Here We Go Again — Deadline Approaches on Budget; Kyrsten Sinema Switches
Author: Greg Valliere
December 12, 2022
BOTH PARTIES ARE STILL ABOUT $50 BILLION APART on non-defense spending, but that could be resolved (on the high side) within a week or so. The bigger issue involves what kind of a budget deal will prevail.
THIS IS ARCANE, BUT IN A NUTSHELL: Democrats want an omnibus bill, which would contain everything but the kitchen sink — from child tax credits to federal permitting reform for energy projects. Republicans want a simple continuing resolution (CR), keeping the government open through the holidays, with spending frozen at 2022 levels.
REPUBLICANS WANT A CR THAT might drag on until well into next year, setting up a huge clash by summer over extending the federal debt ceiling — or else. An impasse over spending restraint would revive threats of debt default, which is highly unlikely, but a potentially nasty headline risk.
THERE’S STILL TIME TO GET A DEAL on this year’s budget, but not by the Dec. 16 deadline. If a deal isn’t reached by the next deadline, Dec. 23, a CR extending into early 2023 is likely; a Christmas Eve government shutdown is unlikely. The Big Picture take-away: the pendulum is shifting toward spending restraint.
* * * * *
THIS ANNUAL MID-DECEMBER BUDGET FIASCO was enlivened last Friday when Kyrsten Sinema announced that she’s an independent, not a Democrat. This annoyed her many detractors, but it really won’t change much. Sinema will continue to caucus with Democrats; the party will keep its Senate majority and control of committees.
SINEMA IS INTENSELY UNPOPULAR among Arizona Democrats; she almost certainly was headed to defeat in the party’s 2024 primary. By running as an independent, she will have an outside chance of keeping her seat.
COULD JOE MANCHIN CONSIDER A SWITCH? That potentially would scramble the Senate math, but we’re hearing that Manchin has no interest in leaving the Democrats — even though he faces a very difficult re-election battle in 2024 in West Virginia.
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.