by Greg Valliere, AGF Management Ltd.
THE AMERICAN PUBLIC is nervous about inflation and confused by mixed signals from Washington on Covid — yet the tone-deaf Democrats are determined to plunge into a debate this week over Senate filibuster rules.
WE UNDERSTAND WHY PROGRESSIVES want to change the rules, which could open up debate on voting reform legislation. Joe Biden will embrace the cause today in Atlanta, but his message may get drowned out by last night’s football win by Georgia.
EVEN THE FALLBACK — making modest tweaks to existing filibuster laws — is likely to fail, amid growing animosity in the party toward Sens. Kyrsten Sinema and Joe Manchin, who aren’t on board. Their increasing alienation could derail the Build Back Better bill.
THE MESSAGE TO BIDEN SHOULD BE CRYSTAL CLEAR: He ran as a moderate, and his embrace of the progressive agenda has backfired spectacularly. There simply isn’t public support for defunding the police or spending another $2 trillion on social spending; fairly or not, the public believes that amount of spending exacerbates inflation.
IN FACT, A MAJORITY OF AMERICANS may not support the expanded child tax credit. In a stunning article in yesterday’s New York Times, it was clear that even beneficiaries of the tax break are lukewarm, fearing it would reward people who won’t work.
THE FILIBUSTER ISSUE SIMPLY CANNOT COMPETE with the public angst over inflation, which will put Fed Chairman Jerome Powell on the hot seat today as his confirmation hearings begin. Powell needs to talk tough on inflation, even as his rhetoric worries the markets.
COULD POWELL BE IN TROUBLE? The last thing he needed was another trading scandal at the Fed, which Sen. Elizabeth Warren pounced on yesterday. She’ll go for the jugular in today’s hearing. We think Powell will win re-confirmation, but it could be a surprisingly close vote later this month.
THE COVID EXPLOSION has caught the Biden Administration off guard, even though a winter surge was predicted months ago. Donald Trump was mercilessly blamed for his failure to speed up testing, and now Biden faces the same criticism as U.S. fatalities climb to about 1,500 per day.
IT’S ALL ABOUT MESSAGING IN THIS CITY, and it’s been dismal — is inflation really caused by greedy companies? What’s the official stance on quarantining? Yet these two issues, which most worry the public, will take a back seat this week as Chuck Schumer attempts — unsuccessfully — to ram filibuster changes through the Senate.
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This post was first published at the AGF Perspectives Blog.
