Washington Update - January 9, 2022

Billy Moore    Dc2

At midnight Friday, Representative Kevin McCarthy was elected Speaker of the House on the 15th ballot, having persuaded six of his Republican opponents to abstain and lower the threshold of his majority. McCarthy made multiple concessions to his opponents to win their neutrality, prompting analysts to forecast he will be a weak speaker.

Historically, most weak speakers yield power to strong committee chairmen, but McCarthy’s concessions also weaken the power of the leaders of the House committees on Rules, Ways and Means, Appropriations, and Armed Services. The net result may be a power allocation similar to parliamentary coalition governments around the world where factional groups compromise on policy preferences to govern jointly. Speaker McCarthy will have to demonstrate exceptional leadership skills to unify the Republican coalitions to move legislation through the House. 

McCarthy’s first test will come Monday when the House votes to adopt rules for the 118th Congress. One centrist Republican, Texas Representative Tony Gonzalez, has already announced his opposition to the package. 

Bigger tests on funding government and raising the debt limit will occur this summer and the economic and political consequences will be much greater. Avoiding failure probably will require a coalition combining the votes of moderate Republicans and Democrats. Empowering Democrats would probably earn McCarthy the parliamentary equivalent of a no-confidence vote, a motion to vacate the chair, that can be demanded by any member.

In contrast, the Senate convened last week, swore in new members, and adjourned until the week of January 23. Senate Republican Leader Mitch McConnell joined President Joe Biden in Kentucky Wednesday to announce a major infrastructure project.

The economy added 223,000 jobs in December. The data fails to clarify whether the Federal Reserve will move to increase interest rates 0.25 or 0.50 percent when it meets January 31-February 1.