Washington Update - January 8, 2024

Billy Moore    Dc2

The most important legislative accomplishments of the first session of the 118th Congress are negative: not defaulting on government debt or shutting down government. Senate successes include confirming hundreds of presidential nominations on which the cooperation of the House is unnecessary.

As Congress convenes for the second session, the prospects for 2024 accomplishments are dwindling. Three immediate goals involve appropriations: avoiding government shutdowns on January 19 and February 2 and passing a supplemental funding package for Ukraine, Israel, Taiwan, and border security. A late Sunday bipartisan agreement on top-line funding amounts for regular appropriations improves the chances of avoiding a shutdown, while the prospects of the supplemental package being held hostage for Republican demands for immigration policy changes are improved, depending on a potential agreement on immigration reforms. 

The Sunday agreement endorsed by the bipartisan congressional leadership and President Joe Biden features spending at the level agreed to last May and includes few of the items required by conservative Republicans, such as closing the border or social issue amendments approved last summer by the House. Speaker Mike Johnson points to the agreement’s $16 billion in spending cuts while Democrats tout the overall spending level of $1.59 trillion. Conservative opposition forecasts appropriations bills passing the House with overwhelming Democratic support under suspension of the rules (replicating the process of prior House accomplishments) and bipartisan Senate majorities. 

The deal is significant because it makes a government shutdown very unlikely. Although many House Republicans believe a shutdown would be a political winner, it would more likely prove a political loser for Republicans. The danger of failure of the supplemental package is significant damage to American reliability as a partner fighting international terrorism and Russian aggression.

The U.S. added 216,000 jobs in December, probably keeping the Federal Reserve on track for three interest rate cuts this year.