POLITICO Playbook: Inside McCarthy’s brewing speaker deal

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With help from Eli Okun and Garrett Ross

DRIVING THE DAY

After spending the last 48 hours on life support, KEVIN McCARTHY’s bid for the speakership is seeing a potential revival.

Following a rollercoaster of a Wednesday during which the California Republican failed three more times to secure the 218 votes for the gavel, McCarthy and some of his critics finally got in a room and had what both sides are describing as productive conversations.

This morning, after slamming coffee at midnight and working the phones until the wee hours, we have a readout of new concessions McCarthy has offered his critics and where things stand.

NEW CONCESSIONS ON THE TABLE: Here’s what’s being discussed, according to one well-placed source familiar with these talks. And, keep in mind, negotiations are ongoing and fluid:

  • A one-member “motion to vacate”: The GOP leader appears to have finally acquiesced to a demand to lower the threshold needed to force a vote ousting a speaker to just one member. While McCarthy originally indicated that restoring the one-member “motion to vacate” was a red line, his allies now argue that there’s not a huge practical difference between this and his previous offer of requiring five members to trigger the vote.
  • Rules Committee seats for the Freedom Caucus: McCarthy is prepared to give the House Freedom Caucus two seats on the powerful House Rules Committee, which oversees the amendment process for the floor. (Some conservatives are still holding out for four seats on the panel.) There are also talks about giving a third seat to a conservative close to the Freedom Caucus but not in it — someone like Reps. THOMAS MASSIE (R-Ky.). Who will pick those members? We’re told there is ongoing haggling. Typically, it’s the speaker’s prerogative, but conservatives want to choose their own members for these jobs.
  • A vote on term limits: This is a key demand of Rep. RALPH NORMAN (R-S.C.), who has proposed a constitutional amendment limiting lawmakers to three terms in the House.
  • Major changes to the appropriations process: Fears of another trillion-plus-dollar omnibus spending bill have been a major driver of the conservative backlash to McCarthy. The brewing deal includes a promise for standalone votes on each of the 12 yearly appropriations bills, which would be considered under what is known as an “open rule,” allowing floor amendments to be offered by any lawmaker. Conservatives also won a concession to carve out any earmarks included in those packages for separate votes, though it’s unclear if they’d be voted on as one package or separately.

The late-night exchange of paper followed another major breakthrough for the GOP leader: The McCarthy-aligned Congressional Leadership Fund reached a deal with the conservative Club for Growth, which had initially signaled opposition to a Speaker McCarthy, to stay out of open House primaries for safe Republican seats. In the past, the two groups often found themselves at war with each other, with CLF pouring in millions to back establishment candidates while the Club endorsed those on the far right. In return for that promise, the Club has dropped its opposition to McCarthy.

THE MILLION-DOLLAR QUESTION: Will this be enough to land McCarthy the speakership? That’s TBD.

Rep. CHIP ROY (R-Texas) — who following a feisty Tuesday night TV exchange with Fox News’ LAURA INGRAHAM played a major role getting talks moving on Wednesday — indicated to GOP leaders that he could bring along as many as 10 McCarthy detractors, according to CNN’s Mel Zanona, and possibly even convince others to vote “present.” That won’t get him to 218, but McCarthy’s camp hopes it might just provide a final boost allowing him to close the gap after a hellish two days.

Still, even McCarthy’s closest allies say this isn’t over just yet.

  • One GOP leadership source told us they believe there are still five “hard nos” against him — Reps. MATT GAETZ (R-Fla.), LAUREN BOEBERT (R-Colo.), ANDY BIGGS (R-Ariz.), BOB GOOD (R-Va.) and MATT ROSENDALE (R-Mont.). Reminder: He can only lose four.
  • As he left the Capitol Wednesday night, Norman told reporters he hadn’t changed his position on opposing McCarthy. But the terms of this possible deal were still being ironed out at that point, and the nod to his own term-limits proposal might well change things.
  • McCarthy allies are also worried about freshman Rep.-elect ELI CRANE (R-Ariz.), who we hear has shown no indication of moving.

As of 1 a.m., the thinking in McCarthy’s camp was that if they can winnow down his opposition from 20 to a half-dozen or so, the pressure on the remaining holdouts will be so great that enough will cave.

However, one McCarthy ally cautioned us that the situation could “get worse before it gets better.” There’s an expectation that McCarthy could actually lose a handful of votes from exasperated members if balloting continues today.

Meanwhile, time is running out as some McCarthy backers frustrated by the stalemate eye an exit strategy. Rep. PETE SESSIONS (R-Texas), a former Rules Committee chair long considered an ally of GOP leadership, insisted on CNN last night that members should start discussing other potential speaker candidates, such as incoming House Majority Leader STEVE SCALISE. “I’m telling you these 19 people are dug in,” he said of McCarthy’s foes, suggesting Republicans could only realistically tolerate about “three or four more rounds” of voting.

BUT, BUT, BUT … We’re told the wheeling and dealing probably isn’t over and may take a few days to nail down. “I still don’t see this getting resolved in the near term. Maybe more likely over the weekend and into next week,” cautioned one GOP lawmaker.

McCarthy’s camp also expects that he may eventually have to endorse conservatives for committee gavels, such as Rep. ANDY HARRIS (R-Md.), who’s pushing to lead the Health and Human Services subcommittee on Appropriations, or Rep. MARK GREEN (R-Tenn.), who’s gunning to lead the Committee on Homeland Security. (Those decisions are subject to the approval of the GOP steering committee, though McCarthy’s influence is significant.)

If the horse trading goes that far, it’s bound to piss off many House Republicans who have been team players and supported McCarthy all along. Rep. DAN CRENSHAW (R-Texas), for example, also wants the Homeland Security gavel. But if push comes to shove, McCarthy may well sacrifice his backers’ ambitions to realize his own speakership dream.

That won’t sit well with centrists or even mainstream conservatives, who will no doubt argue that McCarthy is rewarding bad behavior. One senior Republican aide complained to us on Wednesday night that McCarthy’s concessions would undercut the party in the long run.

“He’s essentially given away all the power of the speakership. He’s making it to where these Freedom Caucus guys can stop anything they want,” the aide told us. “It’s a vanity project. This majority is going to be miserable. It’s just absurd what he’s given away to these guys just to be speaker when I’m sure there’s somebody in this conference that the Freedom Caucus would have accepted as speaker and not demanded all of these crazy changes.”

Meanwhile, there’s one wild card that has McCarthy’s camp more worried: “I think Gaetz and other [‘Never Kevin’ lawmakers] are going to blow this up,” one top McCarthy confidant told us last night. Indeed, on Wednesday night, Gaetz crashed negotiating sessions he was not invited to, per our colleague Olivia Beavers. Expect him to continue to stir the pot.

SO WHAT’S THE PLAN TODAY? The rebels and McCarthy and his whip team are slated to talk early this morning, after conservatives have had time to mull over his latest offers and scrutinize them on paper. The House will gavel in at noon to continue voting on the speakership. There’s been some talk about adjourning to continue negotiations, though they’d have to get a majority to do so.

Some have even floated postponing votes until next week — though others in the party have pushed back on that idea. “The optics of us leaving without a speaker would be really bad,” the Republican lawmaker mentioned above told us last night, arguing that constituents are blowing up their phones telling them to get their act together.

HOW WE GOT HERE: The potential breakthrough came at the end of what began as an abysmal day for McCarthy, with his speakership dreams seeming almost dead. Rep. VICTORIA SPARTZ (R-Ind.), who had previously supported McCarthy through multiple ballots, voted “present,” suggesting McCarthy was bleeding support.

Then Rep. KEN BUCK (R-Colo.), another McCarthy backer in the Freedom Caucus, set McCarthy allies scrambling after he told us off the chamber floor that the GOP leader needed to make a deal that day — or step aside and let someone like Scalise have a go. Within an hour, as he went on CNN to repeat those words, we spotted incoming Chief Deputy Whip GUY RESCHENTHALER (R-Pa.) standing off camera, waiting to corner Buck and try to muscle him back in line.

On the chamber floor, McCarthy’s whip team went to work, feverishly trying to win over some of his 20 detractors — and to discern which of them could still be won over with concessions. McCarthy also spent the evening meeting with freshman opponents who don’t have much of a relationship with him.

The chaotic scene underscored the absurdity of the entire situation. Republicans cheered when they got the votes to adjourn for the night, celebrating as if they’d just passed a massive tax cut deal when they were simply leaving once again without a speaker.

Buck at one point floated — quite seriously, in fact — that members host a meeting with booze, suggesting it might help move talks along. Upon entering a meeting, incoming NRCC Chair RICHARD HUDSON (R-N.C.) joked that his water bottle was actually full of vodka. Down the hall, former Michigan Rep. JUSTIN AMASH nerded out about how great the standoff was, mused over how he wished it had occurred when he was in Congress — then pitched himself for speaker. Rep. JEFF VAN DREW, a petite former dentist from New Jersey often seen in pinstriped suits, argued that absent any agreement, the party’s leaders should “get everybody back in the caucus room and start beating the daylights out of each other until we get something.”

Expect just as much crazy today.

Related reads:

— The policy angle: “House’s speaker drama shrinks congressional agenda,” by Burgess Everett

— The money angle: “McCarthy’s political operation spent millions on lawmakers now opposing his speaker dreams,” by Madison Fernandez

— The Trump angle: “Trump’s spell over GOP breaks with McCarthy meltdown,” by Meridith McGraw and Nicholas Wu

— The succession angle: “As speaker race drones on, Sen. Patty Murray gets presidential succession boost,” by Anthony Adragna

— The local angle: “California Republicans fear McCarthy’s loss would be theirs as well,” by Jeremy White and Lara Korte in Sacramento

— The existential angle: “Does the House even exist right now?” by WaPo’s Dan Zak and Ben Terris

Good Thursday morning, and thanks for reading Playbook. How do you think the speakership standoff will end? Drop us a line: Rachael Bade, Eugene Daniels, Ryan Lizza.

PHOTO OF THE DAY

PLAYBOOK READS

THE WHITE HOUSE

TREND WATCH — Biden’s average approval rating ticked up to its highest level (43.5%) in more than a year, per FiveThirtyEight.

THE SPLIT-SCREEN — As chaos reigned in the Republican-held House, Biden made his first public appearance of 2023 in Covington, Ky., on Wednesday afternoon, where he and Senate Minority Leader MITCH McCONNELL celebrated the bipartisan infrastructure law.

Underneath the Brent Spence Bridge connecting the Bluegrass State to Ohio, Biden called the Kentucky Republican a “man of his word” who was integral in the bill’s passage. “He’s willing to find common ground to get things done for the country,” Biden said of McConnell.

The kumbaya moment, our colleagues Adam Cancryn, Marianne LeVine and Hailey Fuchs write, “represented an early effort to signal the White House’s eagerness for cooperation ahead of a politically combative next two years,” as well as something of “an attempt at political inoculation.” Video of highlights from the event

BIDEN TO THE BORDER? — Biden is considering a trip to the southern border for next week, WSJ’s Tarini Parti and Annie Linskey report. He is slated to meet with Mexican President ANDRÉS MANUEL LÓPEZ OBRADOR and Canadian PM JUSTIN TRUDEAU for the North American Leaders’ Summit in Mexico City on Jan. 9 and 10, but a “final decision hasn’t yet been made on whether Mr. Biden would make what would be his first visit to the border as president as part of the trip,” per WSJ.

FLOTUS FILES — “Jill Biden to undergo procedure for skin lesion,” by CNN’s Kate Bennett: “‘During a routine skin cancer screening, a small lesion was found above the First Lady’s right eye,’ White House physician KEVIN O’CONNOR said in a memo released by the first lady’s office. ‘In an abundance of caution, doctors have recommended that it be removed.’ Biden will have the outpatient procedure known as Mohs surgery on January 11 at Walter Reed National Military Medical Center in Bethesda, Maryland.”

FOR YOUR RADAR — At a Friday ceremony at the White House, Biden will award outgoing Republican Arizona state House Speaker RUSTY BOWERS the Presidential Citizens Medal, the nation’s second highest civilian honor, per Deseret News.

ALL POLITICS

BIG MORNING READ — “The Secret to Ron DeSantis’s Success? Ignore Donald Trump — and Attack Business Instead,” by Bloomberg’s Joshua Green: “Can the Florida governor’s fight with corporate America win back the White House for Republicans?”

SURVEY SAYS — As we approach the two-year anniversary of the Jan. 6 attack on the U.S. Capitol, POLITICO and Morning Consult are out with new polling on the event, the ongoing aftermath and the outlook for the country. Among the results:

  • Did Trump break the law?: Fifty-nine percent of registered voters believe DONALD TRUMP “definitely” or “probably” broke the law while president, while 30% said he “probably” or “definitely” didn’t.
  • Should the investigation continue?: Sixty-two percent said it’s “very” or “somewhat” important for the federal government to continue investigating the attack, while 31% said it’s “not too important” or “not important at all.”
  • Has there been too much focus on Jan. 6?: Forty-seven percent agreed that “there has been too much focus on the Jan. 6 events at the U.S. Capitol,” while 44% disagreed. Toplines … Crosstabs

2023 WATCH — “Republican Senator John Kennedy out of Louisiana governor’s race,” by the Lafayette Daily Advertiser’s Greg Hilburn: “‘I have looked into my heart and decided to remain in the Senate and not to run for governor,’ [Sen. JOHN] KENNEDY said in an email to supporters. ‘At this juncture, I just think I can help my state and my country more in the Senate.’

Who to watch now: “Kennedy’s announcement puts Republican Attorney General JEFF LANDRY, who has already secured the state GOP endorsement, as the clear leader out of the gate and the only major candidate to have officially announced. But Republican Lt. Gov. BILLY NUNGESSER will likely be close on Landry’s heels as soon as next week.”

WAR IN UKRAINE

NEW AID ON THE WAY — “Biden May Send Bradley Armored Vehicles to Ukraine as War Drags On,” by Bloomberg’s Justin Sink and Josh Wingrove

HOW UKRAINE IS FIGHTING — “The little-known weapon knocking down Iranian drones over Kyiv,” by Paul McLeary

RUSSIAN LOSSES MOUNT — “Sitting ducks? Russian military flaws seen in troop deaths,” by AP’s Felipe Dana and Joanna Kozlowska … “Ukraine Claims Heavy Russian Losses in Waves of Missile Strikes,” by NYT’s Andrew Kramer, Anatoly Kurmanaev and Christiaan Triebert … “For Russian Troops, Cellphone Use Is a Persistent, Lethal Danger,” by NYT’s Alan Yuhas, Thomas Gibbons-Neff and Yousur Al-Hlou

AMERICA AND THE WORLD

DANCE OF THE SUPERPOWERS — “Why China’s new foreign minister could be a problem for Biden,” by Phelim Kine

THE ECONOMY

FED FILES — “Fed Minutes Show Officials Feared Markets’ Rallies Could Hinder Inflation Fight,” by WSJ’s Nick Timiraos

STUCK IN REVERSE — “Supply chain woes caused U.S. auto sales to fall 8% last year,” by AP’s Tom Krisher

PRIME NUMBERS — “Amazon Layoffs to Hit Over 17,000 Workers, the Most in Recent Tech Wave,” by WSJ’s Dana Mattioli and Jessica Toonkel

THE PANDEMIC

NEWS YOU NEED TO KNOW — “New Covid strain is the most transmissible yet, WHO says,” by Carmen Paun: “In the U.S., the sub-variant went from being present in 4 percent of sequenced cases to 40 percent in just a few weeks, White House Covid-19 Response Coordinator ASHISH JHA tweeted Wednesday.”

VALLEY TALK

BIG YIKES — “Hackers leak email addresses tied to 235 million Twitter accounts,” by WaPo’s Joseph Menn: “That poses threats of exposure, arrest or violence against people who used Twitter to criticize governments or powerful individuals, and it could open up others to extortion, security experts said.”

MOVE FAST AND BREAK THINGS — “Meta Fined Over $400 Million in EU for Serving Ads Based on Online Activity,” by WSJ’s Sam Schechner

BEYOND THE BELTWAY

REMEMBER HIM? — “College scam mastermind Rick Singer gets 3.5 years in prison,” by AP’s Alanna Durkin Richer

PLAYBOOKERS

Nancy Pelosi was spotted reading a New Yorker article on the House floor: “What Kevin McCarthy will do to gain power.” Impressive trolling.

Steve Womack compared the McCarthy standoff to O.J. Simpson’s low-speed Bronco chase.

George Santos found some folks to sit with.

Jesse Jackson made an appearance in the House gallery.

Michael McCaul got truck-sticked during a TV hit.

Curtis Sliwa suggested Eric Adams should try feral cats for his building’s rat problem.

K STREET FILES — Targeted Victory, a digital marketing and public affairs firm that employs a deep roster of Republican operatives, is laying off nearly a third of its staff, Daniel Lippman reports. They announced the move during an all-hands Zoom call on Wednesday morning.

Though Targeted Victory declined to comment on the exact number of staffers affected, a comparison of the “team” page of the firm’s website between mid-December and Wednesday showed roughly 100 fewer employees. In a statement, CEO Zac Moffatt characterized the layoffs as an “end-of-cycle adjustment,” and an official with Targeted Victory told Daniel that the reduction reflects the demands of the corporate and political market in a non-election year, and that the majority of those affected were either junior-level or political staffers employed for less than six months. One person who was laid off called the cutbacks “shocking,” explaining that they hadn’t expected to lose their job after recently hitting their six-month mark with the firm.

MEDIA MOVES — CNN has added former Rep. Adam Kinzinger (R-Ill.) as a senior political commentator. Full announcement … Pop-Up Magazine is shutting down. Read the explanation

ADMINISTRATION MOVES — Kamau Marshall is joining the Education Department as senior adviser to Secretary Miguel Cardona, per Bloomberg’s Mario Parker. He previously was deputy assistant USTR for media and public affairs and is a Biden campaign alum.

FIRST IN PLAYBOOK — America First Policy Institute is announcing four new senior fellows at the think tank’s Center for American Prosperity: Jim Pinkerton, who was a domestic policy adviser to Presidents Ronald Reagan and George H.W. Bush; Luke Lindberg, former chief of staff of the Export-Import Bank; Robert O’Quinn, former chief economist at the Department of Labor and staff director of the Joint Economic Committee; and Jon Sanders, who is director of the Center for Food, Power and Life at the John Locke Foundation.

— Zach Kahler is now comms director for Rep.-elect Eli Crane (R-Ariz.). He most recently was comms adviser for the House Ways and Means Committee, and is a Senate Republican Conference alum.

TRANSITIONS — Kevin Cameron is now director of federal government affairs at the American Land Title Association. He previously was director of advocacy and strategic engagement at the National Multifamily Housing Council. … Christian Vitek is now deputy press secretary for New York Gov. Kathy Hochul. He most recently was a digital strategist at Mothership Strategies. … Trent Morse is now SVP at Mercury Public Affairs. He most recently was campaign manager for Tudor Dixon’s Michigan gubernatorial campaign, and is a Trump administration alum.

… Sen. Bill Cassidy (R-La.) announced some staff changes: Molly Block is returning as comms director, Joe Ramallo is moving up to press secretary and Ty Bofferding is now comms director for the Senate HELP Republicans. Block most recently was comms director for Sen. Kevin Cramer (R-N.D.). … Reilly Knecht is now senior account executive at AdFero. She most recently was studio director at the NRSC. … Naofa Noll is now director of operations for Rep. Carol Miller (R-W.Va.). She most recently was director of external relations at the Krach Institute for Tech Diplomacy at Purdue.

HAPPY BIRTHDAY: Ohio Gov. Mike DeWine … Gautam Raghavan of the White House … Allison Price … DOT’s Jessie Torres Perkins … WSJ’s Nick Timiraos … POLITICO’s Russell Vea … Ally Flinn of the Cook Political Report … John Solomon … Jeff Hauser … former Reps. Tom Davis (R-Va.), Nancy Johnson (R-Conn.), Carolyn McCarthy (D-N.Y.) and Rodney Davis (R-Ill.) … Nick Lanyi … Allison Biasotti of Senate Majority Leader Chuck Schumer’s office … Caroline Anderegg … Competitive Enterprise Institute’s Christine Hall … Danielle Melfi … Niskanen Center’s Matthew La Corte … Walter Ludwig of Indigo Strategies … Josh Galper (51) … Kristen Grimm of Spitfire Strategies … former CIA Director George Tenet (7-0) … former Pennsylvania Gov. Ed Rendell … David Bauder … Andrew Mills … Patrick Ottenhoff … David Simas of the Obama Foundation … Alexis Bataillon … Mimi Mager … Pedro Ribeiro … Mandi Merritt Risko of FTI Consulting

Send Playbookers tips to [email protected] or text us at 202-556-3307. Playbook couldn’t happen without our editor Mike DeBonis, deputy editor Zack Stanton and producers Setota Hailemariam and Bethany Irvine.

Correction: Wednesday’s Playbook misidentified the organization that awards the Paul Miller Washington Reporting Fellowship. It is the National Press Foundation. It also misidentified the name of the Disney castle inspired by Germany’s Neuschwanstein Castle. It is the Sleeping Beauty Castle.