumer Reporting System;” “Tracking Trump’s Wall Street First Agenda;” “Why We Need the Consumer Financial Protection Bureau and Why Republicans Want It Dead;” “Wall Street Reform: Protecting Consumers and the Economy;” and “The Ending Homelessness Act of 2017.” The Committee has not yet announced any hearings.

Lending can continue without NFIP, regulators say — The federal banking agencies issued guidance last week to remind financial institutions that they can continue to make loans subject to federal flood insurance requirements even when the National Flood Insurance Program is temporarily unavailable, as it is now. “Lenders must continue to make flood determinations, provide timely, complete, and accurate notices to borrowers, and comply with other parts of the flood insurance regulations,” the agencies said.

Lacewell to succeed Vullo as NY state financial regulator — New York Governor Andrew Cuomo announced today that he will nominate Linda Lacewell to serve as Superintendent of the New York State Department of Financial Services, succeeding Maria Vullo, who will leave that office in February. Lacewell most recently served as Cuomo’s Chief of Staff and Counselor to the Governor. She was the architect of OpenNY, a state-of-the-art open data initiative, and oversaw the state’s public pension fund pay-to-play investigation and the out-of-network health insurance investigation. As an assistant U.S. attorney for the Eastern District of New York, Lacewell spent two years on the Enron Task Force. She is a graduate of the University of South Florida and the University of Miami School of Law.

Next Week in Washington:

The House and Senate return on January 8. No committee hearings are scheduled for next week.

The Ellis Insight. Jim Ellis reports on political news:

President

Jay Inslee:  Reports coming from Washington State indicate that Gov. Jay Inslee (D) will imminently announce the formation of a presidential exploratory committee. The Governor is working to construct a national finance team and develop a campaign platform that will center around climate change.

At this point, Mr. Inslee would be the first Governor to take a step toward officially joining the candidate mix, although Montana Gov. Steve Bullock (D) and outgoing Colorado Gov. John Hickenlooper (D) are both contemplating becoming a national candidate.

Martin O’Malley:  Former Maryland Governor and 2016 presidential candidate Martin O’Malley (D) confirmed that he will not be running for the nation’s top office in 2020 via a public statement made yesterday. Mr. O’Malley, however, urged former Rep. Beto O’Rourke (D-TX) to enter the race saying that, “it’s time for a new generation of leadership.”

Sen. Elizabeth Warren:  The Massachusetts Senator kicked off 2019 with her announcement that she is forming a presidential exploratory committee in spite of renewed criticisms about her claimed Native American heritage. Early polling has found Sen. Warren dropping in support, coming in well behind former Vice President Joe Biden, Vermont Sen. Bernie Sanders (I/D-VT), and US Rep. Beto O’Rourke (D-TX). She fails to reach double-digit backing among surveyed Democrats so far in any poll.

Sen. Warren is kicking off the exploratory phase of her presidential campaign with a trip to Iowa, visiting four cities in the central and western part of the state.

Senate

Illinois:  State Representative-Elect Anne Stava-Murray (D), who will be sworn into office next week after unseating Republican state Rep. David Olsen, 51-49% in her western Chicago suburban district, has already announced plans to challenge US Senate Minority Whip Dick Durbin (D-IL) in the 2020 statewide Democratic primary.

Ms. Stava-Murray ran as an anti-establishment, anti-political machine opponent to Democratic state House Speaker Mike Madigan, so we can expect the same type of outsider attacks to be launched against Sen. Durbin. Her chances of denying the four-term Senate leader re-nomination are slim at best, however.

House

Speaker Pelosi:  California US Rep. Nancy Pelosi (D-San Francisco), as expected, was elected Speaker of the 116th House of Representatives, winning 220 votes for the position. She escaped going to a second ballot by only two votes. Fifteen members of her own party, including four who are not serving their first full term, voted for another individual.

Ms. Pelosi, the 52nd Speaker of the House, returns to the position she held from 2007 to 2011. This is the first time since 1955 that an individual has returned to the Speakership after exiting. She is the sixth person in US history to regain the Speaker’s gavel after her party lost the majority.

CA-50:  Ammar Campa-Najjar (D), one of the few 2018 California Democratic congressional challengers who failed to win, announced that he will run again in the next cycle. Back in November, he lost 54-46% to indicted Rep. Duncan Hunter (R-Alpine).

It’s possible that Mr. Campa-Najjar won’t have to wait until 2020. The chances of this seat coming open early and in special election are high. Rep. Hunter is scheduled for trial under a campaign finance indictment and will likely resign or be expelled if found guilty. Therefore, we can expect much early political action coming from this San Diego County anchored seat.

NC-3:  During the re-election cycle, North Carolina Rep. Walter Jones (R-Farmville) said that the 2018 campaign would be his last. Through a spokesman when the new Congress convened, Mr. Jones confirmed that he will not seek a 14th term in 2020. The Congressman was first elected in 1994 and will serve 26 years when the new term ends.

NC-9:  Only 434 certified voting members took their seats when the House was called to order this week. Since the state of North Carolina still has not officially decided the 9th District race – and the eventual conclusion will likely be to call a new election – the House leadership had little choice but to declare the seat vacant.

The North Carolina Board of Elections is next scheduled to meet on January 11th. At that time, the panel may order and schedule the new election that will probably be scheduled for late February or March. Voting irregularities in one county are the reasons the Board refused to certify Republican Mark Harris as the winner. Unofficially, Mr. Harris still leads businessman Dan McCready (D) by 905 votes.

PA-7:  Freshman Pennsylvania Rep. Susan Wild (D-Allentown) has been in office just one day but she has already drawn her first re-election opponent. Yesterday, former Lehigh County Commissioner Dean Browning (R), who barely lost the 2018 Republican primary to County Commissioner Marty Nothstein (318 vote margin from 32,164 ballots cast), announced that he will run again in 2020.

VA-7:  Former Rep. Dave Brat (R) is unlikely to seek a re-match with new Congresswoman Abigail Spanberger (D) in Virginia’s 7th District. Liberty University just announced that Mr. Brat will rejoin academia with his acceptance of their offer to run the institution’s business school. VA-7 is expected to be a top Republican conversion target in 2020, but the party will likely be fielding a fresh standard bearer.

Governor

Mississippi:  As expected, Mississippi Lt. Gov. Tate Reeves (R) officially announced that he will run for Governor in this year’s election. Two-term incumbent Phil Bryant (R) is ineligible to seek re-election.

The announcement likely sets up a competitive odd-year statewide campaign featuring Mr. Reeves and four-term Democratic Attorney General Jim Hood. At this point, both men have primary opposition, but neither faces major competition for their respective party nominations. The Mississippi candidate filing deadline is March 1st. The party primaries are August 6th in preparation for the November 5th general election.

Montana:  Gov. Steve Bullock, a budding 2020 Democratic presidential candidate, is ineligible to seek a third term in his present position come the next election. Yesterday, Secretary of State Corey Stapleton, who ran for Governor in 2012 but was defeated in the Republican primary, announced that he will enter the open 2020 Governor’s race.

Republican Attorney General Tim Fox (R) is also expected to run setting up a major primary between two statewide officials. Lt. Gov. Mike Cooney is expected to lead the statewide Democratic ticket in next year’s campaign.

North Carolina:  Earlier this week, former Gov. Pat McCrory (R), who was defeated for re-election in 2016 by a tenth of a percentage point, says he will not become a congressional candidate. He did confirm, however, that he is considering seeking a re-match with Gov. Roy Cooper (D) next year, or possibly running for US Senate in 2022 if incumbent Richard Burr (R) follows through with statements made in the 2016 campaign that he would not seek a fourth term when his seat next comes in-cycle.