Moving Past the Shutdown Threat; Joe Biden, the Democrats’ Front Runner
Author: Greg Valliere
February 4, 2019
AS A NEW DEADLINE APPROACHES, there are three possible options as another standoff looms on funding for a border wall — and a potential government shutdown is the least likely of those options.
THE PRESIDENT IS IN A BIND: He’ll offer a fresh start in tomorrow night’s State of the Union address, but Republicans are defecting on a wall. Senate Majority Leader Mitch McConnell wants a negotiated deal; his troops aren’t willing to go through another wrenching shutdown. So here are the three options:
1. Declare a national emergency: Trump is leaning toward this option, based on the assumption that House-Senate negotiators won’t come up with anything he can support. By declaring an emergency, Trump can shift funds from military construction projects to build a wall. This would prompt instant lawsuits, but it probably would avoid a shutdown. One negative: many Republicans, including McConnell, think this is a terrible idea that would set a precedent for future presidents to abuse.
2. A deal: The House-Senate negotiators need to finish by this Friday to allow votes in both houses before the Feb. 15 deadline, and there’s a decent chance they will make progress this week. Trump says he won’t consider anything that doesn’t include $5.7 billion for a wall — but what if there’s money for “border security,” or steel slats? There’s a deal to be had if all parties can accept some creative language.
3. Still another shutdown: Last Friday’s stunning jobs report showed that the country can survive a shutdown — but for how long? An inevitable breakdown at airports is one of many reasons why neither party wants another shutdown; it’s possible that Congress could over-ride a Trump veto and re-open the government if 800,000 people once again are denied paychecks. If Trump senses a growing backlash against another shutdown, he could be forced to cut a deal on modest funding, theoretically getting something rather than a stinging veto defeat. This is why a declaration of a national emergency makes the most sense for him.
JOE BIDEN, FRONTRUNNER: He’s inching closer to a declaration that he’s running for president — and why not? Joe Biden would begin with a significant lead among Democrats nationally and in Iowa. The former vice president has a roughly 10 point lead in the Democrats’ growing field and consistently beats Trump by about 10 points in most national polls — the biggest margin among Democrats vs. the president, although right now EVERY Democrat beats Trump, even Elizabeth Warren.
A NEW IOWA POLL released this weekend by Emerson College shows that among Democrats, Biden has 29%, with three others in double digits: Kamala Harris at 18%, Bernie Sanders 15% and Warren 11%. In a poll of all voters in Iowa, Biden is the only Democrat to lead the president, by about 2 points; Trump won the state in 2016 by about 9 points against Hillary Clinton.
BIDEN, 76, HASN’T DECIDED WHETHER HE WANTS to spend the next year in Holiday Inns, raising money, and facing inevitable questions about his age every time his voice goes hoarse. He surely must know that the party wants a fresh face, but he sees polls that show he has the best chance of beating Trump. Biden has a valuable asset — people like him — but for a party that wants fresh ideas, he has few.
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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), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
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