Two Very Important Dates in December
Author: Greg Valliere
November 12, 2020
NOTHING SEEMS TO BE CERTAIN in Washington, including two very important issues — avoiding a government shutdown on Dec. 12 and officially confirming Joe Biden’s election victory on Dec. 14. We’ll look at both of these issues this morning.
GOVERNMENT SHUTDOWN: A so-called “continuing resolution,” keeping the government funded, will expire at midnight on Dec. 11. Could there be a shutdown on Dec. 12? Most sources we’ve talked with believe neither Democrats nor Republicans want that to happen, but no one is quite sure where Donald Trump stands.
KICK THE CAN: The most likely scenario is to pass still another continuing resolution, lasting until a few days before Christmas, or perhaps lasting well into 2021. Congress also has to pass a defense spending bill, which faces a veto threat from Trump, who objects to changing names of military bases that currently are named for Confederate war heroes.
OUR SENSE IS THAT ALL OF THIS WILL GET RESOLVED without a shutdown, but this could take time. It could become a major political distraction in the early weeks of a Biden Administration — or it could become a vehicle for a pandemic stimulus bill.
* * * * *
THE MORE COMPLICATED AND CONSEQUENTIAL ISSUE is the certification of the next president, a process which will begin to unfold soon.
TO SIMPLIFY (WHICH IS A CHALLENGE), states will ratify their presidential election winners in the coming weeks; the law states that all disputes must be resolved by Dec. 8. Then the Electoral College will vote on Dec. 14 — but could some “faithless electors” complicate the process?
THERE HAVE BEEN 165 “FAITHLESS ELECTORS” in U.S. history, and there were seven in 2016 (none have affected the election outcome). The Supreme Court has ruled that these electors can be punished with fines, but does the law nullify their “deviant votes?” Unclear. And in some states, legislatures may have authority to send a slate of electors to Washington who do not reflect the outcome of their states’ election.
IN ANY EVENT, BIDEN — in line for at least 290 electoral votes — seems to have a large cushion; 270 are required to win. Thus it’s likely that he will officially be declared “President-elect” on Dec. 14, although he unofficially has that label now, even on Fox News.
THE NEXT STEP WOULD BE counting the electoral votes in Congress on Jan. 6, followed by the inauguration at noon on Jan. 20. The key issue, of course, is whether any court appeals could delay this process, giving Trump a glimmer of hope; thus far it seems highly unlikely that he can prevail. (Whether he concedes is another issue entirely.)
THESE ARCANE RULES are one of many reasons why a movement has formed to abolish the Electoral College, replacing it with a direct vote. Proponents of this change made great progress in the last few years but their effort has stalled with about 2/3rds of the state votes needed. Electoral College reform thus does not appear to be imminent.
THIS IS 2020, the year from hell, as Covid-19 cases explode throughout the country, so anything could happen. We may not get a budget deal by Dec. 12, but a final Electoral College outcome on Dec. 14 is coming into focus.
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.