Congress is bearing down on TikTok, and if House Foreign Affairs Committee Chairman Michael McCaul gets his way, the app will soon be banned in the United States. Morgan Chalfant has an exclusive interview with McCaul, who says he is working with Senators Mark Warner, D-Va. and John Thune, R-S.D. on merging their respective House and Senate bills on the issue. But there are still differences between their approaches that could prove difficult to overcome. Until a ban comes, do check out Semafor’s really great short videos on the platform.
Should the Feds have insured all of Silicon Valley Bank’s depositors and held them whole, or were there other options, like selling it off to a large buyer? Joseph Zeballos-Roig writes about the unfolding debate that’s set to reach the House and Senate this week as they hold hearings on the response to the banking crisis.
Up in New Hampshire, where our own Shelby Talcott is roving the state, former New Jersey Governor Chris Christie is revving up a potential 2024 campaign and taking some serious swipes at Donald Trump and Ron DeSantis.
PLUS: I have One Good Text with Senator Chris Murphy, D-Conn. on his calls for Congress to start asking deeper questions about the coming impact and consequences of AI.
☞ White House: Biden is visiting the semiconductor manufacturer Wolfspeed in North Carolina today as part of the White House’s “Investing in America” initiative that will see officials fan out across the country to promote legislation passed in his first two years. The White House is also launching a new website feature tracking private sector investment in manufacturing.
☞ Chuck Schumer: The Senate majority leader criticized Sen. Tommy Tuberville, R-Ala. for putting a hold on military promotions in order to pressure the Pentagon to reverse policies designed to protect access to abortions for service members since the overturning of Roe v. Wade.
☞ Mitch McConnell: A staffer working for Sen. Rand Paul, R-Ky. was stabbed in Washington over the weekend and treated for life-threatening injuries.
☞ Kevin McCarthy: The Speaker will bring the Republican’s energy package to the House floor today, even as Biden threatens to veto the legislation.
☞ Hakeem Jeffries: A New York Times profile highlights how growing up in Brooklyn, New York has influenced the minority leader’s trajectory and rise to lead House congressional Democrats.
Don’t expect Washington to take any new action on guns after the school shooting in Nashville that killed six people, including three children, on Monday. Sen. John Cornyn, R-Texas, one of the key negotiators on a bipartisan background checks bill that passed last year following the killings in Uvalde, told reporters it was unlikely lawmakers would enact additional legislation, noting Congress has “gone about as far as we can go.”
Forty-four percent of Democrats and party leaners want Biden to step aside and let someone else run for the 2024 presidential nomination, according to a new Monmouth University poll. That doesn’t mean there’s any obvious alternative that Democrats are pining for, however: 13% name Vice President Kamala Harris as their top choice if Biden doesn’t run, while no other potential candidates even register in the double-digits.
Israel Prime Minister Benjamin Netanyahu said he would delay a controversial judicial overhaul plan after it inspired massive street protests and a general strike. “When there’s an option to avoid civil war through dialogue, I take time off for dialogue,” he said. The White House welcomed the development and urged Israel’s leaders to reach a compromise.
The crypto world’s legal troubles continued to snowball Monday, as the Commodities Future Trading Commision sued Binance, the largest digital currency exchange, for illegally allowing Americans to make derivatives trades and failing to take anti-money laundering precautions. Last week, the Securities and Exchange Commission warned that it planned to sue crypto brokerage Coinbase for violating investor protection laws.
Fox News’“soft ban” on Donald Trump came to an end Monday night as the former president made an appearance on Sean Hannity’s show. He used it to lash out at the Manhattan District Attorney’s hush-money investigation and trash Florida Gov. Ron DeSantis.
Republicans on the House Foreign Affairs Committee have subpoenaed the State Department for a July 2021 classified cable written by Kabul embassy officials warning about the potential collapse of Kabul as the U.S. prepared to fully withdraw forces from Afghanistan. Secretary of State Antony Blinken told the panel last week that he would brief lawmakers on the contents of the cable but that sharing the document itself could have a chilling effect on officials. Spokesperson Vedant Patel told Semafor the department “remains committed to providing the Committee with the information it needs to conduct its oversight function,” but did not say whether it would honor the subpoena.
Punchbowl News: There are concerns among some in House GOP leadership that Republican moderates from the Northeast might oppose the massive energy package up for a vote this week.
Playbook: Despite adding a seat to their slim Senate majority, Democrats are still having trouble confirming some of Biden’s nominees.
The Early 202: The White House faced some criticism on Capitol Hill for its decision to push back on Netanyahu’s judicial overhaul plans, with some lawmakers arguing for a more cautious approach to avoid being seen as interfering in Israel’s internal politics.
Democrats and Republicans are talking TikTok, but a deal is no guarantee
Rep. Michael McCaul, R-Texas has spent weeks pushing his bill to empower the White House to ban TikTok. After a bipartisan grilling of TikTok’s CEO last week, something close to that policy is looking likelier than ever, and he’s working with Democrats to negotiate a unified approach.
“I think there is pressure to, number one, pass legislation, and I then think there would be a lot of pressure for the administration to ban it,” McCaul, who chairs the House Foreign Affairs Committee, told Semafor in an interview in his office on Capitol Hill.
McCaul discussed the path forward for TikTok-related legislation a day after House Speaker Kevin McCarthy, R-Calif. vowed action “to protect Americans from the technological tentacles of the Chinese Communist Party.” McCarthy has also expressed optimism about a bipartisan deal.
Republican leaders in the House still have not identified which of several competing bills they prefer as a starting point. But McCaul is working with Sens. Mark Warner, D-Va. and John Thune, R-S.D., whose RESTRICT Act has 19 cosponsors and White House backing, to reach a compromise that would address national security concerns lawmakers have raised over the app’s Chinese ownership.
It’s more likely than ever now that the government will act against TikTok, either by banning the app in the U.S. or forcing ByteDance to sell its shares in the company. But there’s a tension in Congress over how far legislation should go.
McCaul said he’s concerned that the RESTRICT act gives too much discretion to the Commerce Department and Biden administration on a menu of potential responses, including divestiture or a ban, rather than compelling them towards rapid action.
“Mine is a little tougher, if you will. I think theirs is not and so we’re trying to get a happy medium,” McCaul said. “We’d obviously like to be bipartisan.”
McCaul’s bill, the DATA Act, would give President Joe Biden the power to sanction companies that transfer sensitive data to China and would require him to make a decision on whether to sanction TikTok and its Chinese parent company ByteDance within 90 days of its passage.
He suggested his bill could be the starting point in the House Rules Committee and that lawmakers could then “add parts” of the bill from Warner and Thune to it.
The Committee on Foreign Investment in the U.S., or CFIUS, has been negotiating with TikTok for years and is said to have recently told ByteDance to sell its shares in the company, though talks are still ongoing. Legislation from Congress like the RESTRICT Act would give the Biden administration a bigger stick to wield in those negotiations, which some Democrats may see as a viable path forward.
“The Warner bill gives the president the authority to sanction and also helps strengthen the CFIUS process which would actually give us more leverage to make deals and to make sure that our national security interests are covered and that Americans’ data is protected,” Rep. Gregory Meeks, D-N.Y., the top Democrat on the House Foreign Affairs Committee, told my colleague Kadia Goba earlier this month.
A Warner spokesman said that the senator looked forward to working with McCaul, but noted that “mandatory bans have run into legal challenges in the courts” in the past.
House Republicans, who passed McCaul’s bill in committee along party lines earlier this year amid Democratic concerns about its breadth, may not trust the Biden administration to take the lead in negotiations when they can nudge them towards a ban. On the Senate side, Sen. Josh Hawley, R-Mo. is trying to force a vote on his own bill to rapidly ban the app. If conservatives rally behind a harder line approach that ties the administration’s hands, it could derail bipartisan talks or prompt a veto threat.
McCaul told me that he thinks multiple Biden administration officials would recommend the app be banned. Officials like FBI Director Christopher Wray have publicly raised concerns about the app. Commerce Secretary Gina Raimondo, however, acknowledged recently that a ban on the app popular among young Americans would be bad politics.
“The national security people in the administration, they understand and they would be for a ban. And I think you would certainly have Cabinet officers who would recommend a ban, that I’m aware of. And I think it would put pressure on the president,” McCaul said.
ROOM FOR DISAGREEMENT
There’s a small but vocal cohort of lawmakers in Washington opposed to the idea of banning the popular app, including progressive icon Rep. Alexandria Ocasio-Cortez, D-N.Y. Ocasio-Cortez, one of the most prominent social media mavens in politics, took to TikTok to argue against a ban over the weekend. She’s a powerful voice for the company to have on its side, in addition to an army of young influencers and organizations like the ACLU that have warned about the First Amendment ramifications of a crackdown.
Senators get ready to grill regulators over Silicon Valley Bank
Was it really necessary to bail out all of those depositors?
That’s likely to be one of the major questions from lawmakers on Tuesday, when the Senate Banking Committee holds its first hearing on this month’s collapse of Silicon Valley Bank, as well as the extraordinary federal intervention that backstopped its deposits. Federal Reserve Vice Chair for Supervision Michael Barr is testifying, as is Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation.
Republicans on the panel, led by South Carolina Sen. Tim Scott, are expected to ask whether the FDIC rejected a bid from another bank to buy SVB because regulators did not want to further supersize any “too big to fail” financial institutions, according to a committee aide. Semafor previously reported that the largest US banks were initially excluded from the auction process that the Biden administration organized.
It’s a politically sensitive issue, since backstopping deposits wouldn’t have been necessary if regulators had been able to find a buyer. If they did reject bids, it could expose the Biden administration to charges that it unnecessarily bailed out the startups and venture capitalists who banked at SVB, and possibly weaken the case for policy changes members of Congress have discussed, such as raising deposit insurance limits.
House Republicans have raised the same issue recently as well, and will get their own chance to probe it when the House Financial Services panel holds its own hearing Wednesday.
“What we don’t know is the key decisions that were made that weekend that made us have a very stressful 12 days since then,” House Financial Services chair Patrick McHenry told reporters last week. “Did they have better options they didn’t pursue because of some ideological lens on the regulators and this administration? But we’re going to pursue those things.”
Many Democrats like Senate Banking Chair Sherrod Brown, D-Ohio, are making the case for stiffer oversight over Wall Street after regulations governing mid-size banks were scaled back in 2018. “These bank executives were clearly incompetent at these two banks and we’ll explore beyond that,” he told Semafor on Monday.
But Republicans so far are opposed to new regulations on the banking sector, arguing the bank failures stem from a one-two punch: executives who miscalculated the health of their balance sheets and lax oversight from the San Francisco Fed, whose bank examiners have been accused of falling down on the job.
Barr is expected to defend the Fed’s performance. In testimony posted Monday, the vice chair says bank supervisors warned SVB about its poor risk management in 2021 and 2022. “We need to ask why the bank was unable to fix and address the issues we identified in sufficient time,” his testimony reads. “It is not the job of supervisors to fix the issues identified; it is the job of the bank’s senior management and board of directors to fix its problems.”
The Chris Christie rebrand runs through New Hampshire
GOFFSTOWN, NH – In a modest-sized room adorned with framed photographs of well-known politicians (including former President Donald Trump), New Hampshire voters heard potential 2024 contender Chris Christie out.
And Christie heard them out too, particularly when one attendee lamented that the former New Jersey governor had abandoned the anti-Trump crowd during the 2016 primary to deliver arguably the most important Trump endorsement of the cycle.
“I’m glad to hear you standing up against Trump,” the person said, but “when the results came in, you jumped ship on us.”
“Let me explain. Let me explain 2016 to you,” Christie responded. “I’ll be honest with you. We all made a strategic error … I stayed with him in 2016 because I didn’t want Hillary Clinton to be president.”
“None of us knew what kind of president he really would be or not,” Christie added.
“I did,” the attendee replied.
Monday night’s event at the New Hampshire Institute of Politics at Saint Anselm College, saw Christie spend nearly two hours talking to voters and answering questions ranging from his stance on Social Security to the drug crisis in America. It also underscored a reality for the man currentlyscraping the bottom of polls: After years as a loyal Trump ally, he’s going to have to establish a clear brand of his own, including with voters skeptical of his late conversion.
Christie’s medicine for that problem seems to be frankness. While other candidates have tried to build up their own image to start, Christie has tried to clearly separate himself from the other frontrunners by criticizing them early and often with his trademark New Jersey trash talk.
In Trump’s case, that means slamming his 2020 election fraud claims, which he told the audience had prompted him to finally break with the former president for good.
Christie also took swipes at Florida Governor Ron DeSantis, mocking his description of the Ukraine war as a “territorial dispute” and arguing that the party won’t succeed with candidates who are trying “to be Trump-like.”
“Let me tell you, everybody, what a territorial dispute is. It’s when you get your property survey, and you find out that your neighbor’s fence is six inches on your property. That’s a territorial dispute. When you roll tanks and artillery into a free country in an attempt to take their land and their lives by force: That is authoritarian aggression,” Christie said. “Someone please place a wake up call to Tallahassee.”
For some voters, that bluntness is a plus.
“He says it like it is. You know, there’s no hidden agenda,” Jim MacEachern, chairman of the Derry Republican Party in New Hampshire and sitting city council member, said. Other potential voters echoed the sentiment: “He’s down to earth,” one Democrat attendee declared. “It was very real,” another added.
Christie’s just getting started in New Hampshire, as well: His team tells Semafor they’re in the midst of planning a second trip in April. And while Christie isn’t a proven vote-getter there yet, he has proven he can wreck a candidate who gets in his way in the state (something he brought up on Monday), making him an unpredictable force.
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