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Peter Friedmann's View from Washington DC – November 2023 Counsel

Just back from a terrific WESCCON, we pivot back to our nation’s Capitol. It is hard to know where to begin this month’s ‘View from Washington DC’. It almost seems that Washington DC, like the entire world, is spinning out of control. But let's try.


Mideast..everywhere, for now

Everywhere in DC, the Mideast is top of mind., second only to the perennial highest priority of every elected official – getting reelected. Thousands demonstrating, on Pennsylvania Avenue and even inside a House Office Building. At the White House, it’s the President’s primary focus. On Capitol Hill, the Israel/Ukraine aid bill enjoys bipartisan (but not unanimous) support; Republicans are split over aid to Ukraine, and now the House Republicans seek to use it as a Legislative vehicle to repeal significant Internal Revenue Service funding. For now, Mideast is top of mind, but Congress is famous for its short attention span; how long it remains at the top of the agenda remains to be seen. In the meantime, it is only one factor in determining which who gets reelected and which party controls Congress and the White House a year from now.


Will there be a shutdown?

Despite the many ‘warring parties’ (House versus both the Senate and the White House,

Republicans versus Democrats, Democrats versus Democrats, Republicans vs Republicans)

they’ll try to pass a budget, to avoid a Federal government ‘shutdown’ beginning November 18. The means of passing the various appropriations bills or at least a ‘Continuing Resolution” (which temporarily continues to fund the govt at last year’s levels) is even now being negotiated, out-of-the-public-eye, between the warring parties. Fortunately, contrary to common wisdom, the new Republican speaker has been given some leeway to negotiate with the House Democrats, a budget that could avoid a ‘shutdown’.


The term ‘shutdown’ is very much misunderstood. In fact, wide swaths of federal responsibility will continue operating, including all military, both active and retired, all deployments and all the procurement; all entitlement programs such as Social Security, Medicare, Medicaid, food stamps, housing and other welfare programs will continue unabated. And many Federal agencies, including Customs and Border protection, Dept Homeland Security continue with their responsibilities. Yes, all Federal workers do get paid as soon as the shutdown ends, just not on the normal paydays -- obviously painful for those who live paycheck to paycheck. Perspective: since 1980 there’ve been 15 shutdowns, the longest 34 days. We’ll get past this one as well.


Republicans Find a Speaker

Much “ado” about Republican efforts to find a new leader, known as Speaker of the House of Representatives. Embarrassed by jettisoning 4 of their own before landing on Louisiana

Congressman Mike Johnson. A primary responsibility of any Speaker, Republican or Democrat, is to raise the funds that his party needs to win elections and maintain its Majority. Nancy Pelosi was a prodigious fundraiser for Democratic candidates, Kevin McCarthy was highly effective for Republican candidates. Many questioned if a newcomer like Johnson could be capable? We’ve all been reminded of the power of the DC campaign fundraising apparatus, which has helped Johnson raise more in 2 weeks since elected Speaker, than in his 7 1/2 years in Congress.


So why was he selected when others, more senior and widely known, were rejected? First, he hasn’t been around long enough to make too many enemies. [Harry Truman’s famous adage: ‘if you want a friend here in DC….get a dog’.) Second, apparently, he’s a pleasant guy, easy to get along with, even with those who opposed his politics. Third, Rep. Mike Johnson is easily the most conservative Republican to hold the Speakers’ gavel, in some ways the legal and intellectual mind behind the most conservative positions on abortion, government funding, and States’ rights, etc. Will he be able and willing to compromise his deeply held views, in order to advance Congressional business? So far, the answer is ‘maybe’ – already compromising on Federal spending, in order to avoid a shutdown.


China

Up till October 7, when Hamas invaded, the US-China relationship was top of mind throughout Washington DC. Reigning in China is one place where Congress, both Republicans and Democrats and the White House agree. The House established the Select Committee on the Chinese Communist Party. In hearings and bills House and Senate demanded tough ‘anti-China’ initiatives, such as the Uniform Forced Labor Protection Act. The President agrees, with additional restrictions on China technology imports and US investment in China. I believe USTR will allow existing exclusions from Section 301 Trump-Biden tariffs to expire, thus increasing the number of Chinese products that will be subject to the Trump-Biden China tariffs.


All are alarmed at China's rapid global military expansion, it’s ‘Belt and Road’ global

infrastructure, threats to Taiwan, support of Russia’s invasion of Ukraine. But it’s a balancing act, as both Capitol Hill and the White House are aware of our country’s mutual dependance. We want access to Chinese markets, access to rare earth minerals. All while hoping not to ‘poke the bear’, to induce China to advance on Taiwan.


So, President Biden has invited President Xi to come and meet which he will do later this month in California. He has sent three Cabinet Secretaries to China to maintain relations and communications. So, is China our enemy or our partner? Very much on the minds of those at both ends of Pennsylvania Avenue.


Ocean Shipping, Protecting the US Shipping Public, Customs Brokers and Truckers:

Much effort was put into passing the Ocean Shipping Reform Act (OSRA) in order to address the supply chain crisis and to assure fair treatment of US exporters, importers, customs brokers,

freight forwarders, truckers. Right now, the FMC is close to implementing the Detention and Demurrage Billing Practices Rule, which will address this question: should middleman (such as ‘notify parties) and truckers be held responsible for the payment of detention and demurrage charge, or should carriers and marine terminals only submit detention and demurrage bills to the importer or consignee? The PCC has vigorously pursued the later (while allowing the importers to hire customs brokers, for a fee, to receive, review and process the D & D invoices).


Campaigns for control of the White House and Congress are well underway.

We could not finish up this month’s View without a nod to the 2024 elections. As always, an elected official’s highest priority is their reelection. The 2024 elections are very much on the minds of everybody in Washington DC on both ends of Pennsylvania Ave. So much is at stake. What party will control the agenda in the House of Representatives and in the Senate? Who will occupy the White House and thus control the foreign policy and spending priorities of the United States?


It's common wisdom that President Biden and former President Trump will be the candidates of their parties. My own view differs -- I believe that neither will be nominated by their party as their candidate. As of this writing the latest polls show Trump and Biden Ded (within the margin of error). Each would get about 35 or 36%, while Robert Kennedy would garner 25%. This year we will see how far a third-party candidate can get; Kennedy will learn how integral our two parties are to our system, no 3rd party candidate has ever won.


It’s early days; since 1980, the individuals who lead in the polls on January 1 are not the ones who gain their parties’ nomination. In 2020, Joe Biden was running 12th in Iowa primary; Barack Obama was still unheard of in January of his election year; in March 2016 Donald Trump was laughed at by many in the Republican Party, by August he was their nominee.


“It’s the economy, stupid”. A strong economy is the linchpin to any President’s reelection. How will the economy fare during this coming election year? Will the Fed slow or suspend interest rate hikes? Will inflation abate or lock many out of housing, car loans, etc.?

Joe Biden a self-professed “best friend labor has ever had in the White House”, has been

buffeted by labor strikes which slow the economy, surely the President is asking unions to take a break from the strikes. Will they listen, or follow the lead of the auto unions which won very big in recently concluded negotiations? This week we learned that the President of the ILA, the east and gulf coast longshore union is talking “strike”. Would this damage the economy, and thus President Biden’s re-election chances?


Both Joe Biden and Donald Trump are seeing competition emerge for their parties’

Nominations. This too will be felt on Capitol Hill; several Congressmen, Senators and Governors, both parties, are running or preparing to run. We are less than 12 months from determining which party will control the nation’s Agenda in the House, the Senate and the White House. In the midst of campaigns, will Congress and the Administration be able to focus on the nation’s unprecedented domestic and foreign challenges? We’ll find out on the PCC Mission to DC, date in February to be announced shortly.


Peter Friedmann

November 6, 2023

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