House Republicans Release FY 2025 CR Measure; Tight Votes Expected

Trump’s overall economic, trade game plan

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March 08, 2025 03:32 PM

WEEK AHEAD_PF_FINAL.jpg — The Week Ahead

The Week Ahead: March 8, 2025

— Trump’s overall gameplan. CNBC’s Steve Liesman said after an interview with Treasury Secretary Scott Bessent last Thursday that Bessent had been “calm and stabilizing and cogent ... with all of his answers.” Liesman said, “There’s a lot of concern out there — a lot of turmoil, a lotta chaos. Tariffs are on, tariffs are off — tariffs are partly on, tariffs are partly off. You don’t know what’s going on. People are desperate for a little stability out there.”

Bessent showed the administration’s vision when he told the Economic Club of New York (link) that Trump aims for both rebalancing the international economic system and “the re-privatization” of the U.S. economy. “The president has already begun a campaign to rebalance the international economic system ... to advance the interests of the American people,” Bessent said. He spelled out three pillars of Trump’s America First agenda that are all “linked by the primary vision of this Administration, that every decision and policy of the United States Government should serve the American people":

1. “Responsibly deregulating the financial sector to accelerate what I call the re-privatization of the economy.”
2. Bessent defended Trump’s tariffs as part of an America First Trade Policy designed to reorient international economic relations: “To the extent that another country’s practices harm our own economy and people, the United States will respond.”
3. Economic security and national security “are inseparable. At Treasury, our unique financial tools are a critical component of U.S. foreign policy.”

— Early Sunday morning, the United States — minus Hawaii and Arizona — will enter daylight saving time, the annual tradition of springing forward one hour. Twenty states have passed legislation or resolutions in the last seven years supporting year-round daylight saving time, according to the National Conference of State Legislatures. In December, President Trump said Republicans would push to eliminate daylight saving time, calling it “inconvenient” and “costly.” Trump in recent days said he won’t push for eliminating daylight saving time or making it permanent, as “it’s a 50/50 issue.”

— Canada’s liberal leadership race nears conclusion. Today (March 9) Canada’s Liberal Party will select a new leader to replace Prime Minister Justin Trudeau, who announced his resignation in January. The frontrunners are former central bank chief Mark Carney and ex-deputy prime minister Chrystia Freeland, with Carney leading in most polls. The winner will guide the party into anticipated spring elections, where a once-wide Conservative lead has narrowed amid tensions with the U.S. and criticism of Conservative leader Pierre Poilievre.

Carney, a former Goldman Sachs executive and ex-Governor of the Bank of Canada, is poised to become Canada’s next Prime Minister as the frontrunner for the Liberal Party leadership. Known for comparing former President Trump to the Harry Potter villain Voldemort, Carney has positioned himself as a strong opponent to U.S. trade threats. With polls showing a tight race against the Conservatives, Carney’s firm stance on retaliatory tariffs and his call to “not bow down to a bully” have resonated with Canadian voters. Should he win, Carney could call a snap election to solidify his mandate. Canadian elections are usually held every four years — with one currently set for October — but the Prime Minister can choose to dissolve Parliament and call a snap election any time before then.

— China strikes back: Tariffs on Canadian goods in response to U.S. trade pressure. China announced steep tariffs of up to 100% on Canadian canola, peas, pork, and seafood, effective March 20, in retaliation for Canada’s tariffs on Chinese electric vehicles, steel, and aluminum. The move is seen as a warning to Canada and Mexico to resist U.S. demands to raise tariffs on Chinese goods under USMCA trade agreements. China’s response highlights the ongoing trade tensions and its strategic influence in global markets.

WASHINGTON FOCUS

GOP unveils stopgap bill through September to avoid government shutdown, but votes are uncertain. House Republicans on Saturday introduced a 99-page stopgap bill (link) aiming to avert a government shutdown by midnight Friday, with President Trump’s support. However, tight margins in both chambers of Congress mean GOP leaders may need Democratic votes to pass the measure. Government programs have been running on stopgaps since last October, the start of fiscal year 2025. House Republicans are expected to take swift action on the legislation, eyeing a floor vote on the measure as soon as Tuesday, and then jam the Senate by adjourning the House and putting the onus on Senate Democrats. Referring to the Senate minority leader, Johnson argued on Friday that any lapse in government funding would be “a Chuck Schumer shutdown” if Democrats don’t help Republicans clear the Senate’s 60-vote threshold.

The House Republicans’ plan, crafted by Speaker Mike Johnson (R-La.) in coordination with the White House, trims spending from the 2024 fiscal year by $13 billion — the plan would allow for moderate increases to defense funding of about $6 billion above fiscal year 2024 levels, though below levels previously agreed to for fiscal year 2025 under a bipartisan spending-limits deal struck in 2023. Non-defense spending would drop by about $13 billion. Th measure would increase funding for veterans healthcare and housing, and funds the WIC program. Republicans say the bill also reflects a request to rescind IRS funding. The spending package does not contain an expected bipartisan provision that would reverse cuts to doctors’ pay in Medicare. Physicians groups have argued that the reductions are based on a formula that doesn’t account for rising costs of care. Earmarks are not in the package.

The spending reductions would not touch benefits like Social Security, Medicare and Medicaid. It also does not include disaster relief for fires in California earlier this year or funds legislators take back to their districts for community projects. It also does not address the debt ceiling issue.

“All Republicans should vote (Please!) YES next week,” President Donald Trump wrote in a Truth Social post shortly after the bill was released. “I am asking you all to give us a few months to get us through to September so we can continue to put the Country’s “financial house” in order. Democrats will do anything they can to shut down our Government, and we can’t let that happen.”

The bill proposes to fund the government through September 30, boosting defense spending while cutting nondefense programs. Democrats had previously indicated that any spending changes to defense and non-defense spending would need to go in the same direction, either both increasing or both decreasing. Republicans inserted changes to boost funding for Immigration and Customs Enforcement (ICE), to allow the military to start new projects, and to allow more spending on veterans health programs, among others. The measure would boost ICE funding by about $440 million compared to the previous level, following a request by the White House for more money. Defense spending would see a slight increase and nondefense funds would drop, compared to the fiscal 2024 levels. The measure would also allow a funding increase to support a pay boost for junior enlisted members of the military.

IRS cut, earmarks out. The measure would allow the rescission of Internal Revenue Service funds to automatically double. Lawmakers agreed in 2023 to claw back $20.2 billion of the $80 billion in IRS funds from Democrats’ Inflation Reduction Act (IRA/Climate Act). Since then, lawmakers have relied on stopgap funding measures that repeat the same directive, bringing the total to $40.4 billion in rescinded IRS funds under Saturday’s proposal.

Lawmakers expect to avoid an automatic 1% spending cut that served as a penalty for relying on stopgap measures for too long. Congress enacted legislation to trigger a cut to agency budgets if lawmakers rely on a continuing resolution past Jan. 1. But it’s up to the White House to order those cuts at the end of April, and lawmakers have said there’s an agreement to treat the full-year stopgap measure as a legitimate appropriations bill.

Lawmakers would miss out on $15.9 billion in earmarked funds for local projects. House and Senate lawmakers included those funds in their fiscal 2025 appropriations bills, which have not been enacted. That money— for local law enforcement, water infrastructure, and other local priorities — aren’t included in stopgap funding measures.

The bill includes an additional $6 billion for the Department of Veteran’s Affairs toxic exposure fund, matching what the Trump administration requested for the account. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), would also get a boost of $567 million under the plan which also matches the administration’s request. Democrats say as much as $700 million more could be needed to ensure there are no waitlists.

The stopgap would cut $162 million from the General Services Administration’s funding for federal buildings, in line with the White House’s request for “reduction and consolidation of space.”

Some Republicans remain opposed, and Democrats criticize the bill as a “power grab for the White House.” Democrats will hold a final caucus-wide discussion Tuesday to finalize how they will proceed. House Democrats are circulating a document (link) detailing why they should vote against the GOP’s yearlong plan. Some of the issues the Democrats cited in the document include:

EPA – funding levels within the EPA would not be specified, and the administration could eliminate funding for climate change, Environmental Justice, and PFAS research.
Corps of Engineers’ Civil Works Projects – all project funding levels will be at the discretion of the administration, including $7 billion for over 1,000 projects throughout the country that would otherwise be directed by Congress. These projects keep commerce safely flowing on our waterways, manage flood risk, and restore ecosystems.
Renewable Energy – funding within the Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement could be eliminated.
Department of Energy’s Climate-Related Energy and Science Programs – a full-year CR would not provide guidance to the $15 billion in climate-related funding that will then be at the whim of the administration.
USDA Agricultural Research Service – All funding levels will be at the administration’s discretion. This includes nearly $2 billion in research priorities across the country that Congress would cede control of over to the administration.
Department of Commerce – the Trump administration would have broad discretion to eliminate individual programs of the Economic Development Administration and the National Oceanic and Atmospheric Administration (NOAA). This includes individual NOAA programs impacting coastal and Great Lakes areas, as well as funding for climate change research and for improvements in the forecasting of severe weather.
Wildland Firefighter Pay – the Department of the Interior and U.S. Forest Service would be $130 million short of funds necessary to continue pay reforms for wildland firefighters.
Disaster Relief Fund (DRF) – the DRF will not be able to get through the fiscal year remaining at CR levels and will need an influx of funding to address current and future disasters this fiscal year – especially with a pending hurricane season.

Even if it passes the House, at least seven Democratic senators would need to support it for final approval (Republicans have a 53-47 advantage). Just one Senate Democrat — Sen. John Fetterman (Pennsylvania) — has committed to voting for a year-long CR. “Never, never, never vote for a shutdown — ever,” Fetterman wrote on Friday. Senate Appropriations Vice Chair Patty Murray (D-Wash.) called the House Republican bill a “slush fund” that gives Trump and Elon Musk “more power to pick winners and losers.” She called instead for Congress to pass a “short-term” funding patch to buy time to finish bipartisan negotiations.

In the House, Speaker Johnson may have only one Republican “no” to spare. Rep. Thomas Massie (R-Ky.) already said he’s planning to vote against the bill, even without seeing the text. Rep. Ralph Norman (R-S.C.), a member of the House Freedom Caucus, said Elon Musk’s Department of Government Efficiency has changed everything. “I don’t like [continuing resolutions]. What’s changed is the DOGE commission is coming up with things that the American people are seeing,” said Norman. “So that’s why ... I’ll be voting for it.” Rep. Tim Burchett (R-Tenn.), who has also been an opponent of stopgap bills, is now willing to support a plan that keeps spending at 2024 levels. House Appropriations Committee Chairman Tom Cole (R-Okla.) doesn’t like stopgap bills, but has said it may be the best option with time running out on bipartisan negotiations for a larger spending deal. “I’m ruminating on it,” Rep. Andy Biggs (R-Ariz.) said.

Bottom line: Republican leadership is taking a risk in pressing on with a strategy panned by Democrats as a go-it-alone approach that undercuts a bipartisan spending-limits deal struck in 2023.

— Having a hard time keeping up with President Trump’s trade policy? You have a lot of company. Tariffs have come up a record 700 times during quarterly earnings calls for S&P 500 companies, according to a Bloomberg analysis of transcripts. Just consider the following events during the past week:

Commerce Secretary Howard Lutnick told a business broadcast that the threatened tariffs on Canada and Mexico would stick. Trump then announced a 30-day pause on 25% tariffs on Canada and Mexico. The current exemption covers all goods that comply with the U.S.-Mexico-Canada Agreement (USMCA) that Trump signed in 2020. White House officials said U.S.-based automakers made commitments to relocate manufacturing back to the U.S. — commitments that haven’t been confirmed by the automakers.
Trump doubled the China tariff rate to 20%.
White House Press Secretary Karoline Leavitt said there would be no exemptions for tariffs. “He really doesn’t like the word exemption,” White House National Economic Council Direct Hassett told reporters Friday. “If I walk in and offer an exemption, then I’ll probably get kicked out of the office. We’ll see how it goes.” But some exemptions were announced.
On Friday, Trump threatened a 250% tariff on Canadian dairy and timber. “Canada has been ripping us off for years on tariffs for lumber and for dairy products. 250% — nobody ever talks about that — 250% tariff — which is taking advantage of our farmers. So that’s not going to happen anymore,” Trump said Friday in the Oval Office. “They’ll be met with the exact same tariff unless they drop it, and that’s what reciprocal means. And we may do it as early as today, or we’ll wait till Monday or Tuesday, but that’s what we’re going to do. We’re going to charge the same thing. It’s not fair,” he added.
The U.S. will come up with one number to impose on each country under the reciprocal tariffs program coming April 2, trade adviser Peter Navarro said on CNBC. The number will reflect both the tariff and non-tariff barriers that a country has on the U.S.
White House National Economic Council Director Kevin Hassett said on Bloomberg TV that there’s no uncertainty when it comes to President Trump’s announcements. “I think in some sense that you’ve got quite a bit of clarity already. There’s no uncertainty. There’s going to be some tariff, it’s going to be reciprocal,” he said.
Trump claimed that India will significantly reduce tariffs on American imports, accusing the country of imposing “massive” trade barriers. “India charges us massive tariffs. Massive. You can’t even sell anything in India… They have agreed, by the way; they want to cut their tariffs way down now because somebody is finally exposing them for what they have done,” Trump said on Friday, as reported by ANI. India’s Ministry of External Affairs (MEA) acknowledged the ongoing negotiations but did not confirm any decision on tariff reductions. Of note: Tesla is lobbying for zero import duties as it prepares to enter the Indian market. India currently imposes vehicle import tariffs of up to 110%. The Indian government has historically been cautious about lowering import duties to protect domestic manufacturers. India and the U.S. are moving forward with discussions on a Bilateral Trade Agreement (BTA). India is expected to be hit hard by the like-for-like duties given the high tariffs it charges when compared with the U.S.

ECONOMIC REPORTS & EVENTS

Economic indicators and corporate earnings in focus this week. The coming week will offer critical insights into the U.S. economy with the release of key data points. The Consumer Price Index (CPI) on Wednesday is expected to show a 0.3% gain for February, with an annual increase of 2.9%. The Producer Price Index (PPI) on Thursday is projected to rise 3.3% year-over-year, slightly down from 3.5%, with a 0.3% monthly gain. Tuesday’s JOLTS report may reveal job openings increased to 7.75 million in January. The University of Michigan’s Consumer Sentiment Index, out Friday, is anticipated to dip to 63.3 in March from 64.7.

On the corporate front, Kohl’s is likely to announce a decline in fourth-quarter revenue, as demand for apparel and accessories remains weak. Investors will watch for strategic insights from new CEO Ashley Buchanan. Meanwhile, Adobe is expected to report strong first-quarter revenue growth, bolstered by AI-enhanced design tools.

KEY USDA REPORTS

Ag focus: USDA’s World Agricultural Supply & Demand Estimates will be released Tuesday, when China will also publish its monthly crops report. Malaysia will report monthly figures for palm oil stockpiles, exports and production during the week.

Of note: It will be interesting to see how USDA handles the Trump trade tariffs relative to its WASDE report.

Key USDA and other ag reports this week include (check this for links):

Monday, March 10:

Export Inspections
Price Reactions after Livestock Reports
Malaysian Palm Oil Board’s data on stockpiles, production and exports
Malaysia’s March 1-10 palm oil exports

Tuesday, March 11

Cotton Ginnings
Crop Production
World Agricultural Supply and Demand Estimates (WASDE)
Cotton: World Markets and Trade
Grains: World Markets and Trade
Oilseeds: World Markets and Trade
World Agricultural Production
China’s monthly CASDE crop supply-demand report
EU weekly grain, oilseed import and export data

Wednesday, March 12

Meat Price Spreads:
Dairy Monthly Tables
Wheat Data:
Price Reactions after Crop Reports
Turkey Hatchery
StatsCanada seeded area data for wheat, barley, canola and soybeans
Brazil’s Unica to publish cane crush, sugar production data (tentative)
FranceAgriMer’s monthly meeting

Thursday, March 13

Cotton and Wool Outlook
Feed Grains Database
Oil Crops Outlook
Feed Outlook
Wheat Outlook
Weekly Export Sales
North American Grain and Oilseed Crushings
Slaughter Weekly: A NASS report providing weekly statistics on livestock slaughter.
Brazil’s Conab to publish output, area and yield data for corn and soybeans

Friday, March 14

Honey
Hop Stocks
Peanut Prices
FranceAgriMer weekly crop conditions report
ICE Futures Europe weekly commitments of traders report
CFTC commitments of traders weekly report

KEY ENERGY REPORTS

Energy focus: The annual CERAWeek conference will bring executives from major energy companies and senior politicians to Houston through the week. The three most prominent oil forecasters — the IEA, OPEC and the EIA — will publish their monthly market outlooks.

Monday, March 10
· S&P Global CERAWeek, Houston (through March 14

Tuesday, March 11

S&P Global CERAWeek, Houston (through March 14)
EIA monthly STEO report
API weekly report on U.S. oil inventories

Wednesday, March 12

Genscape weekly crude inventory report for Europe’s ARA region
OPEC Monthly Oil Market Report
S&P Global CERAWeek, Houston (through March 14)
ICE gasoil futures for March expire
EIA weekly report on U.S. oil inventories, supply and demand
Weekly ethanol production

Thursday, March 13

IEA monthly oil market report
French oil industry lobby UFIP holds annual press conference
S&P Global CERAWeek, Houston (through March 14)
EIA weekly report on U.S. natural gas inventories
Earnings: Enel FY 2024; Rubis Q4, FY 2024

Friday, March 14

S&P Global CERAWeek, Houston (last day)
Baker Hughes weekly rig count report
ICE Futures Europe weekly commitment of traders report

KEY DATES IN MARCH

8-20: FOMC blackout where Fed officials cannot comment on monetary policy or the economy.
9: Daylight saving time starts
11: USDA WASDE, Crop Production
12: CPI
13: PPI-FD
13: Purim Fun Jewish holiday
14: Final day of current continuing resolution (CR)
15: Tax filing deadline for partnerships and S corporations
18: NCAA men’s basketball finals
18-19: FOMC meets (interest rates)
20: Spring equinox
20: NCAA women’s basketball finals
21: USDA Chicken & Eggs report | Cattle on Feed | Milk Production
25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

LINKS