President Biden Signs Stopgap Spending Measure Lasting Through Nov. 17

Gaetz plans vote to oust McCarthy after Speaker avoids shutdown

Washington Focus

Government shutdown averted: Senate approves 47-day stopgap bill. In a last-minute effort to prevent a government shutdown, President Joe Biden signed into a law a stopgap measure that funds the gov’t for an additional 47 days, through Nov. 17. The Senate, following a strong push from House Democrats, approved the measure in a lopsided vote. This eleventh-hour decision ensures the continuation of various government services and the payment of federal employees, at least temporarily. However, lawmakers still need to finalize a permanent budget appropriation plan to address the nation's financial needs.

Key Highlights:

The Senate's vote of 88-9 late Saturday evening successfully averted a potential government shutdown, which would have had far-reaching consequences and was scheduled to begin at 12:01 a.m. EDT on Sunday.
Earlier on Saturday, the House passed the bill with a strong majority, voting 335-91. The breakdown of the House vote revealed support from Democrats (209-1) and a mix of Republicans (126-90).
Notably, the bill did not include funding for military aid to Ukraine, a matter of contention for some Democrats and Republicans.
Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) expressed their intent to reinstate funding for Ukraine in the final budget negotiations.
Rep. Mike Quigley (D-Ill.), the only Democrat to vote against the bill, said he did so because it did not include aid to Ukraine. He called it “a victory for Putin and Putin sympathizers everywhere
The continuing resolution (CR) funds the government at current spending levels through Nov. 17.
The CR provides $16 billion in disaster relief.
It does not include any funding for Ukraine - which the White House and Democrats sought. Democrats didn’t want to be accused of putting aid for Ukraine ahead of keeping the government open. The White House had requested $20.6 billion from Congress to support Ukraine in its war against Russia.
The measure does not include any funding for border protection.
Rep. Steve Scalise (R-La.), the majority leader, said Saturday that his party would restart the appropriations process on Monday and continue to push for border security restrictions and spending cuts until the Nov. 17 deadline. “Believe me, this is not the end. This is the beginning of our continued fight to secure our border, to get government spending under control, and to get our economy back on track,” he said.
“If somebody wants to make a motion against me, bring it. There has to be an adult in the room,” House Speaker Kevin McCarthy (R-Calif.) said Saturday at a news conference after the House passed the bill.
Rep. Matt Gaetz (R-Fla.) has for weeks threatened to make a motion to oust McCarthy if he put a “clean” CR on the floor, and been the most vocal opponent of any kind of stopgap measure. But ahead of the vote on Saturday, Gaetz indicated that such a move was not imminent, telling reporters he was focused on averting a shutdown by advancing full-year appropriations bills. Gaetz scoffed at McCarthy's remarks, telling reporters later that day "there's nothing about delaying this process that is being the adult in the room." Gaetz said on CNN's State of the Union that he plans to file a motion this week to overthrow McCarthy. "I do intend to file a motion to vacate against Speaker McCarthy this week. I think we need to rip off the band aid. I think we need to move on with new leadership that can be trustworthy," Gaetz told CNN's Jake Tapper. Because Republicans have only a slim majority in the House, only a handful of Republicans would have to back Gaetz’s motion for it to be successful — as long as Democrats vote with them. The minority party would generally be expected to back such a motion, since Democrats would prefer one of their own — Minority Leader Hakeem Jeffries (D-N.Y.) — as Speaker. “That’s nothing new, he’s tried to do that from the moment I ran for office,” McCarthy said in an interview on CBS News Face the Nation.

Background: House Democrats largely supported the resolution proposed by the GOP, despite its omission of funding for Ukrainian military aid. The budget crisis was triggered by the far-right (rebels/renegades) Freedom Caucus within the GOP, which insisted on significant funding cuts and engaged in a public dispute with their own Speaker. If a shutdown had occurred, it would have been the first in nearly four years, leaving tens of thousands of federal employees on unpaid leave. The Department of the Interior had also announced plans to close most National Parks and Monuments during a shutdown, while various public services, such as public health inspections and small business loans, would have been put on hold.

Members of the Freedom Caucus expressed frustration on social media following their defeat, with Rep. Marjorie Taylor Greene (R-Ga.) stating she wouldn't fund a government with a "weaponized Department of Justice" that prosecutes President Trump, pro-life protesters, and perceived political enemies. In response, Rep. Alexandra Ocasio-Cortez (D-N.Y.) taunted the Caucus after the bill's passage, emphasizing that people would receive paychecks despite their objections.

— With the government funding in place for now, work on a new farm bill can continue, with the same questions (timing, funding, Title 1 reform, etc.) still being unanswered.

— Work and votes on fiscal year 2024 appropriations bills (and amendments) will now be a focal point, with contentious views on both sides of the political aisle and chambers.

Economic Reports for the Week

Key economic report comes Friday with the Employment report.

Monday, Oct. 2

PMI Manufacturing Final: The final manufacturing PMI for September is expected to come in at 48.9, unchanged from the mid-month flash to indicate modest contraction from August.
The ISM manufacturing index has been in long contraction. September's consensus is 47.8 versus August's 47.6.
Construction spending for August is expected to rise 0.5% following July's 0.7% increase that once again showed sharp residential gains versus flat nonresidential results.

Tuesday, Oct. 3

Motor vehicle sales: Unit vehicle sales in September are expected to increase to a 15.3 million annualized rate from August's lower-than-expected 15.0 million.
JOLTS: July's 8.827 million was well below expectations and the lowest in more than two years. The consensus for August is a modest rebound to 8.9 million.

Wednesday, Oct. 4

MBA Mortgage Applications
ADP Employment Report: Forecaster see ADP's September employment number at 150,000. This would compare with August growth in private payrolls reported by the Bureau of Labor Statistics of 179,000. ADP's number for August was 177,000.
PMI Composite Final: Slippage to 50.2 from the mid-month 51.0, which was the slowest pace since February, is the call for the PMI service's August final.
Factory orders are expected to edge 0.2% higher in August versus July's 2.1% fall. Durable goods orders for August, which have already been released and are one of two major components of this report, rose 0.2% on the month.
ISM services are expected to slow nearly a point in September to 53.7 versus 54.5 in August which was more than 2 points above consensus and 1.8 points above July.

Thursday, Oct. 5

Jobless Claims for the Oct. 21 week are expected to come in at 210,000 versus 204,000 in the prior week. Claims have moved noticeably lower in recent weeks.
International Trade in Goods and Services
Fed Balance Sheet
Money Supply

Friday, Oct. 6

Employment: A 160,000 rise is the call for nonfarm payroll growth in September versus 187,000 in August which was nearly 20,000 better than expected. Average hourly earnings in September are expected to rise 0.3% on the month for a year-over-year rate of 4.35%; these would compare with 0.2% and 4.3% in August and 0.4% and 4.4% in both of the two prior reports. September's unemployment rate is expected to edge lower to 3.7% from August's 3.8%.
Consumer credit is expected to increase $11.7 billion in August versus $10.4 billion in July.

Key USDA & international Ag & Energy Reports and Events

The United Nations’ monthly food price index will be released Friday. The Malaysian Palm Oil Association’s two-day gathering will begin in Kuala Lumpur Monday, while an agroexport logistics conference will take place in Moscow on Tuesday.

Monday, Oct. 2

Ag reports and events:

Export Inspections
Crop Progress
Cotton System Consumption and Stocks
Fats & Oils: Oilseed Crushings, Production, Consumption and Stocks
Grain Crushings and Co-Products Production
MPOA National Palm Oil Conference, Kuala Lumpur, day 1