Kyrsten Sinema’s defection from Democrats should be a golden opportunity for the GOP. But two high-profile 2022 election losers in Arizona are eyeing Senate runs in 2024, sparking angst among Republicans that they will blow an increasingly winnable race.
Republican Blake Masters, who lost his Senate bid last year by 5 percentage points, is setting himself up for another potential run, talking to consultants and making calls about the contest. Some Arizona GOP strategists are treating it as a foregone conclusion that he’ll jump in, although a person familiar with his moves said he is truly undecided at this point and just testing the waters.
Kari Lake, the unsuccessful gubernatorial candidate, is also considering a Senate campaign, but any decision is expected to come after her legal challenge alleging false claims that her 2022 election was stolen is completed, according to a person close to her.
The possibility of Lake and Masters entering the political waters once more is complicating the newfound optimism GOP officials felt about capitalizing on Sinema's recent party switch to independent. With Democratic Rep. Ruben Gallego already in the race, Republicans see a prime opportunity to win the election with a plurality of the vote.
Now there are new fears that they’d fumble the opportunity by putting forth a candidate who remains aligned with former President Donald Trump or fixated on election denialism. Lake’s protests about her gubernatorial loss have particularly raised eyebrows in the party after she was narrowly defeated by Democratic Gov. Katie Hobbs.
“Any candidate in ’24 that has, as their principal campaign theme, a stolen election, is probably going to have the same issues that some of the ’22 candidates had,” said Sen. John Thune, the Senate GOP’s No. 2 leader. “I just don’t think that's where the American public is. It’s a swing state — we need to have a good Republican nominee, obviously. You know, whoever gets in, I hope they focus on the future, not the past.”
Far from being bowed by what happened in 2022, the MAGA set in Arizona appear further emboldened to try for office. Caroline Wren, a senior adviser to Lake, shot back that Thune is “everything wrong with the Republican establishment” and that the “Washington cartel” is “signaling that they’re willing to hand an Arizona Senate seat to the radical left.”
Few, if any, states in the country present as clear a testing ground for the future of the Republican Party as Arizona. For decades a bastion of conservatism and libertarianism, the state is drifting leftward. Democrats have won three straight Senate races, the last governor’s race and the presidential race in 2020. What’s more, primaries are typically held late in Arizona, making it tougher for challengers to consolidate support before the general election.
“Just look at what happened in the last two elections. You in no way have to guess what happens when MAGA candidates ignore bread-and-butter issues that Arizonans care about,” said Barrett Marson, an Arizona-based GOP strategist. “Kari Lake is not governor. Blake Masters is not senator. Republicans have to get back to basics.”
The trends have alarmed more establishment Republicans, who are privately discussing ways to head them off. GOP consultants have gone so far as to encourage Masters to run for the House instead of the Senate due to his high unfavorability ratings and the exorbitant amount of money it would take to rehabilitate his reputation in a statewide race, according to a person familiar with the conversations. Republicans believe Lake and Masters are unlikely to run against each other.
There are rumors that Rep. Paul Gosar (R-Ariz.) could retire, opening up a safe red seat and helping ease what could be a crowded field in the contest. Gosar batted down that speculation in a brief interview with POLITICO: “No, I’m not leaving. I still think I’d like to see this majority go to the White House and the Senate.”
Sen. Steve Daines, chair of the Senate Republicans’ campaign arm, said in an interview that “it’s early” but “I want to see a candidate who can win a general election.”
Sen. Shelley Moore Capito (R-W.Va.) put it this way: “I want to win it to get the majority, And I’ll let Arizonans decide who the nominee is going to be. And I think somebody who can win should be the presiding factor. They didn’t win before, so I think that makes it difficult.”
After so much focus on whether they’ll support Sinema or Gallego, Democrats are happy to talk up the GOP’s problems.
“In Arizona Republicans are stuck with a ragtag band of failed candidates,” said Nora Keefe, a spokesperson for the Democratic Senatorial Campaign Committee. “We are confident we will stop Republicans in their effort to take this Senate seat.”
Asked about Lake’s interest in a Senate run, Wren said that “her focus right now is the lawsuit — that hasn’t changed.” A person close to Lake characterized her position as “the door’s not being closed” to a Senate campaign.
Other potential candidates for Senate include Pinal County Sheriff Mark Lamb, Rep. Juan Ciscomani, unsuccessful 2022 Senate candidate Jim Lamon, and businesswoman Karrin Taylor Robson, who lost to Lake in last year’s primary.
Establishment Republicans have shown particular interest in trying to get Robson and Ciscomani into the race, eager to avoid a repeat of 2022, when expectations of a red wave ended in a net Democratic gain in Senate races. Robson, a self-funder, contributed millions of dollars from her own bank account to her gubernatorial campaign last year, only to lose to Lake in the primary.
A person close to Robson said she had not ruled out a Senate run, describing her mindset as: “A lot of people voted for me and I don’t take that for granted. Maybe this is the moment.”
Ciscomani, who was just sworn into office after winning a competitive congressional seat, was a prized GOP recruit in 2022. Steven Law, CEO of the GOP Senate super PAC Senate Leadership Fund, tweeted recently that Ciscomani is a “[f]antastic new addition to the House,” raising eyebrows in the GOP. But launching a statewide bid from his Tucson-based district could be difficult for Ciscomani, particularly in a field of candidates who just wrapped up statewide races.
The ultimate dream candidate for traditional Republicans is former Gov. Doug Ducey, though few think that is a possibility after he passed on a Senate campaign last year, and clashed with Trump over the 2020 presidential election.
“He’s made it pretty clear he’s not interested, but he’d be a great option,” Thune said.
Lamb, like Masters, is a Lake ally. Lamb is speaking with consultants, sources said, and is expected to make a decision early this year. Lamb spokesperson Corey Vale said he is “seriously considering running for the United States Senate.”
Lamon spokesperson Stephen Puetz said that “[i]f a winning candidate emerges, he will strongly back that person — if not, Jim will run in 2024.”
One candidate who has ruled out a run is Kelli Ward, former chair of the Arizona Republican Party. She told POLITICO she was not looking at another Senate bid — she ran in 2016 and 2018 — or a run for the House. The state party is now run by Jeff DeWit, who helped Trump with his 2020 run. The Arizona GOP did not respond to requests for comment.
Though Lake’s advisers insist that she is currently dialed in on her lawsuit to reverse the election, she found time to mention Gallego at a rally Sunday that was otherwise focused on her legal efforts, referring to him as “the AOC of Arizona.”
Lake remains popular within the GOP rank-and-file in Arizona. She appeared to cheers at the state party’s convention in Phoenix on Saturday and drew a large crowd at her rally the following night.
Lake had “supporters show up on a Sunday night in January of the odd year to simply hear her speak,” said Brady Smith, an Arizona-based GOP strategist and former Lake aide. “She’s demonstrated that she still wields the loyalty of the GOP base; anyone eyeing the Senate race has to factor that into their calculus.”
David Siders contributed to this report.
Hundreds of local election officials across the country are about to confront a political challenge putting their management skills and their campaign chops to the test: Administering the 2024 presidential vote while running for reelection themselves.
Donald Trump acolytes galvanized by the former president’s false narrative that the 2020 election was stolen from him piled into last year’s campaigns for state election officer positions. And although Democrats and mainstream Republicans defeated all of those candidates in key battleground states like Michigan, Arizona and elsewhere, far more races for local election positions there and in other states will be up for grabs next year.
The slate of below-the-radar campaigns will test how much money and attention will be available for these critical roles in the midst of a presidential race.
“The concerns about being primaried is absolutely on the mind of very dedicated and very middle-of-the-road, nonpartisan-functioning” election officials in Florida, said Mark Earley, the election supervisor in Leon County, Fla., a blue-leaning county in the state’s deep-red Panhandle.
One of the biggest flashpoints ahead may emerge in one of the biggest counties in the country: Maricopa County, Ariz., where a handful of election administration roles are up in 2024.
The swing county is dominated by the GOP at the local level — the recorder and four of the five members of its board of supervisors are all Republican. But it has been in the center of an elections administration maelstrom since President Joe Biden narrowly won the county and Arizona in 2020.
Local and state-level Republican party committees have repeatedly targeted Maricopa County Recorder Stephen Richer and the GOP board members after they resisted an amateurish election review pushed by Republican state lawmakers and defended their own oversight of the 2022 election. The Maricopa County GOP committee voted overwhelmingly to censure all five of them last month, ending the measure by encouraging “all registered Republicans to expel them permanently from office.”
Maricopa is just one county out of the hundreds if not thousands of jurisdictions that will elect election administrators over the next couple years and give the country a taste for how much more drama voters should expect over their ballots.
Earley, a Democrat and the president of his state’s association of local election officials, said in an interview that the hotter political environment is “built into the fabric” of races for election administrator positions now.
The threats posed by having a local election clerk swept up in conspiracy theories are not far-fetched, because we’ve already seen them come to life. Tina Peters, once the clerk in Mesa County, Colo., was indicted last year after allegedly helping orchestrate a breach of election equipment in the county. Local election officials elsewhere have also assisted unauthorized reviews of election equipment.
Peters, who unsuccessfully ran for the GOP nomination for Colorado secretary of state last year, has pleaded not guilty to charges stemming from the alleged breach.
The scope of local election officials’ jobs are also wildly different from that of secretaries of state, which hadn’t garnered much attention themselves until the most recent election cycle.
County and municipal election officials serve anywhere from millions of voters to just a few hundred. Some are appointed to their positions, while others are elected. And the financial and logistical challenges of mounting a serious campaign on the local level are far smaller than running for secretary of state.
Republican Jodi Fetting — the clerk of Tuscola County, Mich., a red-leaning area in the state’s “thumb” — said she expects her 2024 race to look “a little bit differently than it did” when she was last on the ballot in 2020.
“We definitely have people that believe the 2020 election was stolen,” she said.
Fetting said she and other county clerks in the state will likely face questions about election procedures once they are on the ballot themselves. While she welcomes those questions, she said, it is a “daunting task when you know that you’re not going to change that person’s mind.”
Other local election officials are anticipating a wave of Trump supporters running for local election offices, especially challenging Republican incumbents who have not supported Trump’s stolen election mythology.
Many GOP election officials didn’t respond to requests for interviews, but Dane County, Wis., Clerk Scott McDonell, a Democrat, said that some of his Republican colleagues are preparing for primary challenges from people who have pushed narratives of fraud in public meetings and advocated for policies like the hand counting of ballots — a slower and less accurate way of counting votes that has nevertheless gained a following on the right.
There is expected to be a more intentional recruiting effort from national organizations focused on election clerks and other similar positions this cycle, in an effort to counter a potential wave of MAGA-like candidates running for those under-the-radar positions.
Run for Something, a liberal organization founded after Trump’s election focused on lining up candidates to run for office across the ballot, launched “Clerk Work” last year to recruit candidates for local positions in the election process. It covers everything from county clerks to boards of supervisors.
The group had a hand in recruiting more than 220 candidates in the midterms for voting-related positions, Run for Something co-founder Ross Morales Rocketto said in an interview. That included 32 top-tier candidates, with a focus on county clerk positions in states like Colorado and California and county commissioners in Nevada. The group said 20 of them won their contests, including 10 of the 13 who were running against candidates Run for Something identified as an “election denier.”
“The thing that keeps me up at night isn’t whether we can beat most of these folks — I think we can beat them in most places — it’s actually whether we get people on the ballot to run against them,” Morales Rocketto said. “And that to me is actually the harder challenge in all of this.”
Over the next two years, the group is focusing in on a handful of states — including Wisconsin, Pennsylvania, Texas and Michigan — as top priorities to recruit election officials.
Keep Country First Policy Action, a group founded by allies of former Rep. Adam Kinzinger (R-Ill.), also launched an effort last year to recruit “pro-freedom, pro-democracy” candidates for office, with a focus on local election positions.
In interviews, local officials who will be on the ballot in 2024 said they expected it to be a challenging election, with the added attention on both the official side of the job, as they prepare their offices for a busy presidential election year, and on their own individual campaigns.
“Being on the ballot and running the election, it just adds to the stress,” said Ingham County, Mich., Clerk Barb Byrum, a Democrat. “You're working day and night to make sure every qualified registered voter exercises their right to vote. And then when you're not working your job, you're out campaigning for yourself.”
Officials were quick to note that their offices had safeguards in place to prevent clerks from influencing their own elections, from handing over certain duties to staff members and recusing themselves from some decisions in the office while they’re running.
Those contests also come amid concerns of a persistent brain drain in the sector, as a number of local local election officials retired following the 2020 election. And while the decentralized nature of America’s election system makes retirements hard to track, experienced local officials pointed in interviews to a number of their colleagues leaving, with fears that that could continue ahead of the 2024 election.
A recent survey from the Democracy Fund/Elections & Voting Information Center at Reed College of local election officials found as many as 18 percent planned to either retire or otherwise leave their position within the next two years. That is a bit lower than the 21 percent who indicated as much on a similar survey around the 2020 election.
“I think there’s going to be a surprising number [of supervisors] that decide not to run again,” Earley, of Florida, said. “And it’s already happening in staff too. It’s not just the elected officials.”
The new House GOP majority is taking its first step Wednesday toward a goal that’s openly dividing its members: booting DHS Secretary Alejandro Mayorkas from office.
Republicans will start laying the groundwork on two tracks this week to potentially impeach Mayorkas over his handling of the border — a historically rare step that hasn’t been used against a Cabinet member since 1876. Judiciary Committee Chair Jim Jordan (R-Ohio), who would lead any impeachment inquiry, is holding what he promises will be the first in a series of hearings on the border on Wednesday, while Oversight Committee Chair James Comer (R-Ky.) plans to launch his own opening salvo next week.
And while one group of Republicans prepares to make their case, another is ready to start impeachment immediately. The House GOP’s right flank has already filed an impeachment resolution and Rep. Andy Biggs (R-Ariz.) is now circulating his own proposal. Meanwhile, centrists are warning they aren’t on board and recent polls have suggested the public is wary of an excessive focus on investigations.
It marks another test for House GOP leaders, as they try to balance the demands of more moderate members and a base that’s eager to go scorched-earth against President Joe Biden and other administration officials. Not to mention that Republicanswillhave to navigate a barrage of criticism from Democrats and their allies, who accuse the GOP of using the border as a wedge issue to enact political revenge over policy differences.
Republicanswhowantto impeach Mayorkas acknowledge they haven’t reached a critical mass within their own conference, though Republican Study Committee Chair Rep. Kevin Hern (R-Okla.) predicted that there would be “a lot of sentiment” among GOPlawmakers to remove the DHS secretary. Ifaresolution came to the floor, Republicans could only afford to lose four votes within their own party.
“I think when you lay the case out as any impeachment happens, I think [support] grows. Obviously, it’s not going to happen instantaneously,” Hern said when asked if the conference should move toward impeachment without the votes locked down.
Yet other leadership allies are warning against officially moving forward with impeachment without a baked-in result. Rep. Tom Cole (R-Okla.), part of a shrinking pool of House GOP pragmatists, warned against forcing members to stake out a stance on a controversial topic if it's not guaranteed of success.
“I just don’t think it’s helpful to put people in that position,” he said.
The eager-to-impeach right flank has so far largely lobbed two broad arguments against Mayorkas: That he’s lost operational control of the border, and that he lied under oath when he told Congress the border was secure. And while their early hearings are focused on the border broadly, GOP lawmakers have signaled they will try to use the bully pulpit of their majority to demonstrate that the administration hasn’t complied with the law.
The administration and congressional Democrats, meanwhile, argue Republicans are overstating what amounts to policy differences over the handling of the border. Democrats, and even some Republicans, are quick to point out that is a far cry from the high bar for impeachment of “high crimes and misdemeanors.”
Mayorkas has repeatedly defended his handling of the border, signaling he has no intention of giving into the GOP calls for his resignation. Asked during an MSNBC interview on Tuesday about the House GOP impeachment articles, Mayorkas urged Republicans to take up legislation that would fix what he called a “terribly broken” and “outdated” immigration system. The party has attempted sweeping changes to immigration law and border security multiple times in the last decade, to no avail.
“We are doing everything that we can to increase its efficiency to provide humanitarian relief when the law permits and to also deliver an enforcement consequence when the law dictates,” Mayorkas said.
Hill Democrats are privately betting that conservatives’ impeachment pledge will put its moderates in a bind. A House aide, granted anonymity to speak frankly, predicted that “those members are going to start getting real antsy real fast,” as others try to get into “crazy, wacko border security stuff.”
And it’s more than members in purple districts who may feel squeezed by impeachment talk. Republicans will also be playing defense in a cache of blue-leaning seats come 2024 when their thin majority is on the line. Some GOP members in those districts, even if they strongly disagree with Mayorkas’ handling of the border, are openly skeptical their voters want to see him removed.
“I do think what’s going on at the border is negligence, dereliction of duty, but I’m not convinced that impeaching Mayorkas is going to solve the problem. I think we need the election in 2024 to change the White House,” Rep. Don Bacon (R-Neb.) said, though he cautioned that hearings could give a better sense of how voters feel about the issue.
Others, including Reps. Brian Fitzpatrick (R-Pa.) and Mike Lawler (R-N.Y.), have warned that they think the party needs to focus on policies like fighting inflation. And then there's border Rep. Tony Gonzales (R-Texas), emerging as a vote to watch in the GOP-controlled House, who is viewed as an impeachment skeptic after describing it in January as a “in case of emergency break glass” option.
Gonzales reiterated during a sit-down interview with POLITICO on Tuesday that he wasn’t going to get ahead of any potential proceedings.
A recent spate of polling offers its own cautionary tale for Republicans. Fifty-five percent of respondents to a recent NBC News poll said they expected Republicans leading investigations into Biden and the administration “will spend too much time on the investigations and not enough time on other priorities.”
Nearly three-fourths of respondents to a separate CNN poll said they thought Republicans hadn’t yet paid attention to the country’s “most important priorities.” Nearly half named economic issues as the most important topic, compared to 11 percent listing immigration.
So far, House Speaker Kevin McCarthy is only pledging an investigation. Asked recently about his November remarks calling for Mayorkas to resign, the California Republican told reporters that that the House GOP will conduct their probe and said that could lead to an impeachment inquiry. But he wouldn’t pre-judge an outcome, as many top Republicans hope the case made in committee hearings will win over enough wary colleagues and disinterested voters.
“If a person is derelict in their duties and they are harming Americans and Americans are actually dying by the lack of their work, that could rise to that occasion,” he told reporters.
The Wednesday Judiciary Committee hearing will include testimony from non-administration officials: Brandon Dunn, the co-founder of Forever 15 Project, a group that tries to raise awareness about Fentanyl poisoning; Dale Lynn Carruthers, a county judge in Texas; and Mark Dannels, a sheriff in Arizona. The latter two have both been critical of Biden’s border policies.
Over on the Oversight Committee, Comer announced on Tuesday night that the Department of Homeland Security had offered, and he had accepted, to have two Border Patrol officials testify next week: Gloria Chavez and John Modlin, chief Border Patrol agents.
Neither of the two GOP chairs are ruling out using subpoenas to try to get witnesses and documents they want from the department. Their panel members have backed up that strategy.
“We’re going to use the power of subpoena,” Rep. Chip Roy (R-Texas) said. “And we’ve got to use the power of subpoena to haul Mayorkas in front of the Judiciary Committee.”
ALBANY, N.Y. — New York Gov. Kathy Hochul might have a people problem.
The Democrat promised to build an administration of the best and brightest in the fallout of the toxic culture that led to her predecessor’s downfall. She pulled in top minds from across the city, state and nation to aid her rapid ascension and subsequent election.
But 17 months later, lawmakers and strategists say Hochul hasn’t accessed the fundamental levers of power in both Albany and New York City Hall. And they say she should be past the learning curve over how to negotiate the treacherous New York political minefield as she looks to negotiate the roughly $220 billion state budget she is set to propose Wednesday.
The troubles were most evident in her choice for chief judge, Hector LaSalle — who she picked after warnings from political behemoths like labor and state Senate leadership that he would not be approved. She has continued to back LaSalle despite the Senate’s rejection on Jan. 18 , leaving many wondering whose advice Hochul is choosing over input from longstanding power players.
“I don't know who they're talking to,” Senate Labor Chair Jessica Ramos (D-Queens), a vocal opponent to LaSalle’s nomination, said in an interview. “But I do think that before making major decisions, such as choosing a chief judge, that they should speak to stakeholders, especially those who protect the most vulnerable in New York, who really are at the mercy of whoever the chief judge in the state is.”
There appears to be a dichotomy, however, between the rancor at the Capitol and with the public: Hochul hit record popularity in January with voters, a Siena College poll found last week.
And she’ll have an opportunity Wednesday to introduce her budget plan to reset the conversation in Albany on her fiscal priorities rather than the fallout from the LaSalle case, even as she threatens to sue over it.
The turmoil with lawmakers — Senate Majority Leader Andrea Stewart-Cousins said Tuesday she and the governor haven’t spoken since LaSalle’s rejection — tops off a series of perceived miscalculations in strategic relationship building that even her supporters have described as unforced errors.
There’s still the residual effect from last November’s election, which Hochul won but by the narrowest margin in decades that led to down-ballot losses. Even though Democrats were able to narrowly retain their supermajorities in the Senate and Assembly, the state party lost ground in a year when Republicans underperformed across the country.
Hochul’s election campaign, which raised and spent nearly $60 million, lacked the outreach to key demographics that strategists considered standard practice for running a New York campaign.
Democratic advisers and legislators say they were ignored or turned down when they offered strategies to target boroughs and communities where she lacked support. She failed to rally labor and progressive movements until the final days of her campaign, when those groups became concerned her Republican opponent Lee Zeldin might have a real chance at beating her.
Now some top union leaders said they felt spurned when she tapped LaSalle for chief judge after they publicly logged their opposition, arguing a few of his decisions were anti-labor and anti-abortion rights, which he and Hochul deny.
Critics also point to her struggles in a first major decision in 2021: Her initial pick for lieutenant governor, Brian Benjamin, resigned shortly after being indicted on federal bribery charges, the result of previously reported connections that should have set off alarm bells during the vetting process.
“People make the analogy of ‘they’re playing checkers while everyone else is playing chess,’ said one Democratic strategist and legislative veteran. “No. They’re playing tic-tac-toe, and it’s just embarrassing.”
But Hochul's office is quick to tout her accomplishments since taking office, and her ability to win over the Legislature — including getting lawmakers to approve a deal to fund the Buffalo Bills stadium, tweak controversial bail reform laws and remove Benjamin from the 2022 ballot in a messy workaround to state election law.
"Governor Hochul's senior staff bring decades of experience at the highest levels of local, federal, and state government and records of results, and it should not go unnoticed that they are predominantly women,” Hochul spokesperson Hazel Crampton-Hays said when asked for comment.
Some of Hochul’s Democratic detractors begrudgingly note Andrew Cuomo, despite his scandal-plagued tenure, was masterful at manipulating Albany to his whims after 40 years in the Capitol.
When Hochul took over, she promised to purge the state government of the individuals who’d fostered Cuomo's culture of harassment and intimidation. That clean house effort — led by her then-chief of staff, Jeff Lewis — was aimed at reinvention, but in the process may have stripped away layers of institutional knowledge vital for navigating certain parts in state government, three longtime administration officials have noted.
Some who did remain, such as budget director Robert Mujica, have since departed. Top adviser and special counsel Jeff Pearlman, who also aided David Paterson’s transition from lieutenant governor to governor and was one of Hochul’s first appointees, left her office late last summer to resume his role as director of the state Authorities Budget Office.
Pearlman, when reached for comment last week, said that he felt he fulfilled his transitional role and wanted to complete his work at the Authorities Budget Office.
“There just came a point in time where you become the Maytag repairman,” Pearlman said. “The problems don't come to you. They come to the people that got hired to solve the problems."
Hochul, in an October interview with POLITICO, described her inner circle as including six people: State operations director Kathryn Garcia, secretary to the governor Karen Persichilli Keogh, policy head Micah Lasher, counsel Liz Fine, deputy chief of staff Melissa Bochenski and current chief of staff in Stacy Lynch.
Lewis moved to Hochul’s reelection campaign in March 2022, and post-election has not yet returned to the governor’s office in any official capacity.
It’s easy to characterize a mostly female staff as inexperienced or weak, but that’s not the narrative Hochul’s Democratic critics have pushed. They continue to praise those members of her team as brilliant experts in their fields with proven track records of success.
Garcia, the former New York City Sanitation Department commissioner, came in close second to New York City Mayor Eric Adams in the 2021 mayoral race. Persichilli Keogh was Hillary Clinton’s former New York state director and is well known as a savvy New York operative. Lasher worked as former New York City Mayor Michael Bloomberg's chief Albany lobbyist and chief of staff to former attorney general Eric Schneiderman.
But that experience doesn’t always translate to running a cohesive Albany operation.
Some of the procedures and traditions — those do not include intimidation and harassment — are there for a reason, past and current officials say. And there are specific aspects of working in Albany that aren’t transferable from working in other New York political realms — like knowing that Stewart-Cousins would never tell Hochul she didn’t have the votes to approve LaSalle unless she had personally spoken to each of her members.
“That sounds so simple. But if you haven't been through it before, and you're doing it for the first time? This is New York. This is ‘punch you in the nose’ politics,” said an administration official who has worked in Albany for more than three decades. “You have to experience walking through and working in the Capitol — and it takes a couple of years to live it before you can do it.”
Hochul and her team are also facing a new Albany that more recently stymied her predecessor as well— one controlled completely by Democrats, where the old executive playbook pitting warring Senate and Assembly majorities against one another is defunct.
The factions to court aren’t as simple as Democrats versus Republicans, or even moderates versus progressives anymore.
Hochul’s chief judge pick, for example, would have been the first Latino person to hold the position. That was not enough to persuade several further left Latino elected officials, who said the top seat on the Court of Appeals would mean nothing if LaSalle’s judicial track record didn’t align with their progressive values.
There are new layers emerging in the Democratic party that require acknowledgment, if not full political realignment. The Working Families Party brought in necessary votes for Hochul in November, but it did not get so much as a shout out in the governor’s victory speech.
“It is hard to pinpoint, but I think it's more than one thing and it’s all coming together at once,” the official said of the “frustration” of watching Hochul’s administration navigate the Capitol. “I think it's the new political class. I think it's a little bit of Cuomo PTSD, and I think it's a little bit of the chamber not having the strength of the institutional people to guide them away from what we would think of as rookie mistakes.”
Others in Albany with a longtime vantage that includes a host of unpredictable executives say there’s no reason to be tied to how things “should be.”
“I've been around a long time,” said Sen. Liz Krueger (D-Manhattan). “So I can tell you there's never been normal in Albany.”
Federal Reserve Chair Jerome Powell is vowing to keep up the fight against inflation no matter how much pain it causes the economy. Wall Street is betting that he blinks.
As Fed officials meet in Washington this week to raise borrowing costs for the eighth straight time, investors are laying overwhelming odds that the central bank will reverse course in the coming months and start slashing interest rates if the labor market begins to suffer and inflation continues to cool. The Fed insists it has no plans to start cutting until at least next year.
The timing is crucial because the longer the Fed maintains its tight grip on the economy, the greater the chance for a potentially deep recession involving what could be massive job losses.
The market’s expectation that the central bank will ease up is partly driven by the presence of new faces on the Fed's seven-member board in Washington. In addition to reappointing Powell, President Joe Biden named three new members and promoted Lael Brainard, who in past years advocated for going slow on rate hikes,to Powell’s No. 2.
Other new Fed officials outside Washington are economists who have long pushed for broad and inclusive employment. Among them: Austan Goolsbee, a onetime chief economist to former President Barack Obama who recently became head of the Chicago Fed and joined his first central bank policy meeting this week.
“There’s a pretty strong view that they will ease sooner than they say they will,” said former Kansas City Fed President Thomas Hoenig, whose tenure included the 2008 financial crisis when the economy was losing more than 700,000 jobs a month. “The pressure would be to say, ‘Well, we’re just about there, we can ease back.’”
Fed officials on Wednesday are expected to hike rates by another quarter of a percentage point, nearing the central bank’s target of 5 percent for its main borrowing rate. The aim is to get inflation down to 2 percent — less than half of where it is now.
The Fed wants to ensure that it keeps rates high long enough to bring inflation fully to heel, fearing a repeat of the 1970s and '80s when the central bank backed off, only to see price spikes return.
But investors are pricing in a greater than 75 percent chance that interest rates will be lower in December than in June, according to CME FedWatch. They aren’t convinced that the Fed will keep its key rate at a punishingly high level for long, particularly if inflation keeps falling and unemployment begins to spike.
Inflation has dropped for six straight months, fanning hopes that the surge in prices is on its way to ending. Quarterly data on companies’ labor costs released Tuesday shows that wage growth, a driver of inflation, also continues to tick down.
Yet even though consumer price increases have cooled, Fed officials are maintaining their tough talk with the idea of leaving borrowing costs high enough to keep inflation on its downward trend. They say wage growth will need to slow even further. And Fed policymakers have publicly been in lockstep on how fighting inflation is their most important priority.
That tone could shift if economic indicators allow some members of the rate-setting committee to make the case that inflation is easing even without a significant rise in joblessness from 3.5 percent now. The Department of Labor on Friday will report January’s employment numbers, and they're expected to show a slower, but still steady increase in job creation.
“There is a growing contingent on the committee who will grow very uncomfortable in the second half of the year not cutting [rates] as unemployment rises,” said Derek Tang, an economist at LH Meyer Monetary Policy Analytics, a research firm chaired by former Fed Governor Larry Meyer. “By their own account, they think [the unemployment rate is] going to rise into the 4s. This is all in the service of trying to bring inflation down, but when the rubber meets the road, things might feel a bit different.”
Brainard, the Fed’s vice chair, recently pointed to high profit margins that might give companies room to hold onto workers, particularly as supply chains continue to improve and help them save some costs. That means inflation could ease further without as much of a hit to the job market, she said.
Meanwhile, getting inflation back to 2 percent in the short term might not even be feasible, depending on what's causing it.
Officials like Goolsbee say that if the Fed tries to counteract inflation that's caused by supply problems, rather than by overspending, that could run the risk of a recession without actually cooling prices — what’s often termed “stagflation.” That makes the risks facing the central bank more complicated, he told CNBC last year, before he joined the central bank.
“The Fed has got to balance out some things it doesn’t normally need to balance out,” Goolsbee said at the time.
Other prominent regional Fed presidents, who have rotated out of a voting seat this year but are still part of the debate at rate-setting meetings, might also make the case for a gentler approach to the economy, such as Boston Fed chief Susan Collins. In 2019, Collins, then a professor at the University of Michigan, supported raising the central bank’s inflation target slightly above 2 percent to give more room for the job market to recover during downturns.
Still, the ultimate stance of the committee will depend on how the economy actually evolves. Even Fed officials such as Brainard or San Francisco Fed President Mary Daly, who are historically considered to be “doves” — in central bank parlance, more worried about harm to the labor market than the risk of inflation — have been resolute in the face of price spikes.
Policymakers across the board have said they don’t expect to cut rates this year because they will need to stay at a high level for a while to ensure that high inflation doesn’t become embedded in the economy. That could lead the Fed to keep the brakes on much longer than markets expect.
Tim Duy, chief U.S. economist at SGH Macro Advisors, noted that more dovish officials haven’t shifted their rhetoric yet, “even given the extent to which data has turned in their direction.”
And some officials have pushed for the central bank to be even more aggressive in the face of rising prices, including Minneapolis Fed President Neel Kashkari and St. Louis Fed President James Bullard. Kashkari, who before the pandemic was an outlier in advocating for particularly low rates, has during this bout of inflation pressed for raising rates higher than officials’ median forecast. He has a vote on rates this year, as does Goolsbee.
“I’m just wary about assuming anybody’s priors anymore,” Duy said.
Meanwhile, the direction of debate could also shift considerably if Brainard leaves; she’s currently a contender to replace Brian Deese as head of the White House National Economic Council, according to people familiar with the matter.
“Given the working relationship that she and Powell have had over several years, I think she really plays an important part in the thought leadership and the direction things are moving,” said Claudia Sahm, a former senior economist at the Fed.
Still, even given Brainard’s worker focus, she will be pragmatic about how much progress is being made against inflation, Sahm said. “Maybe later in the year it will matter, but for now, dove, hawk, moderate — they’re going after inflation.”
Figuring out what, exactly, China is up to is one of the intelligence community’s top priorities. Countering Beijing also happens to be a rare instance where there’s bipartisan support in Congress.
But what new lawmakers will quickly discover — especially those joining the House and Senate Intelligence Committees — is that a glaring gap exists that will impact Congress’ efforts to do so. The U.S. cannot adequately address its national security challenges related to China, which are increasingly driven by technology, without the help of a potentially surprising partner: the Department of Commerce.
Unfortunately, the department itself lacks the critical support needed for these efforts. Most crucial: Commerce needs its own intelligence agency.
My last job in the U.S. government was overseeing the intelligence community’s role in the Committee on Foreign Investment in the United States (CFIUS), along with an interagency group formerly known as Team Telecom, and being responsible for the intelligence community’s engagement with our foreign allies’ own investment security efforts. The cases that come before CFIUS are privileged and not publicly disclosed. But I can say this: The most challenging ones usually revolved around issues of advanced or dual-use technology, an area in which the Department of Commerce plays a critical role given its international trade and export control responsibilities.
Today, the Department of Commerce is an agency unexpectedly on the frontlines of vital U.S. national and economic security challenges, most prominently demonstrated by its leading role on ensuring critical access to semiconductors, and as evidenced by the CHIPS Act and recent rules promulgated by the department to protect against even knowledge transfers between the United States and China.
But these efforts are certain to be a beginning for Commerce, not an end. And a dedicated in-house intel agency can better identify emerging threats and challenges from China that Commerce needs to tackle, including potential spyware and other intrusions embedded in foreign technology. For instance, in late November, the U.S. issued a ban on new Huawei and ZTE equipment — along with that of three other Chinese companies — for fear it would be used to spy on Americans. Last month, Congress proposed limiting U.S. exposure to Chinese 5G leaders, including Huawei, by restricting their access to U.S. banks, adding them to Treasury’s Specifically Designated Nationals List.
In fact, Commerce’s current position is not unlike that of the Treasury Department’s in 2004.
That year — as part of the Intelligence Authorization Act — Congress established the current iteration of Treasury’s intelligence agency, the Office of Intelligence and Analysis, and formally made it part of the broader intel community. Since then, OIA has played a critical role for almost two decades combating terrorist financing, helping support sanctions efforts and providing financial intelligence to Treasury policymakers.
OIA’s successes would simply not have been possible without it being a full, integrated member of the intelligence community. Indeed, its assessments often find their way to the White House and to other senior policymakers across town, even as its primary focus is supporting the Treasury Department.
In the same way, the Commerce Department cannot be expected to play a more fulsome role in U.S. national security if its leaders are not fully informed of the strategic goals and illicit tactical efforts of U.S. adversaries. To meet that expectation, requires the launch of a new, 19th intel agency to be housed at the department.
Most Americans think of intelligence and by default conjure up images of the CIA. But there are 18 agencies that make up the U.S. intelligence community, most housed in various departments or military services, and dedicated to providing the kind of intelligence support to a secretary or commander, that CIA continues to lead the way in providing to the White House.
Members of Congress who for the first time are serving on the Intelligence, Foreign Affairs, Armed Services or other prominent national security-related committees and sub-committees, may be surprised to learn that despite what they may have gleaned from the media, the intel community does not actually make predictions; it makes judgments. The difference is critical.
Predictions are generally fleeting: right and wrong, winners and losers, black and white. Judgments are far more complicated. They address the likelihood of events and emergence of prospective capabilities; the potential follow-on implications and challenges from an event occurring — or not; and the associated risks and opportunities for U.S. national and economic security.
These conclusions are what the intelligence community informs policymakers of, to help them make the best decisions possible.
Not only would Commerce Secretary Gina Raimondo benefit greatly from having her own intel agency providing these types of assessments directly to her, but so too would the rest of the department, including the Bureau of Industry and Security, which is responsible for export controls, and the International Trade Administration, which defends U.S. industry against unfair trade practices of foreign allies and adversaries.
In creating the new agency, the Director of National Intelligence and Congress must ensure it does not simply result from merging together overworked and under-supported disparate parts of the department that seem to fit. Less than two years ago, Commerce’s national security work was overshadowed by a rogue and illegal security operation at the department — and neither it nor the U.S. government can afford a repeat.
Rather, a new agency must be stood up and staffed by leaders and analysts who are intel community professionals that know how to blend complex analytic efforts with the priorities of the department. Having this type of experienced leadership will ensure the development of novel and Commerce-centric analysis, all while adhering to intelligence tradecraft and community standards.
A new intel agency at the Commerce Department won’t end the national security challenges the U.S. faces from China; but it will help policymakers mitigate and overcome them.
The views expressed in this publication are the author’s and do not imply endorsement by the Office of the Director of National Intelligence, the intelligence community, or any other U.S. government agency.