Washington Edition

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, congressional correspondent Steven T. Dennis previews the busy week of confirmation hearings for Donald Trump’s cabinet picks. Sign up here and follow us at @bpolitics. Email our editors here.

Hearing Them Out

More than a dozen of Donald Trump’s cabinet picks will be fanning out in the Capitol this week for their Senate confirmation hearings, starting with one of the president-elect’s most controversial choices, former Fox News host and military veteran Pete Hegseth.

Trump has stood by Hegseth in the face of allegations of sexual assault, public intoxication and financial mismanagement at a veterans’ group. Hegseth has denied the accusations, but he can expect to be pressed hard by Democrats on the Armed Services Committee by Democrats like Elizabeth Warren.

The key senator to watch at tomorrow’s hearing is Iowa Republican Joni Ernst, a senior member of the committee who served as a company commander in Kuwait and Iraq and has made fighting sexual assault in the military a priority.

Hegseth Photographer: Valerie Plesch/Bloomberg

Ernst, who faces reelection next year, initially gave Hegseth a chilly reception. She changed her tune after a backlash from Trump supporters online but hasn’t said she’ll vote to confirm him. Hegseth, meanwhile, has walked back his earlier opposition to women serving in combat roles.

Markets will pay close attention to Treasury pick Scott Bessent’s hearing on Thursday for his view on Trump’s economic agenda, particularly regarding inflation, deficits and taxes and tariffs.

Outgoing Florida Senator Marco Rubio, Trump’s pick for secretary of state, can expect one of the friendlier hearings on Wednesday, but expect some senators to try and get commitments on supporting allies, including Ukraine.

Hearings for three other controversial Trump nominees — Tulsi Gabbard as director of national intelligence, Robert F. Kennedy Jr. as health secretary and Kash Patel to head up the FBI — have yet to be scheduled.

No Republican senator has yet expressed public opposition to any of Trump’s nominees, and it’s fairly rare for a cabinet pick to go down to defeat once the nominee makes it to hearings. And with the GOP’s 53-47 margin in the Senate and many Republicans looking to mend fences and curry favor with Trump, it likely would take a major new revelation or a disastrous hearing to send one of them down to defeat. — Steven T. Dennis

Other confirmation hearings scheduled this week:

Doug Burgum for Interior secretary — tomorrow
Doug Collins for Veterans Affairs — tomorrow
Pam Bondi for attorney general — Wednesday
Kristi Noem for Homeland Security secretary — Wednesday
Chris Wright for Energy secretary — Wednesday
Sean Duffy for Transportation Department — Wednesday
John Ratcliffe for CIA director — Wednesday
Scott Turner for Housing and Urban Development — Thursday
Lee Zeldin for EPA administrator — Thursday

Don’t Miss

A federal judge in Florida won’t block Attorney General Merrick Garland from releasing part of the final report on the criminal investigations into Trump’s efforts to overturn the 2020 election.

The White House unveiled new limits on the sale of advanced AI chips by Nvidia and its peers, leaving the Trump administration to decide how and whether to implement curbs fiercely opposed by the industry.

The Supreme Court buttressed environmental advocates’ efforts to hold oil companies accountable for climate change, letting a lawsuit proceed that accuses the industry of deceiving customers about the fossil fuel risks.

The high court also turned away a fresh bid to put independent federal agencies under direct presidential control, as the justices steered clear of a fight with implications for the FTC and SEC.

Outgoing Defense Secretary Lloyd Austin recommended the US boost defense spending by about $50 billion more than projected with increases that would push the Pentagon budget past $1 trillion in the years to come.

A government program that awards billions of dollars in federal contracts to minority-owned businesses is set to face increasing legal attacks as backlash against diversity policies gains steam.

President Joe Biden, in a speech aimed at burnishing his legacy before he departs office next week, argued that his actions over the last four years leave the US in a stronger position for Trump.

Biden moved to discharge federal student loans for more than 150,000 people, a final push that will bring the total borrowers who received loan forgiveness under his administration to over 5 million people.

Donald Trump Jr. has taken on a role advising prediction market Kalshi, casting the betting site and others like it as a superior source of assessing the state of politics and elections.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Republican Representative Nicole Malliotakis of New York about meeting with Trump at Mar-a-Lago and the discussions about raising the state and local tax deduction.

On the program at 5 p.m., they talk with Kirsten Hillman, Canada's ambassador to the US, about relations between the two North American neighbors as Trump is set to take office.

On the Odd Lots podcast, Bloomberg’s Tracy Alloway and Joe Weisenthal talk with Jennifer Pahlka, founder of Code for America and former US Deputy Chief Technology Officer, why government hiring is so inefficient, Elon Musk's Department of Government Efficiency and why a major jolt may be necessary to get better results. Listen on iHeart, Apple Podcasts and Spotify.

New from Bloomberg: Listen to Trumponomics, a weekly podcast on Trump's economic plans and how his administration's policies are shaping the global economy. Editorial head of government and economics Stephanie Flanders will be joined by reporters from Washington and Wall Street.

Chart of the Day

The average perceived chance of missing a minimum debt payment over the next three months increased to 14.2% from 13.2%, according to a consumer survey conducted by the Federal Reserve Bank of New York. The increase was particularly robust among consumers age 40 to 60 who tend to hold larger debt levels -- much of it at floating rates which have risen significantly in recent years. The survey also shows that consumers with incomes over $100,000 have heightened concerns. The mean probability of not being able to make minimum debt payment over the next three months among higher income households is now at the highest share since September 2014. — Alex Tanzi

What’s Next

The producer price index for December will be reported tomorrow.

December’s consumer price index will be reported on Wednesday.

Retail sales in December will be released Thursday.

Housing starts for December will be reported Friday.

Trump will hold a pre-inaugural rally Sunday at the Capital One Arena in Washington.

Inauguration day is next Monday.

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