Covid Aid Bill Still on Track Despite Minimum Wage Ruling; Biden Sends a Message to Tehran

by Greg Valliere, AGF Management Ltd.

A CONTRARIAN TAKE ON MINIMUM WAGE PROVISION: Getting a Covid relief bill through Congress by mid-March just got easier, after a ruling yesterday by the Senate parliamentarian that a minimum wage hike should not be included in the $1.9 trillion aid bill.

THE RULING GENERATED A FIRESTORM of protests from progressives who want to bypass the ruling or kill filibuster rules, but President Biden isn’t on board with those radical options. We continue to view Biden as “progressive lite.”

HAD THE PARLIAMENTARIAN RULED that the minimum wage provision could have been included in the Covid aid bill, it would have led to a bitter fight with moderate Democratic Sens. Joe Manchin and Kyrsten Sinema, both opponents of a hike to $15 per hour. Now that fight is likely to come later in the year.

THE PARLIAMENTARIAN ACTUALLY has speeded up the timetable because a messy fight over the minimum wage now looks less likely. Passage of the massive aid bill — costing between $1.7 and $1.9 trillion — now appears very likely within the next two weeks.

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A MESSAGE TO TEHRAN: The modest U.S. air strike yesterday on Iranian-supported facilities just inside the Syrian border sends three important signals:

First, Biden listened to the Pentagon, unlike Donald Trump. Senior military officials unanimously backed the attack (some wanted an even more aggressive strike).

Second, Biden sent a stern message that Iranian nuclear talks are far from guaranteed. He doesn’t want to appear eager and will insist on strict inspection of Iranian nuclear facilities.

Third, the U.S. will continue to be a major player in the region, targeting Iranian proxies that have attacked U.S. forces and allies. Chilly relations with Israel could warm a bit following the U.S. strike.

SIGNIFICANTLY, THE AIR STRIKE won widespread bipartisan support in Washington; Sen. Marco Rubio and other GOP defense hawks hailed the move.

WITHIN A 24-HOUR PERIOD Biden has angered progressives on the minimum wage and geopolitics. Bernie Sanders and Elizabeth Warren are about to publicly complain — as the long-anticipated rift among Democrats begins to erupt.

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This post was first published at the AGF Perspectives Blog.