Between the Congressional recess and a winter storm, the streets of Washington, DC were quiet this week—but it was a quiet that hid a lot of preparations for a jam-packed week ahead. We often skip the Golden Apple on recess weeks, but the list of upcoming events alone was worth sending out an issue.
SEC proposes expansion of “Test the Waters” reform — The Securities and Exchange Commission (SEC) voted Tuesday to propose expanding its “test-the-waters” accommodations to all issuers, including investment companies. The agency currently allows emerging growth companies (EGCs) to have discussions with certain investors before filing a registration statement, as authorized by the JOBS Act. The SEC proposal would make that available to all issuers in an effort “to enhance their ability to conduct successful public securities offerings and lower their cost of capital, and ultimately to provide investors with more opportunities to invest in public companies,” said SEC Chairman Jay Clayton. The proposal will be open for public comment for 60 days.
Banks report huge earning increases in fourth quarter — The FDIC released fourth-quarter income figures for the banking industry this week, showing fourth-quarter net income of $59.1 billion and full-year net income of $236.7 billion. Quarterly income was up by more than 133 percent from the previous year, while annual income rose 44.1 percent from 2017. FDIC Chairman Jelena McWilliams attributed to the increase to “higher net operating revenue and a lower effective tax rate.” She cautioned banks against reaching for yield, however, and said that “the recent flattening of the yield curve may present new challenges in lending and funding.
Confirmations, nominations, departures, etc. — The Senate Banking Committee will vote on the nominations of Mark Calabria to be Director of the FHFA next Tuesday, along with the nominations of Kimberly Reed to be president and Judith Pryor and Spencer Bachus to be board members of the Export-Import Bank. The Securities and Exchange Commission has named Giles Cohen as Acting Chief Counsel of its Office of the Chief Accountant, and James P. McNamara as Chief Human Capital Officer. The Commodity Futures Trading Commission announced the appointment of Mel Gunewardena as Deputy Director of the Market Intelligence Branch (MIB) and CFTC’s Chief Market Intelligence Officer.
Next Week in Washington:
February 26 — Senate Committee on Banking, Housing, and Urban Affairs will vote on the nominations of Mark Calabria to serve as Director of the Federal Housing Finance Administration, Kimberly Reed to be president of the Export-Import Bank, and Judith Pryor and Spencer Bachus to be members of the Ex-Im Bank board of directors. 9:30 a.m., SD-106 Dirksen Senate Office Building.
February 26 — House Committee on Financial Services holds a hearing on “Who’s Keeping Score? Holding Credit Bureaus Accountable.” 10:00 a.m., 2128 Rayburn House Office Building.
February 26 — House Committee on Energy and Commerce holds a hearing on “Protecting Consumer Privacy in the Era of Big Data.” 10:00 a.m., 2123 Rayburn House Office Building.
February 26 — House Committee on Appropriations holds a hearing on “Leveraging Private Capital for Underserved Communities and Individuals: A Look into Community Development Institutions (CDFIs).” 10:00 a.m., 2362-A Rayburn House Office Building.
February 26 — House Committee on Small Business holds a hearing on “Shutdown Lessons: SBA Capital Access Programs.” 10:00 a.m., 2360 Rayburn House Office Building.
February 26 — Senate Committee on Banking, Housing, and Urban Affairs holds a hearing to examine the Semiannual Monetary Policy Report to the Congress. 10:00 a.m., SD-106 Dirksen Senate Office Building.
February 27 — House Committee on Appropriations holds a hearing on “Stakeholder Perspectives: Fair Housing.” 10:00 a.m., 2358-A Rayburn House Office Building.
February 27 — House Committee on Financial Services holds a hearing on “Monetary Policy and the State of the Economy.” 10:00 a.m., 2128 Rayburn House Office Building.
February 27 — House Committee on Ways and Means hears testimony from US Trade Representative Robert E. Lighthizer on US-China trade. 10:00 a.m., 1100 Longworth House Office Building.
February 27 — Senate Committee on Commerce, Science, and Transportation holds a hearing to examine policy principles for a federal data privacy framework in the United States. 10:00 a.m., SH-216 Hart Senate Office Building.
February 27 — House Committee on Financial Services holds a hearing on “An Overview of Diversity Trends in the Financial Services Industry.” 2:00 p.m., 2128 Rayburn House Office Building.
February 28 — Senate Committee on Banking, Housing, and Urban Affairs holds a hearing to examine legislative proposals on capital formation and corporate governance. 10:00 a.m., SD-538 Dirksen Senate Office Building.
The Ellis Insight. Jim Ellis reports on political news:
Sen. Bernie Sanders: Delivering a blistering personal attack against President Trump while saying he wants to unite America, Sen. Bernie Sanders (I-D/VT) officially announced his presidential campaign via You Tube and email this week.
The Sanders entry means that eleven Democrats have either formally announced their campaigns or have filed a national exploratory committee. Former Vice President Joe Biden remains the major outlier at this point. He promises an announcement of his political plans sometime in March, and his decision, regardless of whether he decides to run, will have a major effect upon the overall campaign.
Howard Schultz: Former Starbucks CEO Howard Schultz said during the week that he would likely abandon his Independent presidential ambitions if the Democrats were to nominate a candidate who he described as being more moderate such as former Vice President Joe Biden or ex-New York City Mayor Michael Bloomberg.
The Money Count: Sen. Bernie Sanders’ (I/D-VT) has already put himself atop the money list in his first day as an official 2020 presidential candidate. It is being reported that the Sanders Campaign exceeded $6 million in campaign receipts in the 24 hours after the Vermont Senator officially entered the campaign. This amount exceeded California Sen. Kamala Harris’ $1.5 million for her first day, and obviously is far better than Sen. Amy Klobuchar’s (D-MN) initial 24 hour $1 million and Sen. Elizabeth Warren’s (D-MA) $300,000.
New Hampshire Poll: Amherst University, located in Manchester, NH, released a new survey for the state’s 2020 first-in-the-nation primary (2/7-15; 337 NH Democratic likely primary voters) and found that former Vice President Joe Biden and Vermont Senator Bernie Sanders place first and second within the field of ten tested candidates.
According to the results, Mr. Biden holds a 28-20% lead over Sen. Sanders. In third place is California Sen. Kamala Harris with 14%, followed by another disappointing performance from Sen. Elizabeth Warren (D-MA) who posted only 9% support in a neighboring state. Former Rep. Beto O’Rourke (D-TX), Sens. Cory Booker (D-NJ) and Kirsten Gillibrand (D-NY), ex-New York City Mayor Michael Bloomberg, Sen. Amy Klobuchar (D-MN) and former HUD Secretary Julian Castro round out the field. All of the latter group consecutively finished in mid-to-low single digits.
Alabama: US Rep. Bradley Byrne (R-Mobile) announced his US Senate candidacy this week. Mr. Byrne had been expected to run for the Senate, but his prospects to win the Republican nomination might be in doubt. The pro-economic prosperity organization Club for Growth conducted an Alabama statewide poll (2/10-12; 500 AL likely Republican primary voters) and found Mr. Byrne tied at 27% with fellow Rep. Gary Palmer (R-Hoover/Alabaster). Mr. Palmer has yet indicated whether he will run for the Senate.
The eventual Republican Senatorial nominee will face Alabama 2017 special election winner Doug Jones (D), who has already declared his intention to run for the full six-year term. The Alabama seat will serve as the Republicans’ top conversion opportunity target for the 2020 election cycle.
Arizona: Late last week, we mentioned that OH Predictive Insights had just released an Arizona statewide survey (2/12-13; 600 AZ registered voters) giving appointed Sen. Martha McSally (R) a 44-42% edge over just-announced Democratic candidate Mark Kelly. The latter man is a retired astronaut whose wife is former US Rep. Gabrielle Giffords (D-Tucson). More results were released early this week. When paired with Rep. Ruben Gallego (D-Phoenix), who confirms he is seriously considering entering the race, Sen. McSally would lead him by a stronger 49-41% margin.
Kansas: Despite US Secretary of State Mike Pompeo saying on several occasions that he would not be entering the open US Senate race in his home state of Kansas next year, speculation continued to grow that he would run. Though candidate filing won’t occur until June of 2020 for the August primary, meaning much time remains to reverse course, Mr. Pompeo again said yesterday that he is ruling out launching a Senate campaign.
The seat is open because veteran Sen. Pat Roberts (R) is not seeking re-election. US Rep. Roger Marshall (R-Great Bend/Western Kansas) has previously said that he would enter the Senate race if Mr. Pompeo decides not to run.
Texas: The Public Policy Polling Company, surveying for a Dallas Democratic political consultant, finds former Rep. Beto O’Rourke (D-El Paso) almost tying Sen. John Cornyn (R) in a February research study. According to the poll (2/13-14; 734 TX registered voters), Sen. Cornyn would lead Mr. O’Rourke, 47-45%. The former Congressman and 2018 US Senate nominee said this week that he would likely make a decision about running for President or against Sen. Cornyn by the end of this month, though he said that date is not firm.
AZ-6: Dr. Hiral Tipirneni (D), who twice ran for Congress last year in the CD — once in the special election to replace resigned Rep. Trent Franks (lost 52-48% to Debbie Lesko) and again in the regular election (lost 55-45% to Rep. Lesko) — is potentially looking to run again, but in a different district. According to the Daily Kos Elections website, Dr. Tipirneni is considering challenging Rep. David Schweikert (R-Fountain Hills/ Scottsdale) in the adjacent 6th District.
Though typically a strong Republican district, Rep. Schweikert is now under an Ethics Committee violation for possibly using his government resources to further his political campaign. There is no firm indication this race will materialize, but Dr. Tipirneni did indicate that she “lives close to the 6th District.”
CA-50: El Cajon Mayor Bill Wells, who attracted 12.9% of the vote to finish third in the 2018 jungle primary election against indicted Republican incumbent Duncan Hunter (R-Alpine), this week announced the formation of a new 2020 federal fundraising committee. With Rep. Hunter scheduled to face a federal trial in September on campaign finances charges, potential candidates are already swirling attempting to best position themselves if a special election occurs should he be found guilty.
In addition to Mayor Wells, Temecula Mayor Matt Rahn (R), retired Navy SEAL and former congressional candidate Larry Wilske (R), and 2018 Democratic candidate Ammar Campa-Najjar (D) have already said they will run for the seat in the next election.
GA-7: Though 2018 Democratic congressional nominee Carolyn Bourdeaux came within 419 votes of unseating Rep. Rob Woodall (R-Lawrenceville), who has already announced he will not seek re-election next year, it appears that she will have to fight hard to win re-nomination.
Three state Representatives all confirm they are considering running in the 7th District, meaning a hotly contested primary will be forced with a likely succeeding run-off if they, and others, enter the race. In addition to Ms. Bourdeaux, who confirms she will run again, state Reps. Sam Park (D-Lawrenceville), Pete Marin (D-Duluth), and Brenda Lopez Romero (D-Norcross) are all confirming that they are potential candidates.
IL-14: Local Chicago suburban business owner and state Senator Jim Oberweis (R-North Aurora), who has lost four statewide and two congressional elections is making yet another electoral attempt, but his entrance into the 14th Congressional District race is already marred. Because, according to Sen. Oberweis, a staff member inadvertently checked the wrong box on the federal political committee form, the office for which he legally formed a committee was the US Senate; in other words, to challenge Sen. Dick Durbin (D).
The Oberweis campaign quickly reversed course after discovering the mistake and correctly filed FEC committee documentation to challenge freshman Rep. Lauren Underwood (D-Naperville). Expect other Republican candidates to join the field. The party leaders are wary of Mr. Oberweis’ past losing record and desire another, fresher and presumably more electable 2020 nominee.
MN-7: Retired Air Force officer Dave Hughes (R) has twice challenged veteran Minnesota Rep. Collin Peterson (D-Detroit Lakes) and, with little in the way of national fanfare, has recorded vote percentages of 47 and 48 in the last two consecutive elections. This week, he announced that he will return for a third campaign next year. Now, with Minnesota Rep. Tom Emmer (R-Delano) in charge of the National Republican Congressional Committee it is likely that MN-7, for the first time, will see some outside attention in this coming election cycle.
NC-9: After three days of hearings before the North Carolina Board of Elections and ending with even Republican candidate Mark Harris calling for a new election, the five-member panel finally issued the order, a conclusion that has been apparent for weeks. At the Board’s next meeting, a special election schedule will be announced.
The 9th District result has been tied up for months following the November election over voter fraud allegations in one county and internal Board of Elections politics. Because North Carolina has a three-tiered election process, meaning a secondary run-off election occurs if no party primary contender reaches at least 30% support, the timing could stretch well into June before the 9th CD finally has a Representative for this congressional session.
PA-12: Pennsylvania Republicans will be holding a special congressional district convention this Saturday to choose a nominee to replace resigned Rep. Tom Marino (R-Williamsport) for the May 21st special election. At least 24 Republican participants have filed with the committee for consideration as a candidate. This is one of the few times a person can run for Congress with little in the way of preliminary expenditure, so seeing a large number of aspirants is not particularly surprising.
The convention winner will face the already-chosen Democratic nominee, college professor and 2018 congressional nominee Marc Friedenberg. The Republican candidate will be considered the favorite in a reconfigured district that President Trump carried 66-30% in 2016.
Mississippi: Responding to former state Supreme Court Justice Bill Waller Jr. entering the Republican primary to challenge Lt. Gov. Tate Reeves for the GOP gubernatorial nomination, term-limited Mississippi chief executive Phil Bryant (R) came out early to take sides.
Late this week, Gov. Bryant formally endorsed Lt. Gov. Reeves for the party nomination. Despite Mississippi’s strong Republican voting history since the turn of the century, Democrats will have an unusually strong nominee this year in the person of Attorney General Jim Hood, one of the most successful Democrats in all of the Deep South. Mr. Hood has won four consecutive elections as the state’s AG, over a period when any other Democratic regional victory has been quite scarce.