Fed decision and shutdown deadline this week in DC
- FOMC meets Tuesday and Wednesday
- Wednesday 2:30 Powell presser
- Next shutdown deadline Friday at midnight
- DoD, HHS, Homeland Security all need action
- The politics of TikTok are complicated
This Tuesday and Wednesday the Fed’s Federal Open Markets Committee (FOMC) meets to determine interest rate policy. Chair Powell and most of the “Fed speak” has indicated that there will be no changes in rates at the March meeting.
At the end of the meeting at 2:00pm on Wednesday the Board releases an official statement which gives the rate policy of the Committee. At 2:30 Chair Powell conducts his always important press conference. What makes the Chair’s presser so interesting is that he knows that three weeks later the minutes of the meeting will be released, and any inconsistencies between the Chair’s post meeting comments and the minutes will obviously stir issues for Powell and raise questions at the next post meeting press conference. This factcheck plays a critical role in the comments that the Chair makes at the presser.
Shutdown politics
Friday at midnight is the next government shutdown deadline for the six spending areas that were not approved two weeks ago. This batch of bills includes the largest and potentially the most controversial: DoD, Labor/HHS, State and Homeland Security. According to staff who have been working on these bills over the weekend there are two departments that face the most difficulty: Homeland Security and the State Department.
With respect to State Congress must decide whether to resume funding for the UN Relief and Work Agency (UNRWA) which funds refugee programs around the world. The US stopped funding for UNRWA when Israel alleged that workers from the agency participated in the October 7 Hamas attack on Israel. The agency supports refugees around the world and plays an important role in helping Palestinians outside of Gaza. Congress may turn to other organizations to distribute humanitarian aid to refugees.
Homeland Security unsurprisingly is a challenge as Republicans and Democrats jockey over immigration policy. Issues range from border wall construction to more agents to deal with the inflow of immigrants. Democrats want money included to help urban areas house migrants who are released after crossing the border illegally. There were reports over the weekend from staff and Members working on the details for the Homeland Security budget will just punt and have the Department operate under a Continuing Resolution (CR) that will last through the current fiscal year that runs until October 1.
The leadership on both sides of the aisle believe that a shutdown hurts them politically and don’t want to be blamed, hence the consensus is that a shutdown will be avoided, but disputes over the border remain the center of partisan disputes.
The politics of TikTok
Last week saw the House pass TikTok ban legislation on a strong bipartisan vote of 365 YES to 65 NO. But what was interesting was the coalition that opposed the legislation. When I speak on the politics of DC I often make the point that on some issues the political spectrum can be more of a circle than a straight line with the left and right meeting; the TikTok ban had such a coalition and now the bill faces a tougher road in the Senate.
Of the 65 NO votes 15 were Republicans and 50 Democrats. Those voting NO ranged from Florida Representative Maxwell Frost who at 27 is the youngest Member of the House to his fellow Florida Representative Matt Gaetz who led the overthrow of Speaker McCarthy. Voting no were Andy Biggs (R,AZ) a leader of the conservative Freedom Caucus and AOC (D,NY) a progressive Democratic leader.
Adding to the unusual partisan split was the change in position by former President Trump who came out against the TikTok ban, while President Biden has vowed to sign the bill if it reaches his desk.
The political map for Senate Democrats is very precarious and young voters will be critical if they are to have any chance of keeping their Senate majority. Leader Schumer has been very quiet about his intent. The banning of TikTok could also have ramifications with respect to US/China relations. It is a fascinating example of how policy and governing coalitions in Washington don’t always follow a predictable trail.
