Joe Manchin — The Most Powerful Person in Washington?
Author: Greg Valliere
February 10, 2021
POLITICO AND OTHERS HAVE PROCLAIMED that Joe Manchin is the most powerful person in Washington (we’d put Joe Biden and Jerome Powell higher, not to mention Elizabeth MacDonough, the Senate parliamentarian; more about her later).
MANCHIN’S POWER BEGINS WITH THE NUMBERS: The Senate is deadlocked, 50-50, which means Vice President Kamala Harris will break all ties. But that assumes every Democrat, including Manchin, votes with the party. Will he?
MANCHIN, 73, IS A MODERATE FROM WEST VIRGINIA, where Democrats are increasingly scarce. He has made it clear that he could side with Republicans on several issues — he opposes scrapping the filibuster, he is reluctant to vote for a big minimum wage hike, and while he is leaning toward supporting the $1.9 trillion Biden stimulus bill, he opposes sending checks to families earning $100,000 or more.
THE BIGGEST DISPUTE involves the minimum wage hike, which is adamantly opposed by small businesses, which obviously are struggling. Manchin might oppose any minimum wage hike that’s not moderate (well under $15 per hour) or phased in over several years.
THE COVID AID BILL thus could be scaled back; we still think that lower income thresholds for government checks will lower the final pricetag to something closer to $1.5 trillion than $1.9 trillion. Once this bill passes, the Democrats will move on to tax hikes and a massive green/infrastructure bill. This is where Manchin will be particularly important.
WE THINK HE WILL HOLD OUT AGAINST big tax hikes and will strongly oppose a green agenda; Manchin urged Biden yesterday to reconsider his killing of the Keystone Pipeline. Manchin is a strong advocate of fossil fuels, and may not cooperate with Democrats on a huge new green bill. And, importantly for the markets, he may not support a major tax hike.
THE MINIMUM WAGE BATTLE may hinge on Elizabeth MacDonough, the non-partisan Senate parliamentarian, who will have to decide whether a wage hike may violate the “Byrd rule,” which mandates what can be in a budget reconciliation bill.
IT’S POSSIBLE THAT MacDONOUGH may rule that a minimum wage hike is not germane to this bill — making her, for the next month at least, one of the most powerful people in Washington.
* * * * *
REPUBLICANS WERE INCREDULOUS YESTERDAY over the inept performance by Donald Trump’s attorneys, who made a very weak case that the impeachment trial is unconstitutional. There was an additional GOP defector yesterday — and there may be one or two more in the coming days — but odds of acquittal are still around 80%, barring some explosive new evidence.
IN PRIVATE, EVEN REPUBLICANS WHO WILL VOTE for acquittal are exasperated by Trump; how much embarrassment can they endure? There’s a growing sentiment that he’s an albatross — incapable of helping the GOP in suburbs, among women and independents. His support within the party will gradually erode, as Republicans conclude that Trump’s base alone cannot win a general election.
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.