- Fed day approaches
- As does ACA deadline
- Foreign policy decisions
With Congress out and President Trump heading to Mar-a-Lago for Thanksgiving, it is expected to be a slow week in Washington. That comes after a period of tensions highlighted by the overwhelming votes to release the Epstein files, resignation of Representative Marjorie Taylor Greene, and a back and forth between the president and some members of Congress over military duty of follow the law. It seems like all sides may benefit from a holiday cooldown.
Fed Action
When officials return to Washington, focus is likely to fall on the Federal Reserve. The rate setting Federal Open Markets Committee (FOMC) is scheduled to meet on Dec. 9-10. While Chair Jerome Powell has been silent on his views, there has been increased speculation on what action the central bank may take.
Last week, John Williams, the New York Fed President and the only regional president with a permanent seat on the FOMC, spoke up indicating that a quarter-percentage point cut at the December meeting may be appropriate. This was in the wake of several other FOMC members hinting that it may be time to pause the current rate-cutting cycle. Odds on Fed action have moved back and forth on cut versus holding the line. Fed policy has also been complicated by the lack of timely economic data caused by the government shutdown.
While Powell has been able to find consensus and have unanimous votes, recent meetings have seen the emergence of some divisions. Trump’s most recent appointee, former Economics Adviser Stephen Miran has voted to cut rates by a half-percentage point rather than the majority favoring a quarter-percentage point. And it’s worth noting that at the October meeting, Kansas City Fed President voted to hold rates steady. Market watchers will be looking for more clues on the policy direction in the days leading up to the Dec. 10 decision.
Congress
When Congress returns, they will only have 20 days to act on the Senate agreement. That was part of the CR reopening the government to have a vote on the expiring ACA/Obamacare subsidies that assist 40 million Americans in getting health insurance. If a healthcare agreement is going to become law, it will also need to be approved by the Congress and signed by the president. Over the weekend, there were reports that Trump is working on a compromise ACA proposal.
The speaker will also have to deal with an increasingly reduced majority. With the current lineup, the House is 219Rs to 213Ds, along with three vacancies. When Greene’s resignation becomes effective on Jan. 5, the Republican majority will be reduced to only two seats. This small majority creates big headaches for leadership as every member has significant influence by threatening to vote against the majority position.
Two lessons from my experience working on Capitol Hill. First, a call to the leadership expressing disagreement on a close vote gives individual members increased leverage. Second, Congressional breaks can make a significant impact on members, as they are home and interacting with their constituents. They will return with a better understanding as to how voters are thinking of the healthcare issue and the extent of the urgency to act.
Foreign Policy
In the coming days, the White House will be in the spotlight as talks progress on the president’s desire to bring peace to Ukraine, and attack drug smugglers centered in Venezuela. During the slow holiday news week, these issues could get a great deal of attention as strategic decisions are made.
Reactions to the foreign policy decisions of Trump have not always followed traditional party lines with both Republicans and Democrats split on support for Ukraine and the possible conflict with Venezuela over the inflow of drugs from the Caribbean. Congress out of town gives the White House more of a space to act without members of Congress rushing to the microphone to express opposition.
