Principals

☞ White House: Biden will try to improve ties with African countries and convince them that the U.S. is a reliable partner during a day of meetings with leaders at the U.S.-Africa Leaders Summit. The White House already committed $55 billion in assistance for Africa over the next three years.

☞ Chuck Schumer: The New York Democrat took a victory lap at the White House, where Biden signed marriage equality into law. “By enacting this law, we are sending a message to LGBTQ Americans everywhere: you too deserve dignity, you too deserve equality. That’s about as an American ideal as they come,” he said.

☞ Mitch McConnell: McConnell blamed Trump for “candidate quality” problems that lost them Senate seats. “Our ability to control the primary outcome was quite limited in ’22 because the support of the former president proved to be very decisive in these primaries,” he said.

☞ Nancy Pelosi: The Speaker’s portrait will be unveiled today and will reside in the Speaker’s Lobby. Her bipartisan attendees’ list includes the 53rd Speaker of the House, John Boehner. Pelosi’s portrait was painted by Ron Sherr, who also painted portraits of Colin Powell and John Boehner.

☞ Kevin McCarthy: McCarthy lashed out at McConnell for cutting a spending agreement before Republicans take the House. “Why would you want to work on anything if we have the gavel inside Congress?” The House leader has opposed various high-profile bipartisan bills to come out of the Senate this year, including deals on infrastructure, semiconductors, and guns.

Florida Gov. Ron DeSantis would defeat Donald Trump in a hypothetical head-to-head GOP primary 52% to 38%, according to a new Wall Street Journal poll out this morning, with 9% of respondents undecided about their choice. Meanwhile, Trump would beat his former Vice President Mike Pence handily 63% to 28%. It’s the second poll this week showing Republican support for Trump plummeting post-midterms.

Is inflation easing up? Eh, let’s not jinx things yet. But stocks ripped higher Monday after the latest government data showed consumer prices rose less than expected in November. Falling gas prices helped. But even leaving out food and energy costs, the Consumer Price Index increased at an encouraging 2.4 percent annual rate, as big categories like used cars and medical care saw declines. The White House reacted cautiously — Biden said it would “take time” for prices to return to normal — having landed in trouble for spiking the football on inflation before.

China looms over Biden’s gathering with dozens of African leaders at the White House later today. Some Democrats say the U.S. needs to do more to counter China’s influence in the region. “It is a focus. It’s going to have to be even stronger,” Sen. Ben Cardin, D-Md., a member of the Senate Foreign Relations Committee, told Semafor Tuesday afternoon. White House officials are not eager to publicly adopt this frame. “It’s going to be a positive proposition about the United States’ partnership with Africa,” Jake Sullivan told reporters at the White House earlier this week. “It’s not going to be about other countries.” But the unspoken signal U.S. officials send to African nations will be that the U.S. is a superior partner to China.

— Morgan Chalfant

Punchbowl News: House and Senate leaders haven’t released a topline figure for the omnibus because they “don’t want to alienate their rank-and-file by saying who got what yet.”

Playbook: Rev. Al Sharpton plans to bring together Black leaders from New York in January to “forge a consensus on tackling crime” after Democrats’ losses in the midterm elections, where safety was a big focus.

The Early 202: The Republican Governance Group, a group of more than 40 moderate House Republicans, pledged to oppose a House rules package if it has the “motion to vacate” that conservatives are demanding of McCarthy.

What’s (probably) in the big omnibus deal

Are there any more exciting words in the English language than “omnibus deal?” Not here in Washington, D.C., at least in the month of December, when Capitol Hill staffers are nervously eyeing the calendar while wondering whether they’re about to get stuck sleeping in their offices Elon Musk-style over the holidays.

Anyway, Congress hasn’t struck a final agreement yet, but lawmakers announced on Tuesday night that they had reached “a bipartisan, bicameral framework” for a full-year government funding bundle that is expected to crank up military and domestic spending, while acting as a vehicle for election reforms designed to stop the next Jan. 6.

“If all goes well, we should be able to finish an omnibus appropriations package by December 23rd,” Sen. Richard Shelby, R-Ala., one of the key negotiators, said in a statement.

With that, let’s go down the Christmas list.

Defense spending will probably get a big boost

Lawmakers haven’t officially released a top line spending number yet (probably to keep members from complaining about it). But Senate Minority Leader Mitch McConnell said on Tuesday that a deal would likely mirror the $858 billion National Defense Authorization Act approved in the House last week, which would deliver a roughly 10 percent increase to military spending. Biden’s original Pentagon request, for context, was only $773 billion. Just imagine one of those “December to remember” ads, but instead of a Lexus wrapped in a big red bow, it’s a predator drone.

Domestic spending will probably get a slightly smaller boost

Democrats wanted to give domestic spending an increase on par with the military haul. Republicans did not, arguing that their colleagues across the aisle had already spent sufficiently on their priorities via Biden’s big partisan bills.

It seems Senate Republicans won the staredown by playing good cop/bad cop with the incoming Republican House, which Democrats worried would be even harder to manage.

“Name the thing you like whether you’re on the right or the left, it’d be cuts,” Sen. Patrick Leahy, D-Vt., another lead negotiator, said early on Tuesday. Roll Call guesses that domestic spending will probably get an 8 percent increase, overall.

Ukraine gets funding

Senate Majority Leader Chuck Schumer is anticipating that the funding package will include more financial assistance to Ukraine. This was one of the crucial motivators for a deal: Both Democrats and Republicans in the Senate worried that a GOP-controlled House might turn stingy when it came to combating Russian aggression next year, since MAGA-style isolationism is likely to hold more sway.

Electoral Count Act Reform is going to happen

Another biggie: Schumer says he “expects” that the Omnibus will include legislation reforming the Electoral Count Act, which played a starring role in Donald Trump’s attempts to overthrow the 2020 election. The former president’s allies argued that the ancient, vaguely worded statute empowered then-Vice President Mike Pence to toss out the electoral college results and declare Trump the winner. The new bill would clarify that’s in fact not the case, while adding other important safeguards to stop state officials from overturning races.

But there won’t be a deal on taxes

Congress often uses Omnibus deals as an opportunity to extend expiring pieces of the tax code. But not this time, folks! Senate Republicans have dug in against Democratic efforts to modestly expand the Child Tax Credit. As a result, Democrats say they are refusing to reup expiring (or already expired) tax provisions, like corporate tax breaks for research and development. A deduction for race horse owners also won’t get revived, as a result, no doubt to the chagrin of Kentuckian McConnell.

— Jordan Weissmann

With SBF under arrest, House progressives go on the attack against crypto

Its star witness may have been MIA, but Tuesday’s House’s hearing on FTX still offered a useful preview of next year’s Congressional battles over cryptocurrencies.

With Sam Bankman-Fried under arrest in the Bahamas, the Financial Services Committee welcomed John J. Ray, the new CEO tasked with winding down the bankrupt crypto exchange, for questioning. Ray told the panel that his predecessor, who is currently facing federal civil and criminal charges, had committed “old fashioned embezzlement.” Bankman-Fried is an investor in Semafor.

However, the hearing was in some ways less notable for what it said about the FTX scandal than for how it spotlighted a growing partisan divide over the question of whether the troubled crypto industry is rotten or salvageable.

Crypto-skepticism appears to be intensifying among Democrats, particularly progressives. “The idea that cryptocurrency is the solution for financial inclusion is not only laughable, it’s dangerous,” Rep. Rashida Tlaib, D-Mich., said, assailing the sector as “predatory.”

“To quote my friend Senator Warren, it’s bullshit,” she said.

Rep. Brad Sherman, D-Calif., reiterated his longstanding call to ban digital tokens.  He ripped a Senate bill that’s now under significant scrutiny for its connections to Bankman-Fried, and has been criticized for being industry-friendly.

“Don’t trash SBF and pass his bill,” Sherman said.

As he spoke, Rep. Alexandria Ocasio-Cortez, D-N.Y., nodded her head in agreement. The New York Democrat later said she believes the Securities and Exchange Commission should be handed most regulatory authority over crypto, imposing stricter regulations against fraud and manipulation. That position aligns with the views of Warren, who’s in the middle of crafting a sweeping bill that will likely be much tougher on digital tokens.

“A lot of her work and conclusions around crypto are ones that I very much agree with,” Ocasio-Cortez told Semafor.

Republicans largely sought to cast Bankman-Fried’s behavior as an isolated incident that shouldn’t reflect badly on the rest of the crypto sector. Rep. Patrick McHenry, R-N.C., said lawmakers must “separate the bad actions of an individual from the good created by an industry and an innovation.”

Even that morning, however, new crypto-world trouble seemed to be brewing. On Tuesday, Binance, the world’s largest remaining digital currency exchange, blocked customers from accessing their deposits after it was hit with $1 billion in withdrawal requests, raising fears of another bank-style run similar to what took down FTX. By Wednesday the company had unfrozen withdrawals, while its CEO warned about “bumpy” times ahead.

— Joseph Zeballos-Roig

WHAT THE LEFT ISN’T READING: Americans listed the U.S. government as the nation’s top problem (higher than inflation) for the seventh year in the past decade, according to new Gallup data.

WHAT THE RIGHT ISN’T READING: A new study estimates that COVID-19 vaccines saved over 3 million lives in the U.S.

— with our partners at Ground News

• It felt a bit like a footnote in the larger indictment, but prosecutors accused Sam Bankman-Fried of funneling money to politicians through a massive, illegal straw donor scheme. “This is the largest corporate conduit contribution case in US history,” told Bloomberg. The revelation threatens to drag untold numbers of Democrats and Republicans into the SBF circus.
• Some small private colleges are slashing the tuition in half as they struggle to recruit students. The New York Times politely explains that the move is a “frank recognition among some lesser-known colleges that their prices are something of a feint,” since they often lure students with massive discounts on their sticker prices. For a deeper dive, check out this piece from the New America Foundation’s Kevin Carey on how financial aid is generally a sham.

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— Steve Clemons