This past week saw the framework established for the new Congress which gets sworn in on January 3. Speaker Nancy Pelosi ended her 20 years as leader of the House Democrats serving as the first, and only, woman Speaker. Much has been written about the role she played in managing what at times was a narrow majority as she led the effort to get through Democratic initiatives ranging from Obama Healthcare to this year’s infrastructure and CHIPS packages.
With Pelosi’s departure both parties in the House will be led by a new generation of leaders. Kevin McCarthy the Republican Leader and likely next Speaker is 57, and Nancy Pelosi will be succeeded by New York House Member Hakeem Jeffries who is 52. As President Kennedy said in his inaugural speech, “the torch has been passed to a new generation of Americans.”
In the Senate, Democratic Leader Chuck Schumer has no opposition and Republican Leader Mitch McConnell easily beat back a challenge from Florida Senator Rick Scott.
The other big political news was the early announcement by former President Trump of his bid for the Republican nomination in 2024. It was the earliest official entry into the Presidential race in recent political history. Florida Governor Ron Desantis is viewed as his most dangerous challenger which has a touch of irony as back in 2015 former Florida Governor Jeb Bush was viewed as his chief rival. Will President Trump be able to deal with DeSantis as handily as he defeated Jeb Bush?
Congress will take next week off for Thanksgiving but will return November 28 for a busy lame duck session. The highest priority will be approval of a government budget as the current Continuing Resolution (CR) expires on December 16. Congress must pass some funding bill in order to avoid a government shutdown just a week before Christmas. Congress will have two options: one is to pass a so-called Omnibus Spending Bill that funds the entire government through the current fiscal year that runs until October 1, 2023 or pass another short-term CR that will run until February or March of next year. The decision is up to Republicans as Senate Republicans could threaten to filibuster the Omnibus bill if they want to have the new House Republican majority play a larger role in this year’s funding decisions.
Next week will see headlines about Fed policy when the minutes from the November FOMC meeting are released on Wednesday and may give a read on Fed thinking before their next meeting December 14/15.