The House passed a bill to address age discrimination, named and approved the managers for the impeachment trial in the Senate and sent the two articles of impeachment to the upper chamber (see below). The Senate approved a nominee to head the Federal Emergency Management Agency, passed the US-Mexico-Canada (USMCA) trade agreement (see below), and took preliminary steps in its impeachment trial (see below).
The House will be out of session, while the Senate will begin the impeachment trial of President Trump.
This was a big week for President Trump with the signing of a phase one deal with China and Senate passage of the US-Mexico-Canada Trade Agreement (USMCA). These victories can be added to the accomplishments President Trump will tout on the campaign trail this year. They are especially helpful to him in countering the narrative that the President’s confrontational trade policies are harmful to the US economy. Despite the good news this week and the markets’ relief that US-China tensions have been relaxed at least this week, we should all continue to pay attention to US trade policy developments. President Trump may see these achievements as a validation of his tactics, which may trigger tariff battles with other trade partners (especially the EU). President Trump will remain aggressive when it comes to trade as long as he is in office.
Due to space considerations, we won’t list the provisions of the agreement, which was signed this week by both countries. They can be found here . Nonetheless, the phase one deal represents a solid first step agreement that is limited but realistic under the circumstances. The phase one deal will occupy most of the US-China trade negotiators’ time this year, and we don’t see much of a chance a phase two deal will emerge this year. In fact, complications will certainly arise from phase one implementation, including the volume of products China has committed to buy from the US as well as other provisions. We should all celebrate the agreement for now but expect a continued bumpy path ahead as disagreements inevitably develop with regard to the implementation of the deal. In the meantime, in the background other US-China tensions will come and go and they may affect this agreement. Due to the complexity and volume of areas of disagreement between the two countries, we expect these tensions to be a theme to watch this entire decade.
With approval by the Senate on a strong and bipartisan basis (89-10), the USMCA now awaits President Trump's signature. The Senate was expected to pass the USMCA after completion of the impeachment trial but was able to squeeze it in for a vote while it awaited House action in sending the articles of impeachment to the upper chamber. The agreement has obvious importance given that Canada and Mexico are the US's two largest trading partners and is a solid bipartisan accomplishment that notably brought both industry and labor to the same side. A lopsided bipartisan 89-10 Senate vote is rare in this town these days and is more reflective of the old days when compromise was the norm, not an aberration.
Other Issues in Play
Senate Impeachment Trial.
House Speaker Nancy Pelosi (D-CA) this week selected the seven managers who will present the House impeachment case against President Trump and then formally sent the House-approved articles of impeachment to the Senate. The Senate trial began this week with various formalities but will continue in a more public and earnest manner next Tuesday. Like most trials, the prosecution and defense teams will separately present their cases over the next two or three weeks. While the verdict — acquittal — seems all but certain, the predictability of the trial’s path could be disrupted by the question of whether witnesses will be permitted and, if so, how their testimony would be received by the Senate. Key potential witnesses, including John Bolton and Hunter Biden, could provide drama to the trial that could still alter its outcome. We could see a scenario where a small number of witnesses could be allowed but their testimony would likely be taken privately rather than in a public setting, as was done in the Clinton impeachment trial in 1999. Until we get to that point, however, the Senate trial will come one day at a time over the next couple of weeks with familiar arguments and a very likely acquittal outcome.
The Senate trial will last at least two weeks and probably longer. Senate Majority Leader Mitch McConnell would prefer to vote prior to President Trump’s scheduled State of the Union address on February 4, but that is looking less likely now. Holding the State of the Union address with an impeached, but not yet acquitted, President would be a first in American history and very awkward at the least. It is possible the State of the Union will have to be rescheduled, which presents its own opportunity for mischief since a rescheduling requires the approval of Speaker Pelosi, whose chamber hosts the address. The trial’s timing also directly affects the Democratic presidential primary election. Four senators still running for President, including top-tier candidates Bernie Sanders and Elizabeth Warren, will have to come off the campaign trail and sit quietly at the impeachment trial for as long as it lasts, which will include not only the Iowa caucuses (February 3) but also likely the New Hampshire primary (February 11). This scheduling challenge seemingly helps non-senators who are running, but it could also have a major impact on Joe Biden if his son is called as a witness. Which candidates win and lose from the trial and its timing is still up in the air, but the one top-tier candidate who seems most unaffected is Pete Buttigieg, who can campaign freely in the early states without an apparent connection to this trial.
Tensions between the US and Iran reached a boil in the days following the drone strike that killed top Iranian General Qassem Soleimani, but have since receded somewhat after President Trump made a conciliatory statement in response to a retaliatory missile strike by Iran against a US base in Iraq. President Trump has even called for a new nuclear agreement with Iran, though the deep distrust and raw feelings between the two governments will make this an exceedingly difficult endeavor. The administration’s actions also have generated hard feelings from Democrats and some Republicans in Congress. Lawmakers are angry about the lack of advance notification on the Soleimani strike and have concerns about the adequacy of the administration’s strategic planning on Iran. The House already has rebuked the administration by passing on a party line basis a largely symbolic resolution to curb the administration’s war powers with respect to Iran and may pass another resolution on Iraq war powers later this month. Senator Tim Kaine (D-VA) has been working with Senator Mike Lee (R-UT) on another resolution in the Senate that would require the administration to get congressional authorization before taking any further military action against Iran. That resolution now appears to have sufficient Republican support and could pass the Senate as soon as next week even with the beginning of the Senate impeachment proceedings. If the resolution is able to get through the Senate, it appears destined for a Presidential veto.
Lawmakers from both parties are concerned by reports that the Trump administration intends to reprogram $7.2 billion from military funds to border wall construction. The growing number of Republican dissenters to this proposal reflects opposition not to the wall but opposition to diverting funds earmarked to the military for the wall project. The $7.2 billion would be made up of $3.5 billion from military counterdrug accounts and $3.7 billion from military construction projects — programs Republicans strongly support. The $7.2 billion would be in addition to the $1.4 billion Congress appropriated for a wall this fiscal year. This is on top of the $3.6 billion the administration has in reprogrammed military construction funds from 2019. Those funds were temporarily frozen by a federal court, but that decision was overturned by an appellate court ruling last week and can now be used. The emerging Republican opposition may force the administration to rethink its plans to use military funds for the wall project this year. Regardless of what the administration does, Congress will likely weigh in more forcefully to limit future diversions of funding like as part of the battle over government funding for next year, which will take place this fall. Meanwhile, as we have said before, the wall project will continue along certain stretches of the border this year but will ultimately be slowed down considerably in Texas, where large parcels of private property along the border and opposition from those landowners will prevent a larger-scale wall construction.
The Final Word
The Race is On.
The Iowa Caucuses are still a little over two weeks away, but the first votes of the 2020 Democratic primary elections will be cast today in Minnesota. While Minnesota's primary election isn't until Super Tuesday (March 3), in-person early voting begins today. Interestingly, the ballot will include multiple presidential candidates who have withdrawn from the race since the ballot was printed. The presence of these candidates who are no longer in the race likely will not be a significant factor. However, there could be a more meaningful impact if one of the current list of major candidates drops out following a weak performance in an early state like Iowa or New Hampshire. Such a candidate may have amassed a sizeable amount of early votes in a state like Minnesota that would be unable to be changed to a candidate who is still viable. While there are still several weeks until the Democratic primary season kick off with live voting, the opportunities to win over new voters shrink every day in some states due to early voting opportunities.