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Stephen Boyd: THE MONDAY BRIEF | March 13, 2023

Stephen Boyd’s weekly Capitol Hill briefing for Alabama’s business, financial, defense and government affairs executives.

The Schedule…

The Senate returns to action at 3 p.m. ET tomorrow to resume consideration of President Joe Biden’s nominee to be Deputy Under Secretary of the Treasury. The House is in recess this week, and many Representatives will be using the time to visit with constituents and attend meetings in their home districts. 

On the radar…

With Representatives crisscrossing their home turf and a relatively light voting schedule in the Senate, let’s get up to speed on ten issues that will shape the debate in Congress between now and the Easter break.

BIDEN BUDGET RELEASED. The Biden Administration released its Fiscal Year 2024 budget last week, about a month late. Biden’s plan calls for $6.8 trillion in spending and a much ballyhooed $3 trillion in deficit reduction. The devil, as always, is in the details: nearly all of that deficit reduction would come by way of a surprisingly large tax hike on corporations and the wealthy. The budget is a statement of the President’s vision and priorities, and it’s non-binding. House conservatives released a competing proposal that focuses on spending cuts and reducing the size of government. 

The Takeaway: Budgets are best seen as negotiating positions, but there is a ton of daylight between Biden and the conservative wing of House Republicans, which has considerable leverage. That doesn’t bode well for a smooth budget and appropriations process this year. 

JOBS, JOBS, JOBS: The economy added 311,000 jobs last month, slowing a bit but still expanding in spite of high interest rates. (Wages grew just 0.2%.) High prices remain a concern. In a Senate hearing last week, Federal Reserve Chairman Jerome Powell said, “Although inflation has been moderating in recent months, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”

The Takeaway: The Bureau of Labor Statistics will release new Consumer Price Index numbers Tuesday. If that much-watched economic measure continues to show stronger-than-expected growth, expect interest rates to continue to rise. 

BANKING PROBLEMS: Silicon Valley Bank, known for its lending to life sciences and tech companies, collapsed Friday—the second largest bank collapse in America’s history. Federal officials announced Sunday that depositors to the bank will soon have access to their money, which is good news because there appears to be little appetite on Capitol Hill for a taxpayer-funded bailout. Experts insist that the broader economy is not at risk, like in 2008. Still, California-based Silvergate bank, which makes loans to cryptocurrencies, announced its “intent to wind down operations and voluntarily liquidate” its holdings last week. And, separately, New York bank regulators shut down Signature Bank over the weekend. 

The Takeaway: Congressional banking committees will kick into high gear to better understand whether existing laws and federal regulations adequately safeguarded bankers, and to evaluate whether systemic weaknesses exist. 

JUST A BOOK TOUR? Florida Governor Ron DeSantis was in Iowa last week touring in support of his book, “The Courage to be Free.” Boosting book sales makes sense, but many believe the real purpose of DeSantis’ visit was to introduce himself to Iowa Republicans ahead of a widely anticipated presidential announcement. DeSantis has dodged questions on his true intent. For 2024, Trump is in. Former South Carolina Governor and U.N. Ambassador Nikki Haley is in. South Carolina Senator Tim Scott is widely expected to join the race. Who else?

The Takeaway: The question is not who gets in the race. The questions is, “Which candidate has a real plan to beat Trump?” Trump continues to poll well in the Republican primary despite—or, perhaps, because of—all sorts of legal headwinds. A late February poll, for example, put Trump over 50% in a crowded Republican field with seven other theoretical contestants.  

TO DRILL OR NOT TO DRILL. According to news reports, the Biden Administration is expected to soon announce a huge energy exploration project in Alaska. He’ll couple that with new protections for other federal lands and water. Any new oil drilling in Alaska has been a bright line divider between the parties for years, so the President’s move is sure to raise eyebrows. The $8 billion project, known as “Willow,” would produce as much as 600 million barrels of crude oil over the next three decades. 

The Takeaway: It makes strategic sense for a future candidate to mitigate his weaknesses prior to a campaign. The President’s support last week for a Republican crime bill, this week’s announcement for new domestic drilling, and the possible return to stricter migrant detention policies in the coming weeks would hit gas prices, crime rates, and immigration.  Despite concerns over his age, Biden is running.  

DATA BREACH HITS THE HILL. When hackers broke into the D.C. Health Links marketplace, they got access to tens of thousands of personal records—including those of many Members of Congress and staff. In all, 56,000 people were affected. Stolen data includes names, birth dates, and social security numbers.

The Takeaway: If it can happen to Congress, it can happen to you. But beyond the obvious risk of financial fraud, the release of personal data for members and staff presents a range of physical safety and national security concerns. 

Q1 NUMBERS: The first quarter of 2023 ends in 17 days, and many members—especially those newly elected—will be eager to post strong fundraising numbers at the end of March. Updated fundraising data is made public by mid-April. In an era when the biggest political concern for many Members is a primary challenge, a demonstration of early fundraising support is a good way to ward off challengers. Though I personally think too much is made of it, many politicos will be keeping tabs on the first few quarters of public data to spot vulnerabilities. 

The Takeaway: If you’re on a politician’s fundraising list, expect to get a call or an email in the next two weeks. For better or worse, the FEC raised the individual contribution limits in 2023-2024 to $3,300 per primary or general election, so get out those checkbooks. 

THE DEBT LIMIT. We examined the debt limit problem in some detail two weeks ago. The good news is you can just re-read that summary because—despite a lot of talk—Congress has made no measurable progress toward a solution. At a Senate Banking hearing last week, Moody Analytics’ Chief Economist testified that “There is a temptation to brush off the developing debt limit drama thinking it will end the same way as the others over the years with lawmakers coming to terms and signing legislation just in time. That seems a mistake given the heightened dysfunction in Congress and the large political differences gripping the nation.”

The Takeaway: The competing budget priorities described above will further drive a wedge between the sides on the debt limit debate, making a compromise that much more difficult to achieve.

END OF AUMF: The Senate Foreign Relations Committee last week approved a repeal of the 1991 and 2002 Authorizations for the Use of Military Force. The open-ended legal authority has routinely been used as cover for presidential use of U.S. military force around the world. The Senate could pass the measure in the coming weeks; prospects in the House are less clear. The 20th Anniversary of the invasion of Iraq is this Sunday. Today, Iraq stands as a U.S. ally on many fronts, especially with regard to ISIS and Iran. 

The Takeaway: A defining trend in federal government over the last several decades has been a delegation of power from the Legislative to the Executive Branch. A vote to repeal the AUMF would represent a rare clawing back of power by Congress.  

CLASSIFIED COVID MATERIALS: The House Friday passed a bill, S. 619, to require the Director of National Intelligence to declassify information regarding the origins of COVID-19. The vote was 419-0, and the Senate had already cleared the measure by unanimous consent. The rare unanimity on a substantive issue comes as a growing divide emerges within the government about the origins of the disease, which has killed millions. Though the majority of the Intelligence Community seems to maintain that COVID-19 occurred naturally, news broke in February that the Department of Energy had determined that Covid-19 may have originated from a laboratory leak in China. Earlier this month, Federal Bureau of Investigation Director Chris Wray said, “the FBI has for quite some time now assessed that the origins of the pandemic are most likely a potential lab incident in Wuhan.” 

The Takeaway: Biden must sign the law in order for it to take effect, and he may not do so given the impact on classified information. But, either way, intelligence information, taken out of context and interpreted by the general public, can sometimes be misleading or raise more questions than it answers. 


Stephen E. Boyd is a Partner at Horizons Global Solutions. Previously, he served as a Senate-confirmed Assistant Attorney General at the U.S. Department of Justice, Chief of Staff for Alabama members in both the U.S. Senate and U.S. House of Representatives, and as a Communications Director of the Senate Committee on the Judiciary. He resides in the Washington, D.C. area. Opinions expressed herein are his own. This news report is not intended to influence or persuade. Email Stephen at [email protected].

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