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The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

Budget school is in session — House GOP seeks to educate members about debt ceiling

The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

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In today’s editionScoop: Biden eyes Federal Reserve Vice Chair Lael Brainard for the top economic position in the White House … Scoopy: How George Santos wooed investors for an alleged Ponzi scheme … What we’re watching: GOP divisions over kicking Rep. Omar off the House Foreign Affairs Committee … Possible retirements before 2024 have Senate Democrats on edge … but first …

On the Hill

Budget school is in session — House GOP seeks to educate members about debt ceiling

As Washington prepares for a drawn-out clash over raising the debt limit, House Republican leaders are embarking on an education campaign to make sure their members understand how the debt limit works, the consequences of failing to raise the ceiling, and the difference between a garden-variety government shutdown and a potential debt default.

House Majority Leader Rep. Steve Scalise (R-La.) will speak today at the weekly lunch of the Republican Study Committee, the largest group of House Republicans.

  • “Some of it will be [about] the proper messaging, making sure that people that are less informed about the process don’t go out and make statements that alarms people on both sides of the aisle,” said one conservative House Republican who will attend the meeting and who like others spoke on the condition of anonymity to discuss the private meeting. 

House Republicans have been united in demanding concessions on spending cuts from President Biden and Democrats in exchange for lifting the nation’s borrowing limit, which the Treasury Department said must be done no later than June to avoid a potential default.

But some GOP members have made statements on social media or in interviews that show a lack of understanding about the policy details regarding the legal limit on how much the government can borrow and what could happen if that cap isn’t increased in time.

Some have equated failing to lift the debt limit with a government shutdown, which happens when Congress fails to enact the government’s annual budget. Rep. Andy Biggs (R-Ariz.) has suggested repeatedly that Congress shouldn’t raise the debt limit at all, which most economists — from the left and the right — say would lead to a financial shock that would be disastrous for the economy. (Here is a debt limit primer for you.)

More than half of House Republicans have never served in the majority before, and fewer than a quarter of them were in office during the 2011 debt limit fight, which triggered a downgrade in the country’s credit rating. 

  • “We’ll get everybody on the same page and we’ll help them understand why it’s not a government shutdown message, it’s about paying the debts we’ve already incurred,” the conservative member said. “And if we want to do our work properly, we will take this moment in time to look at how we change the direction of future spending.”

Some top Republicans say they’re not concerned about lawmakers’ grasp of the debt limit details. “I believe Republican members are quite well aware and we will not default,” said Rep. Jason T. Smith (R-Mo.), the chairman of the House Ways and Means Committee.

But Shai Akabas, the Bipartisan Policy Center’s director of economic policy, said he had spoken with a handful of lawmakers in recent weeks to walk them through the potential consequences of a default, and that he expects to field more questions from Republicans and Democrats alike as the “X-date” gets closer.

“There’s a need to both refresh what people understand about it and, certainly for newer members, get a better understanding,” Akabas said. “It’s such an arcane issue that it’s fully understandable that they don’t have all the ins and outs down to memory.”

McHenry’s warning

At a Republican leadership conference in Florida earlier this week, Rep. Patrick T. McHenry (R-N.C.), the chairman of the House Financial Services Committee and an ally of Speaker Kevin McCarthy (R-Calif.), warned Republicans to be reasonable in their demands for concessions. Some conservative lawmakers are seeking aggressive cuts such as the “dollar-for-dollar” plan to reduce federal spending by a dollar for every dollar the debt limit is raised — an approach endorsed by the conservative Heritage Foundation.

  • McHenry’s message: “You have to realize you don’t have the Senate, you don’t have the White House, you can’t ask for everything in the world,” according to a Republican lawmaker who attended the leadership retreat. (His comments were first reported by Bloomberg News.)

McHenry declined to elaborate on Tuesday evening, telling The Early that he stood by the approach to the debt limit he outlined last month. He told Bloomberg News in December that he preferred to separate raising the debt limit and negotiations to cut federal spending.

“I’m going to advocate for a separation of those two issues so that we can have a proper debate,” he said.

The view from the Senate

Democrats, meanwhile, are eagerly waiting for Republicans to specify the spending cuts they’re seeking so Democrats can lambaste them.

“Let’s see what their plan is on the debt ceiling,” Senate Majority Leader Charles E. Schumer (D-N.Y.) said leaving the White House on Tuesday after meeting with President Biden. “Do they want to cut Social Security? Do they want to cut Medicare? Do they want to cut veterans benefits? Do they want to cut police? Do they want to cut food for needy kids? What's your plan? We don't know if they can even put one together.”

Meanwhile, in the Senate, Minority Leader Mitch McConnell (R-Ky.) plans to stay out of the way for the time being, saying that any debt limit plan needs to come from McCarthy and House Republicans. 

The “Breakfast Club,” a newly formed group of Senate Republican agitators that includes Rand Paul (Ky.), Ron Johnson (Wis.), Mike Braun (Ind.) and Rick Scott (Fla.), will hold a news conference on the debt limit today. 🍿

PROGRAMMING NOTE: Tune in to Washington Post Live today when Leigh Ann will interview Reps. Stephanie I. Bice (R-Okla.) and Chrissy Houlahan (D-Pa.) on their new bipartisan working group for a national paid family leave bill at 11 a.m. Eastern time. She wrote about their efforts here and here. Listen here to find out if there’s any chance they can come up with a bipartisan agreement in the divided Congress. 

At the White House

White House zeroes in on its next top economist

All eyes on Lael Brainard: “Biden is close to naming the next head of the National Economic Council, the top economic position in the White House, and Federal Reserve Vice Chair Lael Brainard has emerged as the top contender,” three people familiar with the deliberations told our colleagues Tyler Pager, Jeff Stein and Rachel Siegel.

  • “The choice of Brainard, 61, would be welcomed by liberals, given her support for strict regulation for Wall Street and her attention to the effects of climate change on the financial world. If selected, she would assume the influential position after the current NEC director, Brian Deese, leaves the White House.”
  • “Deese, who helped guide the White House through the turbulent recovery from the covid-driven economic downturn, is expected to leave soon, though he has not set an official departure date.”
  • Options: “In addition to Brainard, Biden is also considering Commerce Secretary Gina Raimondo; Wally Adeyemo, the deputy treasury secretary; and Gene Sperling, a senior adviser to Biden who ran the NEC under President Bill Clinton and President Barack Obama. People familiar with the process say that Biden has not made a final decision and is still conducting interviews, but that Brainard has emerged as the front-runner.”

More economic news: Rachel reports on the Biden administration plan released this morning to protect tenants and make renting more affordable.

The Campaign

How George Santos wooed investors for alleged Ponzi scheme

Our colleagues Jonathan O’Connell, Isaac Stanley-Becker, Emma Brown and Samuel Oakford are up this morning with the latest tale about what Rep. George Santos (R-N.Y.) was up to before winning election in November.

It focuses on his role at Harbor City Capital before the Securities and Exchange Commission filed suit in April 2021, alleging that the firm defrauded investors of millions of dollars in a “classic Ponzi scheme.” Santos has said he was unaware of any fraud.

The story details how Santos tried to woo investors. Here’s how Christian Lopez described his meeting with Santos at an Italian restaurant in Queens:

“I felt like we were in ‘Goodfellas,’ like we were in a mafia movie. They were like, ‘Hello, I see you are here with George, right this way.’ Bringing us to this fancy restaurant and doing all this, I felt like he was doing it to capture us.”

  • “Collectively, the accounts gathered by The Post offer a detailed picture of Santos’s efforts to recruit investors for Harbor City. In two instances, he inflated his own academic or professional credentials, The Post found. In addition, Zoom recordings of workplace meetings show Santos offering anecdotes about his purported interactions with wealthy people — stories disputed by those involved — for potential inclusion in marketing materials or to impress prospective clients,” Jonathan, Isaac, Emma and Samuel write.

Read the whole story here.

What we're watching

Will McCarthy hold a floor vote to kick Rep. Ilhan Omar (D-Minn.) off the House Foreign Affairs Committee? 

McCarthy announced Tuesday night that he’s going to remove Reps. Adam B. Schiff (D-Calif.) and Eric Swalwell (D-Calif.) from the House Intelligence Committee for the “misuse” of the committee during the last two Congresses.

This has long been expected and something McCarthy has the power to do unilaterally.

He accused Schiff of “lying” during the first impeachment inquiry into President Donald Trump and said that Swalwell should not sit on the committee because of alleged ties to a Chinese spy, whom Swalwell said he immediately ceased communicating with once he was alerted to the issue by the FBI. (Our colleague Glenn Kessler has all the fact-check details here.)

But McCarthy didn’t mention Omar during remarks to reporters on Tuesday or in his letter to House Minority Leader Hakeem Jeffries (D-N.Y.). Because the Foreign Affairs Committee is not a select committee, the full House would need to vote to eject Omar from it.

And McCarthy might not have the votes.

McCarthy and other Republicans have called for Omar’s removal from the panel over past comments that members from both parties have criticized as antisemitic. Omar apologized and has accused Republicans of ginning up “fear and hate against Somali Americans and anyone who shares my identity” in their effort to remove her from the foreign affairs panel.

Two House Republicans — Reps. Victoria Spartz (Ind.) and Nancy Mace (S.C.) — said they wouldn’t vote to remove Omar. Rep. David Joyce (R-Ohio) appeared reluctant, telling us last week that it’s a “bad precedent” and creates a “retaliatory issue.”

Rep. Tom Cole (R-Okla.), the chairman of the House Rules Committee, told reporters on Tuesday evening that he had no qualms about kicking Omar off her committee because Democrats did the same to Reps. Marjorie Taylor Greene (R-Ga.) and Paul A. Gosar (R-Ariz.) during the last Congress.

“This is something Democrats, in my view, brought on themselves,” Cole said.

A busy day for Vice President Harris
  • On the Hill: Harris will visit the Hill one day after Democratic leaders met with her and Biden at the White House. It’s part of an ongoing effort to ensure that Democrats remain united in opposition “to GOP chaos and dysfunction,” according to a Democratic aide familiar with her attendance.
  • In California: Harris will then travel to Monterey Park, Calif., where she will mourn the victims of Saturday’s massacre and meet with their families. The visit comes as Asian Americans try to recover from both the mass killing and Monday’s Half Moon Bay shootings. It’s unclear whether Harris will also visit Half Moon Bay, near San Francisco.

On the Hill

Possible retirements before 2024 have Senate Democrats on edge

Dems on edge: “Senate Democrats returned to Washington to wield their newly expanded majority this week, but the specter of potential retirements in their ranks is already raising anxiety about their prospects in the next election,” our colleague Liz Goodwin reports.

  • “Democrats will be defending a sprawling map of 23 Senate seats in 2024, and three of their incumbents are in states that President Donald Trump won in 2020 — Ohio, West Virginia and Montana. They are also defending seats in the battleground states of Wisconsin, Pennsylvania, Arizona, Nevada and Michigan.”
  • “Sen. Sherrod Brown (D-Ohio) plans to run for reelection, he says, but Democrats are holding their breath waiting for Sen. Jon Tester (D-Mont.) and Sen. Joe Manchin III (D-W.Va.) to decide whether they will stick around for reelection battles in red states where they’ve shown surprising staying power.”

The Media

Early reeeads

From us: 

From across the web: 


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Lawmakers made references to Taylor Swift lyrics during a Senate Judiciary hearing focused on Ticketmaster’s business practices on Jan. 24. (Video: The Washington Post)

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