Sleepy Joe Biden, Still Underestimated
Author: Greg Valliere
May 31, 2023
THE DEFICIT DEAL will have a modest impact on economic growth, perhaps slicing 0.3% or 0.4% off GDP in the next fiscal year, largely because student loan repayments will resume this fall. The spending cuts are far smaller than Republicans expected yet the measure will sail through the House later this week, thanks to support from Democrats, urged on by Biden.
THE EMERGING POLITICAL NARRATIVE is coming into focus: the far left is angry, but that was to be expected. The more dramatic development is the widening rift among Republicans, many of whom would like to oust House Speaker Kevin McCarthy, who apparently will get little credit for slowing spending growth and avoiding a debt default.
WE THINK McCARTHY WILL HANG ON, largely because there’s no obvious successor to him as House Speaker. But he’s on notice that a move to oust him is possible later this year. Meanwhile, nearly a dozen GOP presidential candidates are bashing each other as the primary season begins.
BIDEN STAYED OUT OF THE LIMELIGHT in the past couple of weeks, arm-twisting wavering Democrats and issuing bland statements that a deal was likely. Some progressives are howling that the deal cut spending by too much, and has a pipeline gift for Sen. Joe Manchin, but the mood among most Democrats is that they have to stick with Biden — and, besides, the deal “could have been worse.”
THE GREAT MYSTERY, in light of his legislative accomplishments and a red hot labor market, is why Biden’s poll numbers are so low, even among Democrats. The obvious answer is his age but the election dynamics will change when the race is between Biden and one Republican candidate — probably Donald Trump, who turns 77 in two weeks. Biden will look stronger in a one-on-one contest.
ONCE IT’S CLEAR that default has been avoided, probably by the deadline on Monday, Washington will move on to the next big story — the Ukrainian war, another issue that bitterly divides Republicans. Vladimir Putin is on thin ice as drones strike Moscow, and serious analysts are talking about potential terms of a truce. That also would benefit Biden.
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DEFENSE SPENDING, STILL STRONG: A major theme this coming weekend will be Sen. Lindsey Graham’s furious assertion that defense needs more than a 3% increase next year (after a 10% increase this year). Graham could delay approval of the budget deal — but even on defense, Biden can prevail.
WHEN ASKED EARLIER THIS WEEK about more defense spending, Biden had this clever response: “Obviously if there’s any existential need for additional funding, I have no doubt we’ll be able to get it.” Still another sign that on everything from spending to a default crisis, sleepy Joe Biden knows how to manipulate the levers of power.
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