Elizabeth Warren’s Bank Bill Has No Chance; Talking About the Taboo Subject — Social Security Reform
Author: Greg Valliere
March 16, 2023
THERE’S NO CONSENSUS IN WASHINGTON over how — or whether — to deal with this banking crisis. Many Democrats want to toughen standards, applying them to mid-sized banks, while most Republicans blame lax regulations and President Biden’s economic policies. Some even blame a “woke” agenda that has intimidated bank officials.
OUTSPOKEN SEN. ELIZABETH WARREN will fail in her attempt to toughen laws covering smaller banks that won a rollback from regulations in 2018. Warren doesn’t have enough votes to block a Republican filibuster against her bill in the Senate, and she lacks support in the House.
WARREN, 73, IS LIKELY TO FOCUS on winning re-election to her Senate seat next year, but if this crisis persists, she might give the presidency one last shot. Running against the banks has been a populist staple for the past three centuries.
AMID THE FINGER-POINTING comes the most likely target — the Federal Reserve, already under fire for its failure to anticipate inflation. Hearings will begin soon on what appears to be a lax regulatory climate at the San Francisco Fed, where red flags at the Silicon Valley Bank apparently were ignored.
JANET YELLEN, who testifies before Congress at 10 a.m. this morning, undoubtedly will pledge a thorough investigation of SVB, and a likely toughening of regulations. But that won’t satisfy American voters, who are adamantly opposed to “bailouts” that favor the wealthy. If this issue isn’t contained quickly, it will have huge political implications as the 2024 campaign begins.
* * * * *
AGAINST ALL ODDS, SOCIAL SECURITY is back on the table. Members in both parties have formed ad hoc committees to explore all options: raising the retirement age, hiking payroll taxes, cutting benefits for the wealthy, changing COLA provision, etc.
MOST PRESIDENTIAL CANDIATES will stay away from this issue, fearful of Donald Trump’s wrath against anyone who advocates benefit cuts. But we have been surprised in recent days to hear that the outlines of reform plans are being debated behind closed doors on Capitol Hill.
PASSAGE OF A REFORM BILL is not imminent, but there’s a growing consensus that something has to be done; there’s no hope of meaningful deficit reduction without Social Security reform. Hats off to the brave members of Congress who are willing to talk about this; their proposals will win enactment eventually.
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.
©2023 AGF Management Limited. All rights reserved.