House Speaker Johnson to Push for Rule Changes Re: Motion to Recommit

Biden and XI to meet in November | Pence suspends presidential campaign | FOMC

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October 29, 2023 01:07 PM

Biden and XI to meet in November | Pence suspends presidential campaign | FOMC

Washington Focus

Continued but belated work on fiscal year (FY) 2024 spending bills, an FOMC announcement Wednesday along with a Fed chair presser, and a Jobs report on Friday are the highlights this week.

— The House is expected to take up additional spending bills this week after passing its Energy-Water measure last week. Speaker Mike Johnson (R-La.) has his sights on bringing the Legislative Branch (HR 4364), Interior-Environment (HR 4821) and Transportation-HUD (HR 4820) bills to the floor this week.

That would leave four spending bills left to vote on next month, including the Commerce-Justice-Science (HR 5893) and Labor-HHS-Education (HR 5894) bills, which have been tied up in committee over spending levels and policy disputes. Johnson has said he may seek a “consensus” to discharge the measures straight to the floor.

The Ag appropriations bill has a tentative House dateline for the week of Nov. 13.

Of note: Whatever the final outcomes are for the House spending measure, they will different greatly from the Senate approach (more spending in Senate versions), so hurdles are ahead.

— Speaker Johnson is open to short-term funding measure to avert government shutdown. Johnson indicated his willingness to consider a short-term stopgap funding measure to keep the government funded beyond the Nov. 17 deadline set by the previous funding measure. In an interview on Fox News’ Sunday Morning Futures, Johnson mentioned that he would favor a short-term funding bill until Jan. 15 to ensure the government remains funded. He explained that this approach would help avoid last-minute budget battles and the potential for omnibus spending bills in the Senate.

Johnson emphasized the importance of keeping the government funded as the House works to pass appropriations bills. He suggested that the stopgap measure might include conditions such as a 1% spending cut across the board, which could incentivize the Senate to complete its work promptly. Johnson assured that both fiscal conservatives and other members are committed to ensuring the government’s funding.

These comments align with Johnson’s promises outlined in his “Dear Colleague” letter to the Republican conference, where he advocated for the passage of all 12 appropriations bills and proposed a stopgap measure that would expire either on Jan. 15 or April 15, preventing last-minute legislative maneuvers in the Senate.

— Rep. George Santos (R-N.Y.) will face a vote on whether to expel him from the House. The move comes as a push from his Republican colleagues in the New York delegation who argue that Santos is not fit to serve because of the numerous criminal charges he is facing.

Also, dueling censure resolutions were announced against Rep. Rashida Tlaib (D-Mich.) and Rep. Marjorie Taylor Greene (R-Ga.), setting up votes on those this week.

— Johnson ‘isn’t afraid’ of changing rule on vacating speakership. House Speaker Mike Johnson (R-La.) expressed his willingness to consider changing the rule related to vacating the speakership position. This move has gained support from several GOP lawmakers after the historic removal of former Speaker Kevin McCarthy (R-Calif.) earlier in the month. McCarthy was ousted from the speaker position by a vote of 216-210, making him the first speaker ever to be removed by the House. This vote was based on a “motion to vacate.”

Johnson stated that he is not afraid of changing this rule and is committed to working transparently with all members to ensure that everyone understands the reasons behind it. He believes that the current rule makes it difficult for any speaker to effectively carry out their duties.

During the election that saw McCarthy become speaker in January, he agreed to lower the threshold for calling a vote on a motion to vacate from five to one. This change allowed rebel Rep. Matt Gaetz (R-Fla.) to single-handedly call for the recent vote to remove McCarthy, which has angered many Republicans who now want to prevent such a situation from occurring again.

Johnson acknowledges that changing the rule is not his top priority. He aims to decentralize the power from the speaker’s office and empower committee chairs and other members to be more involved in decision-making processes, thus reducing the need for motions to vacate.

— A farm bill letter was sent by Rep. Brad Finstad (R-Iowa.) and 60 of his Republican colleagues to House Speaker Mike Johnson (R-La.) emphasizing the importance of the farm bill to rural communities and called for its swift passage. The letter highlights the significance of strengthening crop insurance, expanding export markets, protecting farms from animal disease outbreaks, and equipping farmers with advanced precision agriculture technologies. The lawmakers argue in the letter that farm and food security are integral to national security. They emphasize that for a relatively small portion of federal spending (1/5 of 1%), the farm safety net, which includes commodity support programs and crop insurance, is vital for enabling farmers and ranchers to manage risks, pass their farms to the next generation, and continue producing high-quality, cost-effective food, fuel, fiber, and forestry products. Link to letter.

— Mike Pence suspends 2024 presidential campaign amid lagging poll numbers and financial challenges. Former Vice President Mike Pence announced the suspension of his campaign for the 2024 presidential election due to a combination of declining poll numbers and financial difficulties. Pence made this announcement during a speech at the Republican Jewish Coalition’s annual conference in Las Vegas. Concerns had arisen within Pence’s campaign that he might not qualify for the third debate stage scheduled for the next month. This concern played a significant role in his decision, as fundraising efforts in the preceding days had failed to address the campaign’s financial shortfalls.

Being a former vice president, Pence held a unique position in the crowded field as he was competing against the very man, Donald Trump, with whom he served in the previous administration. He consistently emphasized policy differences between himself and Trump, particularly regarding Social Security, abortion restrictions, and foreign policy, including U.S. support for Ukraine against Russia. However, the shadow of Jan. 6, 2021, loomed large over Pence’s campaign. He broke with Trump during the certification of the 2020 election results, and although his role was largely ceremonial, Trump and his supporters had hoped Pence would intervene.

Pence struggled to gain support in the polls during his campaign. Although he met polling qualifications for the first two GOP primary presidential debates, he faced challenges in meeting the individual donor threshold set by the Republican National Committee. Despite his criticisms of fellow Republican rivals during the campaign, Pence had pledged to support the eventual GOP nominee. He had also ruled out the possibility of being a vice presidential nominee again, stating that he had run for the position twice, and that was sufficient.

Former President Donald Trump said Saturday that Pence should endorse him as an act of loyalty for having chosen him as his running mate, but a Wall Street Journal editorial (link) says, “Trump betrayed Mr. Pence with his post-election pressure to betray the VP’s oath of office.”

— On the labor union front, the United Auto Workers (UAW) union announced a tentative contract agreement with Stellantis on Saturday that would end a six-week strike against the maker of Jeep SUVs and Ram trucks. The agreement comes days after Ford reached a separate deal. The UAW saved 5,000 jobs that were to be eliminated, and got a commitment from Stellantis to add an additional 5,000 jobs by the end of the agreement in April 2028, union leaders said. The tentative agreements still need to be ratified by 57,000 UAW members at Ford and 43,000 at Stellantis.

The UAW called a fresh strike at a General Motors factory in Tennessee on Saturday evening.

— Prime Minister Benjamin Netanyahu said Saturday night that the second phase of Israel’s war in Gaza had begun, effectively signaling the start of a ground operation but stopping short of calling it an invasion.

Meanwhile, thousands broke into United Nations food warehouses in central and southern Gaza this weekend, taking wheat flour and other basic items like hygiene supplies (link for details via the Wall Street Journal). Since Israel largely cut off food, water and electricity for Gaza’s 2 million residents following Hamas’s Oct. 7 attacks, only a fraction of the aid that is needed has entered the enclave, according to the United Nations.

— Daylight savings ended Sunday across much of Europe, temporarily narrowing the London-New York time gap to four hours, from the usual five, until U.S. clocks change on Nov. 5.

Economic Reports for the Week

The Federal Reserve decision meeting on Wednesday and the October jobs report on Friday are the focus this week. The Fed is widely anticipated to hold rates steady. Of likely more importance will be the commentary from Fed Chair Jerome Powell during his press conference.

Monday, Oct. 30

Dallas Fed Manufacturing Survey

Tuesday, Oct. 31

Employment Cost Index: Forecasters see employment costs holding steady and elevated at 1.0% quarterly growth in the third quarter.
Case-Shiller Home Price Index: Forecasters see the adjusted 20-city monthly rate rising 0.7 percent in August versus July’s 0.9 percent increase.
FHFA House Price Index
The Chicago PMI is expected to rise in October to 45.0 versus 44.1 in September which was the 13th straight month of sub-50 contraction.
The Consumer Confidence Index is expected to fall further in October, to a consensus 100.0 versus a lower-than-expected 103.0 in September. Weakness in income expectations was noticeable in September’s results.
The Bank of Japan is expected to conclude a two-day policy meeting amid growing pressure to shift further away from its controversial bond yield control, as rising global bond yields and persistent inflation push the 10-year JGB yield closer to a ceiling set just three months ago.

Wednesday, Nov. 1

MBA Mortgage Applications
Forecasters see ADP’s October employment number at 150,000. This would compare with September growth in private payrolls reported by the Bureau of Labor Statistics of 263,000 which was sharply higher than 177,000 in August. ADP’s number for September was 89,000, sharply lower than its August number of 180,000.
Treasury Refunding Announcement
PMI Manufacturing Final
The ISM manufacturing index has been in sub-50 contraction the last ten months but did move up to a higher-than-expected 49.0 in September. October’s consensus is no change at 49.0.
Construction spending for September is expected to rise 0.4% following August’s 0.5%. This report has yet to show any dramatic effects of rising financing costs.
JOLTS: August’s 9.610 million was much higher than expected in a report that included a significant upward revision to July to 8.920 million. The consensus for September is 9.375 million.
FOMC announcement: The Federal Reserve is expected to hold policy steady for a second straight meeting, waiting for the effects of prior rate hikes to further slow inflation.
Fed Chair Press Conference

Thursday, Nov. 2

Jobless claims for the Oct. 28 week are expected to come in at 213,000 versus 210,000 in the prior week.
Motor vehicle sales: Unit vehicle sales in October are expected to decrease to a 15.1 million annual rate from September’s higher-than-expected 15.7 million.
Fed Balance Sheet
Productivity and Costs: Nonfarm productivity is expected to rise to a 4.2% annual rate in the third quarter versus a 3.5% rise in the second quarter. Unit labor costs, which rose 2.2% in the second quarter, are expected to slow to 0.7% in the third quarter.
Factory orders are expected to rise 1.1% in September versus August’s 1.2% that reflected a 2.1% jump for nondurable goods. Durable goods orders for September, which have already been released and are one of two major components of this report, jumped 4.7% on the month.
Money Supply
The Bank of England looks set to keep interest rates on hold, but it is far from relaxing its fight against Britain’s high inflation rate despite growing worries about a recession.

Friday, Nov. 3

Employment situation: A 183,000 rise is the call for nonfarm payroll growth in October versus 336,000 in September which was much stronger than expected. Average hourly earnings in October are expected to rise 0.3% on the month for a year-over-year rate of 4.0%; these would compare with 0.2% and 4.2% in September. October’s unemployment rate is expected to hold unchanged at 3.8%
PMI Composite Final
ISM services are expected to ease 6 tenths in October to 53.0 versus 53.6 in September which was very near expectations and followed 54.5 in August.
Federal Reserve: Michael Barr speaks.

Key USDA & international Ag & Energy Reports and Events

The United Nations’ monthly food price index will be released Friday.

Monday, Oct. 30

Ag reports and events:

Export Inspections
Crop Progress
Egg Products