by Greg Valliere, AGF Management Ltd.
CONGRESS IS GONE, MERCIFULLY, UNTIL NEXT MONDAY, with less than three weeks before adjournment and one very large issue to resolve. It’s not impeachment, it’s the budget.
IMPEACHMENT IS LOOKING LIKE A GIANT FIZZLE: With each new complicated revelation of wrongdoing, the public seems less and less interested. Donald Trump, master of the sound bite, has prevailed — it’s just one big “witch hunt,” and his Republican sycophants in Congress are scrambling to curry favor with him by embracing that narrative.
BUT CONGRESS HAS OTHER WORK TO DO: A budget stalemate, and a potential government shut-down, is possible in late December. We think the odd couple of Nancy Pelosi and Steve Mnuchin can reach agreement on appropriations bills, but a deal-breaker looms: how much new money, if any, should fund a wall on the Mexican border?
TRUMP IS DETERMINED TO KEEP HIS CAMPAIGN PROMISE to build a wall, and if Congress thwarts him in December, a government shutdown could drag well into the winter, as it did last year. The Democrats, headed for failure on impeachment, would welcome a shutdown — an excuse to mock Trump’s boast that he’s a superior negotiator.
REPUBLICANS FEAR A SHUTDOWN: They usually get blamed, so they will focus on the alternative: lumping all of the appropriations bills into a continuing resolution, which would keep the government open through the winter. That’s the likely, but not certain, scenario.
WHAT ABOUT OTHER LEGISLATION? Three bills that Trump seemingly favored a few months ago are now dead: He has pulled the plug on drug price legislation, he has reversed course on vaping curbs, and he has no interest in gun reform.
THE EARLY DECEMBER DRAMA will focus on the NAFTA replacement bill, known as the USMCA. We have little doubt that there are enough votes in both houses to ratify the treaty; virtually all Republicans favor it, as do about a third of Democrats, many of whom would like to tell constituents they did something this fall. It all boils down to whether Pelosi will allow a USMCA vote on the House floor — we think there’s a 55% chance she will.
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THE BLOOMBERG CANDIDACY: We’ve tried to have it both ways with Mike Bloomberg — we think he has the intellect and temperament to be a good president, yet we’ve argued that the aging Wall Street billionaire is far to the right of the party’s activists, who resent his attempt to buy the nomination.
BLOOMBERG HAS A CHANCE: As we wrote last week, he surely must see a beatable field: Joe Biden, losing a step; Pete Buttigieg, too young; Elizabeth Warren and Bernie Sanders, too polarizing. He can outspend them all — plus Amy Klobuchar, Andrew Yang and Cory Booker — in an afternoon.
BLOOMBERG WILL SKIP THE EARLY PRIMARIES, focusing on hiring an army of staffers, working on saturation TV ads, aiming for the March 3 Super Tuesday races, and deflecting pesky reporters who will examine his tax records and personal life. But Bloomberg has a major advantage — no fundraising for him!!
BEFORE MARCH 3, there could be a different winner in Iowa, New Hampshire, Nevada, and South Carolina — that’s entirely possible — so the field could be totally scrambled as spring begins, and Bloomberg would have a chance. If he’s the eventual nominee, the ultimate issue will be clear: will the party’s activists stay at home in the general election?
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This post was first published at the AGF Perspectives Blog.
