by Greg Valliere, AGF Management Ltd.
August 2, 2021
ALEXANDRIA OCASIO-CORTEZ put Democrats on notice this weekend — she’s furious with the party’s establishment over pending evictions, and she has the votes to block the passage of infrastructure bills this fall.
WHO’S TO BLAME ON EVICTIONS? In a rare legislative fumble, the Biden White House seemed to overlook the political risks in letting the eviction moratorium expire on Saturday night. Nancy Pelosi gets plenty of blame; she also seemed to get caught off guard over the eviction furor.
IT’S UNLIKELY THAT THE HOUSE WILL RETURN any time soon, so the media will have a field day with reports of families thrown out on the street just as Covid cases spike. The solution will be for states to end their glacial distribution of rent aid; $46 billion has been appropriated but virtually none of the money has been spent. States have dropped the ball as well.
WHAT STANDS OUT IN THIS FIASCO is the unusually blunt criticism of the White House by progressive Democrats. The Biden team spent late last week focused on Covid and fires in the West, and only belatedly urged Congress to act on evictions. Some states, including New York, have eviction bans that will continue for the rest of this month, but Congress probably won’t return until mid-September.
OCASIO-CORTEZ says the progressives have nearly 100 supporters in the House, which seems high. But even if she has only one-third of that amount, it’s enough to derail the infrastructure bills, and she knows it.
THE SENATE IS LIKELY TO APPROVE the $1 trillion infrastructure package that was ironed out yesterday; passage could come within a week despite persistent concerns over “fuzzy math” used to pay for it. Then Chuck Schumer will attempt to green-light a $3.5 trillion package of social programs, authorizing a reconciliation process that would be used this fall to pass the measure with only 50 Senate votes.
THIS IS WHERE THINGS GET TRICKY: Ocasio-Cortez says the House will not agree to the first infrastructure bill unless the second one also passes in the Senate. The problem — Sens. Joe Manchin and Kyrsten Sinema are opposed to spending $3.5 trillion in the second bill.
BOTTOM LINE: The celebratory Senate mood will persist, as Schumer moves his two bills toward passage, probably before the summer recess in a week or so. But there’s absolutely no guarantee that the House will go along in the fall, which is now apparent after Ocasio-Cortez made it clear that she will be a major player — an albatross, not an ally — for Biden.
* * * * *
OBSCURED BY THIS WEEKEND’S furor over Covid and evictions was the attack on an Israeli oil tanker in the Persian Gulf. The attack, almost certainly by an un-manned Iranian drone, killed two people on the ship. As an extreme conservative, Ebrahim Raisi, prepares for his inauguration on Thursday, chances of a nuclear agreement between Iran and the U.S. have faded significantly.
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 Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. 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.
©2021 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
