A Government Shutdown on Friday Night?
Author: Greg Valliere
September 27, 2022
ONE THING IS CERTAIN: Funding for the new fiscal year will not pass any time soon; a continuing resolution will be necessary, setting Dec. 16 as the deadline. Still another brief extension is likely then, as Congress continues its maddening pattern of jamming consideration of spending bills into a frenzied week before Christmas.
THIS WEEK’S DEBATE will be about what to attach to the continuing resolution. It’s likely that the measure will include at least $12 billion in emergency funding for Ukraine, money for the water crisis in Jackson, Miss., funding for resettling Afghan refugees, heating assistance for low-income families and a five-year reauthorization of the FDA’s user fee programs.
SO WHAT’S THE CONTROVERSY? There’s a juicy political tale of revenge, as Republicans are seeking to kill a “permitting” measure from moderate Democrat Joe Manchin that would make it easier to approve and build energy pipelines. This is generally favored by most Republicans, but they support a permitting bill from the other West Virginia Senator, Shelley Moore Caputo, a Republican. Why?
MANCHIN STUNNED REPUBLICANS by flipping on the massive so-called Inflation Reduction Act, which he essentially steered to passage in late summer — raising taxes and adding thousands of new IRS agents, among several provisions detested by the Republicans. And now they want revenge.
SENATE MAJORITY LEADER Chuck Schumer promised Manchin there would be a vote on his permitting bill (theoretically this week), but the last thing Mitch McConnell and other Republicans want to do is give Manchin another victory.
IT’S CLEAR THAT MANCHIN’S PROPOSAL will fail in a procedural vote today; many liberal Democrats oppose it and some have blasted a provision that would make it easier to build fossil fuel infrastructure and guarantee completion of the Mountain Valley Pipeline, a natural gas project that passes through West Virginia.
AS THE FISCAL YEAR COMES TO A CLOSE at the end of this week, Congress will have to decide whether it’s worth the embarrassment of shutting down the government just five weeks before the Congressional elections.
MANCHIN OFTEN GETS HIS WAY, but he’s burned lots of bridges — and he eventually will have to cave on permitting. Congress is likely to pass a continuing resolution by Friday afternoon, agreeing to address permitting later this year or in 2023. Could there be a brief shutdown? There’s maybe a 25% chance.
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.
©2023 AGF Management Limited. All rights reserved.