Smacked by Voters, Democrats Add More Goodies to Social Spending Bill
November 4, 2021
Smacked by Voters,
Democrats Add More Goodies to Social Spending Bill
November 4, 2021
GO FIGURE: After a dismal electoral performance on Tuesday, it’s unclear whether Democrats learned a lesson. They added even more goodies yesterday to the massive $1.75 trillion social spending bill.
SEEMINGLY EVERYONE IN THIS STUNNED CITY offered advice to the Democrats — pass an aggressive bill, stop the spending, listen to parents, etc. It’s clear that the public is restive, worried about inflation and a choppy economy — which many voters blame on Joe Biden’s huge spending goals.
WE’RE NOT SURE THAT THE THREAT OF MORE SPENDING is having a major impact on the economy or the markets; more troubling is that there’s no road map for the end of a pandemic, with its accompanying supply chain disruptions and an acute labor shortage.
IN ANY EVENT, there was little contrition from Democrats on spending yesterday; the vast majority of Congressional Democrats insisted that they will speed up consideration of the two infrastructure bills.
THE SAUSAGE-MAKING intensified in the House, with members adding more provisions to their 2,135-page bill. Speaker Nancy Pelosi is determined to add paid family and medical leave, which may survive in some form. Other provisions, once considered dead, have been resurrected, including a state and local tax (SALT) break.
PROGRESSIVES ARE ANGRY about SALT reform, which would raise the $10,000 cap to $72,500, effective this year, which would hike tax exemptions — and lower tax bills — next year for residents in wealthy states like California, New York and New Jersey.
OTHER GOODIES HAVE BEEN ADDED, including a new tax credit for companies that employ local news journalists, expansion of a tax break for employers that pay for child care and deductions for union dues and employee uniforms. One can only imagine what else is tucked into this massive bill.
NOT SUPRISINGLY, ADDING MORE PORK is not favored by Sen. Joe Manchin (unless it’s for West Virginia). He will be the final holdout — Kyrsten Sinema apparently is on board with the bill — but after hearing Manchin last night on Fox TV, it appears he wants more concessions. Biden undoubtedly will have a private meeting with Manchin today or tomorrow.
BOTTOM LINE: We still think there’s solid support for the first bill, which funds
basic infrastructure spending for highways, bridges, clean water, wi-fi, etc. The second bill may need more trimming — not more goodies — before Manchin agrees to it.
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.
©2021 AGF Management Limited. All rights reserved.