Yesterday, President Biden released a letter announcing his decision to end his reelection bid. In his letter, the President wrote that he would address the nation later this week with more detail about his decision. He did not give an exact date or time. He is currently recovering from Covid at his home in Rehoboth Beach, DE.

President Biden’s decision to end his reelection bid means Democrats must now quickly find a new candidate. The Democratic National Convention’s rules committee has called a Wednesday meeting to discuss the process for picking a new nominee.

Who picks the Democratic nominee? A few thousand delegates representing voters officially decide on the party’s nominee. Typically, they choose the winner of the primary in their state. Now that Biden has ended his reelection campaign, his delegates are free agents and can choose a candidate on their own without voter input.

There are two types of delegates: 1) Pledged Delegates and 2) Automatic (or Super) Delegates. Pledged delegates commit to supporting the candidate their state voters chose. However, there is a “good conscience” clause in the Democratic party’s rules that give them some wiggle room. “All delegates to the National Convention pledged to a presidential candidate shall in all good conscience reflect the sentiments of those who elected them.” Automatic or Superdelegates include members of Congress, President, Vice President, Governors, Democratic National Committee (DNC) members, and certain former elected officials, such as Presidents and Vice Presidents and members of congressional leadership. They are not pledged to particular candidates, although these delegates might choose to support a particular candidate. Superdelegates are not allowed to vote on the first ballot at the convention.

What is the process for selecting the Democratic nominee? Democrats must make a formal nomination, either through a virtual vote in early August, or in an “open” convention, a scenario the party has not experienced since 1968. The Democratic National Convention (DNC) is slated to take place in Chicago, IL August 19-22. Before President Biden’s announcement, the DNC had decided to confirm their nominee during a virtual roll call some time before August 7 to satisfy ballot deadlines in several states, such as Ohio. Additionally, early voting begins in some places in September, so Democratic leaders probably wanted to settle the nomination before the convention.

Open Convention: If a virtual rollcall doesn’t show a clear majority of delegates backing Harris, they may proceed to an open convention. At an open convention, candidates need 300 delegate signatures to appear on the ballot (no more than 50 signatures can come from any one state). On the first ballot, pledged delegates vote. If a majority is reached, the nominee with the majority is chosen. If a majority is not reached, there is a second ballot which superdelegates are allowed to vote along with pledged delegates. Voting continues, round after round, until a candidate gets the votes of a majority of all delegates and is named the party’s nominee.

Endorsements for Vice President Harris: President Biden officially endorsed Vice President Harris as the next Democratic nominee, and many in the Democratic party quickly endorsed Vice President Harris, including the party chairs for the 57 states and territories, the Clintons, California Governor Gavin Newsom, and NY Governor Kathy Hochul. Today, former House Speaker Nancy Pelosi (D-CA) added her name to the list of endorsers. Biden’s endorsement does not obligate his delegates to support Harris, but they may be inclined to do as he wishes.

The campaign formerly known as Biden for President, in a filing Sunday afternoon with the Federal Election Commission, changed its name to the Harris for President campaign. That means Vice President Harris’ bid for the Democratic nomination is official, with her campaign assuming control of Biden’s campaign money ($95M+). It also allows Vice President Harris to begin raising money for her own presidential bid.

Update July 23, 2024

Last night, the Democratic National Committee (DNC) reiterated that they plan to select their presidential nominee through a virtual roll call, to be completed by August 7 (before some state ballot access deadlines). 

DNC chair Jaime Harrison and DNC Rules Committee co-chair Minyon Moore laid out the new virtual format in a memo released last night. According to the memo, the DNC will use an electronic voting system for the delegates to vote. To participate in this virtual voting process, the candidate must meet three criteria: file a formal declaration of candidacy with the committee, meet the party and legal qualifications to be president, and gather a minimum of at least 300 delegates with no more than 50 delegates from one state. If there is more than one candidate, they would have an option to make their case before the delegates. 

The dates for that process will be announced on Wednesday when the DNC Convention Rules Committee meets virtually. Voting by electronic ballot could be completed as soon as August 1. If more than one candidate qualifies, then the voting could be completed as late as August 7. 

A vice-presidential nominee may be selected before or after the August 7 date, depending on the desires of the presidential nominee. Some of the top names mentioned in recent news coverage are Govs. Roy Cooper of North Carolina, Andy Beshear of Kentucky, J.B. Pritzker of Illinois, Gretchen Whitmer of Michigan, Wes Moore of Maryland, and Josh Shapiro of Pennsylvania; Sens. Mark Kelly of Arizona and Mark Warner of Virginia; U.S. Department of Transportation Secretary Pete Buttigieg; and Admiral William McRaven.

The House and Senate are in recess this week for the Republican National Convention being held in Milwaukee, WI. Former President Trump may announce his Vice President selection tonight. The Vice Presidential pick is scheduled to speak Wednesday evening. One contender, Senator J.D. Vance (R-OH), was spotted leaving his home today with a motorcade. Former President Trump is slated to speak on Thursday, the final night of the convention. The convention will be streamed on YouTube, X, Facebook Live, Rumble, Amazon Prime, Twitch, and Direct TV.

https://gopconvention2024.com/master-calendar/

The Democratic National Convention will be held in Chicago, IL the week of August 19-22.

https://demconvention.com

Both the House and Senate will be in session the weeks of July 22 and July 29. The House will focus on finishing their fiscal year 2025 (FY25) appropriations bills during those two weeks, while the Senate may take up their FY25 National Defense Authorization Act (NDAA) as well as continue confirming Executive Brand and judicial nominations.

Fiscal Year 2025 Appropriations

House

Last week, the House Appropriations Committee completed work on all 12 of their annual spending bills. Four of these bills have narrowly passed on the House floor, however, the Legislative Branch bill was defeated last week by a vote of 205-213. This is typically one of the easier bills to pass, but some Republican members joined all Democrats who voted against the bill because it included a provision providing a pay raise for members of Congress. This could prevent the House from passing all 12 of its bills before the August recess.

The House plans on taking up the Agriculture, Energy & Water, Financial Services, and Interior Environment appropriations bills on the House floor when they return next week. If they manage to pass all four, they would have the four most contentious bills remaining for the final week of July.

Senate

Senate Appropriators started the FY25 appropriations process last week when they approved their subcommittee allocations and reported out three spending bills (Agriculture, Legislative Branch, and Military Construction-Veterans Affairs). The Senate subcommittee allocations do not include $34.5B in emergency spending ($21B for defense programs and $13.5B for nondefense programs) or other upward “adjustments” for nondefense spending that were negotiated as part of the Fiscal Responsibility Act of 2023.

Topline Funding Levels by Appropriations Subcommittee

*Note that the Senate allocations do not include any of the adjustments and emergency funding agreed to as part of the Fiscal Responsibility Act agreement, or the additional emergency funding that Chair Murray and Vice Chair Collins have agreed to for fiscal year 2025. These resources will instead be reflected as  each subcommittees reports its bill.

Senate Passes Emergency Supplemental for Ukraine, Israel, and Taiwan

The Senate passed a $95.3B Israel-Ukraine-Taiwan foreign aid bill earlier this week by a vote of 70-29. After being received in the House, House Speaker Mike Johnson (R-LA) first said the House needed time to “process” the bill before considering it on the floor, but then declared it dead on arrival as it didn’t include border security provisions.

House Republicans who want to see an emergency supplemental passed into law negotiated an alternative package that was released this morning. H.R. 7372 provides $47.7B in emergency aid to Ukraine, $10.4B for Israel, $5.4B for the Indo-Pacific including Taiwan, and $2.4B to support U.S. operations in the Middle East. The bill also includes language for the Secretary of Homeland Security to “suspend the entry of inadmissible aliens” in order to help achieve “operational control of the border.” Immigration officials could immediately detain and expel inadmissible migrants who cross over the U.S.-Mexico border or enter the country by other means. Asylum standards would be toughened, and the “Remain in Mexico” policy would be implemented for one year as well. The House bill excludes the Senate bill’s $10B for humanitarian aid and well as $13B in nondefense funding for Ukraine.

It’s unclear if the bill will get the support it needs from Republicans in the House for passage. Rep. Don Bacon (R-NE), one of the chief negotiators for the compromise bill, said he intends to discuss it with Speaker Johnson this weekend. Even if it passes the House, passage of this new compromise bill is far from guaranteed in the Senate.

Fiscal Year 2024 Appropriations Update

The House and Senate are in recess next week and return the week of February 26 (Senate returns Monday 2/26, the House returns Wednesday 2/28). The current continuing resolutions (CRs) funding the federal government expire on March 1 and March 8. The House has only three days to pass four of the 12 annual spending bills before the March 1 deadline to avoid a government shutdown.

The biggest holdup right now are conservative policy riders that staff continue to negotiate. Hardline conservatives are pushing to force a government shutdown or enact a full-year CR in order to try to win these policy fights. Republican Appropriators told the hardliners that a shutdown only hurts House Republicans.

Congress may have to pass a fourth CR to extend current spending for FY24 before the March 1 deadline.

DHS Secretary Impeachment

The House impeached DHS Secretary Alejandro Mayorkas Tuesday night on a party-line vote, 214-213. This is the first time in nearly 150 years that the House has voted to oust a Cabinet official. The Senate will start the impeachment trial for Mayorkas when the chamber returns from the Presidents Day recess on February 26. Senate President Pro Tempore Patty Murray will oversee the proceedings. No other business can happen on the Senate floor during an impeachment trial. The Senate is likely to avoid the matter entirely as Senate Majority Leader Chuck Schumer (D-N.Y.) can move to either dismiss the two articles against Mayorkas or refer them to the committee level, effectively tabling the process.

The House and Senate have left town for the Thanksgiving recess, but before leaving they passed a short-term continuing resolution (CR). The House passed the CR on Tuesday by a vote of 336-95. Two Democrats and 93 Republicans voted against the measure. The Senate took up the measure last night and passed it by a vote of 87-11. One Democrat and 10 Republicans voted against the CR. The bill now goes to the President who is expected to sign it before the current CR expires tomorrow at midnight.

The CR funds the government at current spending levels with some federal agencies funded through January 19 and the rest of the federal government through February 2. The January 19 date covers the Agriculture, Energy and Water, Military Construction-Veterans Affairs, and Transportation HUD spending bills. The February 2 deadline includes the Commerce Justice Science, Defense, Financial Services and General Government, Homeland Security, Interior Environment, Labor HHS Education, Legislative Branch, and State Foreign Operations. The CR also extends the authorization of the Farm bill until September 30, and some public health provisions, national health security provisions, and a special diabetes program through January 19. The bill does not include an emergency funding for Israel or Ukraine.

House Republicans had to pull their FY24 Commerce Justice Science appropriations bill from the floor this week after 19 Republicans (and all Democrats) voted against the rule for considering the bill on the House floor. The Republican objectors opposed the bill for not going far enough to cut FBI funding, despite the bill already including a 9% cut. The House then turned to the FY24 Labor HHS Education appropriations bill and adopted 93 amendments, but then abruptly left town for the Thanksgiving break. They aren’t expected to have the votes to pass that bill when they return after the break.

While a shutdown has been averted until next year, Congress’ to-do list when they return the week of November 27 includes a number of items. The supplemental funding request for Ukraine, Israel, and Taiwan will require a bipartisan deal on border security. A small group of Senators is continuing discussions over the Thanksgiving break to try to come to agreement on changes to border security policy and funding. The group is hoping to reach an agreement by Thanksgiving. Congress must also complete action on an FAA reauthorization (expires Dec 31), FISA surveillance authorities (expires Dec 31), and the FY24 National Defense Authorization Act (NDAA). A number of tax and healthcare related items also need to be addressed.

Topline Funding Levels by Appropriations Subcommittee

Crisis averted…for now. Congress passed a continuing resolution (CR) yesterday that keeps the federal government funded through November 17. The CR includes an additional $16B for the FEMA Disaster Relief Fund, but no additional funding for Ukraine. The bill also reauthorizes the Federal Aviation Administration (through December 31) and the National Flood Insurance Program (through November 17), and includes the Animal Drug User Fee Amendments of 2023 and some public health and child and family services programs extenders. The new funding deadline expires right before the House and Senate are scheduled to recess for the Thanksgiving holiday.

The House passed the measure by a vote of 335 to 91. Ninety Republicans and one Democrat voted against the measure. The lone Democrat to vote against the bill was Rep. Mike Quigley (D-IL) who called the bill’s lack of funding for Ukraine, “a victory for Putin.” The Senate then took it up and passed it by a vote of 88 to 9. The nine “nay” votes were all from Republicans. The President signed the CR last night enacting it into law.

Funding for Ukraine was left out of the CR even though big majorities in both chambers support sending more money. The White House is preparing to send to Congress a full year supplemental funding request for Ukraine in November. Sen. Michael Bennet (D-CO) secured a commitment from Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) to hold a vote on Ukraine aid in the near future. Not specific timeline was laid out. The Senate could use the House-passed bill providing $300M in Ukraine funding that was passed as a show-of-confidence vote after the money was stripped out of the House Defense appropriations bill. The Senate could amend this bill, add additional funding for Ukraine, and send it back to the House.

The House was supposed to take a two-week recess beginning October 2. House Republican leaders canceled the planned district recess for the beginning of October and said they will continue to move their own spending bills. They will meet next week to consider the Energy & Water and Legislative Branch appropriations bills on the House floor.

Rep. Matt Gaetz (R-FL) announced this morning that he will introduce a motion to remove Speaker Kevin McCarthy (R-CA) from his leadership position. Once the motion to vacate is introduced, the House would have 48 hours to vote on it. Gaetz did not say when he would introduce the motion. Conservative Republicans in the House said they would challenge McCarthy if he relied on Democrats to pass any funding legislation. If they are successful in this effort, Republicans would then need to elect a new Speaker. In any event, this move will eat up valuable floor time that is needed to pass all 12 annual appropriations bills through regular order before the new November 17^th deadline.

Topline Funding Levels by Appropriations Subcommittee

Congress will turn its focus to the debt limit and federal spending when it returns next week. The debt limit – also called the debt ceiling – is the maximum amount of debt that the Department of Treasury can issue to the public or to other federal agencies. The amount is set by law and has been increased or suspended over the years to allow for additional borrowing needed to finance the federal government’s operations. The debt limit was last raised to a total of $31.4 trillion on December 16, 2021. On January 19, 2023, that debt limit was reached, and the Treasury announced a “debt issuance suspension period” during which it can take “extraordinary measures” to borrow additional funds without breaching the debt ceiling. 

Treasury Secretary Janet Yellen sent a letter to House and Senate leadership on January 24, 2023 in which she wrote that the extraordinary measures would last through June 5, 2023, and urged “Congress to act promptly to protect the full faith and credit of the United States.” April tax receipts could change this outlook.Wrightson ICAP thinks that the end date is more likely the end of July. And the Congressional Budget Office estimates that extraordinary measures will be exhausted sometime between July and September 2023.

Since then, there have been a few statements from both sides of the negotiating table and an exchange of letters, but no serious discussions on lifting the debt limit. Behind the scenes, there have been a few recent developments. House Republican leaders have begun informally putting together a debt-limit package they intend to socialize with their members when Congress returns next week. Republicans don’t want to lift the debt limit without spending reductions. 

The proposed Republican bill would lift the debt limit until May 2024 in exchange for either a cap on non-defense discretionary spending or a cap on overall discretionary spending after reducing it to FY 2022 levels (i.e. limiting appropriations growth to 1-1.5% annually over the next decade). The Republican proposal also would rescind unspent Covid money, prohibit President Biden’s student loan forgiveness program, repeal some green tax credits that were in last year’s Inflation Reduction Act (P.L. 117-169), institute work requirements for some federal benefit programs (e.g. SNAP), and implement the House Republican energy plan (H.R. 1) and regulation-cutting REINS Act. While Republicans are not planning to touch Social Security or Medicare benefits as promised, Main Street members and others are pushing to include a provision setting up a bipartisan commission to come up with solutions to ensure the long-term solvency of those programs.

The Republican proposal would require action by several House committees making passage a difficult process. While it has no chance of passing the Senate, it could jump start negotiations with the White House and Senate. However, Democrats say they won’t bargain on such conditions and are insisting on a clean bill.

A congressional stalemate over lifting the debt ceiling could have serious consequences for the U.S. military even if a breach never occurs. Swirling economic uncertainty makes it difficult for the Pentagon and defense industry to execute their long-term plans, and questions over military pay and benefits could discourage people from joining the military amid an ongoing recruiting crisis. More broadly, lawmakers argue that risking a never-before-seen breach would project weakness to adversaries like Russia and China as the U.S. races to aid Ukraine in its war against Russia and deter Chinese aggression.

Vantage Point Strategies’ Summary of the Inflation Reduction Act https://drive.google.com/file/d/1yC1jKsmLjX3fHD7btg2vYu4lUmP2uaew/view?usp=sharing 

The Senate just passed H.R. 4346, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act by a vote of 64 to 33. The bill now goes to the House who could vote on it this week before they leave for their August recess. If the House passes the bill, it would then go to the President for his signature.

The bill is a trimmed-down competitiveness package from a larger bill that passed last year, but stalled in bipartisan, bicameral conference talks. It includes $54.2 billion in five-year grants for semiconductor manufacturing and research, as well as 5G wireless deployment, a 25% tax credit for investments in semiconductor manufacturing facilities through 2026, funding authorization for the National Science Foundation (NSF), and other science-focused measures.

Bill Text

https://www.commerce.senate.gov/services/files/CFC99CC6-CE84-4B1A-8BBF-8D2E84BD7965

Section-by-Section Summary

https://www.commerce.senate.gov/services/files/1201E1CA-73CB-44BB-ADEB-E69634DA9BB9

CHIPS and ORAN Investment Division A Summary

https://www.commerce.senate.gov/services/files/2699CE4B-51A5-4082-9CED-4B6CD912BBC8

NSF, NIST, DOC, NASA Division B Summary

https://www.commerce.senate.gov/services/files/6E687DDA-7AA6-4EA8-B9C8-F25E3A0254ED

Department of Energy Division B Summary

https://www.commerce.senate.gov/services/files/218906F5-60BE-4EEF-A58C-F50CC0A134E6

FY2023 Appropriations

This week the House Appropriations Committee began marking up their 12 fiscal year 2023 (FY23) appropriations bills. They began the process before reaching a bipartisan agreement on discretionary spending levels.

Negotiations have ground to a halt due to differences over defense vs. nondefense spending and a Republican push to strip earmarks out of the bills. Republicans want large defense spending increases to keep pace with inflation, but will only support flat-funding for nondefense agencies.

The first six bills hew closely to President Biden’s FY23 budget request. House Democrats set an overall $1.6T discretionary spending cap for the FY23 bills earlier this month. That is about 9% above the FY22 spending cap. Here is how the House FY23 bills compare with FY22 enacted levels.

Full Committee markups of the House bills will begin next week and wrap up on June 30. The bills will then go to the House floor for consideration in July.