December 1, 2023

Thought of the Week:

There are two types of people who emerge every year in late fall—you’ve got your Thanksgiving people, and you’ve got your Christmas people. You know Thanksgiving people. They complain about Christmas displays going up in grocery stores the day after Halloween, they sprain their ankles during backyard Turkey Bowl games, and they know which breed won the National Dog Show (the Sealyham terrier). And you know your Christmas people. They put reindeer antlers on their cars, collect nutcrackers, and throw ugly sweater parties. Each of us knows whether we’re more Thanksgiving or Christmas. For instance, I’m a Thanksgiving person (The Plymouth Hero You Should Be Thankful for This Thanksgiving). It’s not just because of my ancestor’s association with the holiday; I’m truly a fan of the holiday’s three F’s—family, food, and football. On the other hand, my high school basketball teammate is a Christmas person (Maryland man writes ‘Hi Kevin’ in Christmas lights each year). Every year, his lights go up the day after Thanksgiving and stay lit right through the 12th day of Christmas. So what does the Thanksgiving/Christmas holiday season have to do with policy and politics? While the president typically pardons a turkey or two and lights the national Christmas tree, corporate lobbyists, associations, and interest groups are more interested in how Congress trims its end-of-year legislation, which often deteriorates into what is called a “Christmas tree.” A Christmas tree bill is simply a piece of legislation with many amendments or riders attached to it, which can be, and often are, unrelated to the bill’s original purpose. The amendments are added to attract lawmaker support or provide something that an interest group has lobbied for; Christmas tree bills are controversial. Historically, Christmas trees are most often adorned in the Senate, where lawmakers’ proposed amendments are not constrained by the germaneness rule that requires amendments offered in the House be related to the bill’s original purpose. Once trimmed with riders, Christmas tree bills frequently end up being passed just as Congress is rushing to adjourn for the year. Although tax packages and spending bills are frequently considered at this time of year and often transformed into Christmas trees, Congress has already passed a laddered continuing resolution (CR) to avoid a government shutdown and fund the government through at least January 19. With no year-end spending deal to make, the preferred vehicle for lobbyists’ and lawmakers’ to turn into a Christmas tree is off the table. Official Washington is currently sizing up alternatives, and the National Defense Authorization Act (NDAA) is an attractive target to hang ornaments on as Congress has passed the reauthorization for more than six decades running. Lawmakers and lobbyists pushing to extend tax breaks, renew a provision in the Foreign Intelligence Surveillance Act, rein in credit card fees, target pharmacy benefit managers, and advance other matters see nothing but tinsel when they look at the defense bill. In fact, Senators have already added a number of riders from fuel production to agriculture to their version of the bill. An alternative to the NDAA could be FAA reauthorization as the House has already passed, with broad bipartisan support, its version of the bill. Other items that could act as a Christmas tree include aid for Israel and Ukraine and a border security measure. The Washington office is working with several trade associations to hang the Miscellaneous Tariff Bill (MTB) on at least one of these trees. If none of these ultimately serve as a Christmas tree, Washington will have to wait until next year’s first quarter and the expiration of the CRs to hang their ornaments.

Thought Leadership from our Consultants, Think Tanks, and Trade Associations

Eurasia Group Believes Congressional Retirements Reflect DC’s Dysfunction but have Unclear Implications for Congressional Control. Members of Congress announced their retirements at a record pace in November, indicating that Washington is a less desirable place to serve amid the chaos and dysfunction that has characterized the 118th Congress. The raft of retirements has unclear electoral implications: Senator Manchin’s (D-WV) retirement gives Republicans the clear edge in the Senate in the 2024 election, but the partisan tilt of House retirements is more ambiguous, and Democratic retirements in competitive districts may be offset by Republican retirements in the coming months. With the retirements, Congress is losing a significant number of experienced hands and will gain dozens of new members who are inexperienced at policymaking and possibly more interested in partisanship than cross-aisle cooperation. The retirements mark a continuation of a trend that has played a major role in the post-2010 makeup of the Republican caucus, leading to a House Speaker who has been in Congress since just 2017. The retirements also reflect the increasingly fraught relationships within the GOP, where mainstream Republicans who came of age before the Trump era have found themselves out of step with the party in the 2020s.

National Journal’s Charlie Cook Says, “The House is the Dems’ Last Best Chance in 2024.” The House of Representatives, the only elected federal entity currently controlled by Republicans, could wind up being the sole thing standing between the GOP and unified control of the federal government. Yet, that is an increasingly likely possibility of what may come next November. At this point, Democrats appear to have a better chance of taking control of the House than either holding the White House or keeping their majority in the Senate. Even more unusual: if Democrats take the House while losing the Senate, it would be the first election in U.S. history when the Senate and House flip in opposite directions. Most political handicappers say the Senate, with Democrats holding a 51-49 majority, will go Republican. This was true even before Sen. Manchin (D-WV) announced his retirement. Democrats are forced to defend their majority with the ugliest Senate map for any party in years, trying to hold seats in Montana, Ohio, and West Virginia, each of which former President Trump carried twice. They’re also playing defense in four more states that Trump won once—Arizona, Michigan, Ohio, and Pennsylvania. That’s seven Democratic seats that are far more vulnerable than the only two GOP-held seats that are even remotely competitive—Texas and Florida. With six-year terms, Senate races reflect multi-year cycles. How a party did six, 12, or even 18 years ago can be relevant. This group of Senate seats up in 2024 was last up in 2018, Trump’s midterm election, not a strong year for the GOP. Six years before that was 2012, when Barack Obama was winning reelection. The preceding election, 2006, was George W. Bush’s second-term midterm, which was catastrophic for his party. The cumulative impact of 2006, 2012, and 2018 created an exposure for Democrats that make losses in 2024 almost inevitable. In the presidential, President Biden not only trails Trump in national polls, but in key swing states, and by wide margins voters say Trump did a better job handling the economy. In national polling, Trump leads in the 11 most recent as well as in 16 of the last 18. In what really matters, the half-dozen swing states, polls show that Trump leads in five to Biden’s one. This is grisly math. In fact, swing state polling shows that only 35% think Biden’s policies have helped them personally, while 53% believe his policies have hurt them; nearly the opposite is true for Trump, where 51% say his policies helped them, and 34% think his policies hurt them. Although there is a long way to go in the presidential, it would be hard for anyone to look objectively at this race and see anything but an uphill climb for President Biden. That leaves the House. Just as the country is evenly divided, and the national popular vote will be close, so will the House. However, not only do Republicans have more exposure there than Democrats for Republicans in swing districts the remaining agenda is likely to be driven by a speaker and House leadership who hail from anything but swing districts. For Democrats, the possibility that they will go from having everything in 2021 and 2022 to being shut out of power in 2025 is terrifying, but the House might be where they make their final stand in 2024.  

Observatory Group Asks, “Its Biden vs. Trump, but Who Loses?” With 45 days until the first Republican Presidential Primary and 64 days until the first official Democratic Presidential Primary, all indications are that it will be a repeat of the 2020 election. However, neither former President Trump nor President Biden are inevitable nominees. As things stand on the GOP side, there is about a 20% chance that either former UN Ambassador Haley or Florida Governor DeSantis could win the nomination. On the Democratic side, there is a 10% chance someone other than Biden could be the eventual nominee for President. Although Democrats succeeded in the off-year elections held in November, recent polling shows that President Biden has some stiff headwinds heading into a rematch with Trump. The headwinds are not because Trump has rebounded but because Biden’s favorability has plummeted to such a low level that there is no clear path that he can rehabilitate himself. Thus, a 2024 rematch between Trump and Biden could end up being a rhetorical race to the bottom—more like 2016 than 2020. The race will primarily take place in the battleground states of Nevada, Georgia, Arizona, Michigan, Pennsylvania, and Wisconsin. The Biden camp wants to stay positive, but the data suggests that to succeed, they will need to tear down Trump more than build Biden up. In fact, the White House has been attempting to adopt a positive message for months only to see Biden’s favorability numbers worsen. Although a rhetorical race to the bottom may sound like politics as usual, even off-handed comments by either candidate carry geopolitical risk. Consider the case in 2020 when Biden called the Saudi Crown Prince a “pariah,” or in the aftermath of the October 7 attacks in Israel, when Trump called Hezbollah “very smart.” It’s important to note that although Biden won the national popular vote in 2020 by the largest margin in history, the real race for the Electoral College was much closer. In fact, the race was decided by just 42,918 votes in the swing states of Arizona, Georgia, and Wisconsin. A rematch in 2024 will likely be as close.

“Off the Record”

The Commission on Presidential Debates has scheduled three presidential debates—plus one debate for vice presidential candidates—in the fall of 2024. The debate schedule is as follows:

  • 16: First presidential debate at Texas State University, San Marcos, Texas.
  • 25: Vice presidential debate at Lafayette College, Easton, PA.
  • 1: The second presidential debate at Virginia State University, Petersburg, VA.
  • 9: The third presidential debate at University of Utah, Salt Lake City, UT.

While the Republican National Committee has said the Party would boycott the debates, and President Biden has not yet committed either, the qualification criteria for third-party candidates could produce a candidate who meets them for the first time since Ross Perot in 1992. Ultimate decisions to participate will be up to each party’s eventual nominee.  

In Other Words

“Ultimately, Israel is going to want to continue to conduct military operations against Hamas, particularly the leadership of Hamas,” U.S. National Security Adviser Jake Sullivan.

“I have done the math over and over, and it doesn’t look really good,” Rep. George Santos (R-NY-03) on the prospect of getting expelled. 

Did You Know

Last week, President Biden celebrated his 81st birthday. Born in 1942, President Biden’s birthdate is closer to Abraham Lincoln’s second inauguration than to his own inauguration in January 2021.

Graph of the Week

U.S. Leading Economic Index Down for 19th Month Running. The Conference Board’s Leading Economic Index (LEI) declined by 0.8% in October, marking the 19th consecutive monthly decline on the broad gauge of economic health. The Conference Board continues to expect “a very short recession,” citing inflation, interest rates, and slowing consumer spending as contributing factors.

The Annual LEI Growth Rate Stays Negative, but may have Reached Bottom

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