What we covered here
• Spending bill showdown: House Majority Leader Steve Scalise said tonight that the government funding plan, negotiated by Speaker Mike Johnson a day ago, is officially scrapped after President-elect Donald Trump came out against it. In his criticism, Trump also injected the politically fraught issue of the US debt limit, saying he wanted an increase approved before Inauguration Day.
• Trump’s Cabinet: Key choices for Trump’s Cabinet are back on Capitol Hill this week. His defense secretary pick Pete Hegseth, who Democrats argue is not qualified due to his past behavior, will have a confirmation hearing on January 14.
• Inflation pressure: The Federal Reserve, which cut interest rates today by a quarter point, is banking on higher-than-anticipated inflation after Trump takes office, according to new projections.