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Stimulus Bill Update; Biden’s VP Process Annoys the Party

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Stimulus Bill Update; Biden’s VP Process Annoys the Party

Author: Greg Valliere

August 4, 2020

WE STILL ANTICIPATE PASSAGE OF A STIMULUS BILL, and we still think it will be mid-August before the deal is finally done.

PRESIDENT TRUMP HAS JOINED THE DEBATE with a threat to use executive action to get some stimulus; could he really instruct the Internal Revenue Service not to collect the payroll tax? Could he extend eviction relief by presidential order? It’s unclear, but the negotiators needed a wake-up call.

TRUMP HASN’T BEEN DIRECTLY INVOLVED in the talks, but his threat to take executive action has an impact, motivating negotiators who don’t want to lose their pet issues — aid to state and local governments for the Democrats, and business liability protection for the GOP. Trump may be willing to throw the latter issue under the bus, which would get Mitch McConnell back in the game.

WE NEVER THOUGHT THE REAL DEADLINE was last Friday, when unemployment benefits expired. A more realistic deadline is this Friday, Aug. 7, when the Congressional summer recess is scheduled to begin. We think both sides will be close to a deal by then, with a final package winning approval some time next week.

MANY OF THE ISSUES HAVE BEEN RESOLVED: About $100 billion for colleges and K thru 12 schools; another round of $1,200 checks to most Americans; more funding for hospitals and Covid-19 testing. The strong consensus for these provisions ultimately will prod negotiators to compromise on other issues.

SO WE WILL STICK WITH OUR ODDS: There’s still a 70-30 chance of a bill, hardly a slam dunk, with plenty of potholes lurking — including the reluctance of many Republicans to go any higher than a $1 trillion price tag. Something like $1.5 trillion still looks like the ceiling, which will prompt howling from House progressives, who want far more.

THE KEY WILD CARDS: A very weak — or a very strong — jobs report on Friday could make a difference. The surge of new infections in Middle America could add a sense of urgency. And Trump’s shaky polls could convince him that a major bill is crucial; he lost still another precious day yesterday, as his dispute with Dr. Debra Birx dominated the news cycle.
* * * * *
BIDEN’S IRRITATING VP PROCESS: More and more Democrats are saying “pick, already,” as Joe Biden’s glacial VP search begins to pit potential picks against other potential picks. Surrogates of the front-runners are whispering about their rivals’ flaws, and there could be lasting resentments.

NO ONE’S PERFECT, and the longer this process lasts, the more flaws become apparent — Karen Bass’ affection for Fidel Castro; Kamala Harris’ track record in the Bay Area; Elizabeth Warren’s acceptance of segregated sororities when she was in college; Tammy Duckworth’s willingness to tear down statues; Susan Rice’s involvement in Benghazi; Val Demings’ ties to police unions, etc.

THE LONGER BIDEN WAITS, the longer these candidates will be identified by their baggage, which obviously is not what the party wants. Biden needs to move this week; Harris continues to look like the most logical pick, with Duckworth and Demings still very much in the running.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

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.

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©2021 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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