As Congress convenes in the new year, there’s plenty to keep lawmakers busy, including a battle down to the wire for the House Speaker position, ongoing debt limit concerns, and a major development for U.S.-China relations.
With that in mind, here are the three stories in politics to keep an eye on this week:
House speaker race
Republicans will look to elect a new Speaker of the House, but it’s unclear whether Kevin McCarthy (R-CA) has the votes needed to secure a path to the nomination.
Already, McCarthy’s first effort to secure enough votes on the House floor fell short. A handful of conservative hardliners have shown that they can wield a significant amount of power in blocking McCarthy from becoming the speaker.
The battle has shown just how divided the Republican caucus remains, particularly after underperforming in the midterm elections. McCarthy has said that he will continue to hold the votes on the floor until he secures the nomination.
“We may have a battle on the floor, but the battle is for the conference and the country,” McCarthy said earlier on Tuesday, as reported by the Associated Press.
Debt ceiling
The biggest unknown in Washington this year could be the debt ceiling.
Historically, markets have reacted negatively any time lawmakers have played brinkmanship on raising the debt ceiling. This year’s looming deadline — which analysts anticipate could occur between the summer and fall of this year — may add even more pressure should it coincide with an economic recession.
Some progressives are urging Congress to do away with the debt ceiling altogether, but that’s a nonstarter for moderate Republicans in the bipartisan Problem Solvers Caucus.
Meanwhile, hardline conservatives are digging in that the nation should not raise the debt limit unless it makes significant cost cuts to entitlement programs. This fight would only intensify should an economic recession take place and if the S&P were to threaten to downgrade the U.S. credit rating, which happened for the first time during the last debt ceiling debacle in 2011.
For Republicans, the policy fight is reminiscent of the pre-Trump Republican era, when Tea Party Republicans ascended to power after massive taxpayer bailouts during the 2008 economic collapse.
While moderates are unlikely to equate the Inflation Reduction Act and COVID-19 investments as bailouts, some conservatives in the Freedom Caucus will argue that the Inflation Reduction Act and government spending in the last few years have been Democrats’ efforts to pick winners and losers in the markets.
In contrast, Democrats will argue that Republicans, who failed to elect a Speaker in a unified fashion, are playing Russian Roulette with the economy. Overall, the debt limit debate could shape up to be one of the biggest financial policy battles in Washington since the Affordable Care Act.
China gets a new foreign minister
Beijing is singing a different tune this week in what appears to be a potential warming of rhetoric between China and the U.S.
New Chinese Foreign Minister Qin Gang praised Americans and vowed to work to ease tensions between the world’s two largest economies. Qin previously served as China’s ambassador to the United States, and the South China Morning Post reported that Qin’s promotion is being viewed as an effort by China to improve relations between China and the U.S.
“I have been deeply impressed by so many hard-working, friendly and talented American people that I met,” Qin tweeted earlier this week. “Everything in the past is a prologue. I will, as always, care about and support the development of Sino-US relations, promote Sino-US dialogue and exchanges and mutual understanding between the two peoples, promote mutual respect, peaceful coexistence, and win-win cooperation between the two countries, and contribute to the well-being of the two peoples and world peace, stability, and development.”
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Kevin Cirilli is a visiting media at the Atlantic Council’s Global China Hub and the Krach Institute for Tech Diplomacy at Purdue. Follow him on LinkedIn here.
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