Opening Schools Will be a Major Issue in the Next Stimulus Bill

by Greg Valliere, AGF Management Ltd.

EVERYTHING IS POLITICIZED: If Dr. Fauci is politicized, and even the wearing of masks is politicized, then surely the issue of returning to school will be politicized. It will be a prominent part of the stimulus debate as Congress returns next week.

THE PRICE TAG for new aid for K thru 12 education, plus funding for colleges, will approach $100 billion in what promises to be a bloated stimulus bill that’s likely to win enactment in early August. Both parties need political cover; they want to claim that they’re funding education in this new pandemic era, but the debate won’t end in August.

IN THIS POLITICIZED CLIMATE, Democrats will claim that it’s not safe to return to schools, while Republicans will cite the risks of keeping students at home, which could preclude their parents from working. Many cities, including San Francisco and Houston, will opt for on-line or part-time school attendance, which the Trump Administration adamantly opposes.

AS USUAL, THE POLLS WILL PLAY A MAJOR ROLE: The focus yesterday was on polls showing Trump trailing badly nationwide and in the crucial state of Pennsylvania. But there was another survey that politicians will have to grapple with.

A QUINNIPIAC POLL released yesterday reported that only 31 percent of respondents think it’s safe to send students back to school this fall, while 62 percent say it’s not safe. Just 29 percent approve of Trump’s handling of the school reopening.

TRUMP HAS DEMANDED that schools re-open, although he has no authority to compel it or deny funding. So the fall-back position will be to incentivize schools that open by paying for masks, more buses, and more frequent cleaning. The GOP also wants more aid for private and religious schools, which will complicate the debate.

EVEN IF CONGRESS PASSES MORE AID, that would beg the larger issue: Parents may be reluctant to send kids back to schools. The risk of fatalities among young people is very low — the real risk is that they could bring Covid-19 back to parents and grandparents. And older teachers may simply retire; will there be enough teachers in Philadelphia or Chicago?

OF ALL THE ISSUES CONFRONTING TRUMP this fall, the lack of a coherent plan on opening up schools may become the greatest obstacle to his re-election. We wondered, as Education Secretary Betsy DeVos appeared on the weekend talk shows — what’s the plan? There isn’t one.

STATES AND CITIES will go their own way, hoping for stimulus money in August as some schools open and others don’t.

 

 


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI is registered as a portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.

© 2020 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.

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