In a week shortened by the Thanksgiving holiday, one major economic development to watch is the fallout of last week's decision by Senate Majority Leader Harry Reid to deploy the "nuclear option" for nominees. The result will be that President Obama will need only 51 Senate votes for his nominees for executive branch and judicial positions, some of which have proven difficult for the White House to fill in the past.
One direct consequence of the Senate's approval likely will be the confirmation of Mel Watt, a North Carolina Democratic congressman, to head the Federal Housing Finance Agency, the body that regulates, and effectively runs, the giant government-owned mortgage businesses Fannie Mae and Freddie Mac.
The independent regulator has been run by a holdout from the George W. Bush years, acting director Edward DeMarco, since 2009. At times DeMarco has acted as a veto point for the Obama White House's plans to aid homeowners through the two government-sponsored enterprises. The Senate has been blocking Watt's confirmation to replace DeMarco, but now Watt has a clear path to being installed at the agency.
The nuclear option also could mean a change in the composition of the Federal Reserve's Board of Governors, which soon will have three openings when Chairman Ben Bernanke steps down at the end of January.
In the past, President Obama's picks for the board have faced significant obstruction from Senate Republicans, leading him in one case to package a Democratic nominee with a Republican one to ensure that the Democrat's nomination went through. The Obama administration has already reportedly indicated that it will renominate that Republican, Jerome Powell, to serve another term. But for the two other spots, the White House may be able to favor more liberal candidates if it so chooses without facing a major battle and lengthy delay in the Senate.
In other developments this week, the government will provide a closer look at the health of the slowly healing U.S. housing market. Because its work was delayed by the shutdown, the Census Bureau will release two months of data on building permits on Tuesday morning, for both September and October. This is a major dump of data, but information on housing construction starts and completions -- separate from permits -- couldn't be finished in time for Tuesday. Instead, the Bureau will publish starts and completions for September, October and November on Dec. 18.
This week also will include a few different looks at the state of consumer confidence, which continues to slowly rebuild following the government shutdown and debt limit fights in Congress. The Conference Board will release its survey Tuesday, with the University of Michigan and Bloomberg publishing theirs Wednesday morning. All are expected to show slight improvements.