Principals

☞ White House: Secretary of State Antony Blinken plans to finally take that trip to China in the coming weeks after he was forced to scrap earlier plans to visit Beijing due to the Chinese spy balloon incident, according to Bloomberg News. It’s the latest sign of the Biden administration’s efforts to reopen lines of communication with Beijing. Meanwhile, the administration is still working on a “narrow,” “clear” and “carefully tailored” mechanism by which the executive branch can restrict U.S. investment in Chinese advanced technology, a top Commerce official, Grant Harris, told a gathering at the Center for a New American Security yesterday afternoon.

☞ Senate: Senate Finance Committee Chairman Ron Wyden, D-Ore. warned Democrats may issue a subpoena as they try to pry information from billionaire Harlan Crow about his gifts to Supreme Court Justice Clarence Thomas. “All options are on the table,” Senate Judiciary Committee Chairman Dick Durbin, D-Ill. said on the Senate floor in regards to his own request.

☞ House: Speaker Kevin McCarthy is on a collision course with his Senate colleagues over defense spending, after voicing his opposition to a supplemental that would go around defense budget caps. On Tuesday, he took a shot at Sen. Lindsey Graham, R-S.C., who is leading the charge for additional Pentagon cash. “Lindsey wants to spend money on every war in the world,” McCarthy said. His stance has also raised questions about the fate of future Ukraine aid.

☞ Outside the Beltway: The city of Denver elected former state senator Mike Johnston, a Democrat, as its new mayor on Tuesday. Johnston, who defeated fellow Democrat Kelly Brough in a runoff election, will be the Colorado city’s first new mayor in more than a decade.

Former vice president Mike Pence is kicking off his presidential campaign today in Iowa, mounting a long-shot challenge against his former running mate. “Today, our party and our country need a leader that will appeal, as Lincoln said, to the better angels of our nature,” Pence says in his campaign launch video released this morning.

And in other dark horse news, Chris Christie launched his own White House bid in New Hampshire with the kind of blunt personal attacks against Donald Trump other candidates in the increasingly crowded field have avoided. “A lonely, self-consumed, self-serving mirror hog is not a leader,” Christie said of the former president. He also accused Trump’s family of “breathtaking” grift.

And in other other dark horse news, North Dakota Governor Doug Burgum writes in a Wall Street Journal op-ed announcing his presidential campaign today that America needs a “new leader for a changing economy.”

On the Democratic side, President Joe Biden already announced he’s running and faces no serious opposition within the party. But David Weigel reports that his age is making it hard for many Republican voters — and even some Democrats — to entirely accept that he’ll be on the ticket come November, or serving in the White House if he wins. It’s leading both parties to some weird places, most notably a burst of attention on Robert F. Kennedy, Jr.’s campaign.

Fresh off a massive settlement with Dominion, Fox News is keeping one of the most visible figures named in that defamation lawsuit on a tight leash as she promotes her new book, infuriating her publisher and some Christian conservative activists. Two people with knowledge of the situation told Semafor’s Max Tani that the network has severely limited Pirro’s promotional appearances by strongly discouraging her from appearing at multiple conservative religious and political events. In a statement shared with Semafor, a spokesperson for Pirro’s publisher, Winning Team Publishing, said the former New York judge was “prohibited from speaking at Turning Point USA, church services, and various other events.”

— Morgan Chalfant and Benjy Sarlin

Punchbowl News: McCarthy met Tuesday evening with some House conservatives — including House Freedom Caucus Chair Scott Perry, R-Pa., Chip Roy, R-Texas, and Byron Donalds, R-Fla. — to help ease tensions after clashing with that wing of the GOP during the debt limit debate.

Playbook: Politico looks at the early campaign pitches from Christie and Pence, arguing that Pence is struggling to make a strong case against Biden in his opening argument and that his messaging on this front is “precarious.”

The Early 202: The Washington Post analyzes the conservative revolt in the House. They also report that House Democrats plan to push for an expanded, permanent Child Tax Credit: Reps. Rosa DeLauro, D-Conn., Suzan DelBene, D-Wash., and Ritchie Torres, D-N.Y. plan to introduce their bill as early as next week.

Axios: White House chief of staff Jeff Zients has been phoning members of Biden’s Cabinet to tell them that if they plan to leave the administration they should do so in the “next few months,” Axios reports. Biden’s aides are keen on avoiding any major confirmation battles for Cabinet posts in an election year.

Congress may be done with crypto

THE NEWS

Eight months after the high-profile collapse of FTX, there’s still a lingering appetite in Congress to build guardrails for crypto. But the chances of major legislation may be fading as the Senate loses interest in potential bills and the top proposal in the House struggles to attract bipartisan support.

At the same time, the Securities and Exchange Commission is escalating its own crackdown on the freewheeling cryptocurrency market with twin enforcement actions. On Monday, the SEC accused Binance of mishandling customer funds and lying to American regulators. A day later, it sued Coinbase and alleged it had failed to register as a broker.

On Tuesday, the House Agriculture Committee held a hearing centered around a 162-page draft bill from GOP Reps. Glenn Thompson of Pennsylvania and Patrick McHenry of North Carolina released last week that’s designed to provide joint responsibility to both the SEC and the Commodities Future Trading Commission in regulating digital assets.

The bill would set up the SEC as the top cop for digital assets offered under investment contracts as securities. Those that qualify as commodities would be policed by the CFTC. It would provide a path for platforms to register at the SEC, CFTC, or both.

“It is incumbent on us to not miss this opportunity and bring certainty to digital asset markets,” Thompson said in his opening remarks.

But Democrats are still not on board. Rep. David Scott of Georgia, the ranking Democrat on the Agriculture committee, said the proposal relied on “complex and untested processes” that could make enforcement even more uncertain. He singled out a temporary registration process that provides some relief from the bill’s requirements while relevant agencies draft final rules.

JOSEPH’S VIEW

Thompson and McHenry helm the House Agriculture panel and Financial Services committee, respectively, giving their proposal significant momentum to make it out of the House.

But that’s where the trail ends right now for crypto legislation. I wouldn’t expect major activity to flow from the Senate anytime soon.

“I think we’ve looked at it,” Sen. Mike Rounds of South Dakota, a member of the Senate Banking panel, told Semafor. “I’m not sure that we’ll have a strong enough consensus in the Senate to actually do something this year.”

Senate Banking Chair Sherrod Brown, who’s in a competitive reelection race in Ohio, told Semafor that he has a lengthy to-do list on his committee and was noncommittal. “I hope we do that but we have our plate full,” Brown said. “We’re doing CEA nominees, we’re doing Fed nominees, we’re doing [fintech], we’re doing executive accountability, and we’re doing SAFE banking.”

For key senators, a “let it burn” approach may be taking hold. They’d rather not legitimize crypto by providing rules of the road, instead taking a buyer-beware approach that keeps it isolated from the rest of the economy.

Up to now, Brown has largely deferred to SEC chair Gary Gensler, who has consistently said new rules aren’t necessary and urged trading platforms to register with the SEC and abide by regulations treating most tokens as securities. Gensler took it a step further in a Tuesday CNBC interview, suggesting that digital tokens aren’t needed in today’s financial ecosystem. McHenry has criticized Gensler’s approach as overzealous, warning it will drive the crypto industry overseas.

“It’s pretty clear that Senate Democrats think most cryptocurrencies are securities and that the SEC has the legal authority to police the crypto market right now,” Lee Reiners, policy director at the Duke Financial Economics Center, told Semafor. “They don’t see any urgent need to put forward any legislation.”

A parallel effort at a hefty crypto bill by Sen. Elizabeth Warren of Massachusetts has also gone silent.

Another major bill from the Senate Agriculture Committee which drew intense scrutiny last year for its close ties to FTX founder Sam Bankman-Fried (who is no longer a Semafor investor) appears to be stalled. “Talks continue regarding reintroducing the DCCPA, but the farm bill conversations have been taking priority at the moment,” Patrick Creamer, a spokesperson for Senate Agriculture Republicans, told Semafor.

“I haven’t heard that is a viable effort this year,” Kristin Smith, CEO of the Blockchain Association, told Semafor.

As for the House’s latest proposal, it’s unclear if it would attract Democratic support — or even come up for a vote — if it came to the Senate. “The biggest issue is this is an all GOP bill,” Patrick Slaughter, policy director at Paradigm, tweeted. “So this bill may pass the House, but it will need some serious Democratic support (likely 50-100 Democratic House Members) to have a chance of becoming law.”

ROOM FOR DISAGREEMENT

Some House Republicans believe their measure will attract Democratic support. “I would say there’s a high level of interest,” Rep. Dusty Johnson of South Dakota told Semafor. “It addresses a lot of the issues that a number of them tell me they’re concerned about, which is that we need a spot market regulator in the digital asset space.”

The House Freedom Caucus is protesting (but not removing) Kevin McCarthy

A splinter of the House Freedom Caucus tanked a marquee Republican bill to protect gas stoves Tuesday as retaliation against leadership’s handling of its debt limit deal.

Eleven Republicans voted with Democrats to block a combined rule meant to preview four separate bills, including two that would block future bans on gas stoves along with a budget bill and a separation of powers bill (a twelfth, Majority Leader Steve Scalise switched to “no” to allow him to bring the vote up again later).

The dissension forced leadership to huddle with Freedom Caucus members on the House floor, but HFC remained unconvinced and ultimately voted down the rule — a feat that hasn’t been achieved since 2002, as C-SPAN noted. Leadership is expected to bring the rule and bill up again on Wednesday.

Rules Committee Chair Tom Cole, R-Okla. called his colleagues actions “disappointing,” adding that the dissenters “turned over control of the floor to Democrats.”

HFC members were upset with leadership over the debt ceiling bill, which was a step down from their initial demands. McCarthy had to turn to Democrats to get both the bill, and a rules vote advancing it, over the line last week.

They also claimed leadership refused to bring Rep. Andrew Clyde’s resolution to roll back a Bureau of Alcohol, Tobacco, Firearms and Explosives rule on pistol braces to the floor this week after promising to do so — presumably as payback for not supporting their approach to the debt limit. Within two hours, Clyde tweeted leadership “confirmed” the bill is coming to the floor next Tuesday.

“Today we took down the rule because we’re frustrated at the way this place is operating,” Rep. Matt Gaetz, R-Fla., a member of the House Freedom Caucus, told reporters after leaving the chamber. “We took a stand in January to end the era of the imperial speakership.”

Just a week ago it was an open question whether HFC members would lead an effort to topple McCarthy’s speakership in response to the debt ceiling bill. A rules hiccup on a messaging vote seems like a pretty minor protest in comparison to a coup attempt over a bill whose failure would have jeopardized the global economy.

Still, it’s a sign that they’re looking for ways to reassert their power and remind the speaker that his five-seat majority is still in their hands. As part of their agreement to put him in power in January, he agreed to a rule that lets any one person bring an effective vote of no confidence. Even without invoking it, they can clearly make life difficult if they feel they’re not being heard.

“We will enforce the agreement that we reached in January under which Kevin McCarthy assumed the speakership,” Rep. Dan Bishop, R-N.C. told reporters. “It will be performed.”

Looking ahead, the vote could be a preview of what’s to come during soon-approaching fights over appropriations, defense, Ukraine aid, and potentially other bipartisan legislation, where hardline conservatives are expecting McCarthy to make good on his promises to give them an influential role in the process.

Asked whether conservatives might upend future votes, Rep. Ralph Norman, R-S.C. responded: “We’ll see.”

— Kadia Goba

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The White House is pulling out all the stops to get Julie Su confirmed as Labor secretary, while a few key senators remain undecided on her nomination. A White House official told Semafor that senior officials join a nightly “war room” call on her nomination (a call that continued even through the debt limit negotiations). President Biden’s chief of staff Jeff Zients and legislative director Louisa Terrell have been speaking regularly with Senate Majority Leader Chuck Schumer and other key senators, the official said.

Capitol Hill allies are engaged, too: the leaders and members of four caucuses, including the Congressional Asian Pacific American Caucus and Congressional Black Caucus, are writing to Senate leaders today urging her quick confirmation in a letter shared exclusively with Semafor.  Su, who is currently the acting Labor secretary, will appear before the House Committee on Education and the Workforce later this morning for an oversight hearing, where she’ll likely face scrutiny from Republicans.

— Morgan Chalfant

Chris Murphy is a Democratic senator from Connecticut. He is a member of the Senate Foreign Relations Committee and has called on the U.S. to reevaluate its relationship with Saudi Arabia, including arms sales.

Stories that are being largely ignored by either left-leaning or right-leaning outlets, according to data from our partners at Ground News.

WHAT THE LEFT ISN’T READING: Tucker Carlson launched his new Twitter show with a 10-minute monologue posted to the social media platform on Tuesday, following his surprise ouster at Fox News in April.

WHAT THE RIGHT ISN’T READING: Prosecutors have been using a second grand jury in Miami, Fla. to hear evidence from witnesses in the federal investigation into Trump’s handling of classified documents after leaving office.

Editor-at-large Steve Clemons

Washington Bureau Chief Benjy Sarlin

Washington Editor Jordan Weissmann

National Security Reporter/Lead Principals Writer Morgan Chalfant

Congress and Politics Reporter Kadia Goba

Domestic Policy and Politics Reporter Joseph Zeballos-Roig

2024 Campaign Reporter Shelby Talcott

Senior Politics Reporter David Weigel

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