Reeling Biden Floats Trial Balloon on Lower Cost for Infrastructure Bill

by Greg Valliere, AGF Management Ltd.

For Print Only Logo

Insights and Market Perspectives

Author: Greg Valliere

September 23, 2021

Reeling Biden Floats Trial Balloon
On Infrastructure Price Tag
September 23, 2021
WE NEVER UNDERSTOOD the Washington practice of setting deadlines, because they usually slip and make politicians look inept. But here we go again, with three huge issues facing deadlines that prompted frantic negotiations this week. Here are the three —

1. Government shutdown: This deadline is clear — One second past midnight in the morning of Oct. 1, when the government could shut down if there’s no spending deal for the new fiscal year. The risk to investor and consumer confidence is huge, so we think a “kick the can” extension probably will pass at the last moment, keeping the government open.

The sense we got yesterday was that Democrats know they could get much of the blame if there’s a shutdown. Senate Minority Leader Mitch McConnell will not relent. The Democrats control both houses (barely) and this could be a rare shutdown crisis that hurts them more than Republicans.

2. Debt ceiling: This deadline is vague because it involves Treasury receipts. We think a default could occur between Oct. 31 and Nov. 10 if there’s no extension of the debt ceiling. That’s more than a month away — plenty of time for more posturing and fear-mongering before the Democrats cave on this issue as well.

3. Infrastructure taxes and spending: This is a total mess, with Democrats fighting among themselves, threatening to blow up the entire process. Biden met with leading moderates and progressives yesterday, with one clear take-away: he’s willing to accept a social spending bill that costs less than $3.5 trillion. He essentially said “make me an offer.”

A Sept. 27 House deadline to pass both infrastructure bills probably will slip. We still think there’s plenty of bipartisan support for a $1 trillion infrastructure bill for highways, bridges, wi-fi, clean water, etc.

But the second bill will get a huge reduction — perhaps so huge that House progressives will walk away from the entire process. But that might not occur until winter; there’s no rigid deadline on this issue, which could bounce back-and-forth between the House and Senate for weeks.

PRESIDENT BIDEN IS REELING: His poll approval numbers have plunged into Donald Trump territory — into the low-40s in some polls. And Biden faces other issues, headed by the immigration crisis, which has horrified Republicans, Democrats and the general public.

HOW BIDEN HANDLES IMMIGRATION, crime, inflation and the three fiscal issues we listed above will determine the trajectory of his presidency heading into 2022 and the midterm elections. For now, the elections are shaping up as a rebuke to him and the Democrats.


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.

Total
0
Shares
Previous Article

Tech Talk for Thursday September 23rd 2021

Next Article

Cenovus Energy Inc. - (CVE.TO) - September 23, 2021

Related Posts
Subscribe to AdvisorAnalyst.com notifications
Watch. Listen. Read. Raise your average.