POLITICO Nightly: Where Republicans are soft on China

 

BY GAVIN BADE Sen. John Cornyn (R-Texas) at the U.S. Capitol on May 10. | Kevin Dietsch/Getty Images) TALK IS CHEAP — Republicans in Congress love to talk tough on China — tougher, they’d emphasize, than Democrats and President Joe Biden. But on one key issue they may be going soft. On the table is how to regulate American investments in the Chinese economy. Defense officials have warned for years that U.S. banks are helping fuel Beijing’s military rise by pouring money into Chinese firms that turn around and give their tech to the People’s Liberation Army. It’s an obscure issue that nevertheless is front-of-mind for the Pentagon, Wall Street and K Street alike — since any new overbite would constitute the first time the U.S. has tried to regulate American companies overseas in such a broad manner. That would be a sea change in economic governance, as we reported last year . The Biden administration has been working for over a year to finish an executive order that would address the issue by setting up a new government review board that would evaluate — and potentially deny — investments that threaten national security. For a while, it seemed like many Republicans were on board, with powerful members like House Foreign Affairs Chairman Michael McCaul (R-Texas) and Sen. John Cornyn (R-Texas) signing on to bills that would codify the new outbound investment review board into law. McCaul and liberal Rep. Rosa DeLauro (D-Conn.) penned an op-ed together on the subject in the conservative Washington Examiner as recently as February. But in recent months, that momentum has slowed. This week, Cornyn and his co-sponsor Sen. Bob Casey (D-Pa.) released a scaled back rewrite of the Senate’s version of outbound investment review. The updated version would not empower the federal government to block investments — only forcing companies to notify the feds of risky deals. That opens up a conflict with the House’s more aggressive version, but that didn’t stop the senators from filing the bill as an amendment to the yearly defense spending bill, which Senate lawmakers could take up as early as next week. Meanwhile, House GOP support for outbound investment review is faltering under the opposition from Rep. Patrick McHenry (R-N.C.) and other Wall Street-aligned lawmakers. McHenry has made clear that he views any new government review board as an unacceptable expansion of federal power, and reiterated that to POLITICO this week, calling it a “terrible idea” that “won’t work.” (House appropriators also omitted funding for the Treasury Department to administer an investment review board in the funding bill they advanced this week.) Instead, some members of McHenry’s committee are taking a more modest approach outlined by Rep. Andy Barr (R-Ky.). His bill would expand the government’s ability to blacklist individual Chinese firms, blocking their access to American finance, but would stop short of a new government review board. “The approach I’m trying to persuade my colleagues to pursue is sanctions and not a clunky bureaucratic outbound capital regime,” he told POLITICO this week. “I think I’ve gotten more buy in for that approach.” That remains to be seen. The Financial Services subcommittee on national security plans to hold a markup at the end of this month. Barr is hopeful that his bill could get a vote that day, though McHenry stressed that no final decisions have been made. And even if his more modest approach wins favor there, the GOP China doves will still have to fend off future efforts from hawks like China Select Committee Chair Mike Gallagher (R-Wis.), who called Barr’s bill “a positive first step” but said lawmakers should go further. Those debates will come to a head in the coming weeks and months, as lawmakers in both chambers chew over China issues in committee. And the final text of Biden’s executive order (when it finally arrives) could scramble the conversation. But for now, even the most hawkish Republicans are optimistic they can avoid more internal discord, so watch this space. “I know there’s differences, but I think we all want to go in the same direction,” Gallagher told POLITICO this week. “It’s just a question of landing the plane.” Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author at gbade@politico.com or on Twitter at @GavinBade .   SUBSCRIBE TO POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY .     WHAT'D I MISS? — Biden administration unveils $39B of student debt relief as part of income-driven repayment fix: The Biden administration announced today that it would cancel $39 billion of student debt owed by more than 804,000 borrowers whose debts have been outstanding for more than 20 years. The Education Department said it was implementing its plan, announced in April 2022, to compensate borrowers for what it called “historical inaccuracies” and other failures in how the agency and its contracted loan servicers have managed the income-driven repayment programs. — Biden’s top legislative director to step down: Louisa Terrell, a top aide to President Joe Biden and his director of legislative affairs, plans to step down from her position , according to two people familiar with her plans. Terrell, who has been with Biden since the start of his presidency, played a key role during the first two years of his administration in getting his key legislative priorities passed, including the bipartisan infrastructure bill and last year’s Inflation Reduction Act. — Reserve troops who may be called up for Europe duty would serve ‘administrative’ functions, Kirby says: President Joe Biden’s authorization Thursday for the military to call up as many as 3,000 reserve troops to support operations in Europe would be for “administrative” support contributing to the existing rotational presence , National Security Council spokesperson John Kirby said. “These are people that are specialists in things like administrative functions, logistics, supply, maybe medical, dental, those kinds of things,” Kirby said in an interview with Fox News this morning. It is not yet clear if the military plans to actually deploy any of the 3,000 reserve troops. NIGHTLY ROAD TO 2024 NERVY NUMBER — Mike Pence’s campaign and super PAC raised just $3.85 million in the second quarter of 2023 , reports POLITICO’s Eric Bazail-Eimil, a relatively small haul as the former vice president struggles to gain traction in the crowded GOP presidential primary. Pence, who entered the race for president in early June, saw his campaign raise just over $1.1 million in the first three weeks of his campaign, while his super PAC, Committed to America, announced it raised just over $2.6 million dollars. Pence’s haul pales in comparison to the fundraising totals released by many of his Republican rivals, especially given Pence’s previous two appearances on a presidential ticket and access to donors. Florida Gov. Ron DeSantis, who officially announced his bid for president in late May, raised over $20 million in the first six weeks of his campaign, while former President Donald Trump and his PAC raised over $35 million in the second quarter. South Carolina Sen. Tim Scott raised $6.1 million in the second quarter and reported having over $21 million on hand. SKEPTIC SUMMIT — Conservative pundit Tucker Carlson sparred with Asa Hutchinson after inquiring about the former Arkansas governor’s vaccination status today , reports POLITICO’s Lucy Hodgman. Carlson, interviewing Hutchinson on stage at the conservative Family Leadership Summit in Des Moines, Iowa, asked the 2024 Republican presidential candidate how many Covid-19 vaccinations he had received and how he felt about his decision to do so in retrospect. Hutchinson confirmed that he had been vaccinated against Covid-19 and defended his choice as the “right decision of taking the vaccine for me,” but noted that others can “make a different decision.” But before Hutchinson gave his answer, he lobbed the question back to Carlson. “How many Covid shots did you take?” Hutchinson asked. “Zero,” Carlson responded to a round of applause from the audience. Before confirming he had been vaccinated, Hutchinson touted his opposition to vaccine mandates as the governor of Arkansas, pointing to a law he signed that prohibited vaccination mandates among government employees. In 2021, Hutchinson also OK’d a law allowing employees to opt out of vaccination requirements from businesses — although he called the debate on the opt-out bill “harmful to our goal of increasing vaccination rates in Arkansas.” AROUND THE WORLD Revelers celebrate around a float featuring Russian oligarch Yevgeny Prigozhin, co-founder of the Wagner Group, who has six arms with the flags of Ukraine, Germany, Europe, NATO, the U.S. and Britain, equating them all with nazis, during a street carnival parade in Düsseldorf, Germany in February. | Ina Fassbender/AFP via Getty Images DONE AND DUSTED — Russian President Vladimir Putin has given his own account of a June 29 meeting with Wagner mutineer Yevgeny Prigozhin and his men in the Kremlin after the paramilitary group’s aborted mutiny, claiming he gave the fighters an opportunity to continue fighting in Ukraine, writes Zoya Sheftalovich . Speaking to a reporter from Russia’s state-controlled Kommersant newspaper on Thursday, Putin said 35 Wagner fighters accompanied Prigozhin to the three-hour meeting in the Kremlin last month. The Russian president said he offered Wagner troops several options, including continuing to operate under the command of someone he identified by the call sign “Sedoy,” meaning “Gray-haired,” whom they had served under for 16 months. Putin also attempted to play down the actions of the Wagner fighters who, under Prigozhin’s command, marched on Moscow on June 24, taking control of Russian territory and seeking the resignations of the president’s Defense Minister Sergei Shoigu and Chief of the General Staff Valery Gerasimov. Asked whether the Wagner Private Military Company would remain a fighting unit, Putin seemingly became agitated. “‘Well, the PMC Wagner does not exist!’” Putin exclaimed, according to Kommersant.   UNLEASH THE FUTURE OF HEALTHCARE WITH POLITICO, A 7/20 INTERACTIVE EVENT: Imagine a future where rare genetic diseases are not only treatable, but potentially curable. Where our approach to chronic illness takes a monumental leap forward. That future is already taking shape in the form of next-generation health care treatments such as gene therapy. Join POLITICO on Thursday , July 20 and delve into the burgeoning field of gene therapies, which hold the power to redefine our health care landscape. Are you ready to explore this new frontier in health care? Don't miss this chance to be part of the conversation. REGISTER NOW .     NIGHTLY NUMBER $72 million The amount of money that President Joe Biden, the Democratic National Committee and their joint fundraising committees raised in the second quarter of this year , his campaign said today. Biden also revealed that 394,000 donors contributed to him, the DNC and their committees. He and the DNC had a combined $77 million in cash on hand as of June 30, when the latest fundraising period ended. In 2019, then-President Donald Trump and the Republican National Committee raised $105 million in the second quarter. In 2011, then-President Barack Obama and the DNC brought in more than $86 million. RADAR SWEEP IT’S A SCORCHER — How can we understand the latest heat wave in the United States that’s rocked 100 million Americans who are now under heat alerts? What’s happened is something called a “heat dome” that forms as a high pressure system in the air. As the air descends towards the ground, it condenses and heats up, capable of reaching over 100 degrees Fahrenheit when it reaches the ground. This descending cap self-perpetuates, discouraging the formation of clouds and raising ground temperatures even further. Matt Simon reports on the phenomenon for Wired. PARTING IMAGE On this date in 1977: Firefighters fight a blaze above a row of looted stores in Brooklyn the day after a power failure that swept across New York City and led to widespread chaos and looting. | AP Photo Did someone forward this email to you?  Sign up here .   Follow us on Twitter Charlie Mahtesian @PoliticoCharlie Calder McHugh @calder_mchugh Katherine Long @katherinealong   FOLLOW US

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July 14, 2023 HEATHER COX RICHARDSON

July 14, 2023 HEATHER COX RICHARDSON JUL 15 Traditionally, the National Defense Authorization Act (NDAA), which funds the annual budget and appropriations of the Department of Defense, passes Congress on a bipartisan basis. Since 1961 it has been considered must-pass legislation, as it provides the funding for our national security. For all that there is grumbling on both sides over one thing or another in the measure, it is generally kept outside partisanship.  Late last night, House Republicans broke that tradition by loading the bill with a wish list from the far right. Republicans added amendments that eliminate all diversity, equity, and inclusion (DEI) programs in the Defense Department; end the Defense Department program that reimburses military personnel who must travel for abortion services; bar healthcare for gender transition; prevent the military academies from using affirmative action in admissions (an exception the recent Supreme Court decision allowed); block the Pentagon from putting in place President Biden’s executive orders on climate change; prevent schools associated with the Defense Department from teaching that the United States of America is racist; and block military schools from having “pornographic and radical gender ideology books” in their libraries. House speaker Kevin McCarthy (R-CA) tweeted: “We don’t want Disneyland to train our military. House Republicans just passed a bill that ENDS the wokism in the military and gives our troops their biggest pay raise in decades.”  In fact, the events of last night were a victory for right-wing extremists, demonstrating that they hold the upper hand in the House. Representatives Mikie Sherrill (D-NJ) and Chrissy Houlahan (D-PA), both military veterans, expressed shock that so many Republicans voted to strip abortion protections from military personnel. “[T]hey will say, ‘this is a really bad idea,’ ‘this is not where the party should be going,’ ‘this is a mistake,’” Sherill said. “[W]ell then why did everyone but two people in the Republican conference vote for this really bad amendment?” The bill passed by a vote of 219 to 210, largely along partisan lines. This year’s budget is $886 billion as the U.S. modernizes the military to compete with new threats such as the rise of China, and it provides a 5.2% increase in pay for military personnel.  But Senate Democrats will not vote for it with the new partisan amendments and are working on their own measure. While there will be a conference committee to hammer out the differences between the two versions, McCarthy has offered a position on that committee to Representative Marjorie Taylor Greene (R-GA), one of the extremists. This is an unusual offer, as she is not on the House Armed Services Committee.  House minority leader Hakeem Jeffries (D-NY) said: “Extreme MAGA Republicans have hijacked a bipartisan bill that is essential to our national security and taken it over and weaponized it in order to jam their extreme right-wing ideology down the throats of the American people.” “We are not going to relent, we are not going to back down, we’re not going to give up on the cause that is righteous,” Representative Scott Perry (R-PA) said. Representative Sean Casten (D-IL) summed up the vote today on Twitter. “The National Defense Authorization Act (NDAA) is the bill that funds all of our military operations. It is typically bipartisan and is about as serious as Congress gets. What weapons of war we fund, which allies we share them with, how we recruit. National security is a BFD. We can have our political debates about any number of issues but it is generally understood that when Americans are willing to sacrifice their lives to defend us, it’s time to check the crazies at the door. But today, the crazies won. “They won first because [McCarthy] put the crazies in positions of power. But second because none of the “moderate” Republicans had the courage to stay the hell out of KrazyTown…. Is every member of the [House Republican Conference] a homophobic, racist, science denying lunatic? No. But the lesson of today is that the ones who aren’t are massive cowards completely unfit for any position of leadership.  “There is space—and demand—for reasonable differences of opinion in our democracy. This isn’t about whether we agree. It’s about whether we can trust that—differences aside—we trust that we’ve got each other’s back if we ever find ourselves in a foxhole together. That’s usually a metaphor, conflating the horrors of war with the much lower-stakes lives that most of us are fortunate enough to lead. But today, the entire [House Republican Conference] told us—both literally and metaphorically—that they don’t give a damn about the rest of the unit.” — Notes: https://www.cnn.com/2023/07/14/politics/house-ndaa-vote-amendments/index.html https://www.nytimes.com/2023/07/14/us/politics/defense-bill-house-ndaa.html https://www.politico.com/news/2023/07/14/house-passes-defense-bill-despite-controversial-abortion-transgender-policies-00106373 https://www.cbsnews.com/news/supreme-court-affirmative-action-military-academies-exemption/ https://twitter.com/SpeakerMcCarthy/status/1679890062148874241 https://talkingpointsmemo.com/news/houlahan-sherrill-abortion-defense-house-republicans https://twitter.com/SeanCasten/status/1680003210885431306