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Source: Flickr user Ryan McFarland.

Since March 2009 the Dow Jones Industrial Average and S&P 500 have been practically unstoppable. Neither abnormally bad weather in the U.S. nor the threat of geopolitical tensions has changed the rising tide of America's iconic stock market.

However, ask Americans how they truly feel about the U.S. as whole or the economy, and you're likely to be painted a far different picture. Based on a Pew Research study released in September, 62% of respondents noted that they were unhappy with the way things were going within the U.S. (note that this was an all-encompassing and general question), while 58% viewed the current economic situation as "bad." Furthermore, 30% expected the economy to worsen over the next 12 months, with an additional 33% predicting that it would "stay the same." It's tough to imagine the economy rising when so many investors have such a bleak view of the economy. 

However, one source could hold the answer as to where stocks head next: the U.S. Congress.

Investors aren't oblivious to the fact that fiscal policy set by lawmakers can affect the course of the U.S. economy and therefore the stock market. Things like corporate and individual tax rates, as well as annual government spending levels, are all determined by the actions of Congress and the president. Actions taken by the U.S. Congress can therefore have wide-ranging impact on the overall health of the U.S. economy and, ultimately, the stock market.

This is an important point to understand, as there are three upcoming issues that Congress will soon have to vote on that could guide where the stock market will head next.

1. The Highway Trust Fund
One of the more pressing issues currently facing Congress is what to do about the Highway Trust Fund. The Fund, which generates revenue from federal gasoline and diesel taxes, is responsible for providing money to assist in constructing and maintaining bridges, roads, mass-transit systems, and select aspects of America's energy infrastructure. According to The Wall Street Journal, roughly $216 billion is spent annually on highway and mass-transit construction and improvements, with the Highway Trust Fund kicking in about one-quarter of that total.

The problem is that the Highway Trust Fund is heading toward insolvency. Had Congress not voted to extend funding through May 2015 (kicking the can down the road once again), the Fund would have been running a negative cash balance by September 2014.  

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Source: U.S. Department of Transportation.

The bigger problem is that infrastructure jobs comprise about 14.2 million jobs in this country -- 10% of our workforce -- according to a study from Brookings. In other words, if funding begins to get cut to individual states, the trickle-down effect from contractors to individual workers could result in substantial layoffs. A failure of both political parties to work together on this issue could be devastating to select states that have a higher concentration of infrastructure jobs, as well as the U.S. economy as a whole.

2. The U.S. debt ceiling
Speaking of "kick the can," perhaps no Congressional topic has resulted in more pushback from our nation's two-party system than the debt ceiling.

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Source: Flickr user Alan Cleaver.

Put simply, the debt ceiling is the amount of money the U.S. government is authorized to borrow in order to meet its expenses, given that it often runs a budget deficit. Without the ability to borrow money, the U.S. government could potentially default on some of its outstanding loans and may have to shut down critical federal programs, which would entail the furlough of some federal employees.

As you might imagine, the consequences on a financial level of not raising the debt ceiling could be dramatic. Based on data from The Washington Post in October 2013, total government payments sent out would drop by roughly one-third, and Goldman Sachs at the time estimated that U.S. GDP would see a decline of more than 4%! Thankfully, congressional voting diffused the October 2013 government shutdown and, following the 78th debt-ceiling limit hike since 1960, pushed the next U.S. debt ceiling vote out to March 2015.

But what happens next is anyone's guess. Elections are constantly changing the makeup of the House and Senate, which have the potential to alter the debt-ceiling vote. In addition, the lack of a balanced budget remains a constant hindrance to members of Congress opposed to further debt-ceiling raises. Needless to say, March 2015 promises to be quite interesting.

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Source: White House via Flickr.

3. The president's annual budget
Lastly, investors will want to keep a close eye on the U.S. budget presented by President Obama, which is usually due by February of the year prior to implementation. In this case, President Obama should be laying out his budget for fiscal 2016 as of February 2015.

The approval of the president's budget proposal by Congress could actually be the most important market-mover of them all, and not necessarily because it may be the first major congressional vote in 2015. I say this because the president's budget includes spending actions that could directly impact the aforementioned Highway Trust Fund and the U.S. debt ceiling, and it could also clue investors in on how much funding is expected to go to GDP-critical industries, particularly the defense and security industries, which accounted for about 19% of the $3.5 trillion spent in 2013.

A drawn-out approval process could dampen investor sentiment and reduce foreign investors' confidence in the U.S. economy, possibly hurting the Dow and S&P 500.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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