- Two special U.S. House elections Tuesday
- Tariff day on Tuesday
- House and Senate face Budget Reconciliation decisions
- Debt ceiling must be raised
The political world is looking at the special election to be held on Tuesday to fill the seat of Republican House Representative Mike Waltz, who left Congress to serve as President Trump’s national security advisor. The seat is for Florida’s sixth Congressional district, which went Republican in 2024 with Waltz getting over 66% of the vote over his Democratic opponent. However, recent polling has shown that the race is closer than anyone expected and that the safe Republican district could send a warning signal to Republicans if the results are close, or in the seemingly unlikely scenario that the Democratic candidate wins.
There is a second House race on Tuesday in Florida’s first Congressional district. This vacancy was created when former member Matt Gaetz left Congress with a cloud over his head. However, last November, Gaetz got 66% of the vote and recent polling shows it might safely go to Republican on Tuesday.
The House with the current four vacancies is divided 218 Republicans to 213 Democrats. Two recent Democratic deaths have created two vacancies in the safe Democratic seats, and there are the two Republican vacancies that will be filled this week. The precarious narrow Republican majority led Trump last week to withdraw his nomination of upstate New York Member Elise Stefanick to be the U.S. Ambassador to the United Nations.
With key parts of the president’s agenda set to be passed on party line votes, the White House is concerned with any narrowing of the razor-thin Republican majority. With tough votes on the debt ceiling and spending cuts coming up in coming months the Republicans will need every member they can get. All eyes in Washington will be on Florida’s sixth district on Tuesday night. A loss in this strong Republican seat would send a chill down the Republican Party.
The political world on Tuesday is also watching the race in Wisconsin to fill a seat on the state’s Supreme Court. The Court is currently divided 5 to 4 for liberal justices. Elon Musk is leading the campaign to flip the Court seat. Musk was up in Wisconsin the past weekend and throwing his financial resources into the race. Wisconsin flipped to give Trump a narrow win last year and the Court seat could be another sign of how the early days of Trump 2.0 are going with voters.
Tariffs
Trump has labeled Wednesday, April 2, as Liberation Day, as he announces reciprocal tariffs against friends and foes alike that tariff U.S. products entering their markets. Most observers are hoping that this is part of a Trump negotiating tactic and won’t cause wide disruptions in the economy, but risks lie ahead as Liberation Day arrives.
Last week, the president unsettled markets when he announced a 25% tariff on imported cars and parts. These new tariffs will become effective this week and add to the uncertainty the tariff policies create for the economy and markets.
Reconciliation and debt ceiling
The House and Senate are trying to agree to the framework for approving the president’s program through the Budget Reconciliation process. The first step is for both Chambers to approve a rough outline in the form of a Budget Resolution. The House and Senate are far apart in their vision for the resolution. Over the weekend, there were reports that the Budget Resolution will merely punt the issues where differences exist and wait for the final legislation to make the big spending, reduction, and tax decisions.
In addition to the president’s program that leaders want to put into the Budget Reconciliation bill, there is a growing awareness that the Reconciliation Bill may be the best legislative vehicle for increasing the debt ceiling. That has always been a tough vote for fiscally conservative members of the House and Senate, as it recognizes their failure to restrain government spending, and indeed, there are some members who have never voted to increase the ceiling. However, with a paper-thin margin in the House some of these “no” always members will likely have to vote “yes” to increase the ceiling.
Last week, the Congressional Budget Office estimated that the ceiling may not need to be increased until August or September; but they added the caveat that a shortfall in government revenues may move the date forward. In Washington jargon, the date when the ceiling is reached is called the X date. This date is officially determined by the Treasury Department, and to date, the department has not issued any guidance on the X date. This is going to be a very significant issue in the coming weeks, and Trump will need to use all of his leverage to get this past the finish line.
