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Rep. Kevin McCarthy (R-CA) finally clinched the House Speakership Saturday, but the repercussions will shape the next Congress.

Our Government Relations team weighs in on what the extended fight—and McCarthy’s concessions—mean for the rest of the congressional term:

• Freedom Caucus—and Democrats?—empowered. A key win for voting holdouts was three Freedom Caucus members on the powerful Rules Committee, which comprises eight Republicans and four Democrats. Freedom Caucus members could create headaches for leadership in getting bills to the floor if they team up with Democrats to oppose rules they don’t like—though this GOP infighting may stay behind the scenes.

• Expect a spending showdown. McCarthy agreed to bring a 10-year budget that caps spending at 2022 levels, which would cut defense spending by 10%. It will be nearly impossible for this bill to pass in the House. Many Republican defense hawks and defense appropriators will be opposed to it, and some have already voiced concerns.

• McCarthy on a tightrope. The most significant Rules Committee concession allows just one member to introduce a privileged resolution to “vacate the leadership.” If enough Freedom Caucus members–as few as five–become disillusioned with McCarthy, they will probably want to unseat him. Moderate/mainstream conservative Republicans may also push back against McCarthy if they feel he is bending too much to Freedom Caucus members at their expense. But don’t expect them to use the same threats and tools as the Freedom Caucus.

• The discord puts a premium on McCarthy’s ability to advance issues that unite the conference, most obviously Biden administration oversight and anti-China legislative efforts. Last week’s events have underscored how much McCarthy will need to foreground those issues with his conference’s near unanimous support. A Biden announcement on intent to seek re-election would supercharge the oversight efforts.

• The environment that allowed for major successful bipartisan legislation last Congress no longer exists. Last term, centrist senators were able to broker Senate deals knowing the Biden White House would likely be able to help those deals pass the House. That’s no longer the case.  We may still see Senate “gangs” with some of the same players, but they will be cutting deals without expecting those deals to actually survive the House. As a result, these senators will have less incentive to take the political risks that bipartisan deal-making necessarily entails. For example, it’s hard to imagine Senator John Cornyn (R-TX) championing the bipartisan gun safety bill last year with a Republican House. At the same time, the two must pass items for this session – debt limit and funding the government—and perhaps the two most important things for the economy and voters—will REQUIRE bipartisan support.

After nearly four years, Twitter is relaxing its rules on political and cause-based advertising, stating its belief caused-based ads can “facilitate public conversation around important topics”. 

The ban was initially instituted in 2019 by ex-CEO Jack Dorsey, who said paying for political reach “has significant ramifications that today’s democratic infrastructure may not be prepared to handle.”

The policy change comes as major advertisers are still boycotting Twitter after Elon Musk’s acquisition and a few weeks after Musk made news for banning journalists.

The return of political ads could have a huge impact on Twitter and public discourse ahead of the 2024 presidential election. But additional insights into the policy change and when it will be enacted are still unclear.

What does this mean for brands?

• Expect challenges to civic discourse. Dorsey initially created the policy due to concerns over an increase in false or misleading information, including potential exposure to threats like AI- created deepfakes. Although relaxing the policy may slightly ease the financial toll felt from the advertiser boycott that occurred months prior, anticipate new challenges. 

• Remain vigilant. As Twitter continues to roll out changes, keep closely monitoring your account and key audience conversations to see if your priority audiences migrate to another platform.

• Stay informed by following @Twitter. The policy will be lifted in the “coming weeks,” though the exact timeline and details are vague. 

• Establish and enforce your online community standards. As content moderation dwindles on Twitter, brands should lean heavily on their own online public community standards.

The 53^rd Annual Meeting of the World Economic Forum in Davos next week will take place against a backdrop of continued geopolitical and macroeconomic turmoil. Interest in this year’s meeting is particularly high after more than two years of canceled, downsized, or postponed meetings.

This year’s WEF advocates system changes in the following areas:

• Energy, Climate and Nature: Reduce carbon emissions, mitigate the effect of climate change and develop more ambitious infrastructure investment plans.

• Investment, Trade and Infrastructure: A new vision and collaborative stakeholder approach for economic prosperity and development.

• Harnessing Frontier Technologies for Private Sector Innovation and Resilience: Companies need to foster emerging technologies and optimize for agility.

• Work, Skills and Care: Future-proof economies require a new social contract that supports stronger investment in education, healthcare and skills.

• Dialogue and Cooperation in a Multipolar World: A new global system that is more stakeholder-based and equipped to handle the dynamics of the 21^st century.

Companies attending should prepare by:

• Developing a strong narrative and determining compelling key messages to communicate to their audience at the WEF.

• Creating a comprehensive communications and advocacy plan with specific goals and objectives. This may involve reaching out to potential partners, customers, investors and key political decision-makers or participating in panel discussions or relevant side events.

• Establishing relationships and setting up meetings, chats or interviews with key media outlets covering WEF and other relevant topics. And use social media to share updates and engage with target audiences. 

• Even companies not attending the event can leverage international attention through social and traditional media platforms. Companies everywhere can showcase their own initiatives and innovations and address conference topics that relate to their products and services, potentially attracting media attention and new customers. 

For more Davos support or to subscribe to our Inside Davos newsletter, email wef@fgsglobal.com.