Washington Update - January 16, 2022

Billy Moore    Dc2

New House Speaker Kevin McCarthy had a successful first week on the job, with the Senate out of session and President Joe Biden under a new investigation. 

McCarthy was able to muscle his House Rules package through the chamber and pass legislation on mostly party-line votes limiting abortion procedures and rescinding appropriations for the Internal Revenue Service. He won bipartisan support for limiting sales from the Strategic Petroleum Reserve and investigating China. Like the Senate, the House will not be in session this week.

As the week ended, Treasury Secretary Janet Yellen informed congressional leaders the government would reach its borrowing limit January 19 and warned the government could be unable to pay its bills by early June without legislative action to increase the debt ceiling. Speaker McCarthy has promised not to raise the debt limit without major spending cuts. The most likely outcome is a bipartisan agreement between Senate leaders that would win support from House Democrats and Republican moderates, breaching the Republican House coalition and perhaps endangering McCarthy’s hold on the speaker’s chair.

Between now and June, McCarthy will seek to strengthen his position with House conservatives by pushing investigations into the Biden Administration, especially now that the President is the subject of a special prosecutor probe into his storage of classified papers.

The rolling revelations that President Biden improperly stored classified papers from his vice presidency put Washington’s hypocrisy on full display: Republicans were outraged at behavior they previously excused by former President Donald Trump and Democrats reversed themselves in the opposite direction.

Consumer prices fell 0.1 percent in December, the first monthly decrease since May 2020 and the sixth consecutive month of inflation easing. The data suggests the Federal Reserve Board will slow its pace of interest rate increases in two weeks, most likely with an boost of 0.25 percent.