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Portfolio > Economy & Markets

Washington Watchers See a Lull in Budget Wars

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As lawmakers get back to work after their holiday recess, the Senate will kick off 2014 by voting Monday to confirm Janet Yellen as the new Federal Reserve chairwoman.

Washington analysts like Greg Valliere of Potomac Research also predict that there won’t be a government shutdown on Jan. 15, or a debt ceiling crisis later this winter.

Industry watchers will also be awaiting this month a governmentwide appropriations bill to fund federal agencies like the Securities and Exchange Commission.

Valliere predicts in his Monday morning commentary that appropriators “will win passage of a $1 trillion 2014 budget by mid-January; a farm bill will pass later this winter; and lawmakers probably will find enough ‘pay fors’ to pass unemployment assistance (perhaps for one last time) and kill a COLA cut for military retirees.”

Indeed, commentators at Washington Analysis say that congressional appropriations staffers will continue work this week on an omnibus budget bill as the Jan. 15 deadline for the current continuing resolution approaches. “While the deal brokered between Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., established new spending caps to mitigate the impact of sequestration, lawmakers must still set firm funding levels for the various agencies, as well as decide on the latitude afforded to executive branch departments in applying funds to individual programs.”

Washington Analysis questions in its Washington This Week newsletter whether unemployment benefits will be extended. The Senate is set to consider a three-month extension of long-term unemployment benefits, which expired at the end of 2013. But, the analysts say, “At the moment, it is unclear if the measure can even pass the upper chamber, though even if it does, the House is unlikely to follow suit without legislative offsets to pay for the $6.5 billion price tag.” Democrats, meanwhile, “balk at such an approach, maintaining that it is an emergency measure intended to assist those individuals still searching for a job.”

Noting with a shout in his early Monday commentary that “It’s an election year!,” Valliere says that “unless the economy really, really blasts off, this will not be a good election for the Democrats,” as they have “virtually no chance of winning 17 net seats and recapturing the House (in fact, they could lose seats).”

The Republicans, he says, “are within a seat or two of the net six they need to regain control of the Senate.”

Bottom line, predicts Valliere: “The next Congress should be even more conservative than this one.”


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