With Congress agreeing to fund the government for another five days, which pushed the deadline to work on a longer-term appropriations bill to Wednesday, lawmakers are “furiously negotiating” the major hurdle of what policy riders to include, says political analyst Andy Friedman of The Washington Update.
Both parties “are keeping the negotiations very close to the vest,” Friedman told ThinkAdvisor on Monday. As to whether a rider will be attached requiring the Department of Labor to put its rule to amend the definition of fiduciary on retirement accounts through another comment period, Friedman says that he believes “that if the Democrats agree to the rider, it must be with White House permission. That suggests Obama would not veto the legislation over that issue.”
White House Press Secretary Josh Earnest said during his Dec. 8 press briefing that the administration will “aggressively oppose any effort by Republicans to water down” the DOL’s rule to amend the definition of fiduciary under the Employee Retirement Income Security Act.
Indeed, Greg Valliere, chief investment strategist for Horizon Investments, calls this week the “most crucial” this year, noting the trifecta of a spending bill, the Federal Reserve decision on interest rates, and the Republican debate.
Considering the “fragility in the commodity and junk bond markets,” Valliere says, “some Fed officials may have second thoughts about hiking the [federal] funds rate on Wednesday, but the die has been cast, there’s no turning back.”
Valliere predicts that the Federal Open Market Committee’s statement on Wednesday will be “exceptionally dovish, with no commitment to a March move and a clear signal that the Fed will raise rates very deliberately in 2016.”
A positive sign that an omnibus spending bill will indeed be wrapped up by the Wednesday deadline (or a couple of days later) is the fact that House Speaker Paul Ryan had dinner with Minority Leader Nancy Pelosi on Friday evening, Valliere notes.