Donald Trump Gives Democrats a Late Christmas Present
Author: Greg Valliere
January 24, 2020
DEMOCRATS IN THIS TOWN have been hand-wringing about their prospects in the presidential race; Las Vegas oddsmakers have made Donald Trump the clear favorite But, inexplicably, he gave Democrats a major opening this week — Social Security, the third rail that politicians never want to touch.
WE TALKED WITH REPUBLICANS YESTERDAY who were incredulous that Trump would casually tell Fox and CNBC interviewers that he will take on Social Security reform later this year, apparently after the election.
NANCY PELOSI AND OTHER DEMOCRATS immediately pounced, claiming there’s a secret Republican plan to cut Social Security benefits. There’s no plan, although most Republicans agree that deficit reduction cannot be accomplished without entitlement cuts. The irony is that neither Republicans nor Democrats really care about deficit reduction.
BUT THERE’S A LONG LIST of Social Security options, most proposed by Paul Ryan several years ago, that make Republican lawmakers very nervous. Many of them were on the phone to the White House yesterday, urging no further Trump comments on the subject.
DAMAGE CONTROL: The president then sent out a tweet that seemingly disassociated himself from his own comments the previous day on Social Security and Medicare cuts — Trump said he wants to “strengthen” retirement programs. That wasn’t enough to quell the furor; one Republican staffer bemoaned the astonishing 142 tweets that Trump sent out on Wednesday. “When you tweet that much and say anything to make headlines on Fox, controversy is inevitable,” our source said.
POLITICS ASIDE, THERE’S A CASE for slowing the growth of entitlement programs like Social Security. Experts have proposed reforms of the cost of living component,
raising the eligibility age, increasing Social Security taxes, tightening disability and eligibility rules, more aggressively means-testing benefits, etc. — but chances of enactment are close to zero.
TRUMP THINKS HE CAN CUT A DEAL on virtually every issue, but this is one he needs to avoid; he can’t out-bid the likes of Bernie Sanders, who wants to expand Social Security benefits.
ONCE TRUMP WINS ACQUITTAL IN THE IMPEACHMENT TRIAL, he will move on to other issues — including a tax cut that would lower middle class rates to about 15%. That has little support in the House, where it will be a tough sell without business tax increases. But Social Security reform is a virtually impossible sell, and Democrats are smacking their lips — Trump has given them an issue.
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.
