Congress
Credit cards could blow up a carefully crafted crypto compromise
Senate Majority Leader John Thune’s pledge to return the Senate to “regular order” is about to face a major test, with one of President Donald Trump’s top financial policy priorities on the line.
After months of chaotic negotiations in the Senate, landmark cryptocurrency legislation that would create a regulatory framework for stablecoins finally appears to have the votes to clear the chamber. But a contentious battle over credit card swipe fees — what processors like Visa, MasterCard and American Express charge merchants for the ability to use their payment networks — is now threatening to blow the effort up.
Thune’s promise to allow an open amendment process has raised the possibility of an amendment vote on divisive legislation that seeks to force payment networks to compete on swipe fees.
The credit card measure, long championed by Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.), is a fraught policy battle that pits two powerful lobbying forces — the financial sector and major retailers — against one another.
Crypto supporters, who are within spitting distance of their biggest win ever in the Senate, are scrambling to prevent the credit card provision from derailing their stablecoin bill. It is unclear how a vote on the Durbin-Marshall provision would go: Most senators haven’t taken a position on the matter.
But the fear for pro-crypto lawmakers is that it could garner enough support to be adopted as an amendment with backing from most Democrats and some Republicans — and then tank the underlying stablecoin bill by peeling off GOP senators who oppose the credit card amendment.
“It’s a deal-killer,” said Sen. Thom Tillis (R-N.C.), who supports the stablecoin legislation but said he will try to “kill the bill” if the credit card legislation is attached. “If it goes in it, the value out of the stablecoin components would not outweigh the damage done by [Durbin-Marshall].”
It is uncertain if the swipe fee crackdown will ultimately get a vote. The issue is likely to come to a head this week as GOP leaders look to move the bill toward final passage. Further procedural votes could come this week, but the timing of a vote on final passage will depend on whether they can get a deal on amendments.
“I’m hoping that we can finish up this legislation in the very near future,” Thune said Monday.
The credit card provision is the biggest outstanding question. Durbin and Marshall have been pushing for years to force a vote or attach it to must-pass legislation, and they have failed every time.
Marshall has filed his bill as an amendment to the stablecoin legislation. But asked prior to Congress’ Memorial Day recess whether he will seek to force a vote on the measure, he said he has “not decided what to do.”
Congress
Lawmakers zero in on spectrum auction deal, Rounds says
Lawmakers seem to have reached a breakthrough over language for a spectrum provision in the GOP’s tax and spending megabill, Sen. Mike Rounds (R-S.D.) told Blue Light News Wednesday.
The House proposal aimed to open up 600 MHz of spectrum for commercial use, alarming national security hawks, who warned that it would encroach on important military and intelligence frequencies. Rounds, a senior Senate Armed Services Committee member who was among those who pushed back, said on Wednesday that, per this emerging agreement, key spectrum bands would be protected from the auctions through 2034.
“It’s looking better than it has in the past, and I think we’re going to be able to get everything that we had concerns with,” he said, cautioning that the deal was still pending. “Final paper I have not seen, but it looks good.”
Asked earlier Wednesday about Rounds’ threats a day earlier to vote against legislation that doesn’t address his spectrum concerns, Senate Commerce Chair Ted Cruz (R-Texas) said, “I am confident we’ll get it done.”
Congress
2 finalists emerge in Capitol Police chief search
The secretive board overseeing the Capitol Police has narrowed its search down to two choices for the next chief of the department: former Phoenix Police Chief Michael Sullivan and former Secret Service Director Randolph “Tex” Alles, according to three people granted anonymity to describe the private deliberations. The people said a final decision was expected imminently.
Before serving as interim in Phoenix, Sullivan had stints at the Baltimore Police Department as deputy commissioner of compliance and deputy commissioner of operations, according to his Linkedin profile. He’s also been a deputy chief at the Louisville Metro Police Department.
Alles, a former Marine Corps major general, served as the director of the Secret Service during President Donald Trump’s first term before departing the role in April 2019 as part of a department-wide shakeup. Trump derisively referred to Alles as “Dumbo,” the New York Times reported at the time. Since then, he served in a senior role at the Department of Homeland Security until March of this year, according to Alles’ LinkedIn profile.
Notably, the Capitol Police Board appears poised to go outside the department for a chief yet again, passing over Sean Gallagher, the interim head of the department and assistant chief, who has been with the department for more than two decades and served in a wide variety of roles across the agency. Gallagher was part of the leadership team during the Jan. 6 insurrection, weathered a no-confidence vote by the union and eventually worked to help stabilize the agency after a time of tectonic tumult.
The union signaled it was opposed to Gallagher’s selection as interim chief, with union chair Gus Papathanasiou saying in a Tuesday statement: “We’re astounded the Board would even consider [Gallagher] for the role. The Capitol Police force cannot continue to see problem officers ‘fail upwards’, winning promotions instead of demotions commensurate with their actions.”
The Capitol Police Board is composed of Senate Sergeant-at-Arms Jennifer Hemingway, House Sergeant-at-Arms William McFarland and Architect of the Capitol Thomas Austin. They are tasked with replacing former chief Thomas Manger, who retired last month after four years at the helm.
The board’s potential choice of another outside candidate, instead of promoting internally within the Capitol Police ranks, signals residual doubts about those who were in leadership roles for the Jan. 6 attack on the Capitol.
“They’re going to have to learn about our mission, the uniqueness of it, but the structure of oversight as well, and there is a learning curve there,” Manger said in a recent interview, talking about anyone who comes to lead Capitol Police from an outside law enforcement agency.
Others who had been in the mix included external and internal candidates from the force, including former Deputy Chief JJ Pickett, Deputy Chief Tom Loyd, and Assistant Chief Jason Bell.
Congress
Tuberville raises alarms on GOP food-aid plan as he seeks governorship
Several former Republican governors in the Senate have sounded alarms over a controversial House GOP plan to help pay for the Trump megabill by pushing billions in federal food aid costs to states.
Now there’s a would-be governor raising similar concerns. Behind the scenes in recent days, Sen. Tommy Tuberville of Alabama raised issues over the provision with GOP leaders and pushed for the plan to be scaled back, according to three Republicans granted anonymity to describe the conversations.
Tuberville, who announced a gubernatorial bid May 27, confirmed his worries in a brief interview Wednesday.
“Everybody that’s going to be in state government is going to be concerned about it,” he said. “I don’t know whether we can afford it or not.”
The House provision affecting the Supplemental Nutrition Assistance Program would financially hammer deep-red states like Alabama, forcing governors and state legislatures to foot billions in new costs or cut benefits to low-income families. The Republicans say Tuberville appears to be increasingly worried about a multi-billion-dollar bill hitting his desk should he be elected governor.
Tuberville, a staunch ally of President Donald Trump who supports the House bill’s strict new work requirements for SNAP, isn’t the only Republican who’s raised concerns about the House plan. At least two dozen other GOP senators have quietly raised concerns about how their states could be hit.
Senate Republicans involved in the talks have been surprised that current GOP governors have not raised more public concern about the House GOP plan. Many House Republicans assumed the Senate would strip the proposal out of the megabill, but the Senate GOP is now considering a host of options to scale down but not fully strip out the cost-sharing measure.
Senior Republicans have discussed one option to force every state to pay five percent of the cost of SNAP benefits for the first time, adding extra penalties for states with the highest payment error rates, according to three other Republicans with knowledge of the conversations.
“I think a lot of governors are saying the Senate is not going to do this to us,” said one Republican with direct knowledge of the conversations. “No, we absolutely might.”
Republicans involved in the talks say they will likely need to maintain some version of the provision in order to achieve the needed spending cuts while also paying for a $60 billion farm bill package in the House version of the bill. The Senate parliamentarian appears likely to nix one smaller source of savings from the Agriculture bill — a provision creating a national clearinghouse to crack down on duplicate benefits across SNAP, Medicaid and other programs.
Sen. Jim Justice, who served as West Virginia’s governor until January, said both current and future governors need to “analyze this very, very, very seriously” and “voice their opinions.”
“Because if you’re asleep at the switch, and you miss what the cost is going to be … you can put a state in a tough spot,” he said.
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