Biggest Obstacle to Infrastructure Bill May Be Nancy Pelosi
Author: Greg Valliere
July 26, 2021
Biggest Obstacle to Infrastructure Bill
May Be Nancy Pelosi
July 26, 2021
HOW’S THIS FOR IRONY? Progress on infrastructure spending may grind to a halt because of House Speaker Nancy Pelosi, who adamantly opposes a compromise deal that is likely to emerge in the Senate this week.
PELOSI SAYS SHE WON’T ALLOW a House vote on just the one Senate bill, which would add roughly $1 trillion for highways, bridges, dams, water, etc. She insists that a second infrastructure bill also must be included; it would spend several trillion dollars — estimates vary — for social spending on college tuition, child tax credits, housing, etc.
NOT SURPRISINGLY, PELOSI HAS INFURIATED Republican negotiators in the Senate, who are close to a $1 trillion bipartisan deal, which should pass within days. But these Republicans — and one or two Democrats — are not ready to approve the very expensive second bill.
WITHOUT A SECOND BILL, Pelosi won’t move anything on the House floor. There’s a precedent: she bottled up a covid aid bill for several months last fall, finally getting less than Democrats initially sought.
SO THE FOLLOWING SCENARIO SEEMS LIKELY: Senate passage in early August of a $1 trillion bill, no agreement on a second bill, with the House gridlocked. A wide range of issues — social infrastructure, a debt ceiling increase, tax hikes and a 2022 budget — will be stalled until fall. These bills eventually will move, but for now — Pelosi can’t take yes for an answer.
THIS IS STILL ANOTHER HEADACHE for Joe Biden, whose job approval rating has slipped as crime explodes and Covid surges. He needs a victory — and infrastructure spending is popular — but Pelosi is focused on the 2022 election and an investigation of the Jan. 6 riot on Capitol Hill. That might win some political points, but passage of an infrastructure bill would be far more significant for Biden.
* * * * *
CANADA NOW HAS MORE FULLY VACCINATED PEOPLE than the U.S. yet the Biden Administration has kept the border closed; vaccinated Canadians won’t be able to enter the U.S. until Aug. 21, even though Canada has declared Americans can cross the border by Aug. 9. The closed border has been a significant economic drag on both sides of the border.
* * * * *
THIS IS FED WEEK, and we reiterate our assertion that the surging delta variant will have a major impact on the central bankers. They will talk tough on inflation, but Covid will preclude the Fed from any policy changes. If this new outbreak of the virus persists into early fall, the Fed will have to stay neutral; a tapering of asset purchases is still months away.
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.