In this episode of Street Cred, Chris Krueger, Macro Policy Analyst, breaks down 2024 into three tracks to make sense of the year:
- Policy cliffs – including fiscal policy and five action-forcing deadlines
- The U.S. presidential election
- Legal and constitutional questions – including election certification, ballot access, and impeachment
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Good morning. Welcome back to TD Cowen Street Cred. I am Chris Krueger with TD Cowen’s Washington Research Group, and we’ll attempt to translate K Street to Wall Street faster than a speeding Acela, and even faster if you juice up the playback. Looking to knock out our 2024 resolutions with at least one pod per month, and this year has no shortage of policy and political cliffs to summit. To try to make sense of 2024, we’ve broken the year in Washington into three separate tracks that are currently running parallel but will soon intersect. All right, here we go. Buckle up. Okay, Track One, the so-called policy cliffs. A historically unproductive Congress returns this week, which will leave until next Friday until the government begins to run out of funding. There are no less than five action-forcing deadlines for Congress in the first four months of 2024. Would also note that Congress left last month without addressing any of the big three pending fiscal issues.
Real quick before we get into those five action-forcing deadlines, the three pending fiscal issues. Number one, the $110 billion security supplemental. This covers issues like Ukraine, Israel, Gaza, Taiwan, and the US-Mexico border. Number two, the overall discretionary spending levels for these 12 appropriation bills. And then number three, the Debt Commission. This was one of the first things that Speaker Johnson flagged when he became speaker, but really no details there yet. So onto the action-forcing catalysts. Next week is the first one, January 19th. That’s when government funding expires for 4 of the 12 departments. If you recall, Speaker Johnson set up that laddered CR with the two separate deadlines. So January 19th, next Friday, the first one. Then February 2nd, Groundhog Day. Happy birthday to my sister, Mimi. But February 2nd, the second deadline for government funding. That’s also the deadline for flood insurance.
Skipping to the next month, March 8th is when FAA authority expires. That’s the Federal Aviation Administration. Then the following month, April 19th, this is FISA authority, the Foreign Intelligence Surveillance Program. And then finally, the end of April, which is what is sort of dictating most of the fights over fiscal spending right now, this is that potential 1% across the board sequester cut to discretionary spending. This was the hammer that was included in the Fiscal Responsibility Act, which raised the debt ceiling last spring, and if there’s not agreement on government funding come April 30th, you get that 1% cut across the board. So no less than five action-forcing catalysts to start off 2024 on Capitol Hill. All right, Track Two, shouldn’t be a big surprise, it’s an election year. The policy calendar is going to be competing with the campaign calendar, which begins next Monday with the Iowa caucuses.
Unfortunately, that’s going to make the pending legislation like immigration/border, Ukraine funding, all the more challenging given their fervent opposition by former President Trump, who is the prohibitive front-runner to get the Republican nomination for president for the third cycle in a row. Reminder, given the nature of the Republican primaries and how delegates are awarded, Trump could secure a majority of the outstanding delegates as early as March 19th. That’s largely because those proportional allocation systems have been discarded in upwards of 30 states with a winner-take-all format locked in place, which really will give Trump a pretty meaningful tailwind going into the primaries. From our seat, the most interesting time period to watch within the elections is the late March to summer window. The candidates are not the actual nominees until they are at the conventions and the delegates vote at the conventions to make them the official nominees. Mid-July in Milwaukee is the Republican Convention, and then mid-August in Chicago is for the Democratic National Convention.
Not to be morbid, but the actuarial tables for the two oldest likely nominees in US History would suggest that the probability is not zero that there will be some type of health issue potentially this spring or summer. The conventions are really the only time and the only mechanism that could change the candidates. Once the conventions end, that is it, pencils down. These are the nominees. Early voting starts in some states in September. Remember that November 5th is when the election hopefully ends, not starts, so the conventions really could be the event to watch on the primary calendars this year. All right, final track, number three. This is what we call the legal/constitutional track. There’re really no less than five things to unpack here. The first one will be the start of no less than four criminal trials facing former president Donald Trump, the first one beginning the day before Super Tuesday on March 4th in Washington D.C. This is the so-called January 6th trial. You then have, in late March, the kickoff of the so-called Hush Money Trial in New York.
Then in May, you have, in Florida, the so-called Documents Case, dealing with those sensitive and classified documents found at Mar-a-Lago. Then in August you have the Georgia trial, dealing with the election certification. Second one to watch is what we call the Trump ballot access question. You do have both the Colorado and Maine decisions dealing with Trump being on the primary ballot. We expect the Supreme Court to override both of those decisions, stemming from the insurrection clause of the 14th Amendment, on Colorado. The ballots are not actually mailed until February 12th, so the Supreme Court has until February 11th if they really want to go down to the wire on that. But we expect the 6-3 Supreme Court to override both of those, retaining Trump on the ballot in Colorado and Maine. Number three is what is likely to be the impeachment of the current president, Joe Biden. You had an impeachment inquiry vote to close out last year. Would expect those proceedings to kick off, if not in January, in February.
Following up on that, what will happen this week will be the first in what is likely to be a series of hearings on the impeachment of the Homeland Security Secretary, Mayorkas. This would be the first, provided it goes forward. In theory anyway, it’s going to be over the immigration border issue. Should the House impeach Mayorkas, that would be the first cabinet secretary impeached since 1876. It’s very on brand for this Congress, having broken a number of historic records. It was the most speaker votes since the Civil War, so I guess it’s only right that we continue to knock out our records going back to the 19th century. Finally, number five, having mentioned the Trump trials, there are also likely further action on the Hunter Biden issue with trials and/or potential house hearings on that front as well. So no shortage of policy issues to tackle, no shortage of elections to watch, and no shortage of legal and constitutional questions to unpack this year. All right, that’s a wrap. This has been Chris Krueger with TD Cowen’s Washington Research Group for Street Cred. Have a great week and buckle up for a wild year.
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