Inching Toward a Compromise on Infrastructure
Author: Greg Valliere
June 1, 2021
Inching Toward a Compromise on Infrastructure
June 1, 2021
AN INFRASTRUCTURE DEAL APPEARS POSSIBLE when Congress returns to town next week — it will take more compromises but President Biden can get a package costing a little more than $1 trillion for highways, bridges, dams, broadband, clean water, etc.
A BILL COSTING SOMETHING LIKE $1.3 TRILLION could win grudging support from Republicans but if Biden agrees to a huge haircut, the populist left surely would be angry. But as one source told us this weekend, if Biden can get $1.3 trillion, why not declare victory and take it, then come back for more?
BIDEN’S JOB APPROVAL NUMBERS — even from the conservative Rasmussen survey — are solidly positive, so he has political capital. Biden may need to spend some of it next week; he will have to lower his latest proposal, which would spend $1.7 trillion over eight years, down from his initial target of $2.25 trillion.
A DEAL WOULD GIVE THE WHITE HOUSE momentum for the next two bills — a huge package of social spending that could move via budget reconciliation, and a tax measure that will have to be scaled back dramatically. These latter two bills are months away from resolution, but an infrastructure package will either fail or pass this summer.
DISAPPOINTING THE LEFT: Biden will have to tone down his tax and spending proposals because at least two Democrats will resist — and in a 50-50 Senate, that would be fatal. The left won’t succeed in killing the filibuster, packing the Supreme Court, making DC a state, etc. But Biden can get a compromise on infrastructure.
THE PRESIDENT FACES CHALLENGES THIS MONTH: His June 16 summit with Vladimir Putin will be contentious, a possible change in leadership looms in Israel, a police reform measure bill will require more dealing on Capitol Hill, and a voting reform bill probably won’t move in Congress later this month.
AS CRITICISM MOUNTS FROM REPUBLICANS over surging crime, illegal immigration, inflation and shortages, Biden needs a good unemployment report this Friday. Was last month’s disappointing 266,000 non-farms payroll rise a fluke, as some economists suspect? We’ll get clues on Friday; analysts expect a job rise of 500,000 to 700,000.
IT COULD BE A TRICKY JOBS REPORT for Biden — another soft number would intensify criticism that generous unemployment benefits are a disincentive for job creation. But a blowout number could ramp up speculation that the Federal Reserve may have to begin considering a tapering of its asset purchases.
THE NEXT MONTH will be pivotal for Biden’s job approval numbers after this
spring’s mood swing. People are traveling, they’re going to malls and restaurants, and the low-keyed Biden gets some credit in polls that also show his big spending is popular.
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.
©2022 AGF Management Limited. All rights reserved.