Key Takeaways
  • President signs bill avoiding partial shutdown
  • March 22 next shutdown deadline
  • FOMC rate decision March 20
  • More primaries Tuesday

Last Friday the Senate passed a so-called minibus (versus an omnibus) that had spending for eight government departments.  Unlike the past few bills that were short-term Continuing Resolutions (CRs), last week’s bill funded eight departments and lasts through the current fiscal year that runs to October 1.  The eight budgets in the minibus were: Veterans Affairs, Agriculture, Interior, Transportation, Housing, Justice, Commerce and Energy.  In addition to these departmental bills the legislation contained 6000 earmarks that had been requested by Members of the House and Senate totaling $12B in spending. Earmarks have been a bone of contention since the days I worked in Congress.  While some hate them as “pork barrel” politics, others believe it is better to have local spending determined by local officials versus government bureaucrats. 

The Senate Republicans have a non-binding rule that earmarks should be avoided, yet 17 Republican Senators got earmarks for programs in their states to get money.  Senator Rick Scott of Florida led the effort to try to take out the earmarks.  However, if the amendment had passed it likely would have caused a government shutdown over the weekend as it would have required the House to return to DC and pass the amended legislation. The Scott amendment failed on a vote of 64 to 32, with 4 of the Republican Senators asking for the earmarks voting for the amendment.

In the end the Senate passed the bill 75 to 22.  This was after the House had passed the bill on Thursday on a vote of 339 to 85.  In the Senate all the NO votes were cast by Republicans and in the House 83 of the 85 NO votes came from the most conservative Members of the Republican conference.

After Senate approval the bill was sent to the White House where President Biden signed it Saturday morning.

The next government shutdown deadline is in two weeks on March 22.  This bill will pose a bigger political challenge to get Republican support as it has DoD, HHS and Homeland Security. A group of conservative Republicans wants to add provisions to restrict abortions by military personnel, reduce spending on some social programs, and include provisions aimed at the policies at the border.  It may be harder for the Speaker to build a bipartisan majority with the Democrats on some of these issues.  The clock is ticking and there will be many meetings this coming week to find a pathway that can get these budgets passed and avoid a shutdown.

Fed day approaches

The Tuesday announcement of February CPI will be one of what is likely to be a rash of stories this week speculating on the course of interest rate policy as the Fed’s FOMC rate setting meeting is now just a week away.  As I have written of all the economic measures that are published in my DC days the one that got the most focus was CPI. The FOMC March meeting is the 19th and 20th with the 20th having the official announcement and the Chair’s very important press conference.

Last week Chair Powell gave his semi-annual testimony before the House Financial Services Committee and the Senate Banking Committee.  He pretty much stuck to his script of recent weeks leaving all options open for March, but cuts later in the year seemed to be a likely policy alternative.

Presidential race

While last week’s primaries all but clinched a rematch between President Biden and former President Trump there are still several states to hold races.  This week Georgia, Mississippi, and Hawaii will hold primaries on Tuesday.

Disclosures (show)

Stay up to date with the latest articles and business updates. Subscribe to our newsletter

Articles Read 1/2

🎁 Unlock 1 extra article by joining our Community!

Stay up to date with the latest articles. You’ll even get special recommendations weekly.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)