With help from Oriana Pawlyk and Tanya Snyder
— Southwest Airlines says its nightmare Decembercould cost as much as $825 million.
— McCarthy claims the speakershipafter concessions to conservatives.
— Drone manufacturer DJI is banned from CESafter being blacklisted by the U.S. government.
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LOTS OF DOUGH: Southwest Airlines in a Friday SEC filing said it canceled more than 16,700 flights between Dec. 21 and Dec. 31, a disruption that will cause the company a revenue loss of $400 to $425 million in the fourth quarter of 2022. And combining the revenue loss with money spent on reimbursing customers, doling out rewards points and additional compensation for employees will end up costing the airline $725 million to $825 million, Southwest said.
FEDERAL RESPONSE INCOMING: DOT Secretary Pete Buttigieg has pledged that the federal government will ensure that Southwest meets its obligations to passengers, including providing refunds, as some passengers who lost luggage over the holidays are still waiting for their bags to arrive and refunds could take weeks to process. A group of House Democrats is calling on DOT to provide stronger consumer protections, while Senate Democrats have said they plan to call hearings on the matter (expect similar hearings from House Republicans in the coming months). This year’s FAA reauthorization bill will be a likely vehicle for additional consumer protection provisions.
COUGHING UP MORE: And, as a reminder, Southwest was the first U.S. airline to issue a dividend after a congressional ban on the practice expired last year. The dividend will be paid out to shareholders at the end of this month.
GAVEL SECURED: Rep. Kevin McCarthy (R-Calif.) is finally House speaker after narrowly winning a majority on the 15th ballot on early Saturday morning, and he was forced to make significant concessions to appease those casting anti-McCarthy votes that will make his speakership vulnerable to challenges and give the dissenters more influence over House GOP, Anthony Adragna, Nicholas Wu, Meredith Lee Hill and Marianne LeVine report. McCarthy flipped some dissenting votes in earlier rounds of voting, but finally claimed the gavel after GOP Reps. Andy Biggs (Ariz.), Lauren Boebert (Colo.), Eli Crane (Ariz.), Bob Good (Va.), Matt Rosendale (Mont.) and Matt Gaetz (Fla.) voted present.
BUT AT WHAT COST? McCarthy’s victory, beyond allowing the 118th Congress to begin in earnest, comes with changes that are designed to empower House conservatives who saw an opportunity to leverage a slim GOP majority for concessions after leadership failed to flip more seats in the midterms. The House GOP will present a budget that balances over the course of 10 years, capping discretionary spending at fiscal 2022 levels or lower. The concession has defense hawks worried about automatic defense spending cuts, though they aren’t necessarily mandated as part of the deal.
CUTS, CUTS, CUTS: The deal also includes a plan from Rep. Thomas Massie (R-Ky.) that would have the House pass a stopgap spending bill that includes 98 percent of current funding in the event of a government shutdown, with the idea of triggering automatic cuts to incentivize the House to finish appropriations work. Conservatives will also hold three seats on the House Rules Committee as part of the deal, potentially giving some of the McCarthy holdouts a chance to tank legislation before it gets to the floor.
BACKROOM DEALS? McCarthy also sought to mollify his supporters over concerns that some of the holdouts were seeking certain committee assignments or gavels, though leadership will have the final say over who gets what. In transportation world, Rep. Sam Graves(R-Mo.) will lead the House Transportation Committee as he has no opposition for the post. The committee can begin staffing up and determining oversight priorities now that the speaker fight has been resolved (for the time being).
Finally, a reminder that any attempt to revert to fiscal 2022 spending levels or up-or-down votes on single-issue bills that are of importance to members who initially rejected McCarthy are likely to go nowhere with a Democratic-controlled Senate.
BLACKLISTED: DJI, the world’s largest manufacturer of commercial drones, was missing from the exhibitor lineup at the 2023 Consumer Electronics Show in Las Vegas this weekend due to the company’s blacklisted trade status by the U.S. government, Oriana reports. A spokesperson for the Consumer Technology Association, which is in charge of the conference, said companies on the Department of Commerce’s entity list “are not allowed to exhibit” at the show. Drone blog DroneXL first reported the news.
The department moved to formally add China’s DJI to its “entity list” in December 2020, citing its connection to “human rights violations in China.” U.S. companies are restricted from doing business with those on the list.
GOVERNOR IRE: After sounding the alarm over Florida Gov. Ron DeSantis’ migrant flights, big-city Democratic mayors are now upset with a member of their own party: Colorado Gov. Jared Polis. New York City Mayor Eric Adams and Chicago Mayor Lori Lightfoot demanded Saturday that Polis stop busing asylum seekers to their cities, saying they are “over capacity,” Kierra Frazier and Shia Kapos report. The mayors said Chicago has received nearly 4,000 migrants since Aug. 31 while New York City has seen more than 36,000 asylum seekers arrive as of Jan. 4.
“We respectfully demand that you cease and desist sending migrants to New York City and Chicago,” Adams and Lightfoot wrote in a letter to Polis. “Since December of 2022, Chicago and New York City have received hundreds of individuals from Colorado.”
GETTING THEM GOING: Polis told POLITICO in an earlier interview that around 70 percent of migrants arriving in Denver have final destinations elsewhere in the country, including New York, and that his office was working with Denver officials to help them on their way.
Jason Rano has joined the RV Association to lead its advocacy efforts, replacing the retiring vice president of government affairs, Jay Landers. Rano was most recently senior partnership development manager at Rivian. (h/t POLITICO Influence)
Joanne Rotondi has been named the practice area leader for Hogan Lovells’ transportation regulatory practice.
— “Automakers are cautiously optimistic for a 2023 rebound after worst new vehicle sales in more than a decade.” CNBC.
– “Southwest starts on reputation repair after cancellations.” The Associated Press.
– “’We threw ourselves to the floor’: Mexican passenger plane caught in cartel crossfire.” Reuters.
— “Treasury interim guidance: What it is and what it means for EV adoption.” ZETA.
— “Widening highways doesn’t fix traffic. So why do we keep doing it?” The New York Times.
— “Travelers rush to take advantage of China reopening.” The Associated Press.
— “How McCarthy got here: From Young Gun to Trump ally.” POLITICO.
— “Why you might want a heat pump in your electric car.” The Washington Post.
— “Love in the TSA line, Cher in a mobile lounge and other Dulles tales.” The Washington Post.
— “Subway train collision in Mexico City kills 1, injures 57.” The Associated Press.
— “Once-vibrant gateway to U.S. capital falls on hard times. Some hope to fix it.” The Washington Post.
