Your Weekly Report on the Discord from Washington, D.C.
In Partnership with the Eris Group
In case you hadn’t heard, Punxsutawney Phil saw his shadow last Thursday, predicting six more weeks of winter. Discouraging, but as the official Groundhog Club notes, “He’s been wrong before.”
Otherwise, last week was pretty much all Trump, all the time. It’s hard to keep up with the deluge of executive orders and memoranda coming from 1600 Pennsylvania Avenue, but these were last week’s highlights:
- Monday’s executive order directs that for FY 2017, “whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.” All executive agencies must keep the incremental costs of new regulations to zero in this fiscal year. For FY 2018 and beyond, each agency head must identify the incremental costs involved with any proposed regulation, and the plans to offset those costs by removing other regulations. Regulations issued “with respect to a military, national security, or foreign affairs function” are exempt from the order.
- Thursday’s memorandum directs the Department of Labor to reconsider the final rule on fiduciary obligations of retirement investment brokers, and to postpone its effective date of April 10. Acting U.S. Secretary of Labor Ed Hugler issued a statement: “The Department of Labor will now consider its legal options to delay the applicability date as we comply with the President’s memorandum.”
- Thursday’s executive order requires a review of the rules enacted under Dodd-Frank, and of the current staffing of the federal financial regulatory agencies. House Financial Services Committee Chairman Jeb Hensarling (R-TX) praised the action, which he said mirrors the provisions of his Financial CHOICE Act.
- Separately, Gary Cohn, director of the National Economic Council, told the Wall Street Journal Thursday that the administration plans to review the Financial Stability Oversight Council and the Orderly Liquidation Authority established by Dodd-Frank. Cohn said that the administration does not believe non-banks should be designated as systemically important financial institutions.
Senate nullifies SEC rule on foreign payments — Last Friday the Senate voted along party lines to void the SEC rule on “Disclosure of Payments by Resolution Extraction Issuers,” required by Dodd-Frank. The rule required resource extraction issuers to disclose payments made to governments for the commercial development of oil, natural gas, or minerals. Rep. Bill Huizenga (R-MI) sponsored the joint resolution, which passed the House last Wednesday.
Perdue, Graves introduce joint resolution to reject CFPB rule on prepaid accounts — Senator David Perdue (R-GA) and Rep. Tom Graves (R-GA) have introduced companion bills (S.J. Res 19/H.J. Res 62) that would use the power of the Congressional Review Act to override the Consumer Financial Protection Bureau’s rule on prepaid accounts. The rule on prepaid accounts is scheduled to take effect on October 1. The joint resolution specifies that “such rule shall have no force or effect,” if Congress approves it.
Kaptur, Jones introduce bill to reinstate Glass-Steagall — Reps. Marcy Kaptur (D-OH), Walter Jones (R-NC), Tim Ryan (D-OH) and Tulsi Gabbard (D-HI) introduced HR 790, the Return to Prudent Banking Act, last Wednesday. The bill would repeal provisions of Gramm-Leach-Bliley and reinstate barriers between commerce and banking. In introducing the bill, Rep. Kaptur noted that President Donald Trump had campaigned in favor of reinstating Glass Steagall: “That is why we are here, to build on the momentum.”
Mork named staff director of House Financial Services Committee — Rep. Jeb Hensarling, chairman of the House Financial Services Committee, announced last Tuesday that Kirsten Mork will be the panel’s new staff director. She has served as Deputy Staff Director since 2013, and was Hensarling’s Legislative Director before that. She previously served as a legislative assistant with responsibility for financial services in the offices of Rep. Peter Roskam (R-IL) and Rep. Tom Price (R-GA).
Federal Reserve, OCC issue capital, stress testing rules for 2017 — Executive orders notwithstanding, the Federal Reserve Board announced last Monday that it had finalized the rule on capital plans and stress testing for 2017. The new rules on Comprehensive Capital Analysis and Review (CCAR) exempts noncomplex firms from qualitative assessment, “reducing significant burden on these firms and focusing the qualitative review in CCAR on the largest, most complex financial institutions.” Separately, the Office of the Comptroller of the Currency released its economic and financial market scenarios for stress testing last Thursday.
This Week in Washington:
House Financial Services Committee meets to approve its authorization and oversight plan for the 115th Congress. The committee’s oversight plan will focus on “cuts to or the elimination of programs that are inefficient, duplicative, outdated, or more appropriately administered by State and local government.”
The Ellis Insight. Jim Ellis reports on political news:
President Trump’s nomination of Colorado US Appellate Court Judge Neil Gorsuch to replace the late Justice Antonin Scalia on United States Supreme Court occurred early in the week, as we know. The action is igniting a hard charging and controversial confirmation process that will divide along party lines. Watch in particular the ten in-cycle Democratic Senators from states that President Trump carried in the November election. Sens. Bill Nelson (FL), Joe Donnelly (IN), Debbie Stabenow (MI), Claire McCaskill (MO), Jon Tester (MT), Heidi Heitkamp (ND), Sherrod Brown (OH), Bob Casey Jr. (PA), Joe Manchin (WV), and Tammy Baldwin (WI) will become the focal points of this likely record-setting confirmation battle.
Arizona: Sen. Jeff Flake (R) appears to have dodged one primary challenger bullet. After last week saying he was considering launching a campaign against Flake in the regular 2018 election, Rep. Paul Gosar (R-Prescott) announced that he will not run statewide next year. Instead, he will seek re-election to a fifth term in the House.
Indiana: Rep. Susan Brooks (R-Carmel) publicly ended speculation that she will enter the statewide race to challenge Sen. Joe Donnelly (D). Rep. Brooks will not run for the Senate, but two of her colleagues may. Rep. Luke Messer (R-Greensburg/Muncie) appears to be actively readying for a statewide effort, and western state Congressman Todd Rokita (R-Brownsburg/ Lafayette) confirmed this week that he is also considering launching a Senate challenge.
CA-32: Rumors again abound that 80-year old Rep. Grace Napolitano (D-Norwalk) will retire. She decided late in the last election cycle to seek a tenth term in office, and apparently she is again contemplating whether or not to seek re-election. Adding more fuel to the retirement fire, former Napolitano staff member Mary Ann Lutz (D), the former Mayor of Monrovia, CA, says she is preparing to run for Congress in the event that her former boss does not opt for another term.
FL-13: With defeated Rep. David Jolly (R) already indicating he’d like to seek a re-match with freshman Representative and former Governor Charlie Crist (D), St. Pete Polls ran a quick survey of the Pinellas County district. The poll (1/30; 1,289 FL-13 registered voters through automated device) finds Crist leading Jolly 49-41%. In the November election, Mr. Crist scored a 52-48% win in a district that the court ordered mid-decade redistricting plan customized for him. With the post-election poll still being within high single-digits, another Jolly run here may well come to fruition.
KS-3: With Rep. Lynn Jenkins (R-Topeka) now out of the open 2018 Governor’s race, Rep. Kevin Yoder (R-Overland Park/Kansas City) is reportedly seriously considering entering the contest. Mr. Yoder just scored a ten-point re-election victory in the lone Kansas district that Hillary Clinton carried, so his political capital is high. Gov. Sam Brownback (R) is ineligible to seek a third term. Lt. Gov. Jeff Colyer, Secretary of State Kris Kobach, and Attorney General Derek Schmidt are all potential Republican gubernatorial candidates, so we can expect a crowded and hotly contested primary battle here next year.
MN-2: Former healthcare company executive Angie Craig (D), favored in the 2016 congressional election and outspending her opponent by almost a 4:1 ratio but still lost, is reportedly considering forcing a re-match with freshman Rep. Jason Lewis (R-Woodbury/ Burnsville). The 2nd District is a southeastern Minneapolis suburban district that had shown signs of trending Democratic. Thus, veteran Rep. John Kline’s (R) retirement led to an open seat that most expected to flip. But, former radio talk show host Lewis surprised most with his two and one-half point victory over Craig, running just ahead of Donald Trump who carried the seat with a 46-45% margin. Despite the electorate’s marginal vote tallies, the 2nd District has remained in Republican hands for nine consecutive terms.
MN-8: Businessman Stewart Mills (R) has lost two consecutive congressional races to Rep. Rick Nolan (D-Crosby/Duluth) by margins of half a percentage point (2016) and one point (2014). He, too, is reportedly considering making another attempt next year. The 8th has traditionally been a Democratic seat, electing a Republican for only one term since 1946, but the numbers are changing. Donald Trump scored a whopping 54-39% win here against Hillary Clinton, thus making it a bit surprising that Mills was failed to come through on his coattails considering his close margin two years prior.
MT-AL: Moore Information just released an internal poll (1/18-19; 500 MT likely special election voters) for former gubernatorial nominee Greg Gianforte, the presumed leading candidate to replace Rep. Ryan Zinke (R-Whitefish) when the latter is confirmed as Interior Secretary. Mr. Gianforte would lead state Rep. Amanda Curtis (D), who was the party’s 2014 US Senate nominee, 47-33%. Against Deputy US Attorney Zeno Baucus (D), the Gianforte spread grows to 45-29%. Democrats were dealt a blow when the perceived strongest candidate, former state School Superintendent and 2016 congressional nominee Denise Juneau (D), said she will not enter the special election campaign.
SC-5: Just like in Montana, the Palmetto State Republicans received a major break. In the impending special election once Rep. Mick Mulvaney (R-Lancaster/Rock Hill) is confirmed as Office of Management & Budget director, the Democrats have lost their strongest potential candidate. State Senator Vincent Sheheen, who twice became the party’s gubernatorial nominee and held former Gov. Nikki Haley (R) to only a four-point statewide win in 2010, closed the door last week on entering the special congressional election campaign, preferring to remain in the state legislature. Now, more than ever, the eventual Republican nominee will become a heavy favorite to replace Mr. Mulvaney.
Georgia: Some Democratic Party activists are apparently beginning to rally around the idea of Sally Yates, recently deposed as Acting Attorney General for defying President Trump’s immigration Executive Order, entering the open 2018 gubernatorial campaign. It will be interesting to see whether a Yates potential candidacy gains legs, or if her bout with Trump represents her “15 minutes of fame.” In any event, the eventual Republican nominee will be favored to hold the Governorship. Gov. Nathan Deal (R) is ineligible to seek a third term.
Ohio: Tarrance and Associates, for the American Freedom Builders conservative group, conducted a survey of the Ohio GOP electorate (1/23-26; 800 OH likely Republican primary voters) and finds Attorney General and former US Senator Mike DeWine opening up a healthy lead. According to the results, Mr. DeWine scores 47% support among the Republican sampling group, followed by Secretary of State Jon Husted at 18%, and Lt. Gov. Mary Taylor with 10%, while Rep. Jim Renacci (R-Wadsworth) posts only 4% support. If the race were just between DeWine and Husted, the Attorney General would hold a 55-26% advantage. Only Mr. DeWine is an announced gubernatorial candidate. Mr. Husted appears to be a sure entry. Lt. Gov. Taylor has not yet made the decision to run, while Rep. Renacci is unlikely to become a statewide candidate.