House Hurtles Toward Impeachment, Government Shutdown
Author: Greg Valliere
September 5, 2023
THE MAJORITY OF SENATE REPUBLICANS are aghast; they think a shutdown and impeachment would backfire, costing the GOP the House, Senate and White House in 2024, as moderate voters reject more Washington chaos. The major GOP argument for moderation is coming from Mitch McConnell, who faces a serious health issue.
THE CONFLICT IS IN THE HOUSE: It was clear, several months ago, that there would be consequences for Kevin McCarthy, who made all sorts of concessions to the House Freedom Caucus in order to win just enough votes to become House Speaker.
THREE DOZEN HARD-RIGHT House members appear to have enough votes to reject a budget “continuing resolution” when the new fiscal year begins on Oct. 1. As Newt Gingrich and other Republicans have discovered, the public dislikes this tactic; rating firms like the Fitch agency have become increasingly vocal about budget dysfuncion.
THE FREEDOM CAUCUS WANTS SEVERAL AMENDMENTS to be attached to any continuing resolution — cuts in military aid to Ukraine, more border restrictions for immigrants flooding into Texas, and a new debate on spending cuts, which would scrap the debt ceiling deal that McCarthy and the White House agreed to earlier this summer.
ONE WAY McCARTHY CAN GET A DEAL by Oct. 1 is to beg for votes from Democrats, who he will need again when a final deal has to be ratified, probably in late December. But if McCarthy seeks support from Democrats, the Freedom Caucus could oust him as speaker.
SO McCARTHY HAS TO APPEASE members on the far right, and he has some catnip for them — a pledge to begin an impeachment inquiry into Joe Biden’s business dealings. It’s unclear whether there’s hard evidence against Biden (there is against his son). And there’s no chance that the Senate would vote to convict in a trial (assuming impeachment gets that far). But a House fight over impeachment could inoculate McCarthy on the budget.
EVEN IF THERE’S A TEMPORARY DEAL on Oct. 1, that still would leave a final budget agreement in limbo. Usually there’s a messy deal in December, but the House conservatives could block it unless they get major concessions.
THE IRONY IS THAT REPUBLICANS have a chance of success in the 2024 elections — which could be thwarted if they shut down the government and pursue impeachment. This could be a great gift for the Democrats, who are worried this morning about slumping polls, a Covid outbreak in the White House, and a looming strike in Detroit.
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.