Congress Grasps at Straws in Default Debate; Astonishing New Trump Polls
Author: Greg Valliere
May 3, 2023
THERE ARE VAGUE PLANS to bring a “discharge petition” to the floor of the House, allowing a vote on a clean debt ceiling hike, with Democrats citing the 14th amendment to the Constitution to waive the debt ceiling and keep government open. Good luck with that.
WITH A TINY MAJORITY, Kevin McCarthy can’t afford to lose more than four or five House Republicans on a discharge petition, but we think he would have the votes to defeat this gambit. As for a Constitutional challenge, legal scholars are divided on whether the debt ceiling is legal — but with the Supreme Court controlled by conservatives, a Constitutional challenge probably would fail.
JOE BIDEN AND JANET YELLEN have refused to consider these gimmicks (which include the minting of a $1 trillion coin, which theoretically could fund the government). Their most likely tactic in the next few days may be a fierce argument that Social Security benefits could be jeopardized by a debt default, which would scare seniors and inflict a toll on Republicans.
A FINAL DEAL IS NOT LIKELY on May 9, when key leaders of both parties meet with President Biden. There may be a consensus on slowing spending increases, but an agreement on details is not imminent, which will increase the likelihood of kicking the can down the road. As for a Constitutional challenge, it will muddy the waters and further polarize the Supreme Court, and it’s not the answer to this crisis.
* * * * *
ASTONISHING NEW TRUMP POLLS: Establishment Republicans in Washington are horrified by new polls. A survey released yesterday showed Donald Trump ahead in a nationwide survey of Republicans, with a 58% to 22% lead over Ron DeSantis, and no other Republican topping 5%. In key states, the results are similar — Trump leads in DeSantis North Carolina by 55% to 22%.
THE INCREASING LIKELIHOOD that Trump will win the Republican nomination has generated deep anxiety among party veterans, especially in the Senate. They worry about a general election blowout, with Trump losing his re-election bid while dragging down House and Senate candidates.
THE SEARCH FOR ALTERNATIVE CANDIDATES has been futile, although we think DeSantis could become a more formidable candidate by summer. If Nikki Haley, Mike Pence, Asa Hutchison, etc. don’t catch fire, Trump will remain the frontrunner. We think Virginia Gov. Glenn Younkin could be a serious candidate, but he seemingly is in one week and out the next.
THE PROSPECT OF TRUMP WINNING THE NOMINATION virtually unopposed will provoke the media to find someone who could give them a horse race to cover. It’s possible there may a surge for activist Vivek Ramaswamy or feisty New Hampshire Gov. Chris Sununu, but it’s unlikely that either could mount a serious challenge. Trump is the likely nominee.
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. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.
AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
For further information, please visit AGF.com.
©2025 AGF Management Limited. All rights reserved.
