To help you understand what is going on in the House and the Senate and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
New Speaker Mike Johnson’s (R-LA) short honeymoon is over, as he’s already used up significant political capital to pass a temporary government funding bill that avoided a shutdown of federal agencies days before Thanksgiving.
The Johnson-crafted stopgap bill that keeps the federal government funded at 2023 levels until early next year has infuriated hard-right House Republicans who pushed for steep spending cuts. The spending levels are the same as those included in an earlier temporary funding bill that former Speaker Kevin McCarthy (R-CA) jammed through in September, a move that led to his ouster days later by a handful of hardline conservatives. The current stopgap bill won’t cost Johnson his job, yet. But he already has received a tongue-lashing from hardliners in closed-door meetings, who are pulling the short leash they have on him tighter.
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Adding to Johnson’s woes is an increasingly restless group of House GOP centrists from Biden-won districts who have made clear they’ll push back if leadership tries to force tough votes on them. The funding battle will only get worse after the New Year, when the unusual two-tiered funding bill runs out, with some parts expiring on January 19 and the rest running out on February 2. Johnson has vowed that November’s stopgap bill will be the last government funding bill he supports without spending cuts. Hardline Republicans would revolt otherwise. But any spending cuts are a non-starter with Democrats, setting up a dangerous game of political chicken that could result in a government shutdown after the New Year.
Meanwhile, Johnson is in a pickle regarding military aid to Israel and Ukraine. While money for Israel has wide bipartisan support, most Republicans oppose more cash for Ukraine unless Democrats also agree to comprehensive immigration reforms. Negotiations are at a standstill, though talks will continue. Johnson has gotten the benefit of the doubt so far, from his House Republican colleagues, because he inherited the speakership at a tricky time. But House GOPers won’t give him a pass indefinitely, and if he crosses hardliners again they won’t hesitate to launch an effort to fire him as they did with McCarthy.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
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