Your Weekly Report on the Discord from Washington, D.C.
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We wish you gōngxǐ fācái — happiness and prosperity — as we begin the Year of the Rooster. On the Chinese lunar calendar, the Year of the Rooster symbolizes fidelity and punctuality.
“Dismantling Dodd-Frank” is a priority, says Pence — Vice President Mike Pence told House Republicans last Thursday that “dismantling Dodd-Frank” is a top legislative priority for the new Trump Administration. Rep. Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee, said that doing so “is essential to leveling the playing field, building a healthy economy and offering every American greater opportunities to achieve financial independence.” He pointed to the proposed Financial CHOICE Act as an alternative that will “protect consumers by holding Wall Street and Washington accountable, end bailouts and unleash America’s economic potential.” The House Financial Services Committee approved the Financial CHOICE Act last fall, but the Senate did not act on a companion bill.
Piwowar steps in as Acting SEC Chair — Michael S. Piwowar, President Obama’s Republican appointee to the Securities and Exchange Commission, has been designated Acting Chairman of the agency. Former Chair Mary Jo White had announced her plans last year to leave at the end of the Obama administration. Piwowar was the Republican chief economist for the Senate Banking Committee, and served on the Council of Economic Advisers under both President George W. Bush and President Obama.
CBO lowers 2017 deficit estimate — The Congressional Budget Office (CBO) announced last week that the 2017 deficit will likely be lower than projected last year, mainly because mandatory spending is expected to be lower. The cumulative deficit for the next ten years, however, is essentially the same as that projected last year, “the result of strong growth in spending for retirement and health care programs targeted to older people and rising interest payments on the government’s debt, accompanied by only modest growth in revenue collections.”
OCC, Fed will comply with hiring freeze — Among the executive orders signed by President Trump last week was a hiring freeze, effective at noon last Sunday, that prohibits all executive departments and federal agencies from filling any vacant positions or adding any new positions. The order exempts military personnel and “any positions . . . necessary to meet national security or public safety responsibilities.” The OMB has 90 days to produce a long-term plan to reduce the federal workforce by attrition. Although both the Office of the Comptroller of the Currency and the Federal Reserve Board are self-funded organizations and arguably have public safety responsibilities, both agencies have said they will comply with the hiring freeze. Other regulatory agencies have not said whether they plan to freeze hiring.
HUD suspends FHA mortgage insurance premium reduction — One of President Trump’s first actions was the publication of a mortgagee letter that immediately suspends the plan to reduce FHA mortgage insurance premiums for loans that close or are disbursed on or after January 27. “FHA will issue a subsequent Mortgagee Letter at a later date should this policy change,” the letter stated.
Senate Finance members clash at Price hearing — Last Tuesday’s Senate Finance Committee hearing on the confirmation of Rep. Tom Price (R-TN) as Secretary of Health and Human Services became a debate on the merits of the Affordable Care Act (ACA), access to care, and drug pricing. Senator Ron Wyden (D-OR), the Committee’s ranking member, said that Price “ducked” questions about whether those currently covered by ACA would lose access to health insurance, and whether Price endorses President Trump’s promise to lower prescription drug prices. Chairman Orrin Hatch (R-UT) emphasized the need to make health care available “without ruining the country,” and said he saw no reason not to confirm Rep. Price.
Senate Banking approves Carson for HUD — The Senate Committee on Banking, Finance and Urban Affairs voted last Tuesday to approve Dr. Benjamin Carson’s nomination to serve as Secretary of the Department of Housing and Urban Development. The Senate vote on the nomination has not yet been scheduled, but will likely happen this week.
Senate Commerce approves Ross, Chao, senior fraud bill — The Senate Commerce Committee approved the nominations of Wilbur Ross to serve as Secretary of Commerce and Elaine Chao to serve as Secretary of Transportation last Tuesday. The committee also voted in favor of S. 81, a bipartisan measure to create an office within the Federal Trade Commission’s Bureau of Consumer Protection for the purpose of advising the Bureau on ways of preventing financial fraud against senior citizens. The office would have specific authority to monitor mail, television, internet, telemarketing and robocalling frauds targeted to seniors.
CFPB fines two Citi subsidiaries $28.8 million for mortgage servicing practices — The Consumer Financial Protection Bureau started last week by ordering CitiFinancial Servicing and CitiMortgage, Inc., to pay a total of $28.8 million in compensation and civil penalties to homeowners facing foreclosure. The CFPB said that the companies failed to inform consumers about foreclosure relief options; misled consumers about the effect of deferring payment due dates; and charged consumers improperly or inappropriately cancelled credit insurance; provided incorrect information to credit bureaus; and failed to investigate customer disputes.
Banking agencies fine ServiceLink $65 million for improper foreclosures — The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency announced last Tuesday that they are assessing ServiceLink Holdings a $65 million fine for “significant deficiencies” in the services offered by its predecessor company, Lender Processing Services, to mortgage servicers. ServiceLink Holdings remains subject to a 2011 consent order.
This Week in Washington:
Senate Committee on Small Business and Entrepreneurship will vote on the nomination of Linda E. McMahon to serve as Administrator of the Small Business Administration. Time to be announced, S-216.
Senate Judiciary Committee meets to vote on the nomination of Senator Jeff Sessions to serve as Attorney General. 9:30 a.m., SD-226 Dirksen Senate Office Building.
Senate Committee on Energy & Natural Resources meets to vote on the nominations of Ryan Zinke to be Secretary of the Interior and Rick Perry to be Secretary of Energy. 9:30, SD-366 Dirksen Senate Office Building.
Senate Committee on Health, Education, Labor and Pensions meets to vote on the nomination of Elisabeth Prince DeVos to serve as Secretary of Education. 10:00 a.m., SD-430 Dirksen Senate Office Building.
Senate Committee on Homeland Security and Governmental Affairs meets to vote on the nomination of Mick Mulvaney to serve as Director of the Office of Management and Budget. 9:40 a.m., SD-342 Dirksen Senate Office Building
Senate Committee on Aging holds a hearing on “Stopping Senior Scams: Developments in Financial Fraud Affecting Seniors.” 2:30 p.m., SD-562 Dirksen Senate Office Building.
The Ellis Insight. Jim Ellis reports on political news:
Electoral College: Legislators in three states are sponsoring bills to make their state’s Electoral College votes proportional. Currently, only two states, Maine and Nebraska, split their presidential votes. In both places, a candidate wins two votes for placing first in the statewide vote, and one more for each congressional district won. Maine has two seats, Nebraska three. Live legislation to convert to the same system that Maine and Nebraska employ will now be debated in Minnesota (8 congressional districts), New Hampshire (2 CDs), and Virginia (11 CDs). If this system had been law for these places in 2016, Donald Trump would have gained five votes in Minnesota, one in New Hampshire, and six in Virginia. This would have brought the final Election Night electoral vote count to 318-220.
California: Though Sen. Dianne Feinstein (D) says she is leaning toward running for re-election in 2018, Public Policy Polling (1/17-28; 882 CA registered voters) asked survey respondents a Senate campaign question as if the seat will be open. Sen. Feinstein, at 83 is the Senate’s oldest member and an incumbent that most believed would retire at the end of this term, stated in interviews last week that she is leaning toward running again. Without Feinstein in the field, however, it is newly appointed Attorney General Xavier Becerra (D) who would lead a jungle primary (21%), followed by San Diego Mayor Kevin Falconer (R; 18%), ex-Fresno Mayor Ashley Swearengin (R; 13%), and Rep. Brad Sherman (D-Sherman Oaks; 11%).
Missouri: As it is beginning to look less likely that Rep. Ann Wagner (R-Ballwin) will challenge Sen. Claire McCaskill (D) next year, a new figure may be coming to the political forefront. NASCAR race driver Carl Edwards (R), who just announced his retirement as an active driver, is not denying that he is considering entering the political arena. Should Edwards make such a race, he would have some name identification, and his celebrity status should be helpful in attracting financial support.
New Mexico: Albuquerque Mayor Richard Berry (R), who has already announced he won’t seek re-election this year, is not closing the door on a political race in the near future. Mayor Berry admits to be keeping his options open for a potential challenge against Sen. Martin Heinrich (D), to entering the open Governor’s race, or even the open 1st Congressional District contest. Incumbent Rep. Michelle Lujan Grisham (D-Albuquerque) has already declared her own campaign for Governor.
Texas: A couple of weeks ago, Rep. Beto O’Rourke (D-El Paso) confirmed that he is considering challenging Sen. Ted Cruz (R) next year. Now, a House Democratic colleague is also signaling interest in exploring a run against the one-term Senator and former presidential candidate. San Antonio Rep. Joaquin Castro (D) also admits that he is willing to test the statewide waters and is contemplating a Senatorial run. It is unlikely both men will run, since all Democratic resources would be better spent in a general election. Therefore, it is more likely that Rep. O’Rourke will be the one to finally step forward. Rep. Michael McCaul (R-Austin) has also indicated more than a passing interest in potentially launching a Republican primary challenge against Sen. Cruz.
CA-34: The California legislature has confirmed Rep. Xavier Becerra (D-Los Angeles) as the state’s new Attorney General, and he quickly resigned the congressional seat. He replaces Sen. Kamala Harris (D) in the statewide prosecutorial role. Gov. Jerry Brown (D) has scheduled the special congressional primary for April 4th, with the general following on June 6th. California uses a jungle primary system, meaning all candidates share the same ballot and the top two vote getters advance to the general election regardless of political party affiliation. The seat is heavily Democratic and it is likely that such a pair will advance. Assemblyman Jimmy Gomez (D-Los Angeles) is favored to secure one of the run-off slots.
KS-2: Rep. Lynn Jenkins (R-Topeka) announced last week that she will not seek a sixth term in the House next year. Originally thought to be entering what will be an open 2018 gubernatorial race, Rep. Jenkins will instead exit politics altogether, preferring a return to the private sector. The 2nd District is reliably Republican, and the eventual GOP nominee will be viewed as at least an early favorite to hold the seat. The eastern Kansas 2nd CD stretches from Nebraska to Oklahoma. Topeka and Lawrence are its two largest population centers.
KS-4: Rep. Mike Pompeo (R-Wichita), now confirmed as President Trump’s new CIA Director, officially resigned his congressional post. Gov. Sam Brownback (R) has scheduled the special general election for April 11th, and set February 18th as the date when the parties must have a nominee in place. Republicans will call a convention of the 4th District Committee, the 126 members of which will decide upon the special election congressional nominee. The GOP is looking at February 9th as a potential convention date. Former US Rep. Todd Tiahrt (R) and state Treasurer Ron Estes (R) are the two most prominent early candidates. Democrats have yet to announce their nomination procedure. The eventual GOP nominee will become a prohibitive favorite to win the special election.
MT-AL: Democrats lost their strongest potential special election candidate last week when former Montana state School Superintendent Denise Juneau announced she will not compete in the coming at-large election. Ms. Juneau challenged Rep. Ryan Zinke (R-Whitefish) in November and lost 56-40%. After the election, Mr. Zinke was appointed Interior Secretary in the Trump Administration. Upon confirmation to his new position, the Congressman will resign and Gov. Steve Bullock (D) will schedule the special. If the resignation comes in February, the voters will cast their ballots on or around June 1st. The two parties will meet in convention to choose their standard bearers. Former gubernatorial nominee Greg Gianforte, a Montana business leader, appears to be the leading contender at this point in time. Democrats now appear turning toward state Rep. Amanda Curtis, who was the party’s 2014 US Senate nominee.
California: A Public Policy Polling survey (1/17-18; 882 CA registered voters) of the coming open gubernatorial campaign finds Lt. Gov. Gavin Newsom (D) opening up a small lead in a hypothetical jungle primary. San Diego Mayor Kevin Falconer (R) was second, five points behind Newsom (25-20%). Los Angeles Mayor Eric Garcetti (D), former Fresno Mayor Ashley Swearengin (R), and ex-LA Mayor Antonio Villaraigosa (D) follow with 13, 12, and 9%, respectively. Billionaire Tom Steyer (D), Secretary of State Alex Padilla (D), and state Treasurer John Chiang (D) all trail in single digits. Only Newsom, Villaraigosa, and Chiang are announced candidates. Mayor Falconer is a possible contender, while ex-Mayor Swearengin says she will not enter the race. Gov. Jerry Brown (D) is ineligible to seek a third consecutive term. Democrats will be favored to hold the state’s top position.
South Carolina: Gov. Nikki Haley (R) was confirmed as the new US Ambassador to the United Nations; hence, she immediately resigned her gubernatorial post upon her confirmation to the federal position. Lt. Gov. Henry McMaster (R) then ascended to the Governorship. State Senator Kevin Bryant (R) became the state’s Lt. Governor. Under SC law, the Senate President Pro Tempore automatically becomes Lt. Governor in the case of a vacancy. In this case, Senate President Hugh Leatherman (R-Florence) did not want to become Lt. Governor because his legislative position is actually more powerful. He resigned as Pro Tempore, and Bryant was elected. Upon being sworn in as Pro Tem, Bryant then immediately took the oath of office for Lt. Governor. Leatherman then ran again for the vacant President Pro Tempore position, and was re-elected.
Tennessee: State House Speaker Beth Harwell (R) is taking steps to enter the open Governor’s race. While not yet officially announcing her candidacy, last week she did open a new campaign account, separate from her state House committee. Gov. Bill Haslam (R) is ineligible to seek a third term. Both parties expect a crowded field of candidates vying for their respective open seat nominations.