by Greg Valliere, AGF Management Ltd.
WHAT A PERVERSE IRONY: As Washington reflects on the epic Senate career of Bob Dole, Congress is mired in dysfunction, unable to pass crucial legislation as time runs out before the Christmas break.
THERE’S NO ONE IN CONGRESS TODAY with the stature of Senator Dole, and no one who can quickly break the deadlock over crucial legislation. Congress will focus this week on the defense spending bill, which could take several days to resolve. Then comes the most serious issue — raising the debt ceiling.
BUDGET EXPERTS THINK THE TREASURY can stumble through the next two weeks before there’s a genuine crisis, but waiting until after Christmas is now viewed as risky.
WE CONTINUE TO BELIEVE that Chuck Schumer will have to cave, with the Democrats embracing the reconciliation process to raise the ceiling. Could it be attached to the defense bill? Perhaps, but key leaders are lukewarm. In any event, we do not anticipate a U.S. default.
HOW CAN THERE POSSIBLY BE ENOUGH TIME to pass Joe Biden’s $2 trillion Build Back Better bill? That probably will get pushed into 2022, thanks largely to Joe Manchin, who is convinced that more spending will lead to more inflation. A bill could pass later this winter, but it’s possible that it could sink from its own weight.
IN THE MEANTIME, THE PARTISANSHIP WILL PERSIST: The House may take nearly a full day for a vote to censure Rep. Lauren Boebert (R-Colo.), who made anti-Muslim remarks about Rep. Ilhan Omar (D-Minn.). Hearings over the Jan. 6 riot are coming, amid more subpoenas. And over the weekend, Donald Trump publicly called the Chairman of the Joint Chiefs of Staff a “f—-ing idiot.”
THE GOOD NEWS IS THAT THE ECONOMY continues to expand, with fourth quarter GDP growth of at least 5% likely; last Friday’s jobs report was a fluke, in our opinion. The economy is nearing full employment — and more immigrants are needed to fill job openings. The Fed finally gets it — the fed funds rate will have to rise, perhaps beginning as early as spring.
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BOB DOLE, RIP: On a personal level, two things stand out — his biting sarcasm, often self-deprecating and always very funny. He, Alan Simpson and Mo Udall were the funniest members we ever encountered. Second, you had to shake hands with your left hand, because his right side was permanently crippled. It altered his life and left him in constant pain, but he never complained.
SENATOR DOLE WAS ONE OF THE LAST SURVIVORS of the Greatest Generation, which gave selflessly as World War II raged. Many sacrificed their lives and others sacrificed their careers; Dole wanted to be a doctor. Like George H.W. Bush and John McCain, Bob Dole put the country ahead of politics, a fading concept amid today’s bitter dysfunction.
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This post was first published at the AGF Perspectives Blog.