DEALING WITH DACA: With 10 days to until the CR expires, a number of Democrats, especially in the House, have said that they will oppose the CR if Deferred Action for Childhood Arrivals (DACA) legislation is not included in the CR. Bipartisan discussions will continue today at the White House, but the Senators at the table couldn’t be further apart on one of the top issues that continues to stymie government funding negotiations. President Trump has made it clear he wants $18 billion in funding for the wall, border security and an end to chain migration as a part of any DACA fix and the Democrats want full citizenship for all DACA affected people. While the Democrats are exercising their newfound leverage, they will hit roadblocks in the short run given that another short-term CR (the 7th) is likely and Republicans can only solve this issue if President Trump personally gets involved in setting the policy, making the compromises and selling the agreement to the country. Even Trump critic Senator Jeff Flake believes a deal can be reached without Trump losing face with Democrats agreeing to fund border security efforts that in turn can be the foundation for the wall. While DACA may end up on a separate plane altogether, the larger issue at hand is nailing down top-line budget levels in short order - with Republicans pushing for an increase in defense spending and Democrats countering for an equal increase in defense and domestic outlays.
MUSICAL CHAIRS: With House Budget Committee Chairwoman Diane Black giving up the coveted and agenda-shaping gavel to run for Tennessee Governor, Republicans will be picking their third Chairman on that Committee in less than a year (remember Tom Price?). Inside money is on Rep Steve Womack (R-AR) who is favored by the leadership over two other candidates. Add Black to the growing list of retiring House Chairmen - including House Foreign Affairs Chair Ed Royce (announced last night), House Administration Chair Gregg Harper (MS), Financial Services Chair Jeb Hensarling of (TX), Judiciary Chair Bob Goodlatte (VA), Science Chair Lamar Smith (TX) and Transportation Chair Bill Shuster (PA), and the halls of Congress will be seeing a slew of new Chairmen in 2019 – whether the Republicans keep the House or not…
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INDECISION ON INFRASTRUCTURE: Trump and NEC Advisor Gary Cohn weren’t quite on the same page at the Republican strategy retreat at Camp David over the weekend. After Trump sowed doubt on his own soon-to-be-unveiled proposal for federal spending of ~$200 billion, levered up to $1 trillion in private, state and local spending, Cohn swooped in and contradicted the president outlining that very approach by the Administration to what is likely to be the bipartisan centerpiece of the Republican agenda for 2018. We’ve been skeptical that Team Trump can pull this off given the price tag of said legislation, but given the impending retirement (and track record) of battle-tested House Transportation Chairman Bill Shuster (R-PA) at the end of the year, we raise our odds slightly that he may be able to shepherd a bill across the finish line. |
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UNNATURAL DISASTER: After a record year for natural disasters, Congress has yet to move forward on a funding relief bill after the House passed an $81 billion measure (almost twice the size of the White House request) back in December. The third go-around for additional funding for hurricane and wildfire relief is stalled given Minority Leader Chuck Schumer’s stance on domestic spending and his insistence on fairer treatment for Puerto Rico after the imposition of a business tax resulting from the tax reform overhaul. Back in September, Congress approved over $50 billion in disaster relief - the current House measure includes ~$28 billion for FEMA, ~$26 billion in block grants and ~$12 billion slated for the Army Corps of Engineers. U.S. TREASURY SANCTIONS FIVE IRANIAN ENTITIES WORKING ON BALLISTIC MISSILE PROGRAM: Our Senior Energy Analyst Joe McMonigle writes that last week’s announcement is start of tougher US action on Iran as Trump considers renewing oil sanctions on Jan 12. Read his flash note here. |
WILL THE JUSTICE DEPARTMENT REVISIT COMCAST-NBC UNIVERSAL? (CMCSA, T, TWX): Our Senior Telecom Analyst Paul Glenchur writes that despite political pressure to extend DOJ merger conditions, Comcast should avoid a decree modification or a breakup effort. Read his piece here.
