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The Call @ Hedgeye | May 3, 2024

JT TAYLOR | CAPITAL BRIEF  - JT   Potomac banner 2 

ON THE SENATE FLOOR: The Senate will continue to consider nominations.

IN THE HOUSE: This week’s agenda for the House includes two bills dealing with federal regulations.  The REINS Act would require Congress to approve any executive branch rule that costs more than $100 million, while the Separation of Powers Restoration Act would curtail the deference that judges give to an agency’s interpretation of laws and regulations.  Two other bills on the agenda are the Gas Stove Protection and Freedom Act and the Save Our Stoves Act. 

Looking Ahead:  Now that an agreement has been enacted suspending the debt limit through January 1, 2025, lawmakers are turning their attention to other issues, including the farm bill, FAA reauthorization, the National Defense Authorization Act (NDAA), and FY 2024 appropriations bills. On Wednesday, the House Agriculture Committee will hold a hearing on nutrition programs in the farm bill, and both the House and Senate Armed Services Committees plan to mark up their versions of the NDAA the week of June 19. 

As for FY 2024 spending bills, the debt limit bill set caps of $886.3 billion for defense and $703.7 billion for nondefense. In the Senate, where 60 votes will be needed to clear the spending measures, Appropriations Chair Patty Murray (D-WA) and Ranking Member Susan Collins (R-ME) will be negotiating to reach a bipartisan agreement on the caps for the 12 individual spending bills. In the House, where the Republican majority can pass bills without Democratic support, Republicans are reportedly discussing whether to use the top-line caps for their bills or possibly cut nondefense spending further. Once that decision is made, Appropriations Chair Kay Granger (R-TX) is expected to announce the subcommittee spending levels. 

If all 12 appropriations bills are not enacted by January 1, 2024, the debt limit bill provides that the spending caps will reset to 1% below FY 2023 levels, which would result in a substantial decrease to the defense cap and a substantial increase in the non-defense cap. This enforcement mechanism, which was included to encourage passage of all appropriations bills, is also applicable for FY 2025.  A Congressional Research Service explanation of the spending caps notes that “under such a scenario, a sequester order would be issued on April 30 of either 2024 or 2025. The [Fiscal Responsibility Act (FRA)] states that the revised limits would revert to the original FRA limits if full-year appropriations were enacted before April 30.” 

House Scorecard: With the June 1 resignation of Democratic Rep. David Cicilline of Rhode Island, the party breakdown in the House is now 222 Republicans and 212 Democrats.  A special election in the overwhelmingly Democratic district to replace Rep. Cicilline, who stepped down to lead the Rhode Island Foundation, will be held on November 7, following a primary election on September 5. The tally will change again this fall when Rep. Chris Stewart (R-UT) says he will resign because of his wife’s health. Rep. Stewart, who represents a staunchly Republican district, said he will leave office sometime in September “after an orderly transition can be ensured.”  A special election will be needed to fill the vacancy.

COMMITTEE ACTION: 

Monday, June 5

  • House Rules Committee Meeting to formulate a rule on H.R. 277 – REINS Act of 2023; H.R. 288 – Separation of Powers Restoration Act of 2023; H.R. 1615 – Gas Stove Protection and Freedom Act; H.R. 1640 – Save Our Gas Stoves Act 

Tuesday, June 6

  • House Agriculture Committee Hearing: “The Future of Digital Assets: Providing Clarity for Digital Assets Spot Markets”
  • House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet Hearing: “IP and Strategic Competition with China: Part II – Prioritizing U.S. Innovation Over Assisting Foreign Adversaries”
  • House Small Business Subcommittee on Economic Growth, Tax, and Capital Access Hearing: “American Ingenuity: Promoting Innovation Through the Tax Code”
  • House Oversight and Accountability Subcommittee on National Security, the Border, and Foreign Affairs Hearing: “Help Wanted: Law Enforcement Staffing Challenges at the Border”
  • House Natural Resources Subcommittee on Water, Wildlife, and Fisheries Hearing: “Examining the impacts of the National Oceanic and Atmospheric Administration’s proposed changes to the North Atlantic Right Whale Vessel Strike Reduction Rule”
  • House Energy and Commerce Subcommittee on Environment, Manufacturing, and Critical Minerals Hearing: “Clean Power Plan 2.0: EPA’s Latest Attack on America’s Electric Reliability”
  • House Homeland Security Subcommittee on Border Security and Enforcement Hearing: “Examining DHS’ Failure to Prepare for the Termination of Title 42”
  • House Oversight and Accountability Joint Subcommittee Hearing: “ESG Part II: The Cascading Impacts of ESG Compliance” 

Wednesday, June 7

  • Senate Finance and Small Business and Entrepreneurship Joint Committee Hearing: “Tackling Tax Complexity: The Small Business Perspective”
  • Senate Budget Committee Hearing: “Cultivating Stewardship: Examining the Changing Agricultural Landscape”
  • Senate Agriculture, Nutrition and Forestry Subcommittee on Food and Nutrition, Specialty Crops, Organics, and Research Hearing: “Horticulture Title: How the Farm Bill Works for Specialty Crop Producers”
  • Senate Foreign Relations Subcommittee on Europe and Regional Security Cooperation Hearing: “Aligning Transatlantic Approaches on China”
  • Senate Judiciary Subcommittee on Intellectual Property Hearing: “Artificial Intelligence and Intellectual Property – Part I: Patents, Innovation, and Competition”
  • House Science, Space and Technology Committee Hearing: “Advancing American Leadership in Quantum Technology”
  • House Agriculture Hearing: “Innovation, Employment, Integrity, and Health: Opportunities for Modernization in Title IV”
  • House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions Hearing: “Dollar Dominance: Preserving the U.S. Dollar’s Status as the Global Reserve Currency”
  • House Small Business Committee Hearing: “Prices on the Rise: Examining the Effects of Inflation on Small Businesses”
  • House Judiciary Subcommittee on Immigration Integrity, Security and Enforcement Hearing: “The Border Crisis: Is the Law Being Faithfully Executed?”
  • House Foreign Affairs Subcommittee on the Western Hemisphere Hearing: “Ignoring our Allies in the Western Hemisphere: Reviewing President Biden’s FY24 Budget Request”
  • House Homeland Security Subcommittee on Counterterrorism, Law Enforcement, and Intelligence Hearing: “Transnational Criminal Organizations: The Menacing Threat to the U.S. Homeland” 

Thursday, June 8

  • Senate Health, Education, Labor and Pensions Committee Hearing: “Why Are So Many American Youth in a Mental Health Crisis? Exploring Causes and Solutions”
  • Senate Commerce, Science, and Transportation Committee Hearing: “Protecting Consumers from Junk Fees”
  • Senate Finance Committee Hearing: “Consolidation and Corporate Ownership in Health Care: Trends and Impacts on Access, Quality, and Costs”

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