It may only be the first of January, but after more than a week out of the office and a very successful effort during that time to catch up on some sleep, the year ahead is starting to come into better much better focus as far as Washington and economic policy is concerned.

So what will Washington do between now and Election Day when it comes to the economy?  If we’re talking about the White House and Congress, the answer is “not much.”

As they did this past year, the Bush administration and congressional Republicans won’t allow congressional Democrats to do much of anything so that the Dems can’t get credit for making it happen.  Democrats will have a majority but won’t have either the 60 votes to stop a filibuster in the Senate or the 2/3 vote need to overcome a veto.  The White House, meanwhile, will continue to insist that the economy is fine because the president’s policies have made it so.

Unless there’s a clear economic crisis that everyone agrees is happening which provides the political cover elected officials need to move away from their established positions, the only thing we’re likely to see from the White House, House, and Senate this year as far as the economy is concerned are pious statements and lots of hearings that place the blame elsewhere and don’t lead to anything actually happening.

That will shift the full burden to the Federal Reserve and financial markets.